Wakilii

Ishanga & Another v Bank of Baroda (U) Limited & 2 Others (Miscellaneous Application 74 of 2024)

High Court · [2024] UGHC 256 · 2024 Application Partly Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for temporary injunction arising from civil suit challenging foreclosure sale of mortgaged property
Decision
Temporary injunction granted to preserve 255 subdivided plots pending main suit; application dismissed as against the 2nd respondent who had already taken possession of sold property

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that where mortgaged property had already been sold by public auction and transferred to a purchaser in possession, there was no status quo for the mortgagor to preserve and no injunction could be granted. However, an injunction was granted to preserve 255 subdivided plots still registered in the applicants' names pending determination of a debt settlement arrangement issue in the main suit.

Outcome

Temporary injunction granted to preserve 255 subdivided plots pending main suit; application dismissed as against the 2nd respondent who had already taken possession of sold property

Facts

The 2nd applicant obtained three loan facilities from the 1st respondent bank totaling UGX 10.5 billion, secured by three properties including FRV 1072 Folio 15 Plot 1 Kitunzi Road and land at Kashari comprising 255 subdivided plots. The 2nd applicant defaulted on repayments. The 1st respondent issued notices of default and sale and advertised the FRV 1072 property for public auction. The property was sold to the 2nd respondent who took possession and demolished the existing structure. The applicants then filed a main suit challenging the sale as fraudulent and illegal, and this application seeking temporary injunctions to restrain dealings with the properties. The applicants claimed a debt settlement arrangement existed with the 1st respondent. By the time of hearing, the 2nd respondent was registered proprietor and in possession of FRV 1072 property, while the 255 Kashari plots remained registered in the applicants' names with titles held by the bank.

Issues

  1. Whether a temporary injunction order should be granted to restrain dealings with mortgaged property that had been sold by public auction.
  2. Whether the applicants were required to make a 30% deposit under Regulation 13(1) of the Mortgage Regulations 2012.
  3. Whether the applicants established a prima facie case with probability of success.
  4. Whether the applicants would suffer irreparable injury if the injunction was not granted.
  5. Where the balance of convenience lay between the parties.

Orders

  • Application granted in part.
  • Status quo in respect to the 255 certificates of title subdivided out of land formerly comprised in Kashari Block 1 plots 89 and 148 is maintained until HCCS 22 of 2024 is heard and determined.
  • The 1st respondent shall pay the applicant's costs of the application.
  • The application against the 2nd respondent is dismissed with costs.

Rules and key headnotes

Injunctions — Temporary Injunctions — Status Quo — Property Already Sold and Transferred
Where mortgaged property has already been sold by public auction, transferred to the purchaser, and the purchaser has taken possession, there is no status quo for the mortgagor to preserve and an application for temporary injunction to restrain dealings with such property must fail.
Mortgages — Sale of Mortgaged Property — Regulation 13(1) Deposit Requirement — Applicability
The requirement under Regulation 13(1) of the Mortgage Regulations 2012 to deposit 30% of the forced sale value or outstanding amount applies only where an applicant seeks to adjourn or stop a sale by public auction, and does not apply where the property has already been sold or where there is no evidence of an imminent sale.
Mortgages — Sale by Public Auction — Protection of Purchaser — Section 29 Mortgage Act and Regulation 16(1)
A purchaser of mortgaged property sold by public auction receives protection under Section 29 of the Mortgage Act 2009 and Regulation 16(1) of the Mortgage Regulations 2012, which provides that irregularities in conducting the sale do not vitiate the sale, though the mortgagor may bring an action for damages.
Mortgages — Irreparable Injury — Mortgaged Property — Sale Contemplated at Mortgaging
When property is mortgaged to a bank, sale of the property upon default is contemplated at the time of mortgaging, and claims of irreparable injury are weakened where the mortgagor had opportunities to seek court redress upon receipt of notice of default, notice of sale, or publication of advertisement but failed to do so.
Injunctions — Prima Facie Case — Debt Settlement Arrangement — Triable Issues
Where parties to a mortgage agree to a debt settlement arrangement and there are triable questions about its impact on the mortgage relationship, a prima facie case is established sufficient to justify preserving property still registered in the mortgagor's name pending determination of the main suit.

Legislation cited (14)

Cases cited (8)

  • Giella v Casman Brown [1973] EA 358
  • Kiyimba Kaggwa v Abdul Katende (Civil Suit No. 2109 of 1984)
  • Simba Investments v Vantage Mezaine Fund (Miscellaneous Application 141 of 2022)
  • Yefusa Goloba v RL Jain (Miscellaneous Application 334 of 2013)
  • Cairo Bank & Another v John Kanyago (Miscellaneous Application 1559 of 2022)
  • Ferdsult Engineering Services Limited & Another v AG & ABSA Bank Uganda (Constitutional Petition 18 of 2021)
  • Resty Nantongo v David Kayondo (Supreme Court Civil Appeal 1 of 1994)
  • Kiyimba Kaggwa v Haji Abudul Nasser Katende [1985] HCB 43

Full judgment

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

Ishanga & Another v Bank of Baroda (U) Limited & 2 Others (Miscellaneous Application 74 of 2024) [2024] UGHC 256 (3 May 2024)
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.