The High Court Commercial Division has dismissed the Bank of Uganda and Crane Bank suit against Sudhir Ruparelia and Meera Investments, with Justice David Wangutusi ruling that Crane Bank (in Receivership) has no legal basis to sue.
The judge dismissed the suit over lack of legal basis to sue and ordered BOU to pay costs to the businessman, who had been accused of taking Shs397b out of the financial institution in fraudulent transactions and land title transfers.
In his ruling, the head of the commercial court, David Wangutusi, said 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.”
He 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.
Sudhir’s lawyers had 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.
Sudhir, 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.