Court Rules in Favour of BSP Claim to $680k from Businessman

The Civil High Court has ruled in the favour of the Bank South Pacific in claiming $685,470.04 of guarantee bonds from businessman Mohammed Hanif. BSP instituted these proceedings to recover $685,470.04 with interest pursuant to Guarantee Bonds dated April 25, 1995, and February 27, 2004, respectively executed by the defendants securing the repayment of the loan and advances granted to his company Western Wreckers Limited.

Mr Shamim did not file his defence and the court entered a default judgment against him. The court ordered that the judgment entered against Mohammed Faizal Shamim to jointly pay to BSP a sum of $685,470.04 with interest and costs to be assessed.

Mr Hanif, while denying that he was indebted to BSP claimed that there were securities given to BSP by other directors and shareholders and BSP had realised some securities and favoured the other guarantors.

At the pre-trial conference, BSP and Mr Hanif admitted that there were other shareholders and directors [Wazid Ali, Rahmat Ali, Mohammed Hanif, and Mohammed Faizal] of the Western Wreckers Limited who gave their guarantees for the advancement of loans and that various securities were also given by other shareholders and directors of Western Wreckers Limited.

When this matter was taken up for trial on April 6, 2021, Mr Hanif was absent and unrepresented. The court proceeded to hear the matter.

The two defendants,

Rahmat Ali and Wazid

Ali have subscribed their signatures to the guarantee bond as guarantors.

Clause 11 of the Guarantee bond reads as follows: “I agree that an amount that I am liable to pay under this guarantee becomes payable as soon as the Bank gives me a written demand for payment, and

I agree to pay the Bank the amount immediately.”

Judge Justice Lyone Seneviratne said from the above clause it was clear that each and every guarantor had agreed to settle the amount due to the bank individually.

“Mr Hanif is, therefore, not entitled to say that the bank cannot sue him without suing the other guarantors. Since there was no defence put forward by the defendants, the court has no reason not to rely on the evidence of the plaintiff witness and the documents tendered in evidence,” he said.

When this matter was taken up for trial on April 6, 2021, Mr Hanif was absent and unrepresented. The court proceeded to hear the matter.