The Commercial Court in Kampala has ordered Former Buganda Finance Minister and City businessman Mr. Rajni Tailor to pay up his outstanding loan and accruing interest amounting to more than Shs146 million or face a six-month jail sentence.
Presiding judge Susan Abinyo on Monday observed that she was not convinced by Mr Tailor’s explanation that he had fully paid back his loan of $20,000 (Shs70.6m) to Prime Finance Company that he had obtained more than five years ago.
“Following the above discourse between the parties and the proposed settlement by the applicant [Mr Tailor], I find the applicant’s assertion that he paid the loan facility of $20,000 in three equal instalments before the lapse of the loan period… unacceptable in the circumstances,” Justice Abinyo ruled.
Adding: “The application is dismissed and court makes the following orders; a decree is hereby entered for the plaintiff in the sum of $40,048 (about Shs141m) and the respondent and or plaintiff, is granted costs of this application and the main suit.”
Court documents show that on August 6, 2016, Mr Tailor entered into a loan agreement with Prime Finance Company for a personal loan of $20,000 (about Shs70.6m).
The said loan was to be repayable in three weeks by August 27, the same year.
The businessman contended that he fully serviced the said loan in three equal instalments even before the lapse of the loan repayment period and that as such, he was not indebted to the finance institution.
“…..The applicant (the businessman) at all times demanded acknowledgement of receipt of the total amount of $20,000 but the respondent (Prime Finance Company) refused or failed to issue the said receipt in his favour despite his efforts on several occasions to engage with the managing director who was nowhere to be seen,” defence told court.
“The respondent retained the cheque which had been given to it as security and banked the same without the applicant’s knowledge and that the respondent has never served him with any notice of dishonour of the cheque,” defence team added.
The businessman had also argued that since 2016 to date, the finance service company had never issued any demand notice or notice of default to him until now, which it denies.