The Supreme Court has dismissed with heavy Costs Bank of Uganda’s (BoU) case in which Crane Bank Limited (CBL) (in receivership) filed an application against Sudhir and URSB seeking for an interim order preventing the businessman from claiming, taking control, repossessing or in any way interfering with the management of CLB or of its receiver until the hearing and determination of Supreme Court Civil Application No.32 of 2020.
BoU was also seeking for an interim order preventing URSB from registering any resolutions in respect of the applicant/CBL until the hearing and determination of Supreme Court Application NO. 32 of 2020.
BoU sought an injunction against what they perceived as efforts by URSB to permit Sudhir repossess CBL as a company. But in the presence of URSB’s lawyer Allan Kakungulu, Dr. Joseph Byamugisha (for BoU) and Ellison Karuhanga & Bruce Musinguzi (for Sudhir), Supreme Court’s Justice Paul Mugamba on Monday 9th November dismissed the application with costs against BoU.
Sudhir Floors Bank of Uganda for the third time
In his letter to URSB, Sudhir referred to the prior finding and proclamation by High Court and Court of Appeal to the effect that the receivership period (giving BoU authority over CBL) had ended in January 2018 (having commenced on 18th January 2017).
According to the law, once the receivership period ends, whatever remains of the company reverts to the Directors and Shareholders.
In his writing, Sudhir appropriately sought to bring these two court decisions to the attention of URSB but the same alarmed BoU whose top officials construed this to be an attempt to have repossession and resume running a company called Crane Bank Ltd.
The bank’s lawyers rushed to Supreme Court and filed an application seeking an injunction against these perceived Sudhir moves but the application was dismissed with costs to Sudhir and URSB.
June 23, 2020, a Panel of Court of Appeal Justices led by the Deputy Chief Justice Alfonse Owiny Dollo and Cheborion Barishaki would uphold Justice Wangutusi’s ruling and dismiss the appeal with costs to Sudhir and the Ruparelia Group of Companies.
In dismissing the appeal, the Court of Appeal held that the trial judge was satisfied that the preliminary points of law which the respondents raised were based on the presumption that the facts in the plaint were true and that the points of law, if upheld, were sufficient to conclude the case.
On June, 23, 2020, Court of Appeal Justices, Alphonse Owiny Dollo; Cheborion Barishaki and Stephen Musota agreed with an earlier ruling by Commercial Court Judge Justice David K. Wangutusi’s August 26th 2019 that a bank in receivership (Crane Bank Limited in this case), under the Financial Institutions Act (2004) cannot sue or be sued and therefore Crane Bank (in receivership) cannot and should not have sued businessman Sudhir Ruparelia and his company Meera Investments.
While delivering their ruling, Civil Appeal 252 of 2019 at the Court of Appeal, the trio also ruled that Crane Bank (in receivership) being a foreign owned bank, cannot own freehold land in Uganda and therefore has no legal basis to sue Sudhir for land it cannot own.
“The appeal consequently fails. It is thus dismissed with costs here and the court below,” ruled the justices. The costs would be borne by Bank of Uganda.
BoU loses twice
This is the third time, Bank of Uganda’s case- HCCS 493 of 2017, in which BoU, through Crane Bank (in receivership) alleged that the businessman fraudulently siphoned around $92.8million (about Shs334billion) and another Shs8.2billion of depositors’ money from Crane Bank for personal gain, has failed.
Sudhir’s victory is a major blow to Bank of Uganda’s attempt to recover the alleged cash (Shs397billion) it claimed he syphoned from his CBL before the central bank took it over on October 20, 2016 and sold it to dfcu bank for a paltry Shs200bn.