Housing finance Bank Ltd v Mugisha Charles lwanga (Originating Summons 14 of 2014)
Observed later treatment
No later-treatment classification is recorded for this judgment.
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Holding
Where a mortgagor defaults in repayment of principal and interest secured under a mortgage despite repeated demands and fails to respond to originating summons, the court will grant the mortgagee the right to foreclose and sell the mortgaged property under section 8(1) of the Mortgage Act. The mortgagee is entitled to vacant possession to facilitate sale of the property.
Outcome
Foreclosure granted; respondent directed to deliver vacant possession; property to be sold to realize outstanding debt
Facts
Housing Finance Bank Ltd advanced a credit facility of Shs 175,000,000 to Mugisha Charles Lwanga to purchase LRV 627 Folio 1 Plot 173. The respondent was to repay through monthly installments of Shs 2,434,698. The respondent defaulted in repayment of principal and interest secured under the mortgage. Despite repeated demands dating back to 2012, the respondent failed to pay the agreed monthly installments. The outstanding indebtedness stood at Shs 193,017,571 including principal loan, accrued interest and accumulated arrears. The respondent did not file an affidavit in reply or respond to the summons. The lease in respect of the mortgaged property was expiring in November 2014. The mortgage deed provided that the mortgagor shall vacate the mortgaged property to facilitate sale with vacant possession.
Issues
- Whether the respondent should be foreclosed of his right to redeem the mortgaged property on account of having failed to settle his indebtedness.
- Whether the applicant should be permitted to sell the mortgaged property upon foreclosure in accordance with the law.
- Whether the applicant should be granted costs of the suit.
Orders
- The applicant is granted the powers to exercise its rights of foreclosure.
- The property mortgaged is to be sold to realize the amount due.
- The defendant is directed to deliver vacant possession of the security or mortgaged property.
- Costs of the application are granted to the applicant.
Rules and key headnotes
Legislation cited (2)
- Civil Procedure Rules O.37 r.4
- Mortgage Act Cap 229 s.8(1)
Full judgment
The original judgment as reported. Read the original PDF before relying on any passage.