One of the properties KCB is seeking to sell to recover Shs21.1b. FILE/COURTESY By Dorothy Nakaweesi
Summary
BY Dorothy Nakaweesi
KAMPALA. KCB Uganda and Kenya Commercial Bank will proceed to sell several Tirupati Development properties unless $5.97m ( Shs21.1b) is cleared within 30 days.
In a notice published early this week, KCB Uganda and Kenya Commercial Bank noted that they would proceed to sell condominium units on Ovino in downtown Kampala and Tirupati Mazima Mall in Kabalagala, Kampala, vacant land in Kikaaya, Kampala and several units contained in a business park if Tirupati does not pay the outstanding loan.
This is the second time the same properties are being advertised after a series of court battles.
On June 23, 2017, the same properties were advertised, which prompted Tirupati to go to court, praying for a declaration that KCB and its agents were in breach of contract, statutory obligation and duty.
In documents filed before court, Tirupati had noted that it was not in default of any payments to warrant the sale of mortgaged proprieties, adding that the intended sale was unlawful and the interest rate and penalty charged by KCB was unacceptable.
The 2017 application resulted into a consent judgement in which Tirupati conceded to being indebted to KCB up to the tune of $5.97m (about Shs21.1b).
In the judgement delivered on July 28, 2017, the two parties also agreed to draw a new payment plan, in which Tirupati would deposit varied sums of money on different dates upon which KCB would release titles of $400 per square metre worth of received sums.
For instance, Tirupati had been required to deposit $40,000 on July 28, 2017, $300,000 on July 31, 2017, $500,000 on July August 31 and $500,000 on September 30 upon which KCB would cause the withdrawal of the notice of sale.
However, it was also agreed that in the event of default, Tirupati had consented to the sale of mortgaged properties with or without a fresh notice.
“… in the event of default in the payments referred to …. the plaintiff [Tirupati] hereby consents to the sale of the mortgaged properties ... with or without a fresh public notice to recover the entire outstanding sum,” the consent judgement singen by Barenzi & Co Advocates on behalf of Tirupati and Kabayiza, Kavuma, Mugerwa & Ali Advocates, reads in party.
However, on December 11, 2019, Tirupati filed a new notice in which it sought to vacate the consent judgment and all its orders on grounds that it had been executed through misrepresentation, and ignorance of material facts.
“This application is aimed at correcting an error in the judgement in effect to the extent that the applicant [Tirupati] is not indebted to the first respondent [KCB Uganda]. The applicant is in the process of filing an application seeking to amend the plaint and reliefs sought in action,” reads in part the December 11, 2019 application, which highlights KCB Uganda and Kenya Commercial Bank as first and second respondents, respectively.
However, in a ruling delivered on September 17 , 2021, Justice David Wangutusi dismissed the prayer to set aside the consent judgement on grounds that the applicant had failed to prove that it had been entered into without sufficient material facts, miss apprehension or ignorance of material facts, or it was actuated by illegality, fraud, mistake or contravention of court policies or any reason that would enable court to set aside an agreement.
“I find no reason to set aside the consent judgement freely entered into by the parties,” Justice Wangutusi ruled.
Yesterday, Mr Johny Barenzi, the lawyer representing Turipati, told Daily Monitor they will contest the ruling, noting that: If they [KCB] have gone ahead to advertise [the properties] it has been done in [bad] faith”.
Background
According to details before the Commercial Division of the High Court, on July 17, 2012, KCB Uganda and KCB Kenya entered into a loan agreement in which the two banks advanced Tirupati a loan facility of $7m (Shs24.8bn, secured by a number of properties in Kampala.
The mortgage deed was later executed in 2014 with the two parties agreeing to reschedule the repayment after a 24 month moratorium in which Tirupati had been required to start repayment of the loan and interest within 120 months.
However, by 2017, Tirupati had started defaulting, failing to deposit payments to KCB Uganda from April to June 2017, as well omitting remission of loan payments to Kenya Commercial Bank for six months in 2017 as well as desposing of some of the suit properties.
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