Wakilii

Parabot Breweries Ltd (In Recievership) v Standard Chatered Bank (U) Ltd & Anor (Miscellaneous Application No. 208 of 2018)

High Court · [2018] UGCOMMC 50 · 2018 Application Partly Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for temporary injunction to restrain sale of mortgaged property pending determination of main suit
Decision
Temporary injunction granted conditional on payment of 30% deposit within 60 days; matter to proceed to hearing of main suit

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Court granted temporary injunction restraining sale of mortgaged property but conditioned it on applicant paying 30% of forced sale value within 60 days. Held that Regulation 13(1) of the Mortgage Regulations 2012 is binding and applies regardless of alleged procedural irregularities, following Court of Appeal authority. Applicant cannot avoid the statutory deposit requirement by alleging breaches of the Mortgage Act.

Outcome

Temporary injunction granted conditional on payment of 30% deposit within 60 days; matter to proceed to hearing of main suit

Facts

The applicant held properties mortgaged to the first respondent. The court had previously granted two temporary injunctions for six months each, one requiring payment of 30% of forced sale value for property at Kiwatule (which was paid), and another for property at Kitetika. Both injunctions elapsed without the applicant seeking extension. The respondents advertised the sale of all properties. The applicant filed this fresh application to restrain the sale pending determination of the main suit (Civil Suit No. 442 of 2016), arguing that the Mortgage Regulations do not apply due to alleged irregularities: failure to serve mandatory 45-day default notice under Mortgage Act s.19(2) & (3), failure to serve proper sale notice under s.26, and lack of evidence of forced sale value. The respondent contended that Regulation 13(1) requiring 30% deposit must apply to both properties.

Issues

  1. Whether a temporary injunction should be granted to restrain the sale of mortgaged property pending determination of the main suit.
  2. Whether Regulation 13(1) of the Mortgage Regulations 2012 requiring a 30% deposit applies where the applicant alleges irregularities in the mortgage sale process.

Orders

  • Temporary injunction granted restraining respondents and their agents from selling, alienating, attaching, evicting or dealing with the properties at Kyadondo Block 197 plots 121, 122, 677 & 678 at Kitetika and Block 220 plot 1623 at Kiwatule until final determination.
  • Applicant ordered to pay 30% of the forced sale value of the land at Kyadondo Block 197 plots 121, 122, 677 & 678 or of the outstanding amount, whichever is higher, within 60 days.
  • Respondent restrained from advertising or selling the property during the 60-day period.
  • In the event of default by applicant, respondents must ensure full compliance with all provisions of the Mortgage Act and regulations before sale.
  • Costs in cause.

Rules and key headnotes

Banking & Finance — Mortgage Sale — Temporary Injunction — Regulation 13(1) of Mortgage Regulations 2012 — Mandatory Deposit Requirement
Under Regulation 13(1) of the Mortgage Regulations 2012, a court may stop the sale of mortgaged property on application by a mortgagor, but the stoppage is conditioned on the deposit of 30% of the forced sale value or the outstanding amount by the applicant, and this requirement is mandatory.
Banking & Finance — Mortgage Sale — Injunction — Effect of Court of Appeal Precedent on Regulation 13(1)
An order of injunction restraining mortgage sale is not available to an applicant who is in breach of Regulation 13(1) of the Mortgage Regulations 2012; lower courts are bound by Court of Appeal decisions on this point and cannot apply the regulation selectively.
Banking & Finance — Mortgage Sale — Alleged Procedural Irregularities — Effect on Deposit Requirement
An applicant cannot avoid the statutory requirement to deposit 30% under Regulation 13(1) by alleging irregularities in the mortgage sale process such as failure to serve default notices or sale notices; the deposit requirement applies regardless of such allegations.

Legislation cited (6)

Cases cited (3)

  • Ganafa Peter Kisawuzi v DFCU Bank Ltd (Civil Application No. 0064 of 2016)
  • Mutuba Zaituni v Crane Bank Limited & Ors (Miscellaneous Application No. 1536 of 2017)
  • Parul Ben Barot v Victoria Finance Company Ltd (Miscellaneous Application No. 319 of 2017)

Full judgment

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

Parabot Breweries Ltd (In Recievership) v Standard Chatered Bank (U) Ltd & Anor (Miscellaneous Application No. 208 of 2018) [2018] UGCommC 50 (22 June 2018)
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.