Wakilii

Post Bank (U) Limited v Tamale (Civil Suit 729 of 2016)

High Court · [2023] UGCOMMC 180 · 2023 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for recovery of money had and received, instituted by summary procedure under Order 36 Rule 2 of the Civil Procedure Rules
Decision
Judgment entered for the plaintiff for recovery of UGX 58,316,475 plus interest at 15% per annum from date of filing suit until payment in full, with costs

Observed later treatment

Cited — treatment unverified cited in 2 (treatment unverified) 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.

No adverse treatment recorded Cited 2 times with no adverse treatment recorded; not yet tested on the merits. Citations fading — 3 citing cases on record, 3 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

The court held that a bank's write-off of a non-performing loan does not discharge the borrower from liability to repay. The plaintiff was entitled to recover UGX 58,316,475 as money had and received, notwithstanding that the underlying mortgage was unenforceable for lack of spousal consent. The write-off is an internal accounting procedure that does not extinguish the debt or bar recovery. Interest at 15% per annum was awarded from the date of filing suit.

Outcome

Judgment entered for the plaintiff for recovery of UGX 58,316,475 plus interest at 15% per annum from date of filing suit until payment in full, with costs

Facts

On 12 July 2011, the defendant borrowed UGX 90,000,000 from the plaintiff bank at 24% per annum interest, repayable in 24 monthly instalments of UGX 4,758,399, secured by property at Kyaggwe Block 110, Plot 1869, Seeta. The defendant made six payments totalling UGX 31,683,525 and then defaulted. The plaintiff sought to sell the mortgaged property, but the sale was challenged in a separate suit (HCCS 480/2012) by Ruth Lunkuse, who claimed to be the defendant's wife, on grounds of lack of spousal consent. A temporary injunction was issued restraining the sale. The plaintiff conceded it had not obtained spousal consent, rendering the mortgage unenforceable. The plaintiff then instituted this suit to recover the outstanding loan amount as money had and received. The defendant argued the debt had been written off and was not recoverable. The defendant failed to appear at trial to testify.

Issues

  1. Whether the defendant is indebted to the plaintiff, and if so for how much?
  2. Whether the plaintiff is entitled to recover the sums claimed from the defendant?
  3. What are the available remedies?

Orders

  • The defendant shall pay the plaintiff UGX 58,316,475 (Uganda Shillings Fifty-eight million, Three hundred sixteen thousand, Four hundred seventy-five only) which was the outstanding amount at the time of default, as money had and received.
  • The defendant shall pay interest on the principal sum at the rate of 15% per annum from the date of filing the suit until payment in full.
  • Costs of the suit are awarded to the plaintiff.

Rules and key headnotes

Banking & Finance — Loan Write-Off — Effect on Borrower's Liability
A bank's write-off of a non-performing loan is an internal accounting procedure undertaken for taxation and book-keeping purposes and does not discharge the borrower from liability to repay the debt. The bank retains the right to pursue recovery from the borrower and reimburse itself for the provisioned amount.
Banking & Finance — Financial Institutions Regulations — Provisioning for Non-Performing Loans
Under the Financial Institutions Credit Capitalization and Provisioning Regulations 2005, financial institutions are required to provision for non-performing facilities and write them off after 90 days if not regularised. However, the institution is expected to pursue recovery of the debt from the borrower and reimburse itself. The rationale is to ensure depositors' money is not tied down due to borrower defaults.
Contract Law — Money Had and Received — Basis of Liability
An action for money had and received is maintainable where one person has received money from another under circumstances such that the law regards the recipient as having received it to the use of the other. Liability is based on the principle of unjust enrichment: the defendant must have been enriched by receipt of a benefit, the enrichment must be at the expense of the plaintiff, and retention of the enrichment must be unjust.
Contract Law — Money Had and Received — Recovery Where Underlying Transaction Unenforceable
Where a loan is secured by a mortgage that is unenforceable for lack of spousal consent, the lender may nonetheless recover the principal sum advanced as money had and received. The equitable remedy is available where money has been advanced but cannot be recovered under the law governing the original transaction between the parties.
Land & Property — Mortgage — Spousal Consent — Effect of Non-Compliance
A mortgage executed without the required spousal consent renders the security unenforceable. The lender cannot exercise remedies under the Mortgage Act to realise the mortgaged property, but this does not extinguish the underlying debt or bar recovery by other means.
Civil Procedure — Burden of Proof — Disputed Payments
Where a plaintiff proves the amount advanced and the defendant disputes the amount repaid, the defendant bears the burden of proving the payments claimed to have been made. Failure to adduce evidence on oath to discharge this burden leaves the plaintiff's evidence uncontroverted.
Contract Law — Interest — Award on Money Had and Received
A plaintiff who has been wrongfully deprived of money is entitled to interest. The basis of an award of interest is that the defendant has taken and used the plaintiff's money and benefited from it, and ought therefore to compensate the plaintiff. The award of interest is a matter of the court's discretion.

Legislation cited (9)

Cases cited (9)

  • Shenoi & Another v Maximou [2005] EA 280
  • Mahabir Kishore & Madhya Pradesh 1990 AIR 313
  • Dr James Kashugyera Tumwine & Another v Sir Willie Magara & Another (High Court Civil Suit No. 576 of 2004)
  • Jamba Soita Ali v David Salaam (High Court Civil Suit No. 400 of 2005)
  • Samuel Black T/A S B Coaches v DFCU Bank Ltd (Civil Suit No. 416 of 2009)
  • Nicholus Mahihu Muriithi Vs Barclays Bank Kenya Limited Civil Appeal No. 340 of 2012
  • Mohammed Gulamhussein Farzal Karmali and Another Vs C.F.C. Bank Limited and Another (2006) eKLR
  • Salim Akbarali Nanji Vs Union of India & Others, Civil Appeal No.6715 of 2004
  • Sietco v Noble Builders (U) Ltd (Supreme Court Civil Appeal No. 31 of 1995)

Cases citing this judgment (2)

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.

Post Bank (U) Limited v Tamale (Civil Suit 729 of 2016) [2023] UGCommC 180 (31 March 2023)
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.