Court days ago ordered DFCU Bank to leave a number properties owned by Mera Investments within the next three months.
Mera Investments Limited is part of the Ruparelia Group of companies owned by businessman Sudhir Ruparelia.
After a protracted legal battle over property rights, Justice Tadeo Asiimwe, a renowned Land Division Judge at the High Court, made the ruling in favour of Meera Investments Limited.
In addition to serving the eviction notice, the bank is required to pay Mera Investments, the complainant, an astounding Shs 2.4 billion in compensation for the losses they incurred while seeking justice. From the date of the judgment until the awarded amount is paid in full, an interest rate of eight percent per year will be applied.
The decision, which was made on October 24, marks a dramatic shift in a legal dispute that has captured the public’s interest for a long time since Bank of Uganda controversially sold Crane Bank to DFCU in January 2017.
The defendants, DFCU Bank and the Commissioner of Land Registration, were sued by the plaintiff for allegedly selling and possessing 48 leasehold properties in an unlawful and fraudulent manner. Mera Investments asserted its claims by citing its registration as the owner and lessor of 48 Mailo and freehold titles, which were the source of the disputed lease agreements.
The tansaction was part of the Purchase of Assets and Assumption Agreement (P&A), between dfcu Bank and Bank of Uganda where the former agreed to pay BoU Shs 200 million for Crane Bank assets.
The main points of contention in the dispute were who owned these properties and when DFCU Bank was granted lease possession and title transfer. DFCU Bank, on the other hand, denied these claims, arguing that they had legitimately obtained their stake in the 48 leasehold properties by purchasing them from the Bank of Uganda in their capacity as Crane Bank Limited’s receiver.
Moreover, the bank contended that since the transfer was carried out in accordance with the Financial Institutions Act, Mera Investments’ approval was not necessary prior to the transfer or the acquisition of the contested assets.
In order to bolster their denial of any involvement in unlawful or fraudulent activity during the purchase of the assets, dfcu Bank referred to the receivership filings of Crane Bank Limited.
However, Justice Asiimwe ruled that the transfer of leasehold titles had illegally and flagrantly ignored the lessor’s statutory rights and powers. He stated that DFCU Bank’s registration as the initial defendant was obtained unlawfully and might therefore be revoked.
In addition, the Judge discovered that the dfcu Bank had entered the property illegally and fraudulently in January 2017, and that the fraudulent and illegal acquisition of the leased properties’ certificates of title justified their cancellation.
In addition, the judge acknowledged that the properties needed general repairs and replacements. After DFCU Bank paid to have the properties returned to rentable condition, the court ordered the bank to leave the premises within three months of the judgment date.
Furthermore, the judge granted Mera Investments a total of Shs2.4 billion in general damages, with an 8 percent annual interest rate from the date of the judgment until it is paid in full, acknowledging that the company had incurred financial losses and was unable to earn income from its properties during the dispute.
This ruling sets a major legal precedent and is expected to have a substantial impact on the real estate market as well as the judicial system as a whole.
However, Dfcu said in a brief statement on Saturday morning that “The court ruling does not affect the Bank’s day-to-day operations since the branches in question were vacated in 2020.”
The bank further vacated the buildings which are located in different parts of Uganda.