Wakilii

Cairo Bank Uganda v Banga Michael Ssemugabi and Another (Miscellaneous Application No. 1406 of 2025)

High Court · [2025] UGCOMMC 336 · 2025 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for eviction order and vacant possession arising from mortgage enforcement following public auction sale
Decision
Respondents ordered to deliver vacant possession of the mortgaged property to the applicant

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court held that an application for vacant possession by a mortgagee following public auction sale may properly be brought by Notice of Motion under section 23(2)(c) of the Mortgage Act, notwithstanding pending suits challenging the sale. Where the mortgagee has complied with statutory notice requirements and the mortgaged property has been lawfully sold, the court may grant vacant possession without rendering pending suits nugatory, as any loss can be compensated by damages.

Outcome

Respondents ordered to deliver vacant possession of the mortgaged property to the applicant

Facts

Cairo Bank Uganda advanced a loan of UGX 412,000,000 to the respondents on 18 February 2020, secured by a mortgage over land at Kisugu. The respondents defaulted. The bank issued a notice of default on 17 November 2022 requiring payment of UGX 617,963,988 within 45 working days. The respondents failed to pay. The bank advertised the property for sale. The respondents instituted Civil Suit No. 624 of 2024 and obtained an interim injunction conditioned on payment of 30% of the outstanding amount within 45 days. The respondents failed to meet the condition. The property was re-advertised and sold by public auction on 7 February 2025 to Dr. Byarugaba Jover for UGX 850,000,000. The certificate of title was transferred to the purchaser on 13 June 2025. The bank sought vacant possession. The respondents refused to vacate and filed Civil Suit No. 1060 of 2025 challenging the sale as fraudulent and illegal.

Issues

  1. Whether this application is competent before this court.
  2. Whether the applicant is entitled to an order of vacant possession of property and developments comprised in Block 244 Plot 4646 Kyadondo land at Kisugu.
  3. Whether the grant of the application shall render Civil Suits 624 of 2024 and Civil Suit No. 1060 of 2025 nugatory.

Orders

  • Application allowed.
  • The respondents forthwith deliver to the applicant vacant possession of the mortgaged property, described as Block 244 Plot 4646 Kyadondo land at Kisugu.
  • The respondents pay costs of this application.

Rules and key headnotes

Civil Procedure — Originating Summons — Application by Notice of Motion — Competence where pending suits exist
Where there are pending suits involving the same parties and subject matter, an application for vacant possession may properly be brought by Notice of Motion rather than by Originating Summons, as Originating Summons cannot be filed where there is a pending suit involving the same parties and subject matter.
Banking & Finance — Mortgage Enforcement — Power of Mortgagee to Take Possession — Requirements under Mortgage Act s.23
Under section 23 of the Mortgage Act, a mortgagee may exercise the power to take possession of mortgaged land by court order where: (a) a notice of default has been issued giving the mortgagor 45 working days to cure the default; (b) the mortgagor has failed to rectify the default; and (c) a notice of not less than five working days of intention to enter into possession has been issued.
Statutory Interpretation — Purposive Approach — Policy Considerations in Mortgage Enforcement
In interpreting section 23 of the Mortgage Act, the court must consider the policy objectives behind the provision, which include protection of the lender's security, protection of the borrower's interest through due process, efficient enforcement, judicial oversight, public policy, and market stability.
Banking & Finance — Mortgage — Service of Notices — Contractual Mode of Service
Where parties to a mortgage deed have stipulated that service by post shall be effective service, proof of posting constitutes proof of service, and the mortgagee is not required to effect personal service.
Civil Procedure — Vacant Possession — Effect on Pending Suits — Nugatory Orders
The determination of vacant possession does not render pending suits challenging the validity of a mortgage sale nugatory, as it merely addresses occupancy status and does not resolve underlying disputes concerning ownership or compliance with statutory requirements, which remain subject to adjudication.
Civil Procedure — Vacant Possession — Adequacy of Damages — Balance of Convenience
Where an order for vacant possession is made and a pending suit is subsequently decided in favour of the mortgagor, any loss can be compensated by an award of damages, provided the mortgagee is not shown to be impecunious and unable to pay such damages.

Legislation cited (9)

Cases cited (4)

  • Chaudhri Thakur Das and Others v Chaudhri Jairaj Singh [1903] UKPC 77
  • Housing Finance Bank Limited v Silk Events Limited and Another (High Court Civil Appeal No. 0300 of 2021)
  • Escoigne Properties Ltd v Inland Revenue Commissioners [1958] 1 All ER 406
  • Heydon's Case (1584) 3 Co Rep 7a

Full judgment

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Cairo Bank Uganda v Banga Michael Ssemugabi and Another (Miscellaneous Application No. 1406 of 2025) [2025] UGCommC 336 (20 September 2025)
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.