Stanbic Bank
Stanbic Bank
Stanbic Bank
Stanbic Bank
19.6 C
Stanbic Bank
Stanbic Bank
Stanbic Bank
Stanbic Bank

Supreme Court orders BoU to pay Sudhir, return Crane Bank

Must read

Supreme Court has dismissed Bank of Uganda’s appeal against Sudhir Ruparelia and Meera Investments, and ordered the central bank to directly pay costs at all Court levels.

Court also ordered that Crane Bank is reverted to the owners/shareholders marking an end to the 5-year dispute.

Crane Bank Limited was closed by Bank of Uganda (BoU) on October 20, 2016, after it failed to comply with a capital call on July 1, 2016.

“If all the parties to the appeal do not consent to the withdrawal of the appeal, the appeal shall stand dismissed with costs, except as against any party who has consented, unless the court on the application of the appellant, otherwise orders. At the time of filing the suit, Bank of Uganda had taken over management. Counsel for the Plaintiff/Respondent submitted that the proceedings were not commenced by Bank of Uganda but by Crane Bank Limited in Liquidation. A persual of the affidavit in reply to the application throws light on who brought the suit to court. The affidavit is deponed by Margaret K. Kisule who describes herself” reads the ruling.

It further continues “We agree with the learned Judge in dismissing HCCS 493 of 2017 and awarding costs following the dismissal. The preliminary objection in this case wholly disposed off HCCS 493 of 2017. There was therefore nothing left to try following the dismissal. We for those reasons find this ground in the negative……. in the instant case, we find no such misconduct relating to litigation on the part of the respondents and as such, we find no reason to deny the respondents costs of the suit. We therefore, uphold the trial Judge’s order as to costs”

The judges in their ruling further said that in ruling civil application No.32 of 2020 and found that indeed, receivership of the appellant had ended on January 20, 2018. The said the implication of the finding in their view was that the management of the appellant had reverted to shareholders after January 20,2018.

“In the result, this appeal is dismissed with costs to the respondents in the terms found by the lower courts. The dismissal of the instant appeal takes effect as of the date of endorsement of this ruling. Weso order. Justices Ruby Opio Aweri, Faith Mwondha, Prof. Tibatemwa-Ekirikubinza and Percy Night Tuhaise”

For his part, Sudhir said justice had prevailed the judiciary and courts had done its part. He further thanked his lawyers led by Senior Counsel Peter Kabatsi. He said if BoU is dissatisfied with the ruling, they can go and appeal to God.

“I want to thank the judiciary and the courts for giving me justice. It has taken more than five years to fight this case and it has impacted on our businesses. I want to thank all the lawyers for their time. Honestly BoU stole money in the name of Crane Bank and even Auditor General has said so. The legal department of BoU is so corrupt and is misleading the board. BoU legal department should go and appeal to God” Sudhir said.

On his part, Counsel Kabasti hailed the ruling as well but said he wasn’t surprised by the ruling as it was expected. He said BoU should accept the consequences of the ruling since they dragged Sudhir to court.

“The implications are actually many and if anyone goes to court, he or she like BoU did should expect the consequences”. First of Sudhir lost a bank and time, That isn’t cheap and first he lost his bank which shouldn’t have been but because of the mistakes of BoU” He said.

Counsel Kabatsi the costs to be awarded will be calculated in accordance with the law.

After selling the assets to DFCU, Bank of Uganda filed a suit under Crane Bank in Receivership against Sudhir and Meera Investments seeking to recover over Shs400 billion and 48 land titles.

The suit by Crane Bank was dismissed by High Court with costs to be paid by Bank of Uganda on ground that a bank under receivership cannot sue, receivership had ended and Crane Bank was a non-citizen company which could not hold freehold titles. Bank of Uganda appealed to the Court of Appeal which unanimously upheld the findings of the High Court. Thereafter, Bank of Uganda appealed the matter to the Supreme Court.

“An interlocutory mandatory injunction doth issue returning the status quo of the 1st respondent to what it was at the time of filing Civil Appeal No.07 of 2020. A declaration doth issue that the 2nd respondent is in contempt of court’s order,” the ruling read.

“The 1st respondent was closed as a financial institution and placed under receivership. Upon closer, it ceased being a financial institution under the Act and it could therefore, not be progressed to liquidation. The 2nd respondent’s act therefore of moving the 1st respondent to liquidation are contrary to the above clear provisions of the law and the same cannot be sanctioned by this court,” reads the ruling.

However, before the hearing of the appeal, Bank of Uganda decided to place Crane Bank into liquidation which materially altered the status of the Bank before the Court. Bank of Uganda’s application to change the status of the appellant from Crane Bank in Receivership to Crane Bank in Liquidation was equally dismissed by the Supreme Court.

After issuing a notice to the public placing Crane Bank into Liquidation, Sudhir through his lawyers, Kampala Associated Advocates filed an Application against Bank of Uganda for a temporary injunction objecting to the move by the Bank of Uganda placing Crane Bank under Liquidation yet there was an appeal before Supreme Court.

Earlier Bank of Uganda withdrew Supreme Court appeal that was contesting the Court of Appeal’s dismissal of the case it filed on behalf of Crane Bank Ltd (in Receivership) versus Sudhir Ruparelia and Meera Investments Ltd.

In a September 15 notice of withdrawal, the Supreme Court Registrar indicated that BoU has decided not to prosecute the appeal and will pay costs.

Justice David Wangutusi of Commercial Court in August 2019 dismissed the first case in which BoU claimed that Sudhir and his Meera Investments fleeced his own Crane Bank (now in receivership) of Shs397 billion.

On Tuesday, June 30, the BoU insisted that receivership does not take away the corporate personality of a company which includes the right to trace and recover assets and the right to sue for those assets.

In the preliminary stages of the appeal, the Supreme Court in August this year, dismissed with costs, an application by lawyers representing BoU in which they sought to substitute the court record from Crane Bank Limited (in receivership) to Crane Bank Ltd (in Liquidation), with the court rejecting the move, as in bad faith and intended to circumvent facts.

- Advertisement -

More articles

- Advertisement -

Latest article

- Advertisement -