Wakilii

Auto One Spares & Accessories Ltd v Equity Bank Uganda Ltd (Civil Suit No. 653 of 2023)

High Court · [2026] UGCOMMC 103 · 2026 Judgment for Defendant AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit seeking relief against foreclosure under the Mortgage Act
Decision
Plaintiff's suit dismissed with costs to the Defendant

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court dismissed the plaintiff's application for relief against foreclosure under section 33 of the Mortgage Act. The court held that granting the plaintiff one year to sell mortgaged properties without bank control was unreasonable where the plaintiff had already received a loan restructure and six-month moratorium but continued to default. The mortgagee's right to sell upon default on a restructured loan is inevitable, and further delay would cause prejudice to depositors and increase the outstanding balance through accruing interest.

Outcome

Plaintiff's suit dismissed with costs to the Defendant

Facts

The plaintiff obtained two loan facilities from the defendant bank totalling UGX 3,650,000,000 in 2019, secured by mortgage over two properties in Kampala. The plaintiff faced financial difficulties due to COVID-19 and obtained a loan restructure with a six-month moratorium in June 2020. Despite the restructure, the plaintiff defaulted on monthly repayments. The defendant issued a notice of default on 21 September 2022 and a notice of sale on 28 December 2022. The plaintiff filed suit on 19 July 2023 seeking relief against foreclosure, requesting one year to sell the properties without bank control to pay off the loan.

Issues

  1. Whether the Plaintiff in the given circumstances is entitled to an order of relief against foreclosure?
  2. What remedies are available to the parties?

Orders

  • Suit dismissed.
  • Costs awarded to the Defendant.

Rules and key headnotes

Banking & Finance — Mortgage Foreclosure — Relief Against Foreclosure — Reasonableness of Time Requested
Where a mortgagor has already received a loan restructure and moratorium but continues to default, a request for one year to sell mortgaged properties without bank control is unreasonable, particularly where interest accrues daily and the outstanding balance increases.
Land & Property — Mortgage — Mortgagee's Right to Sell — Default on Restructured Loan
A mortgagee's right to sell mortgaged property upon default on a restructured loan is inevitable and the court will not grant relief against foreclosure where the mortgagor has failed to meet obligations despite prior accommodations.
Banking & Finance — Relief Against Foreclosure — Prejudice to Depositors
In considering relief against foreclosure, the court must consider prejudice to bank depositors whose money was lent to the mortgagor, and further delay causing financial loss to the bank weighs against granting relief.
Civil Procedure — Costs — Discretion — Costs Follow the Event
Costs are in the discretion of the court but ordinarily follow the event, and an appellate court should not interfere unless the discretion has been exercised injudiciously or on wrong principles.

Legislation cited (5)

Cases cited (9)

Full judgment

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

Auto One Spares & Accessories Ltd v Equity Bank Uganda Ltd (Civil Suit No. 653 of 2023) [2026] UGCommC 103 (31 March 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.