Wakilii

R. L Jain Limited v Nganda Kaweesa Fredrick (Civil Suit No. 826 of 2024)

High Court · [2025] UGCOMMC 439 · 2025 Judgment for Plaintiff (Interest Rate Reduced) AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for recovery of outstanding loan amounts
Decision
Judgment entered for the Plaintiff with reduced interest rate on outstanding loan amounts

Observed later treatment

No later-treatment classification is recorded for this judgment.

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.

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 the defendant was indebted to the plaintiff for unpaid loan amounts, but reduced the contractual interest rate from 6% per month (72% per annum) to 2% per month (24% per annum) on the grounds that the original rate was harsh, excessive, and unconscionable under Section 26(1) of the Civil Procedure Act and Section 88 of the Tier 4 Microfinance Institutions and Money Lenders Act. The defendant's claim that payments totalling UGX 35,000,000 were made towards the suit loans was rejected for lack of cogent evidence linking those payments to the loans in issue.

Outcome

Judgment entered for the Plaintiff with reduced interest rate on outstanding loan amounts

Facts

The plaintiff, a money lender, advanced five loans to the defendant between November 2022 and February 2023 totalling UGX 46,134,000 at an interest rate of 6% per month. The defendant made partial payments of UGX 11,534,000 on two of the loans. The plaintiff claimed an outstanding balance of UGX 72,380,000 including accumulated interest. The defendant admitted receiving the loans but contended he had paid UGX 35,000,000, leaving a balance of only UGX 11,134,000. The defendant also argued that the 6% monthly interest rate was harsh and unconscionable. The court found that the defendant failed to prove the alleged UGX 35,000,000 payment related to the suit loans, as the receipts adduced were dated after service of a notice to show cause in a separate execution matter and the defendant could not link specific payments to specific loans.

Issues

  1. Whether the Defendant is indebted to the Plaintiff in the liquidated sum of UGX 72,380,000/=.
  2. What remedies are available to the parties.

Orders

  • The Defendant shall pay the Plaintiff the outstanding principal sum and the accrued interest at the rate of 24% per annum, the equivalent of 2% per month, on each disbursed loan from the date of disbursement until the date of filing the suit.
  • Interest at the rate of 24% per annum is awarded on the sum in (1) above from the date of filing the suit until payment in full.
  • Costs of the suit are awarded to the Plaintiff.

Rules and key headnotes

Contract Law — Loan Agreements — Performance of Contractual Obligations
Once a contract is valid, it creates reciprocal rights and obligations between the parties. When a document containing contractual terms is signed, in the absence of fraud or misrepresentation, the party signing it is bound by its terms. Each party to a contract must perform their respective promises.
Banking & Finance — Money Lending — Unconscionable Interest Rates — Court's Power to Reopen Transactions
Under Section 26(1) of the Civil Procedure Act and Section 88(1) of the Tier 4 Microfinance Institutions and Money Lenders Act, a court may reopen a money lending transaction and reduce the interest rate where it finds the rate to be harsh, excessive, and unconscionable. A monthly interest rate of 6% (equivalent to 72% per annum) is unconscionable and excessive, and may be substituted with a rate of 24% per annum.
Evidence — Burden of Proof — Linking Documentary Evidence to Specific Claims
Where a party adduces receipts as proof of payment, that party must provide cogent evidence linking the payments to the specific claim at hand. Failure to specify which payment relates to which particular loan, combined with evidence that the payments were made after service of a notice in a separate execution matter, may lead the court to find on a balance of probabilities that the payments related to the separate matter and not the suit at hand.
Commercial Law — Interest Awards — Compensation for Deprivation of Use of Money
Where a plaintiff in the business of money lending is deprived of the use of its money, the court may award interest at a rate that compensates for the loss occasioned by the deprivation, taking into account inflation and the depreciation of currency. An award of 24% per annum on the outstanding sum from the date of filing suit until payment in full may be reasonable in such circumstances.

Legislation cited (11)

Cases cited (15)

  • John Bwiza v Patrick Yowasi Kadama (Court of Appeal Civil Appeal No. 35 of 2011)
  • Sebuliba Busuulwa v Co-operative Bank Ltd [1982] HCB 129
  • William Kasozi v DFCU Bank Ltd (High Court Civil Suit No. 1326 of 2000)
  • Omega Bank Plc Vs O.B.C. Limited [2005] 8 NWLR (pt.928) 547
  • Fina Bank Ltd v Spares and Industries Ltd [2000] 1 EA 52
  • Mwijukye Cephus v Kampala Financial Services Limited & Another (High Court Civil Suit No. 35 of 2021)
  • R.L Jain v Loy Komugisha and 2 Others (High Court Civil Suit No. 98 of 2018)
  • Rajnish Jain (Administrator of the Estate of the late R.L Jain) v Lokii Peter Abraham (Civil Suit No. 277 of 2013)
  • Jas Ventures International Limited v Atuhaire Juliet (Civil Suit No. 676 of 2021)
  • Juma v Habibu [1975] EA 108
  • Milly Masembe v Sugar Corporation (U) Ltd and Another (Supreme Court Civil Appeal No. 1 of 2000)
  • Wallersteiner v Moir [1975] 1 All ER 849
  • Mohanlal Kakubhai Radia v Warid Telecom Uganda Ltd (High Court Civil Suit No. 224 of 2011)
  • Hash Security Company Limited v Roko Construction Limited (High Court Civil Suit No. 39 of 2022)
  • Uganda Development Bank v Muganga Construction Co. Ltd [1981] HCB 35

Full judgment

↓ Download PDF

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

R. L Jain Limited v Nganda Kaweesa Fredrick (Civil Suit No. 826 of 2024) [2025] UGCommC 439 (27 November 2025)
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.