Wakilii

Housing Finance Bank Limited v Seninde and Another (Civil Suit Originating Summons 7 of 2021)

High Court · [2022] UGCOMMC 138 · 2022 Foreclosure Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Originating summons for foreclosure and sale of mortgaged property following loan default
Decision
Property foreclosed and ordered sold by public auction; vacant possession granted to plaintiff

Observed later treatment

No later-treatment classification is recorded for this judgment.

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.

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 granted foreclosure of the mortgaged property after the defendants defaulted on the loan and failed to file a defence. The equity of redemption was extinguished. The court ordered sale by public auction rather than private treaty, as required by the Mortgage Act where the mortgagor does not consent to private sale. Vacant possession was ordered to facilitate the sale. Costs were awarded to the plaintiff as the successful party.

Outcome

Property foreclosed and ordered sold by public auction; vacant possession granted to plaintiff

Facts

The 1st defendant applied for a loan of UGX 150,000,000 from the plaintiff bank in July 2011 for completion of construction of a residential building. The loan was approved at 18.5% per annum, repayable over 16 years with monthly instalments of UGX 2,441,928. Both defendants mortgaged land comprised in Kyadondo Block 244 Plot 6170 at Kisugu, Kampala, as security. The mortgage was registered on 14 November 2011. The 1st defendant defaulted on the loan. A default notice was issued on 14 November 2019. The plaintiff advertised the property for sale on 14 September 2020 and again on 25 August 2021, but the defendants prevented access for valuation and inspection. Neither defendant filed a defence to the originating summons.

Issues

  1. Whether the plaintiff (mortgagee) is entitled to foreclose and sell the mortgaged property of the mortgagor to recover all sums of money due in respect of the principal debt, interest and other incidental charges.
  2. Whether the mortgagee is entitled to sell the property by private treaty or public auction.
  3. Whether the plaintiff is entitled to an order of vacant possession of the suit property.
  4. Whether the plaintiff should be granted the costs of the suit.

Orders

  • The right, title and equity of redemption of both defendants to and in the mortgaged property described as Kyadondo Block 244 Plot 6170 being 0.084 hectares of land situated at Kisugu, in Kampala, are hereby foreclosed for purposes of sale.
  • Sale of the said mortgaged property shall be by public auction in accordance with the relevant provisions of The Mortgage Act, 8 of 2009 and The Mortgage Regulations, 2012.
  • The defendants are ordered forthwith to deliver to the plaintiff or as the plaintiff directs, possession of the mortgaged property or of such part of it as is in the possession of the defendants.
  • Costs of the suit awarded to the plaintiff.

Rules and key headnotes

Mortgage Foreclosure — Requirements for Foreclosure Order
A mortgagee is entitled to a final order of foreclosure where the mortgagor defaults on the secured debt and fails to exercise the right of redemption, and where the defendants do not challenge the process or assert their equity of redemption.
Mortgage Enforcement — Sale by Public Auction vs Private Treaty
Under section 28(1)(d) of the Mortgage Act 2009, where a mortgagee exercises the power of sale, that sale must be by public auction unless the mortgagor consents to a sale by private treaty, and Regulation 8(1) of the Mortgage Regulations 2012 requires sale by public auction subject to the Act and Regulations.
Originating Summons — Appropriate Procedure for Mortgage Enforcement
An originating summons under Order 37 rule 4 of the Civil Procedure Rules is the appropriate procedure for a mortgagee to seek foreclosure and sale where the main point at issue is one of law and there is no substantial dispute of fact.
Equity of Redemption — Effect of Foreclosure
A final order of foreclosure extinguishes the mortgagor's equity of redemption and puts an end to the right to redeem the property, allowing the mortgagee to obtain title free and clear of the defendants' interests and to transfer the property to a purchaser.

Legislation cited (9)

Full judgment

↓ Download PDF

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

Housing Finance Bank Limited v Seninde and Another (Civil Suit Originating Summons 7 of 2021) [2022] UGCommC 138 (16 May 2022)
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.