Sri Lanka, May 29 -- The Supreme Court ruled that banks hold the legal authority to take direct legal action against a guarantor without first suing the principal debtor, on the condition that the guarantor explicitly waived that right within the guarantee agreement.

The decision came as the Supreme Court dismissed an appeal filed by a guarantor and upheld a previous Commercial High Court ruling. That initial judgment held Vithanage Happawana liable as a guarantor for credit facilities secured from DFCC Bank Public Limited Company.

The legal battle originated from a lawsuit launched by the bank to claw back more than 5.5 million rupees plus interest from the defendant, who served as the guarantor for the company's loan facilities.

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