KAMPALA, UGANDA: The Supreme Court of Uganda has Monday afternoon ruled that liquidation of Crane Bank Limited is illegal, the Daily Express reports.
In a ruling read on Monday morning, the highest court in the land said Crane bank was closed as a financial institution and placed under receivership and hence after closure, it ceased being a financial institution.
“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.
BoU insisted on and appealed against the High and Supreme Court’s ruling which concurred with Tycoon Sudhir Ruparelia that liquidation was illegal since it ended in January 2018.
The ruling comes at a time when BoU has just withdrawn a Supreme Court appeal that was contesting the Court of Appeal’s dismissal of the case it had filed on behalf of Crane Bank Ltd (in Receivership) versus Sudhir Ruparelia and Meera Investments Limited.
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.
The notice was signed by the central bank lawyers Messers Byamugisha & Co Advocates, confirming the latest victory for Dr. Sudhir Ruparelia who has given the BoU a run of their money in the court, ever since they closed his bank.
On June 23, 2020, the Court of Appeal upheld the judgment of the Commercial Court in an application filed by BoU seeking a refund of Shs397 billion from the tycoon.
Justice David Wangutusi of Commercial Court in his August 2019 ruling dismissed the first case in which BoU claimed that Dr. Sudhir and his Meera Investments e fleeced his own Crane Bank (now in receivership) of Shs397 billion.
In 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 Limited (in Liquidation), with the court rejecting the move, as in bad faith and intended to circumvent facts.
A panel of the Supreme Court Justices, Ruby Opio-Aweri, Faith Mwondha, Lillian Tibatemwa, Ezekiel Muhanguzi and Night Tuhaise, in a ruling issued on August 12 rejected arguments by BoU lawyers led by veteran attorney stating that Crane Bank Limited (in Receivership), Crane Bank Ltd (in Liquidation), and Crane Bank Limited are three distinct entities with different rights, powers, and obligations.
Earlier in the High Court, Justice Wangutusi noted in his ruling that at the time BoU and Crane Bank (in receivership) filed the suit against Dr. Ruparelia and his Meera Investments in January 2017, Crane Bank was a non-existing entity, having been terminated when the Central Bank sold its assets to DFCU Bank in October 2016.
The judge ruled that this rendered Crane Bank in receivership incapable of suing or being sued since there would be no assets to be claimed for.
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