Wakilii

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

High Court · [2026] UGCOMMC 176 · 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
Suit dismissed with costs to the Defendant

Observed later treatment

No later-treatment classification is recorded for this judgment.

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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 dismissed the plaintiff's application for relief against foreclosure under section 33 of the Mortgage Act. The plaintiff had defaulted on two restructured loan facilities totalling UGX 3.65 billion secured by mortgage over two properties. The court held that granting the plaintiff an additional year to sell the mortgaged properties without bank control was unreasonable and prejudicial to depositors, particularly where the loan had already been restructured once and the plaintiff had failed to meet obligations for over two years since the default notice.

Outcome

Suit dismissed with costs to the Defendant

Facts

The plaintiff obtained two loan facilities from the defendant bank: UGX 3 billion on 22 January 2019 and UGX 650 million on 25 September 2019, secured by mortgage over two properties in Kampala. The loans were repayable in 120 monthly instalments. Due to COVID-19, the facilities were restructured on 8 June 2020 with a six-month moratorium. The plaintiff subsequently defaulted on 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 independently and pay off the loan. The plaintiff admitted during cross-examination that no payments had been made since the default notice over two years prior.

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

  • The suit is dismissed.
  • Costs awarded to the Defendant.

Rules and key headnotes

Banking & Finance — Mortgage Foreclosure — Relief Against Foreclosure — Reasonableness of Time Requested
Where a mortgagor seeks relief against foreclosure under section 33 of the Mortgage Act, the court must assess whether the time requested is reasonable taking into account that interest accrues daily upon default and the outstanding balance keeps increasing, and that the funds advanced are depositors' money which the bank is obliged to revert to depositors as needed.
Banking & Finance — Mortgage Foreclosure — Relief Against Foreclosure — Effect of Prior Restructuring
A mortgagee's right to sell mortgaged property upon default on a restructured loan is inevitable, and a mortgagor who has already benefited from loan restructuring and moratorium but continues to default is not entitled to further extensions of time to pay.
Banking & Finance — Mortgage Foreclosure — Relief Against Foreclosure — Failure to Service Loan
Failure by a mortgagor to service the loan or to pay the lender or to pay to court what has been admitted takes the mortgagor outside the realm of exercise of the court's jurisdiction to grant relief against foreclosure.

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 176 (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.