Eyapu v Centenary Bank (U) Limited (Civil Suit 346 of 2019)

Observed later treatment

Citator coverage is limited to judgments in the Wakilii corpus and source-matched treatment records. Absence of a signal is not an assertion that the case remains good law.

Holding

The court held that the plaintiff failed to comply with the statutory requirements under the Mortgage Act 2009 s.17 for transfer of a mortgage, including providing written notice to the mortgagee bank and paying all sums due including early redemption fees. The funds remitted by Standard Chartered Bank were insufficient to discharge the loan. The plaintiff remained indebted to the defendant bank. The defendant acted lawfully in debiting the guarantor's account pursuant to the guarantee agreement. The suit was dismissed and the counterclaim allowed.

Outcome

Suit dismissed; counterclaim allowed with judgment for Ugx 943,656/= plus interest and costs in favour of the defendant bank

Facts

The plaintiff obtained a secured loan of Ugx 4,000,000/= from the defendant bank in 2015, repayable over two years in monthly instalments. The loan was secured by a kibanja and guaranteed by two individuals. In March 2015, after paying only one instalment of Ugx 397,000/=, Standard Chartered Bank remitted Ugx 3,846,084/= to the plaintiff's account with the defendant for alleged loan settlement. The plaintiff claimed this fully settled his loan. However, the defendant applied the funds to the loan account normally but maintained that the total amount paid was insufficient to discharge the loan, which required total repayment of Ugx 4,759,809/= under the repayment schedule. The defendant subsequently debited the guarantor's account and listed the plaintiff with the Credit Reference Bureau as a defaulter. The plaintiff sued for breach of contract, negligence, and damages totalling Ugx 100,000,000/=, claiming loss of credit access and business loss. The defendant counterclaimed for the outstanding balance.

Issues

1. Whether the plaintiff's loan balance with the defendant was off-set in full by Standard Chartered Bank.
2. Whether the plaintiff is indebted to the defendant.
3. Whether the defendant breached its contract with the plaintiff as its customer when it froze the plaintiff's guarantor accounts and debited money to off-set the plaintiff's loan balance.
4. What remedies are available to the parties?

Orders

• Suit dismissed with costs to the defendant.
• Judgment entered in favour of the defendant on its counterclaim.
• Plaintiff to pay the defendant Ugx 943,656/= being the outstanding loan balance as at 30th April 2019.
• Penal/default interest at 0.5% per month to accrue on all arrears from the date of default until payment in full.
• Interest at court rate awarded on the decretal sum from the date of judgment until payment in full.
• Costs of the counterclaim awarded to the defendant.

Rules and key headnotes

Legislation cited (2)

• Mortgage Act 2009 s.17
• Contracts Act 2010 s.71

Cases cited (1)

• Stroms v Hutchinson [1905] AC 515

Cases citing this judgment (1)

How later Ugandan judgments in the Wakilii corpus have cited this case. Treatment labels come from Sequitur — Uganda’s citator — each backed by a verbatim span from the citing judgment, and are not an assertion that this case is, or is not, good law.

• Bintubizibu Fortunate Nsubuga v Grace Nabbosa and Another (Miscellaneous Application No. 405 of 2025)

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