Wakilii

Jaffery Forex Bureau Uganda Ltd v Abdul Karim Ali & 2 Ors (Civil Suit No. 348 of 2012)

High Court · [2015] UGCOMMC 19 · 2015 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for recovery of debt arising from dishonored cheques
Decision
Judgment entered in favor of the plaintiff for principal debt, general damages, interest, and costs

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that dishonored cheques constitute prima facie evidence of debt. The plaintiff established on a balance of probability that defendants issued cheques totaling UGX 2,040,000,000, of which only UGX 895,000,000 was paid, leaving UGX 1,200,000,000 outstanding. The defendants' claim of cash payments was unsupported by evidence. Judgment entered for the plaintiff for the principal sum plus general damages and interest at commercial rate.

Outcome

Judgment entered in favor of the plaintiff for principal debt, general damages, interest, and costs

Facts

The plaintiff forex bureau advanced financial services and foreign exchange (US Dollars) to the defendants over five years, with payment via cash or cheques. The parties maintained a running account. Around October 2010, the defendants issued cheques totaling UGX 2,040,000,000 drawn on DFCU Bank and Bank of Africa accounts. The cheques were presented but dishonored. The plaintiff held a certificate of title to land belonging to the first defendant as security. The defendants paid UGX 895,000,000, but the balance remained unpaid. The plaintiff reported the matter to police and filed suit. The defendants claimed to have paid the full debt in cash and that cheques issued totaled only UGX 1,200,000,000.

Issues

  1. Whether the plaintiff is entitled to sums claimed from the defendants.
  2. What remedies are available to the parties.

Orders

  • The defendants are condemned to refund to the plaintiff the sum of UGX 1,200,000,000.
  • The defendants, jointly and severally, to pay interest on the principal amount at the rate of 21% per annum from when the cause of action arose till payment in full.
  • The defendants, jointly and severally, to pay to the plaintiff general damages of UGX 60,000,000 which will attract interest at the rate of 6% per annum from date of delivery of this judgment till payment in full.
  • The defendants, jointly and severally, to pay the reasonable costs of this suit as incurred by the plaintiff.

Rules and key headnotes

Bills of Exchange — Dishonored Cheques — Prima Facie Evidence of Debt
A bill of exchange constitutes prima facie evidence of the sum of money printed on it and due to the person in whose favor it is drawn, with such debt only being discharged when the bill of exchange is honored.
Bills of Exchange — Cheques as Unconditional Promises to Pay
Cheques by their very nature are unconditional. Upon presentation and dishonor, the holder has a cause of action to recover the face value of the cheque, as a cheque constitutes a promise to pay and the drawer becomes liable to make good the amount written on the cheque.
Burden of Proof — Rebuttal of Debt Arising from Dishonored Cheques
Where a plaintiff establishes that cheques were issued and dishonored, the burden shifts to the defendant to prove payment. Unsupported claims of cash payments without receipts or corroborative evidence will not discharge this burden.
General Damages — Business Loss Due to Non-Payment of Debt
General damages may be awarded where the defendant's failure to repay a debt causes business loss to the plaintiff, including the need to borrow funds to keep the business operational and loss of business reputation. The assessment is compensatory and at the court's discretion.
Interest — Commercial Rate on Business Debts
Where a debt arises from a commercial transaction and the plaintiff has been kept out of the use of business funds for an extended period, interest at the commercial rate is appropriate from the date the cause of action arose until full payment.

Legislation cited (1)

Cases cited (5)

  • Naris Byarugaba v Shivam M.K.D Limited [1997] HCB 71
  • Kotecha v Mohammed [2002] 1 EA 112
  • Redfox Bureau de Change v Anke Alemayehu & Another [1997-2001] UCLR 359
  • Sembule Investments Ltd v Uganda Baati Limited (HCMA No. 0664 of 2009)
  • Dharamshi v Karsan [1974] 1 EA 41

Full judgment

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

Jaffery Forex Bureau Uganda Ltd v Abdul Karim Ali & 2 Ors (Civil Suit No. 348 of 2012) [2015] UGCommC 19 (22 January 2015)
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.