Wakilii

Maruri Venkata Bhaskar Reddy and 2 Others v Bank of India (U) Limited (Civil Suit No. 804 of 2014)

High Court · [2022] UGCOMMC 60 · 2022 Judgment for Defendant on Counterclaim AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for breach of contract and defamation; plaintiffs' suit dismissed for non-appearance; defendant's counterclaim heard ex parte
Decision
Plaintiffs' suit dismissed; judgment entered for defendant on counterclaim with damages, interest, and costs

Observed later treatment

Treatment recorded in citing cases followed in 4 Sequitur — Uganda’s citator · Derived from citing cases in the Wakilii corpus — not an assertion that this case is good law.

Citator coverage is limited to judgments in the Wakilii corpus and source-matched treatment records. Absence of a signal is not an assertion that the case remains good law.

Good law Followed in 4 cases and applied in 0 cases, with no adverse treatment recorded. Citations rising — 7 citing cases on record, 7 in the most recent three data years. Derived from citing cases in the Wakilii corpus — a deterministic signal, not legal advice.

AI-generated summary. This summary was generated by AI from the full text of the judgment. It may contain errors or omissions—always read the source judgment before relying on it.

Holding

Held that where a borrower defaults on a loan facility and fails to appear to defend the suit, the lender is entitled to recover the outstanding principal sum, general damages for breach of contract, and interest at the contractually agreed rate. The court awarded UGX 1,106,571,768 as principal, UGX 50,000,000 as general damages, interest at 22% per annum on the principal from the date of default, and interest at 6% per annum on general damages from judgment.

Outcome

Plaintiffs' suit dismissed; judgment entered for defendant on counterclaim with damages, interest, and costs

Facts

The plaintiffs acquired a loan facility of UGX 1,027,000,000 from the defendant bank in October and November 2012. The plaintiffs alleged that the defendant delayed in disbursing the loan, leading to failure of their project and default on the loan agreement. The plaintiffs sued for breach of contract and defamation. The defendant denied the claims and counterclaimed for recovery of UGX 1,106,571,768 being the outstanding loan amount as of 30th June 2014. When the suit came up for scheduling, the plaintiffs neither appeared nor were represented despite being duly served. The court dismissed the plaintiffs' suit and allowed the defendant to proceed ex parte on the counterclaim. Evidence showed that the loan was disbursed as agreed, with funds released upon documentary proof of utilization of prior disbursements. The counter defendants made only a few instalment payments, not on schedule, leaving a substantial balance outstanding.

Issues

  1. Whether the Counter Claimant is entitled to the sums claimed in the counter claim?
  2. What remedies are available to the Counter Claimant?

Orders

  • Plaintiffs' suit dismissed under Order 9 rule 22 of the Civil Procedure Rules with costs.
  • Judgment entered for the Counter Claimant against the Counter Defendants jointly and severally.
  • Counter Defendants to pay the principal sum of UGX 1,106,571,768.
  • Counter Defendants to pay UGX 50,000,000 as general damages for breach of contract.
  • Interest on the principal sum at the rate of 22% per annum from 1st July 2014 until payment in full.
  • Interest on general damages at the rate of 6% per annum from the date of judgment until payment in full.
  • Counter Defendants to pay the taxed costs of the suit and counterclaim to the Counter Claimant.

Rules and key headnotes

Civil Procedure — Dismissal for Non-Appearance — Order 9 Rule 22 CPR
Where a plaintiff neither appears nor is represented at a scheduling conference despite being duly served with court process, the court may dismiss the suit under Order 9 rule 22 of the Civil Procedure Rules with costs.
Civil Procedure — Ex Parte Proceedings — Counterclaim After Dismissal of Main Suit
Where the main suit is dismissed for non-appearance of the plaintiff, the defendant may proceed to hear the counterclaim ex parte under Order 9 rule 20(1)(a) of the Civil Procedure Rules.
Contract Law — Breach of Loan Agreement — Liability of Borrower and Guarantor
Where a borrower defaults on a loan facility, such conduct amounts to breach of contract under Section 33 of the Contracts Act 2010, and a guarantor who executed a contract of guarantee is also liable under Sections 68 and 71 of the Contracts Act.
Damages & Quantum — General Damages for Breach of Contract — Assessment Principles
General damages for breach of contract are awarded at the discretion of the court to restore the aggrieved party to the position they would have been in had the breach not occurred. In assessment, the court considers the value of the subject matter, the economic inconvenience suffered, and the nature and extent of the injury.
Damages & Quantum — Aggravated Damages — Requirements for Award
Aggravated damages are awarded as extra compensation for injury to feelings and dignity caused by the manner in which the defendant acted, such as malice, arrogance, humiliation or distress. Such damages remain essentially compensatory in nature and require proof of aggravating factors beyond the breach itself.
Banking & Finance — Interest on Loan Default — Contractual Rate
Where parties to a loan agreement have contractually agreed to an interest rate, the court may award interest at that contractual rate on the outstanding principal sum from the date of default until payment in full, provided the rate is reasonable in the circumstances.
Damages & Quantum — Interest on Damages — Court Rate
A successful claimant is entitled to interest on general damages at the court rate from the date of judgment until payment in full, to compensate for being kept out of the awarded sum and to insulate against inflation and currency depreciation.

Legislation cited (9)

Cases cited (11)

  • Hadley v Baxendale (1894) 9 Exch 341
  • Charles Acire v M Engola (High Court Civil Suit No. 143 of 1993)
  • Kibimba Rice Ltd v Umar Salim (Supreme Court Civil Appeal No. 17 of 1992)
  • Uganda Commercial Bank v Kigozi [2002] 1 EA 305
  • Bank of Uganda v Fred William Masaba and 5 Others (Supreme Court Civil Appeal No. 3 of 1998)
  • Esso Petroleum Co Ltd v Mardon [1976] QB 801
  • Obongo v Kisumu Council [1971] EA 91
  • Fredrick JK Zaabwe v Orient Bank and Others (Supreme Court Civil Appeal No. 4 of 2006)
  • Premchandra Shenoi and Another v Maximov Oleg Petrovich (Supreme Court Civil Appeal No. 9 of 2003)
  • Harbutt's Plasticine Ltd v Wayne Tank & Pump Co Ltd [1970] QB 447
  • Kinyera v Management Committee of Laroo Building Primary School (High Court Civil Suit No. 099 of 2013)

Cases citing this judgment (6)

How later Ugandan judgments in the Wakilii corpus have cited this case. Treatment labels come from Sequitur — Uganda’s citator — each backed by a verbatim span from the citing judgment, and are not an assertion that this case is, or is not, good law.

Full judgment

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

Maruri Venkata Bhaskar Reddy and 2 Others v Bank of India (U) Limited (Civil Suit No. 804 of 2014) [2022] UGCommC 60 (27 July 2022)
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.