Commercial Court Orders dfcu To Cough Shs82m To Former Crane Bank Employee!

BY: Eyalama In Business On

Shakil Pathan Ismail, a former employee of the closed Crane Bank Limited has won Shs82m(plus damages) in a case against DFCU Bank!

Shakil Pathan sued the bank for unlawfully blocking/deducting Shs62m from his account in 2017 unlawfully.

Head of the Commercial Court, Justice David Wangutusi who delivered the ruling Tuesday, ordered scandal ridden DFCU bank to pay Shakil his due Shs62m without fail.

Court also ordered the Bank to pay 21 per cent (21%) interest per annum from April 2016 on till payment is made in full amounts.

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The judge awarded damages of Shs20m and also ordered the bank to pay a further six per cent (6%) interest on damages from the date of judgement (today Tuesday) till the amount is fully paid.  The judge also ruled that dfcu meets Shakil’s costs of the law suit.

In their defence, dfcu Bank contended that they were not successors in title to Crane Bank Limited (CBL) but only acquired some of its assets and liabilities on 2 January 2017.

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However, Wangutusi ruled that Shakil was not privy to the Purchase of Assets and Assumption of Liabilities Agreement Purchase of Assets and Assumption of Liabilities Agreement and that legally dfcu assumed the position of Crane Bank when it took over the Bank.

“This position is buttressed by the Employment Act. Section 28(2) provides; ‘Where a trade or business is transferred in whole or in part, the contracts of service of employees employed at the date of transfer shall automatically be transferred to the transferee, all rights and obligations between each employee and the transferee shall continue to apply as if they had been rights and obligations concluded between the employee and transferee.’

The relationship between the Plaintiff and Crane Bank simply shifted to dfcu by operation of the law. This position would however have been changed if the Plaintiff had been privy to the Purchase of Assets and Assumption of Liabilities Agreement,” Wangutusi ruled.

While awarding interest, Wangutusi ruled that; “It is without doubt that the defendant kept the plaintiff (Shakil) out of use of his money. The bank must have used this money for commercial purposes. It is also without doubt that if the plaintiff had borrowed that money from the bank, he would have paid it back at commercial interest rate. What is good for the goose should also be good for the gander.”

The ruling means that dfcu Bank can suffer all the previous liabilities inherited from Crane Bank provided the victims of these liabilities were never privy to the purchase of Crane Bank assets and liabilities.

This ruling will definitely energise the over 800 former Crane Bank workers who last October sued dfcu for unfairly terminating their services which was in breach of an earlier agreement that they wouldn’t be laid off when dfcu took over Crane Bank.

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