Wakilii

Khurram v Diamond Trust Bank (U) Limited 2 Others (Company Cause 30052 of 2023)

Tribunal · [2024] UGRSB 6 · 2024 Preliminary Objections Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application to the Registrar of Companies to investigate the affairs of EK-KEN (U) Ltd, with preliminary objections raised by the 1st and 2nd Respondents challenging procedure, locus standi, and jurisdiction
Decision
Preliminary objections dismissed; matter to proceed to hearing on merits

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Holding

The Registrar of Companies overruled all five preliminary objections raised by the respondents. The application was properly brought under Regulation 21 of the Companies (Powers of Registrar) Regulations, 2016, which requires applications to be in writing without verification or commissioning. The applicant, as biological son and beneficiary of the late Rubina Ahmed who held 50% shares in the company, has locus standi to sue as a representative of the estate without prior grant of letters of administration. The Registrar has jurisdiction to investigate company affairs under Regulation 3(j), and this jurisdiction is not ousted by concurrent succession proceedings in the High Court Family Division concerning revocation of probate, as the subject matters are distinguishable.

Outcome

Preliminary objections dismissed; matter to proceed to hearing on merits

Facts

Khurram Ahmed, biological son of the late Rubina Ahmed who held 50% shares in EK-KEN (U) Limited, filed an application seeking the Registrar of Companies to investigate the company's affairs, conduct a comprehensive audit, and hold respondents liable for any illegalities in relation to alienation of company assets. The 1st and 2nd Respondents raised five preliminary objections challenging: (1) procedural defects for failure to verify and commission the application; (2) applicant's locus standi as he was not a registered shareholder or member and had not obtained letters of administration; (3) invocation of two concurrent jurisdictions; (4) that the matter raised succession issues beyond the Registrar's jurisdiction; and (5) that the applicant had not been declared a personal representative as required by law. A concurrent Citation No. 1547 of 2023 was pending in the High Court Family Division seeking revocation of a grant of probate issued to the 2nd Respondent.

Issues

  1. Whether the application should be expunged from the record for lack of proper procedure?
  2. Whether the applicant has locus standi to bring this application before the Registrar of Companies?
  3. Whether the applicant is invoking two jurisdictions of intervention in respect of EK-KEN (U) Limited?
  4. Whether the application raises succession matters to which the Registrar of Companies lacks jurisdiction?
  5. Whether the applicant brought the application as a personal representative of Late Rubina Ahmed without being declared so as required by law?

Orders

  • All preliminary objections raised by the 1st and 2nd Respondents are overruled.
  • No order as to costs.
  • The application shall be heard on its merits.

Rules and key headnotes

Company Law — Applications to Registrar — Procedural Requirements — Form and Verification
An application to the Registrar of Companies under Regulation 21 of the Companies (Powers of Registrar) Regulations, 2016 need only be in writing and does not require verification or commissioning. The requirement for verification and commissioning under Regulation 26(1) applies only to petitions brought under Section 247 of the Companies Act, 2012 (As Amended) relating to oppression of a member of a company.
Company Law — Evidence Before Registrar — Mode of Giving Evidence
Section 288 of the Companies Act, 2012 (As Amended) confers discretion on the Registrar of Companies to determine the mode of giving evidence, including the power to take evidence viva voce or by statutory declaration. The Registrar is not restricted to evidence adduced only by way of statutory declaration.
Company Law — Locus Standi — Beneficiary of Deceased Shareholder
A beneficiary of a deceased shareholder has locus standi to bring an application before the Registrar of Companies to protect interests in the company without first obtaining letters of administration, provided the interests sought to be protected are germane to the estate. The biological son of a deceased shareholder holding 50% shares in a company has sufficient interest to confer locus standi as a representative of the estate on all matters regarding the affairs of the company.
Succession & Estates — Legal Representative — Definition and Scope
The term 'legal representative' under Section 2(k) of the Civil Procedure Act Cap 71 is inclusive in nature and not confined to administrators. It includes persons who may or may not be the administrator of the estate but who in law represent the estate of a deceased person, including persons entitled to succeed to the personal or real estate of the deceased. This definition is wider than 'personal representative' under Section 2(r) of the Succession Act Cap 162 (As Amended).
Company Law — Jurisdiction of Registrar — Concurrent Proceedings in High Court
Regulation 4 of the Companies (Powers of the Registrar) Regulations, 2016 prohibits the Registrar from hearing matters pending before court. However, this prohibition applies only where there are concurrent proceedings concerning a similar subject matter with the same applicant seeking the same remedies. The Registrar retains jurisdiction to investigate company affairs under Regulation 3(j) even where succession proceedings concerning revocation of probate are pending in the High Court Family Division, as the subject matters are distinguishable.
Civil Procedure — Preliminary Objections — Nature and Scope
A preliminary objection consists of a point of law which has been pleaded or which arises by clear implication out of the pleadings, and which if argued as a preliminary point may dispose of the suit. It raises a pure point of law on the assumption that all facts pleaded by the other side are correct, and cannot be raised if any fact has to be ascertained or if what is sought is the exercise of judicial discretion.
Statutory Interpretation — Purposive Approach — Determining Legislative Intent
Where the literal meaning of statutory words yields more than one interpretation, the purposive approach may be used to determine the intention of the lawmaker. The purposive approach seeks to give effect to the true purpose of the legislation and permits consideration of extraneous material bearing on the background against which the legislation was enacted.

