Wakilii

Agaba Gilbert v Edson Ngomangime Kabahena (Civil Suit 15 of 2020)

High Court · [2026] UGHC 122 · 2026 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for recovery on a dishonoured cheque, heard ex-parte after defendant's non-appearance
Decision
Judgment entered for plaintiff for the full face value of the dishonoured cheque with commercial interest and costs

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court held that a drawer who countermands a cheque issued as security for a loan remains liable to the payee for the face value of the cheque. Countermand does not extinguish the underlying obligation but leaves the drawer liable. The court awarded the plaintiff the full face value of the dishonoured cheque (UGX 71,750,000) plus commercial interest at 16.5% per annum from the date of filing until payment in full, emphasising that a bounced cheque is an independent cause of action and consideration is collateral.

Outcome

Judgment entered for plaintiff for the full face value of the dishonoured cheque with commercial interest and costs

Facts

The plaintiff advanced a loan of UGX 71,750,000 to the defendant for the purpose of buying land for mining iron ore. The defendant issued DFCU cheque No. 000009 dated 30 April 2020 as security for the loan. On 25 May 2020, the defendant stopped payment on the cheque at DFCU's Ndeeba Branch. The plaintiff presented the cheque but it was dishonoured due to the countermand. The defendant admitted in his witness statement that he issued the post-dated cheque and instructed the bank not to honour it on the basis of alleged breach of contract (non-delivery of maize). The defendant failed to appear at the adjourned hearing on 10 July 2025 despite service of process, and the matter proceeded ex-parte.

Issues

  1. Whether the defendant is indebted to the plaintiff.
  2. What remedies are available to the parties.

Orders

  • Judgment for the plaintiff in the amount of UGX 71,750,000.
  • Interest at the rate of 16.5% per annum on the above sum from the date of filing to payment in full.
  • Costs of the suit awarded to the plaintiff.

Rules and key headnotes

Bills of Exchange — Cheques — Countermand — Liability of Drawer
A drawer who countermands a cheque issued as security for a loan remains liable to the payee for the face value of the cheque. Countermand does not extinguish the underlying obligation but merely revokes the bank's authority to pay, leaving the drawer liable to the payee.
Bills of Exchange — Dishonoured Cheque — Independent Cause of Action
A bounced or dishonoured cheque is an independent cause of action. Consideration for the underlying transaction is collateral to the liability on the cheque itself. A claim on a bill of exchange, absent proof of illegality, does not require proof beyond presentment of a countermanded or dishonoured cheque.
Bills of Exchange — Cheques — Definition and Nature
A cheque is a bill of exchange drawn on a banker payable on demand. It is an unconditional order in writing requiring the bank to pay on demand a sum certain in money to a specified person or bearer. The provisions of the Bills of Exchange Act applicable to bills of exchange payable on demand apply to cheques.
Interest — Commercial Transactions — Rate of Award
In commercial transactions where a defendant has deliberately kept the plaintiff out of money (such as by countermanding a cheque), the court may award interest at the commercial bank rate rather than the court rate. The basis of an award of interest is that the defendant has had the use of the plaintiff's money and ought to compensate the plaintiff accordingly.
Ex-Parte Proceedings — Failure to Appear — Rejection of Defence
Where a defendant fails to appear at trial despite proper service, and the matter proceeds ex-parte, the court is entitled to reject the defendant's written defence for lack of proof where the defendant has not testified to prove matters such as failure of consideration.

Legislation cited (5)

Cases cited (4)

Full judgment

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The original judgment as reported. Read the original PDF before relying on any passage.

Agaba Gilbert v Edson Ngomangime Kabahena (Civil Suit 15 of 2020) [2026] UGHC 122 (23 February 2026)
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.