Post Bank Uganda Limited v Gumisiriza Stella (Civil Suit 1 of 2024)
Observed later treatment
No later-treatment classification is recorded for this judgment.
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Holding
The High Court held that a mortgagee who has complied with statutory notice requirements under the Mortgage Act may exercise its power of sale by public auction to recover outstanding debt. The court found that the plaintiff bank had properly served demand notices and notice of default within the statutory timeframes before issuing a notice of sale. An eviction order was granted to take effect if the mortgagor fails to comply with a fresh notice demanding vacant possession. No costs were awarded given the exparte nature of the proceedings and the amounts involved.
Outcome
Mortgagee granted power of sale by public auction and conditional eviction order against mortgagor
Facts
Post Bank Uganda Limited advanced an agriculture loan of UGX 20,000,000 to Gumisiriza Stella on 24 October 2019, repayable within 24 months through quarterly instalments, secured by a legal mortgage registered on land comprised in FRV MBR 447 Folio 6 Plot 95 Block 26 at Kanoni Cell, Ntungamo District. The defendant defaulted on payment obligations and requested a grace period in May 2020. The bank extended the grace period from 4 June 2020 to 4 December 2020 and amended the payment period to 30 months with reduced quarterly instalments. After continued default, the bank served a demand notice on 31 December 2021, a notice of default on 18 January 2022, and a notice of sale on 28 March 2022. The defendant refused to vacate the property, threatened prospective buyers, and denied access to the property. The outstanding debt stood at UGX 18,050,770 plus additional costs. The defendant was served with summons but did not file a reply or enter appearance despite substituted service by newspaper publication.
Issues
- Whether the Plaintiff/Mortgagee as the legal mortgagee is entitled to foreclose and sale the mortgaged property to recover the entire sum of monies due to it in respect of the principal amount, interest, costs and all other charges arising from the Defendant's loan.
- Whether the mortgagee is entitled to sale the mortgaged property by public auction or by treaty.
- Whether the Plaintiff/Mortgagee is entitled to vacant possession of the mortgaged property and to evict the Defendant and her agents from the mortgaged property.
- Whether the Plaintiff/Mortgagee should be granted costs for the suit.
Orders
- The Plaintiff/Mortgagee is permitted to exercise their power of sale over the mortgaged property being land comprised in FRV MBR 447 Folio 6 Plot 95 Block 26 at Kanoni Cell, Ntungamo District, to recover the outstanding sum of UGX18,050,770/= and any incidental expenses.
- The Mortgagee shall issue a fresh notice on the mortgagor demanding possession of the mortgaged land from the Mortgagor.
- The Plaintiff/Mortgagee is granted an eviction order against the Mortgagor/Defendant, to become effective once the mortgagor fails to comply with the notice of vacant possession.
- Any sale of the mortgaged property shall be by public auction in accordance with provisions of the Mortgage Act Cap 239 and Rules thereunder.
- No order as to costs is made.
Rules and key headnotes
Legislation cited (9)
Full judgment
The original judgment as reported. Read the original PDF before relying on any passage.