Wakilii

Nagji Textile Ltd v Popat and Others (Civil Appeal No. 37 of 2003)

Court of Appeal · [2008] UGCA 33 · 2008 Appeal Dismissed ✦ AI-generated summary ↓ Download
Jurisdiction
Uganda
Case Type
Civil appeal from High Court judgment dismissing a suit for cancellation of title and registration
Decision
Appeal dismissed; High Court judgment upholding the sale and dismissing the suit for cancellation of title affirmed

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Cited — treatment unverified cited in 2 (treatment unverified) Derived from citing cases in the Wakilii corpus — not an assertion that this case is good law.

AI-generated summary. This summary was generated by AI from the full text of the judgment. It may contain errors or omissions — always read the source judgment before relying on it.

Holding

The Court of Appeal dismissed the appeal, holding that the power of attorney granted by the company through two directors could not be revoked by a single director acting in his personal capacity. Under article 36(b) of the company's Articles of Association, two directors were required to transact such business. The purported revocation was also unwitnessed by a notary public as required by section 155 of the Registration of Titles Act, was never registered, and was never communicated to the respondents. The sale by the 1st respondent under a valid power of attorney was therefore lawful. No fraud was established, and the 2nd and 3rd respondents were bona fide purchasers for value without notice of any defect in title.

Facts

Two directors of the appellant company executed a power of attorney in July 1992 appointing the 1st respondent to repossess Plot 3 Acacia Avenue, Kampala from the Departed Asians Property Custodian Board. In December 1996, the same two directors granted an additional power of attorney authorising the 1st respondent to sell and transfer the property. In January 1997, Janak Masrani, acting in his personal capacity, purported to revoke the power of attorney by an instrument that was unwitnessed by a notary and never registered. The 1st respondent sold the property to the 2nd respondent in January 1997 under a sale agreement, with transfer effected after a repossession certificate and ministerial consent were obtained. The 2nd respondent later sold the property to the 3rd respondent in 1998. The appellant sued to cancel the titles, alleging the sale was unauthorised, fraudulent, and that the price was depreciated suspiciously. The High Court dismissed the suit.

Issues

  1. Whether the power of attorney granted by the appellant company to the 1st respondent was validly revoked.
  2. Whether the sale of the suit property by power of attorney was illegal or void for lack of authority.
  3. Whether there was fraud on the part of the respondents in the transaction.
  4. Whether the 2nd and 3rd respondents were bona fide purchasers for value without notice of any defect in title.

Orders

  • Appeal dismissed.
  • Judgment and orders of the High Court upheld.
  • Costs of the appeal awarded to the respondents.

Key headnotes

Company Law — Powers of Attorney — Revocation requiring company authority under Articles of Association
A power of attorney granted by a company through two directors cannot be effectively revoked by a single director acting in his personal capacity where the company's Articles of Association require two directors to transact such business.
Land & Property — Powers of Attorney — Formal requirements for valid revocation
A revocation of a power of attorney that is not witnessed by a notary public as required by section 155 of the Registration of Titles Act, is not registered with the Registry of Documents, and is not communicated to the parties dealing under it, is ineffectual.
Land & Property — Fraud in dealings affecting title — Burden of proof against transferee
In an action impeaching title, it is the fraud of the transferee in unlawfully depriving a registered proprietor of title that must be proved; a company cannot be fraudulently deprived of property sold with its own express authority.
Contract Law — Agency — Breach of authority by agent does not vitiate a sale validly authorised by the principal
Where an agent acts beyond the terms of an authority validly granted by the principal, this constitutes a breach of agreement between agent and principal rather than an illegality vitiating the transaction; the principal is vicariously liable for the acts of the agent.
Land & Property — Expropriated property — Registration of repossession certificate not a statutory precondition to transfer
There is no statutory requirement that a certificate of repossession be entered on the certificate of title or register before transfer; presentation of the title to the Registrar of Titles is sufficient authority under section 6 of the Expropriated Properties Act.

Legislation cited (5)

  • Registration of Titles Act s.155
  • Registration of Titles Act s.146
  • Registration of Titles Act s.147
  • Evidence Act s.84
  • Expropriated Properties Act s.6

Cases cited (6)

  • Mansukhlal R. Karia and Another v Attorney General (Civil Appeal No. 20 of 2002)
  • Frederick Zabwe v Orient Bank Limited (Civil Appeal No. 4 of 2006)
  • Cartmell's Case (1874) L.R. 9 (Ch. App. 691
  • Bottomleys Case (1880) 16 cH. D.681
  • Lloyd v Grace, Smith & Co [1912] AC 716
  • Percy v Glasgow Corporation [1922] AC 299
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.