Wakilii

Morjaria Maheshwery Purshotam v Stanbic Bank Uganda Limited (Miscellaneous Application 191 of 2022)

High Court · [2022] UGCOMMC 126 · 2022 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for temporary injunction arising from civil suit, following foreclosure order in earlier miscellaneous cause
Decision
Application dismissed; interim injunction previously granted by Registrar set aside

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court dismissed the application for a temporary injunction restraining the mortgagee bank from selling mortgaged property. Held that Regulation 13 of the Mortgage Regulations 2012 requires a mortgagor seeking to stop or adjourn a sale to deposit 30% of the forced sale value or outstanding amount as a mandatory precondition. This statutory requirement overrides the traditional considerations for granting temporary injunctions. The court exercised its inherent jurisdiction to set aside an earlier interim order granted by the Registrar without imposing this condition. The applicant failed to establish a prima facie case, irreparable harm, or that the balance of convenience favoured her.

Outcome

Application dismissed; interim injunction previously granted by Registrar set aside

Facts

The applicant borrowed UGX 30 billion from the respondent bank in November 2020, securing the loan with six mortgaged properties. She defaulted after paying only one instalment, citing adverse effects of Covid-19 pandemic measures on her real estate business. The respondent obtained a foreclosure order on 6 December 2021 in Miscellaneous Cause No. 87 of 2021 for recovery of UGX 28,319,665,848. The applicant was ordered to deliver vacant possession but refused. She made some payments totalling UGX 1.3 billion, USD 400,000 and USD 360,000. The respondent advertised the remaining properties for sale on 1 February 2022. The applicant then filed Civil Suit No. 125 of 2022 challenging the sale and sought a temporary injunction to stop it. The Registrar granted an interim injunction, which the respondent sought to have reviewed.

Issues

  1. Whether the court should grant a temporary injunction restraining the respondent from selling mortgaged property pending determination of the underlying suit.
  2. Whether the applicant was required to deposit 30% of the forced sale value or outstanding amount as a precondition to the grant of a temporary injunction under Regulation 13 of the Mortgage Regulations 2012.
  3. Whether the court should exercise its inherent jurisdiction to review and set aside an interim injunction order granted by the Registrar.
  4. Whether the applicant established a prima facie case with probability of success.
  5. Whether the applicant would suffer irreparable injury if the injunction were not granted.
  6. Whether the balance of convenience favoured the applicant or the respondent.

Orders

  • The ex-parte interim order issued on 2nd March 2022 and extended on 4th March 2022 is vacated.
  • The application for a temporary injunction is dismissed.
  • Costs awarded to the respondent.

Rules and key headnotes

Mortgage Law — Temporary Injunctions — Mandatory Deposit Requirement under Mortgage Regulations 2012
Regulation 13 of the Mortgage Regulations 2012 requires a mortgagor seeking to stop or adjourn a sale by a mortgagee to deposit 30% of the forced sale value of the mortgaged property or the outstanding amount as a mandatory precondition to the grant of a temporary injunction, and this statutory requirement overrides the traditional considerations for granting temporary injunctions under Order 41 of the Civil Procedure Rules.
Statutory Interpretation — Special Legislation Prevails Over General Provisions
Where a general statute and a specific statute relating to the same subject matter cannot be reconciled, the special or specific statute ordinarily will control, and the provision more specifically directed to the matter at issue prevails as an exception to or qualification of the provision which is more general in nature.
Mortgage Enforcement — 'Pay Now, Argue Later' Principle
Regulation 13 of the Mortgage Regulations 2012 enacts a 'pay now, argue later' principle designed to restrict the ability of mortgagors to use litigation vexatiously to delay realisation of money due to mortgagees, reduce frivolous objections to sales, and ensure mortgagees are not left out of pocket due to time lapses during litigation.
Inherent Jurisdiction — Review of Registrar's Orders
Under section 98 of the Civil Procedure Act and its inherent jurisdiction, the High Court may review a decision of its Registrar where the Registrar exercised jurisdiction not vested in law, failed to exercise jurisdiction so vested, or acted illegally, with material irregularity, or injustice, and may make such orders as necessary to prevent miscarriage of justice.
Temporary Injunctions — Adequacy of Damages as Alternative Remedy
An injunction will not be granted where damages are an adequate remedy. Where the subject matter is purely commercial with no aesthetic or sentimental overtones and any loss can be quantified by payment of money or is readily calculated or estimated, the applicant has not established that irreparable harm would result from refusal of the injunction.
Temporary Injunctions — Balance of Convenience in Mortgage Disputes
In assessing the balance of convenience in mortgage disputes, where the mortgagor does not deny indebtedness and has been in default for a substantial period while the mortgagee has not been receiving loan repayments, and where the mortgagor's loss can be adequately compensated in damages, the balance of convenience favours the mortgagee's right to realise its security.

Legislation cited (12)

Cases cited (21)

  • Haji Edirisa Kasule and another v Housing Finance Bank Ltd and two others (Miscellaneous Application No. 667 of 2013)
  • Guaranty Trust Bank (U) Ltd v Ankole Riverline Hotel Ltd (Civil Appeal No. 28 of 2014)
  • Paunocks Enterprises Ltd and others v Stanbic Bank (U) Ltd (Miscellaneous Application No. 1113 of 2014)
  • Willis International Engineering and Contractors Ltd and another v DFCU Bank (Miscellaneous Application No. 1000 of 2015)
  • Miao Huaxian v Crane Bank Limited and another (Miscellaneous Application No. 935 of 2015)
  • Ganafa Peter Kisawuzi v DFCU Bank Ltd (Civil Application No. 64 of 2016)
  • Warburton v. Loveland, (1824-34) All ER Rep 589
  • Escoigne Properties Ltd v. Inland Revenue Commissioners [1958] 1 All ER 406 (BL) at 414D
  • River Wear Comrs v. Adamson ((1877) 2 App Cas 743 at 763-5
  • Eastman Photographic Materials Co v. Comptroller-General of Patents [ 1898] AC 571 at 575, 576
  • Heydon's case (1584) 3 Co. Rep. 7a
  • Whitney v. Commissioner of Inland Revenue [1926] AC 37
  • E.A. Industries v. Trufoods, [1972] E.A. 420
  • Fellowes and Son v. Fisher [1976] I QB 122
  • American Cyanamid Co v. Ethicon Limited [1975] AC 396
  • Geilla v Cassman Brown Co. Ltd [1973] E.A. 358
  • GAPCO Uganda Limited v Kaweesa and another (Miscellaneous Application No. 259 of 2013)
  • American Cyanamid v. Ethicon [1975] AC 396; [1975] ALL ER 504
  • Godfrey Sekitoleko and four others v. Seezi Peter Mutabazi and two others, [2001 -2005] HCB 80
  • Nsubuga and another v. Mutawe [1974] E.A 487
  • City Council of Kampala v Donozio Musisi Sekyaya (Civil Application No. 3 of 2000)

Full judgment

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Morjaria Maheshwery Purshotam v Stanbic Bank Uganda Limited (Miscellaneous Application 191 of 2022) [2022] UGCommC 126 (23 March 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.