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First Almond Company (U) Limited v Mande Constant (Civil Suit No. 752 of 2018)

High Court · [2020] UGCOMMC 182 · 2020 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit by specially endorsed plaint under Order 36 for recovery of debt
Decision
Judgment entered for the plaintiff for UGX 136,000,000 (principal and accrued interest) with costs

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that a money lending license issued retrospectively by the Uganda Microfinance Regulatory Authority validated transactions entered into during the period covered by the license, notwithstanding that the license was issued after the transactions occurred. The court found that the defendant received UGX 100,000,000 under two separate loans and breached the loan agreement by failing to repay the principal and interest in the fourth month as agreed. The plaintiff was entitled to recover the principal of UGX 100,000,000 and interest installments of UGX 36,000,000 that accrued during the period of default.

Outcome

Judgment entered for the plaintiff for UGX 136,000,000 (principal and accrued interest) with costs

Facts

The plaintiff, a licensed money lender, advanced a loan of UGX 55,000,000 to the defendant in December 2017. In March 2018, the defendant requested a top-up loan, and the parties entered into a new loan agreement dated 19 March 2018 for a total principal of UGX 100,000,000 at 12% monthly interest. The loan was to be repaid in three monthly interest installments of UGX 12,000,000 each, with the full principal and interest of UGX 112,000,000 due in the fourth month. The plaintiff disbursed UGX 32,720,000 directly to the defendant on 19 March 2018, and the balance of UGX 12,280,000 was collected by the defendant's son and guarantor, Muwanguzi Isaac, in two installments on 21 and 26 March 2018. The defendant paid interest installments in April, May, and June 2018 but failed to repay the principal and interest in the fourth month. The plaintiff issued demand notices, and when the defendant failed to pay, the plaintiff filed suit for recovery of UGX 136,000,000 (principal plus three months' default interest).

Issues

  1. Whether there was a valid money lending contract between the parties?
  2. Whether the defendant breached the terms of the money lending contract?
  3. What remedies are available to the parties?

Orders

  • The plaintiff is entitled to the amount of UGX 36,000,000 being interest installments that accrued in the time of default and the principle of UGX 100,000,000.
  • There is no award of interest as prayed for in a specially endorsed plaint.
  • Costs of the suit awarded to the plaintiff.

Rules and key headnotes

Money Lending — Licensing — Retrospective Effect of License
Where regulations required for the renewal of a money lending license under the Tier 4 Microfinance Institutions and Money Lenders Act 2016 had not been made by the license expiry date, and the regulatory authority subsequently issued a license with retrospective effect covering the period from 1 January 2018, transactions entered into during that period were validated by the retrospectively issued license.
Loan Agreements — Breach — Failure to Repay Principal
A borrower who signs a loan agreement acknowledging receipt of a specified principal sum and makes interest payments in accordance with the loan terms cannot later deny receipt of the principal. Where the borrower fails to repay the principal and interest as agreed, the borrower is in breach of contract.
Loan Agreements — Receipt by Agent — Liability of Principal
Where a borrower's son and guarantor receives loan proceeds on behalf of the borrower and acknowledges receipt in writing, the borrower is liable for the full loan amount even if the son claims to have used the money for his own purposes. The receipt of funds by an agent acting on behalf of the principal binds the principal.
Summary Procedure — Interest — Specially Endorsed Plaint
In a suit by specially endorsed plaint under Order 36 of the Civil Procedure Rules, interest may only be awarded where the document relied upon by the plaintiff contains a specific agreement on interest. The court has no power under Order 36 to award general interest not agreed upon by the parties.

Legislation cited (15)

Cases cited (8)

  • Nakawa Trading Co. Ltd v Coffee Marketing Board (Civil Suit No. 137 of 1991)
  • Tarvis vs. Moy, Davies-Smith, Vanderrekk & Co. [1936] 1 KB 399 at 404
  • Lombard North Central PLC vs. Butterworth [1987] KB 527
  • Altica Sea Carriers Corporation vs. Ferrostoal Poseidn Bank Reederei GMBH [1976] 1 Lloyds Rep. 250
  • Barclays Bank of Uganda v Howard M. Bakojia (Civil Suit No. 53 of 2017)
  • Agira Esaasi Andrew v Muhumuza Mid & Anor (Civil Suit No. 224 of 2019)
  • Uganda Transport Co. Ltd vs Count de la Pasture (1954) 21 EACA 163
  • Grofin East Africa Fund LLC v Investec Uganda Ltd & 2 ors (Civil Suit No. 374 of 2011)

Full judgment

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

First Almond Company (U) Limited v Mande Constant (Civil Suit No. 752 of 2018) [2020] UGCommC 182 (4 December 2020)
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.