Legislation cited (19)

  • Companies Act No. 1 of 2012 (As Amended) s.83
  • Companies Act No. 1 of 2012 (As Amended) s.173(1)(a)
  • Companies Act No. 1 of 2012 (As Amended) s.174(a)
  • Companies Act No. 1 of 2012 (As Amended) s.247
  • Companies Act No. 1 of 2012 (As Amended) s.262(3)
  • Companies Act No. 1 of 2012 (As Amended) s.288
  • Companies (Powers of the Registrar) Regulations, 2016 Reg.3(d)
  • Companies (Powers of the Registrar) Regulations, 2016 Reg.3(j)
  • Companies (Powers of the Registrar) Regulations, 2016 Reg.3(n)
  • Companies (Powers of the Registrar) Regulations, 2016 Reg.4
  • Companies (Powers of the Registrar) Regulations, 2016 Reg.20(c)
  • Companies (Powers of the Registrar) Regulations, 2016 Reg.21
  • Companies (Powers of the Registrar) Regulations, 2016 Reg.26
  • Companies (Powers of the Registrar) Regulations, 2016 Reg.33
  • Succession Act Cap 162 (As Amended) s.2(r)
  • Succession Act Cap 162 (As Amended) s.180
  • Civil Procedure Act Cap 71 s.2(k)
  • Advocates (Professional Conduct) Regulations, Statutory Instrument 267-2 Reg.16
  • Advocates (Professional Conduct) Regulations, Statutory Instrument 267-2 Reg.17

Cases cited (15)

  • Mukisa Biscuit Manufacturing Co Ltd v West End Distributors Ltd [1969] EA 696
  • M/S Semuyaba, Iga & Co Advocates and Another v Attorney General of the Republic of South Sudan and 2 Others (Miscellaneous Application No. 0004 of 2022)
  • Njau and Others v City Council of Nairobi [1976-1985] 1 EA 397
  • Bank of Uganda & Greenland Bank Limited (In Liquidation) v Kaweesi Sulaiman and 26 Others (Miscellaneous Application No. 1047 of 2022)
  • Israel Kabwa v Martin Babona (Supreme Court Civil Appeal No. 52 of 1995)
  • Dima Domnic Poro v Inyani Godfrey & Apiku Martin (Civil Appeal No. 0017 of 2016)
  • Mukasa v Muwanga (High Court Miscellaneous Application No. 31 of 1994)
  • Pastoli v Kabale District Local Government Council and Others [2008] 2 EA 300
  • Interfreight Forwarders (U) Ltd v East African Development Bank (Supreme Court Civil Appeal No. 33 of 1992)
  • Mumtaz Kassam & 2 Others v Ebrahim Kasam (Civil Appeal No. 10 of 2006)
  • Bryan Xsabo Strategy Consultants (Uganda) Limited & 2 Others v Great Lakes Energy Company NV (Company Cause No. 13 of 2020)
  • Mukiibi v Elitek Technologies International Ltd & 4 Others (Civil Suit No. 227 of 2010)
  • Uganda Revenue Authority v Speke Hotel (1996) Ltd (Court of Appeal No. 12 of 2008)
  • The Sussex Peerage (1844) 8 ER 1034
  • Pepper v Hart [1993] 1 All ER 42

Full judgment

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Khurram v Diamond Trust Bank (U) Limited 2 Others (Company Cause 30052 of 2023) 2024 UGRSB 6 (17 April 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.