21 February 2018

Uganda: Sudhir Sues Dfcu Bank

Kampala — Meera Investments Ltd, one of the business entities owned by city businessman Sudhir Ruparelia, has sued dfcu Bank, seeking to reclaim leasehold titles and developments for 48 banking halls taken over by the latter when Crane Bank was liquidated.

In a suit filed before the High Court Land Division, Meera Investments Ltd contends that it is the rightful owner of the land titles and that their transfer to dfcu Bank should have been effected after its consent.

"The plaintiff (Meera Investments) brings this suit in its capacity as the registered owner of the freehold and mailo interests, the subject of leases constituting the suit properties against the 1st defendant (dfcu Bank) on account of illegality and fraud committed by the 1st defendant (dfcu Bank) in the transfer on the leases on the suit properties into the names, taking possession and further on account of trespass on the suit properties," Meera Investments states in its petition.

Commissioner sucked in

Also sued alongside dfcu Bank is the Commissioner for Land Registration, who is accused of conniving with dfcu Bank to transfer the leases of the 48 properties into the latter's names without the consent of Meera Investments Ltd, an omission it says renders such transfer null and void.

However, in a written statement of defence in court, dfcu Bank states that no prior written consent was needed from Meera Investments Ltd in order to effect the transfer of the said certificates of title to them by Bank of Uganda (BoU).

Through its lawyers Sebalu & Lule Advocates, the bank further explains that upon BoU taking over Crane Bank and the eventual transfer of its assets and liabilities to them, Crane Bank's branch network comprising 48 leasehold land titles was accordingly transferred to them.

"On January 25, 2017, BoU, pursuant to its statutory authority specifically Section 95(1) (b) of the Financial Institutions Act (FIA) and in consideration of the 1st defendant (dfcu Bank) assuming the liabilities of Crane Bank Ltd, transferred to the 1st defendant (dfcu Bank) the assets of Crane Bank, including its branch network comprising 48 leasehold certificate of titles listed," dfcu Bank says.

"The transfer and handing over of the possession of the 48 leasehold certificates of titles was effected by BoU under regulatory and intervention powers granted to it by statute specifically Sections 95 (1) (b) and (C) of the FIA and accordingly, not having been a transfer by Crane Bank, the contractual covenants in the lease agreements relating to the transfer of the leases or parting with possession of the leased land did not apply," dfcu Bank further states.

Meera is seeking an order directing the Commissioner for Land Registration to cancel the leasehold titles in respect of the contested properties and reinstate it as the rightful owner.

Meera Investments Ltd says between 2012 and 2016, it executed several lease agreements with then Crane Bank (now liquidated) and leased several properties to it. Meera adds that the then Crane Bank agreed to pay $6,000 (about Shs21m) as ground rent for each of the properties at the beginning of every year.

On October 25, 2016, BoU took over Crane Bank and suspended all members of its board, saying the then biggest indigenous bank was incurably drained financially and posed a systemic risk to the country's banking sector. The central bank later sold Crane Bank to dfcu Bank in January 2017.

Properties claimed by Sudhir

Plot 7 Rujumbura Block, Rukungiri

Plot 31 Margherita Road, Kasese

Plot 33 Margherita Road, Kasese

Plot 105 Customs Road, Busia

Plot 99 Customs Road, Busia

Plot 1162 Block 5, Mulago, Kampala

Plot 688, Nkumba

Plot 893 land at Nkumba

Plot 22, Kampala Road, Entebbe

Plot 106, Kireka and Banda

Plot 60, Nabingo

Plot 61, Nabingo

Plot 846, Block 652, Luwero

Plot 2A Broadway Road, Masaka

Plot 18, Jinja Rd, Gulu and Nasuuti, Mukono

Plot 20A Jinja Rd, Gulu and Nasuuti Mukono.

Plot 103 Customs Road, Busia.

Plot 101 Customs Road, Busia.

Plot 1B, Ntinda, Kampala.

Plot 93 Mengo, Kampala.

Plot 40 Lubas Road, Jinja.

Plot 80 & 82 Main Street, Iganga

Plot 2 Tanga Road, Malaba

Plot 4 Tanga Road, Malaba

Plot 4 Kennedy Square, Soroti

Plot 40, Main Street, Hoima

Plots 44 & 46 Kamwenge & Ibanda

Plot 143 Kabale Road,

Plot 145 Kabale Road,

Plot 5 Block 76, Kabula, Masaka

Plot 55 Main Street Jinja,

Plot 18 Old Kabale Road, Ntungamo

Plot 54, Rushere Nyabushozi.

Plot 52 Rushere, Nyabushozi

Plot 1, Adumi Road, Arua

Plot 51, High Street Mbarara,

Plot 38, Soroti Central ward

Plot 11 Babiiha, Kabarole

Plot 387, Block 18, Natete, Kampala

Plot 388, Block 18, Natete, Kampala

Plot 52, Port Road, Masindi

Plot 1419, Mulago, Kampala

Plot 1463, Kibuga Mulago, Kampala

Plot 817, Block 10, Nakulabye,

Plot 1, Cell 0, Fort Portal Rd, Bushenyi

Plot 7, Luthuli Lane, Bugolobi, Kampala

Plot 54, Masindi Port Road, Masindi

Plot 4360, Kyadondo, Kawempe

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