Wakilii

I & M Bank Limited v Mango & Another (Miscellaneous Appeal 18 of 2023)

High Court · [2023] UGCOMMC 188 · 2023 Appeal Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Appeal from the ruling of the Deputy Registrar in Miscellaneous Application No. 0690 of 2023 arising from Civil Suit No. 393 of 2023
Decision
Appeal allowed; injunction granted subject to deposit of 30% security within 45 days; matter remitted to Deputy Registrar for enforcement of substituted orders

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court held that Regulation 13 of the Mortgage Regulations, 2012 applies once a notice of default has been issued, triggering the foreclosure process. A court granting an injunction to stop or postpone such foreclosure must condition the injunction on prior deposit of a 30% security, calculated either on the forced sale value or on the outstanding loan debt. The absence of a valuation report does not prevent application of the regulation. The appeal was allowed and the injunction conditioned on deposit of 30% of the outstanding debt.

Outcome

Appeal allowed; injunction granted subject to deposit of 30% security within 45 days; matter remitted to Deputy Registrar for enforcement of substituted orders

Facts

The 2nd respondent (Fontana Auto Parts) obtained loans from the appellant bank secured by mortgages. The borrower defaulted and the bank issued notices of default dated 22nd and 23rd May 2023 and advertised the security for sale. The 1st respondent (Nadia Manji, a director) filed the main suit contesting authenticity of loan documents and applied for a temporary injunction to stop enforcement of the facility. The Deputy Registrar granted the injunction on 21st July 2023 but declined to condition it on deposit of 30% security as required by Regulation 13(1) of the Mortgage Regulations, finding that no advertised sale was underway. The bank appealed.

Issues

  1. Whether the appeal and the 1st respondent's affidavit in reply to the appeal are properly before the Court.
  2. Whether the learned Deputy Registrar erred in law and fact when she declined to enforce Regulation 13 of the Mortgage Regulations, 2012 while determining Misc. Application No. 0018 of 2023.
  3. What remedies are available to the parties.

Orders

  • Appeal allowed.
  • Orders of the learned Deputy Registrar set aside.
  • A temporary injunction is granted restraining the appellant from enforcing the security until disposal of the main suit, subject to prior deposit of USD 865,235.21 (30% of USD 2,884,117.35) within 45 days from the date of this ruling.
  • Costs of the appeal and of Misc. Application No. 0690 of 2023 to abide by the outcome of the main suit.

Rules and key headnotes

Banking & Finance — Mortgage Foreclosure — Commencement of Sale Process — Notice of Default
The process of sale of mortgaged security commences at the time of issuance of a notice of default under Section 19 of the Mortgage Act, not at the time a notice of sale is published or advertised.
Banking & Finance — Mortgage Regulations — Application of Regulation 13 — Conditions for Temporary Injunction
Regulation 13(1) of the Mortgage Regulations, 2012 applies once a notice of default has been issued. Where a court grants an injunction that would effectively stop or postpone foreclosure, it must condition the injunction on prior deposit of 30% security, except where the applicant is the spouse of the mortgagor as per Regulation 13(6).
Banking & Finance — Mortgage Regulations — Calculation of Security Deposit — Valuation Report
The absence of a valuation report does not preclude the application of Regulation 13 of the Mortgage Regulations. In the absence of a valuation report, the court may order that the 30% security deposit be calculated on the basis of the outstanding loan debt as stated in the notice of default.
Civil Procedure — Affidavits — Defective Jurat — Place of Swearing
Where an affidavit states that it was sworn at one location but before a commissioner or notary public located in another jurisdiction, and this contradiction is not explained, the jurat is incurably defective as to a matter of substance and the affidavit must be struck off the record.
Civil Procedure — Appeals — Service of Notice of Motion — Time Computation
The timeline for service of an appeal begins to run from the date the motion is assigned a hearing date by the court, not from the date it is admitted and signed by the Deputy Registrar, where the motion cannot be served until a hearing date is assigned.

Legislation cited (10)

Cases cited (4)

  • Kifamunte Henry v Uganda (Supreme Court Criminal Appeal No. 10 of 1997)
  • Ganafa Peter Kisawuzi v DFCU Bank Limited (CA Civ. Application No. 64 of 2016)
  • J. B. Magara v Katehangwa (HCMA No. 0143 of 2000)
  • Performance Furnishings (U) Ltd & Anor v Diamond Trust Bank (U) Ltd (High Court Misc. Application No. 278 of 2020)

Full judgment

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

I & M Bank Limited v Mango & Another (Miscellaneous Appeal 18 of 2023) [2023] UGCommC 188 (29 November 2023)
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.