The Court of Appeal reversed the judgement given by the District Court in favour of veteran actor Gamini Fonseka against the People’s Bank

The Court of Appeal has delivered a judgement against late veteran film actor Gamini Fonseka over a defamatory action filed by him in the late 1990s claiming Rs. 300 million as damages from a state bank.

The greatest actor in Sinhala cinema, Gamini Fonseka, filed a defamatory action in Hambantota District Court against People’s Bank and a bank manager, claiming Rs. 300 million with legal interest for alleged unlawful disclosure of bank loan details to the Ravaya newspaper editor.

The film star had alleged that Ravaya newspaper had published an article with the meaning that Gamini Fonseka had defaulted on a payment of Rs. 2.5 million, which he owes to a bank, despite there being a settlement for the said loan facilities.

The late Gamini Fonseka had served as the Chariman and Managing Director of Sanasuma Holiday Resorts Ltd. and maintained and operated three bank accounts in the Tissamaharama branch of People’s Bank. Sanasuma Holiday Resorts Ltd. had obtained loan and overdraft facilities from these bank accounts.

The business and occupancy at the hotel were adversely affected following the ethnic riots in July 1983, and in 1989, the hotel was destroyed by fire. Mr. Fonseka had said he could not pay the loan installments and interest regularly because of the aforesaid situation. Following discussions between the bank and the company and having taken into account the aforesaid loss of business and the subsequent destruction of the hotel, the board of directors of the bank finalised a settlement of accounts payable by the said company on the aforesaid loans and overdraft facilities, and Mr. Fonseka, on behalf of the said company, paid that amount to the Tissamaharama branch of the bank as a full and final settlement. Fonseka stated that the newspaper article is distorted, false, defamatory, and malicious, and it is a consequence of the bank officer’s conduct at the Tissamaharama branch, which has caused irreparable loss and damage to his reputation and high esteem. He filed an action in the amount of Rs. 300 million.

Hambantota District Court, on December 13, 1999, delivered a judgement in favour of Mr. Fonseka.

Having heard the appeal filed by the People’s Bank, the Court of Appeal two-judge bench comprising Justices C.P. Kirtisinghe and R. Gurusinghe ordered to set aside the District Court judgement and allow the appeal with costs fixed at Rs. 31,500.

It was alleged that the bank officer had given relevant bank loan details to the Ravaya newspaper. The editor of the Ravaya newspaper had admitted that he got the

information from bank files, although he had not disclosed the name of the person who had given that information. During the inquiry, evidence was given to the effect that an employee of Mr. Fonseka’s office had left the services after falling out with him, and in displeasure, there was a tendency to leak out this information.

The Court of Appeals held that acts committed by the officer do not come within the scope of his employment.

“It is clearly outside the scope of his employment. Therefore, the People’s Bank is not vicariously liable for the acts committed by the bank officer,” the Court of Appeal observed.

Kushan De Alwis, P.C., along with Counsel Chamath Fernando and Milinda Munidasa, appeared for the People’s Bank. Faiz Musthapha, P.C., Mehran Careem, and Bishran Iqbal appeared for Gamini Fonseka.