Wakilii

Hajmohamed v Yahooda (Civil Appeal No. 49 of 1950)

East African Court of Appeal · [1951] EACA 113 · 1951 Appeal Partly Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Appeal from decision of H.M. Supreme Court of Aden confirming sale of mortgaged property in execution of decree
Decision
Sale of one property confirmed; sale of other property remitted to Supreme Court to determine whether reserve price was fixed and, if not, to set aside sale and order new sale with proper reserve

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Rule 299 of the Aden Supreme Court Rules of Court mandates that when a mortgagee is granted leave to bid at a sale in execution, a reserve price must be fixed. The words 'a reserve price as regards him shall be fixed' are mandatory. The discretionary clause 'unless the Court shall otherwise think fit' relates only to the amount of the reserve, not whether to fix one at all. The reserve must either equal the amount due for principal, interest and costs, or be fixed at a lower figure in the court's discretion. Sale confirmed as to property purchased by third party; order confirming sale set aside as to property purchased by mortgagee for failure to fix reserve price.

Outcome

Sale of one property confirmed; sale of other property remitted to Supreme Court to determine whether reserve price was fixed and, if not, to set aside sale and order new sale with proper reserve

Facts

The respondent mortgagee sued the appellant mortgagor for principal debt and interest on a mortgage of two houses securing Rs. 30,000. Judgment was obtained by consent on 11 March 1949 for Rs. 33,422. The appellant defaulted on payment terms. On 14 February 1950, the appellant's pleader consented to an order for sale of the mortgaged properties. Particulars filed on 28 March 1950 valued the houses at Rs. 20,000 (Grant No. 1335) and Rs. 15,000 (Grant No. 1150). The respondent applied for leave to purchase the properties. On 1 May 1950, the appellant's pleader raised no objection to the stated values but submitted that an upset price should be fixed. The learned Judge recorded 'Order by consent; leave to bid' without mentioning any reserve price. At the sale on 25 May 1950, Grant No. 1335 was knocked down to the respondent for Rs. 19,000 and Grant No. 1150 to a third party for Rs. 17,600. The appellant applied to set aside the sale on grounds the prices were too low. The Supreme Court dismissed the application and confirmed the sale.

Issues

  1. Whether Rule 299 of the Aden Supreme Court Rules of Court mandates the fixing of a reserve price when a mortgagee is granted leave to bid at a sale in execution of a mortgage decree.
  2. Whether the words 'unless the Court shall otherwise think fit' in Rule 299 give the court discretion to dispense with fixing a reserve price entirely or only discretion as to the amount of the reserve.
  3. Whether the sale should be set aside where no reserve price was fixed for the mortgagee purchaser.

Orders

  • Appeal allowed in part.
  • Order of the Supreme Court of Aden confirming the sale set aside in so far as it relates to the property comprised in Grant No. 1335 purchased by the respondent.
  • Sale of property comprised in Grant No. 1150 purchased by A. H. H. Abadi confirmed.
  • Supreme Court directed to ascertain whether a reserve price was fixed as regards the respondent in respect of Grant No. 1335.
  • If no reserve price was fixed, Supreme Court directed to set aside the sale, fix a reserve price in accordance with Rule 299, and order a new sale.
  • Each party to bear own costs in respect of property comprised in Grant No. 1335.
  • Appellant to pay respondent's costs of appeal in respect of property comprised in Grant No. 1150, assessed at half the amount the Taxing Officer would have taxed had the appeal wholly failed.

Rules and key headnotes

Civil Procedure — Execution of Decrees — Sale of Mortgaged Property — Reserve Price for Mortgagee Bidder
Where a mortgagee is granted leave to bid at a sale in execution of a mortgage decree, Rule 299 of the Aden Supreme Court Rules of Court mandates that a reserve price as regards the mortgagee shall be fixed.
Civil Procedure — Statutory Interpretation — Mandatory versus Directory Provisions
The words 'a reserve price as regards him shall be fixed' in Rule 299 are mandatory and are not qualified by the subsequent words 'unless the Court shall otherwise think fit'. The discretionary clause relates only to the amount of the reserve which must be fixed, not to whether a reserve must be fixed at all.
Civil Procedure — Execution of Decrees — Reserve Price — Quantum
When a reserve price is fixed under Rule 299 for a mortgagee bidder, it must either equal the amount due for principal, interest and costs (or in the case of multiple lots, add up to that amount), or in the court's discretion be fixed at a lower figure where the amount due greatly exceeds the true value of the property or the value has markedly depreciated since the date of the mortgage.
Civil Procedure — Execution of Decrees — Protection of Mortgagors
Rule 299 is aimed at preventing mortgagees from taking undue advantage of mortgagors by buying in mortgaged property cheaply at forced sales and saddling the mortgagor with a personal decree for the balance of the decretal amount.
Civil Procedure — Execution of Decrees — Material Irregularity — Failure to Fix Reserve Price
Where a mortgagee is granted leave to bid and no reserve price is fixed as required by Rule 299, this constitutes a material irregularity warranting setting aside of the sale as regards the property purchased by the mortgagee.
Civil Procedure — Costs — Scandalous Allegations in Affidavits
Where an appellant makes scurrilous and unjustifiable imputations against the judge and pleaders in an affidavit in support of a memorandum of appeal, the court will not allow such scandalous allegations to be made with impunity and may deprive the appellant of costs even where the appeal succeeds in part.

Legislation cited (4)

  • Aden Supreme Court Rules of Court Rule 293
  • Aden Supreme Court Rules of Court Rule 298(1)
  • Aden Supreme Court Rules of Court Rule 299
  • Aden Supreme Court Rules of Court Rule 310(1)

Full judgment

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Hajmohamed v Yahooda (Civil Appeal No. 49 of 1950) [1951] EACA 113 (1 January 1951)
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.