The Commercial Court in Kampala, has this morning, dismissed a multibillion commercial dispute that had been filed against city tycoon, Sudhir Ruparelia by Crane Bank in receivership, ending a two-year legal battle.
In his ruling, the head of the commercial court, David Wangutusi, observed that Crane Bank in receivership at the time of instituting the commercial suit against the businessman and his Meera Investments company, was none existent, hence never had powers to sue.
“In conclusion, the plaintiff/ respondent (Crane Bank in receivership) did not have jurisdiction to file HCCS no. 493 of 2017. It’s also my finding that the property the plaintiff was seeking when she filed the suit on June 30th 2017 had earlier been given away by the receiver to Dfcu bank on 24th January 2017, four days into receivership and five months before filing of this suit this leaving the plaintiff/ respondent with no property,” the court ruling reads in part.
The Court further condemned BoU to costs that Dr Ruparelia had spent in prosecuting this law suit, on grounds that it’s the one that lodged the suit on behalf of defunct Crane Bank.
The lawyers of Crane Bank accused Mr Ruparelia of taking Shs397b out of the financial institution in fraudulent transactions and land title transfers.
However, the businessman argued that when Crane Bank went into receivership, it lost its powers to “sue” and to “be sued”, rendering its suit against him and Meera Investments Company, a nullity.
During last month’s court hearing, Mr Joseph Matsiko, one of Mr Ruparelia’s lawyers, argued that on October 20, 2016, Bank of Uganda (BoU) took over the management of Crane Bank pursuant to Sections 87 (3) and 88 (1) a & (b) of the Financial Institutions Act and that on January 20, 2018, BoU placed it under receivership.
“The suit was filed on the 30th day of June 2017 when Crane Bank Ltd was in receivership. The issue, therefore, is whether a suit can be filed by a financial institution in receivership,” Mr Matsiko submitted.
He further argued that the Supreme Court has since ruled in a similar case that it would be wrong for any court to confer the right to sue when Parliament did not find it necessary to do so.
Mr Ruparelia, in an affidavit, also contended that under Uganda’s Constitution and the Land Act, Crane Bank in receivership could not own or hold freehold property and was, therefore, not capable of holding the suit property in its names.
But Dr Joseph Byamugisha, who represented Crane Bank in receivership, argued that when a financial institution is placed under receivership, it does not lose powers to commence or continue with lawsuits.Premium Content: To Subscribe to your favorite plan, sign up Here