The proprietor of Simbamanyo Estates Limited, Peter Kamya has lost a multi-billion property case against three private entities including Meera Investments owned by businessman Sudhir Ruparelia.
Others are Luwaluwa Investments Limited, Equity Bank Uganda Limited and the Commissioner Land Registration.
Justice Stephen Mubiru yesterday declined to grant an injunction sought by Kamya restraining the companies from selling, alienating, mortgaging, transferring, encumbering and creating third party interests in the two properties.
On October 8, 2020, Equity Bank sold Afrique Suites Hotel on Mutungo Hill to Luwaluwa at $4,350,000 (Shs15.6bn) and Simbamanyo House on Lumumba Avenue to Meera at $5m (Shs18.5bn) after Kamya failed to pay a Shs38b bank debt.
“Considering the effect of the delays inherent in the administration of justice, a temporary junction will have a disproportionate effect on the companies as an impediment from the pursuit of their proprietary rights,” the head of the Commercial Court noted.
Mubiru further stated that the order if granted would inflict more hardship than it would avoid, to the companies. He said the properties since October 8, 2020 have been transferred and in possession of Meera and Luwaluwa.
“The implication is that the status quo for the last one-and-a-half years is that the two companies have been exercising the right attendant to being the registered proprietors of properties,” he said.
Mubiru said Kamya seeks an interlocutory injunction to protect himself against injury by violation of his claimed property rights which could be compensated, if the final case is ruled in his favour.
Although Kamya pleaded that the caveats he lodged on September 8, 2020 were vacated to allow transfers that followed the sale of properties, the judge said he is bared by section 22 (2) of the Registration of titles Act, to renew the caveats.
The court found that the nature of both properties is purely economic, with no aesthetic or sentimental overtones.
During the hearing, Meera managing director Sudhir Ruparelia said he bought the property at plot 33 legally at an auction conducted by Equity Bank as the mortgagee.
He then subsequently caused a transfer into Meera which is in possession to date and has let out to rent-paying tenants.
“Meera neither purchased nor acquired any business of Kamya conducted on that property, their assets, trade fixtures, tenants or goodwill. The allegations that Meera intends to alienate the property is speculative,” he contended in his affidavit.
Meanwhile the Commissioner Land Registration, contended that it acted lawfully and within its mandate when it caused the transfer of properties into the names of Meera and Luwaluwa on the basis of valid instruments of transfer.
Background
On March 4, 2020 Simbamanyo filed a suit at the commercial court against Equity Bank Uganda, Equity Bank Kenya and Bankone Limited accusing the financial institutions of unlawfully debiting its loan account with fabricated and unexplained amounts, plus uncertain interest charges.
Simbamanyo sought among others a declaration that the mortgages on its properties Simbamanyo House and Afrique Suites Hotel respectively by Equity Bank are illegal.
Court documents indicate on August 20, 2012 Equity Bank granted Simbamanyo a loan of $6m (approx. Shs21.6 billion). The loan was to finance the construction of a hotel at Mutungo and Luzira and to take over a prior facility from Shelter Afrique.
Simbamanyo contends that it started servicing the loan but required more financing which culminated into two additional facilities granted by the bank of $1,220,000 (about Shs4.3bn) for the completion of hotel.
It also asserts that Equity Bank Uganda and Kenya brokered a new deal with Bankone, a Mauritius-based bank to lend $10m to it to pay the old loan with Equity bank lenders.
Simbamanyo contends that the fictitious loan amounted to a fraudulent misrepresentation by Equity bank. Simbamanyo is challenging the propriety and legality of the various credit facilities agreements, mortgages and other securities in favor of the respondents, which were created in November 2017.
