Wakilii

Jonas Tumwine v Ugafin Limited (Originating Summons 45 of 2024)

High Court · [2025] UGCOMMC 524 · 2025 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Originating summons seeking redemption of mortgaged land under Section 98 of the Civil Procedure Act and Order 37 Rule 4, Order 51 Rules 1 and 3 of the Civil Procedure Rules, heard ex parte
Decision
Plaintiff granted redemption of mortgaged land upon payment of principal sum to Secretary to the Treasury; special certificate of title to be issued upon discharge of mortgage

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

A mortgage remains valid and enforceable even where the mortgagee was never licensed to conduct lending business, provided the transaction was not part of a series constituting unlicensed financial business. The lapse of the 12-year limitation period under the Limitation Act bars court enforcement actions but does not invalidate the mortgage itself. Where a mortgagee cannot be found, the mortgagor may redeem by paying the outstanding sum to the Secretary to the Treasury under Mortgage Act s.15(1), whereupon the Commissioner Land Registration shall issue a special certificate of title.

Outcome

Plaintiff granted redemption of mortgaged land upon payment of principal sum to Secretary to the Treasury; special certificate of title to be issued upon discharge of mortgage

Facts

The Plaintiff is the registered proprietor of land comprised in Busiro Block 395 Plot 394 at Sekiwunga, Wakiso District. On 25 January 2011, he borrowed UGX 40,000,000 from the Defendant, secured by a mortgage over the suit land which was registered on the certificate of title. The suit land is developed with the Plaintiff's home. While attempting to repay the loan, the Plaintiff discovered the Defendant had closed its business. He contacted Bank of Uganda and Uganda Microfinance Regulatory Authority, both of which confirmed they had never licensed the Defendant to operate in Uganda. His attempts to contact the Commissioner Land Registration and Secretary to the Treasury for intervention were unsuccessful. The Defendant could not be found and did not appear at the hearing. The Plaintiff sought orders for redemption of the land, issuance of a special certificate of title, removal of the mortgage encumbrance, and a permanent injunction.

Issues

  1. Whether the suit mortgage is valid and enforceable.
  2. Whether the Plaintiff can redeem the suit land.
  3. What reliefs are available.

Orders

  • The Plaintiff shall pay UGX 40,000,000 to the Secretary to the Treasury in full and final settlement of the 25th January 2011 loan.
  • Upon full compliance with payment, the mortgage of the land comprised in Busiro Block 395 Plot 394 situate at Sekiwunga, Wakiso District shall be deemed discharged.
  • The Secretary to the Treasury shall issue written proof of receipt of the funds to the Plaintiff.
  • Upon being presented with proof of receipt, the Commissioner Land Registration shall cancel the mortgage encumbrance on the certificate of title and issue the Plaintiff with a special certificate of title for the land, subject to payment of requisite fees.
  • Each party shall bear their own costs.

Rules and key headnotes

Mortgage Law — Validity of Mortgage — Unlicensed Lender — Distinction Between Unlicensed Financial Business and Isolated Lending Transaction
A mortgage is not invalid merely because the mortgagee was never licensed by Bank of Uganda or Uganda Microfinance Regulatory Authority to conduct lending business. To invalidate a loan and mortgage on grounds of illegality arising from lack of licence, evidence must prove that the lender was conducting financial or microfinance business without a licence. A single money lending transaction does not constitute carrying on financial business requiring a licence. Informal lending between acquaintances or friends is a vital part of Ugandan society and does not require licensing.
Mortgage Law — Limitation — Effect of Lapse of 12-Year Period — Distinction Between Invalidity and Unenforceability by Court Action
Section 18 of the Limitation Act bars actions for enforcement of mortgages after 12 years from the date the right to sue arises. The lapse of the limitation period does not invalidate the mortgage or relieve the mortgagor from obligations secured by it. It only removes court action from the list of enforcement options available to the mortgagee. The mortgagee remains entitled to enforce other lawful reliefs under the law and under the mortgage contract to recover monies owed.
Mortgage Law — Right of Redemption — Once a Mortgage Always a Mortgage — Mortgagor's Entitlement to Redeem
Once a mortgage, always a mortgage. No bargain or term can be incorporated into a mortgage agreement to prevent the mortgagor from redeeming the mortgaged property. A mortgagor is entitled to redeem mortgaged property as long as the duty secured by the mortgage is settled in full. The right to redeem is invariably and inflexibly conditioned on prior full repayment of the loan.
Mortgage Law — Redemption Where Mortgagee Cannot Be Found — Payment to Secretary to the Treasury — Mortgage Act s.15(1)
Where a mortgagee is absent from Uganda or their whereabouts are unknown and there is no person authorised to discharge the mortgage, it is lawful for the Secretary to the Treasury to receive the mortgage money with all arrears of interest due on it in trust for the mortgagee under Mortgage Act s.15(1). Upon such payment, interest on the mortgage ceases to run. The court may direct the mortgagor to pay the outstanding loan sum to the Secretary to the Treasury in place of the absent mortgagee.
Land Registration — Special Certificate of Title — Issuance Where Original Certificate Held by Absent Mortgagee
Where a mortgagee who has taken possession of the mortgagor's certificate of title can no longer be found, and the mortgagor complies with Mortgage Act s.15(1) by paying the outstanding sum to the Secretary to the Treasury, it is fair, just and reasonable for the Commissioner Land Registration to issue a special certificate of title to the mortgagor in place of the duplicate certificate held by the absent mortgagee.
Costs — Discretion of Court — No Order as to Costs Where Defendant Cannot Be Found
While costs ordinarily follow the event and are awarded to the successful party, it is fair, just and reasonable for each party to bear their own costs where the defendant can no longer be found. Awarding costs against a party who cannot be found is tantamount to issuing an order that cannot be enforced, and court orders cannot be issued in vain.

Legislation cited (8)

Cases cited (2)

  • Olara Denis Michael v Omony Stephen Khesmodel (HCMA No. 1 of 2022)
  • Simon Kato Bugoba v Samuel Kigozi (HCCS No. 543 of 2004)

Full judgment

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

Jonas Tumwine v Ugafin Limited (Originating Summons 45 of 2024) [2025] UGCommC 524 (30 December 2025)
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.