[2025] UGCommC 115

# 5 **THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA (COMMERCIAL DIVISION) CIVIL SUIT NO. 397 OF 2020**

#### **1. A. K. T PROJECT MANAGEMENT LTD**

#### 10 **2. KHATUNBHAI AMIRAL TAR MOHAMED**

(Suing through her appointed

Attorney Nizarali Sayani)

## **3. ZAITOON TARMOHAMED a.k.a NINA :::::::::::::::::::::::: PLAINTIFFS**

### 15 **VERSUS**

#### **1. DFCU BANK LTD**

# **2. NATIONWIDE PROPERTY SERVICES LTD :::::::::::::::: DEFENDANTS BEFORE: HON. LADY JUSTICE PATIENCE T. E. RUBAGUMYA**

### **RULING ON PRELIMINARY OBJECTIONS**

### 20 Introduction

This Ruling is in respect of the preliminary objections raised by Learned Counsel for the Defendants resulting from the institution of this suit by the Plaintiffs seeking to render the mortgage between the 1st Plaintiff and 1st Defendant as well as the sale of the mortgaged property to the 2nd

25 Defendant, unlawful.

Learned Counsel for the Defendants raised three preliminary objections to the effect that; the 1st Plaintiff has no capacity to prosecute and maintain the current suit, the 2nd Plaintiff, as an Administratrix, cannot bring the current suit through her lawful Attorney and that the 3rd Plaintiff has no 30 cause of action in the current suit.

# 5 Representation

The Plaintiffs were represented by Learned Counsel Richard Nsubuga and Learned Counsel Monica Namuli of **M/s Nsubuga & Co. Advocates and Legal Consultants**, while the 1st Defendant was represented by Learned Counsel Richard Bibangambah of **M/s K&K Advocates** and the 2nd

10 Defendant by Learned Counsel Yese Mugenyi of **M/s Mugenyi & Co. Advocates.**

# Preliminary Objections for Determination

- 1. Whether the 1st Plaintiff has the capacity to prosecute and maintain the current suit? - 15 2. Whether the 2nd Plaintiff suing through her lawful Attorney has *locus standi* to bring the current suit? - 3. Whether the 3rd Plaintiff has a cause of action in the current suit?

Issue No. 1: Whether the 1st Plaintiff has the capacity to prosecute and maintain the current suit?

# 20 1st Defendant's submissions

Learned Counsel for the 1st Defendant first relied on the laws that govern preliminary objections as per **Order 6 rule 29 of the Civil Procedure Rules, SI 71-1** and the cases of *Mukisa Biscuit Manufacturing Co. Ltd Vs West End Distributors Ltd [1969] EA 696*. Learned Counsel then 25 submitted that only a legal person with *locus standi* can institute a suit and that it is now trite that a non-existent person can neither sue, be sued or maintain a legal action in Court as per the cases of *The Fort Hall Bakery Supply Co. Vs Frederick Muigai Wangoe [1959] EA 474* and *Kenya Power & Lighting Company Limited Vs Benzene Holdings* 30 *Limited T/a WYCO Paints [2016] eKLR*.

- 5 That in the case at hand, the 1st Plaintiff was among the companies that were struck off the company register for failure to file annual returns for five years as per a notice issued by the Registrar of Companies, annexure **"A"** attached to the submissions. That it was also stated under the same notice that a company wishing to be restored had to apply for restoration - 10 before 30th August, 2024. That as of 24th March, 2025, the 1st Plaintiff was still struck off the register as per annexure **"B"**, a search report and that this was the position at the time of filing the 1st Defendant's written submissions on 16th April, 2025. That therefore, the 1st Plaintiff ceased to possess the legal capacity to prosecute and maintain this suit as of 14th - 15 August, 2023, when it was struck off the company register. That as per **Section 265A (2) of the Companies Act, 2012 (now Section 263(2) of the Companies Act, Cap. 106)** and **Regulation 41(4) of the Companies Regulations, 2023**, it is an illegality for a struck-off company to continue carrying on business as by law, it ceased to exist. - 20 In conclusion, Learned Counsel contended that the continued prosecution of this suit by the 1st Plaintiff, which was struck off the register is illegal and untenable in law as it has no capacity to maintain the suit.

# 2nd Defendant's submissions

Learned Counsel for the 2nd Defendant contended that the issue before the 25 Court is whether the 1st Plaintiff has *locus standi* and a cause of action against the 2nd Defendant. To that, Learned Counsel cited the law and principle that govern establishment of a cause of action as per **Order 7 rule 11 of the Civil Procedure Rules** and the case of *Auto Garage & Others Vs Motokov [1971] EA 514*.

30 Learned Counsel then submitted on the Plaintiffs' allegations of fraud against the 2nd Defendant as portrayed in the particulars under paragraph

5 10 of the amended plaint and emphasized that there is no cause of action against it. Learned Counsel did not submit on the 1st Plaintiff's *locus standi* to maintain the suit.

# Plaintiffs' submissions

- In reply, Learned Counsel for the Plaintiffs submitted that the 1st 10 Defendant does not dispute the 1st Plaintiff's capacity to sue, at the time of filing the suit. That the 1st Plaintiff was unaware of the alleged striking off and has since taken the necessary steps and that as per annexure **"A"**, the 1st Plaintiff was restored on the company register. - Regarding the 2nd Defendant's objection, that the 1st Plaintiff has no cause 15 of action against it; Learned Counsel submitted that the 2nd Defendant duly acknowledged that the Plaintiffs pleaded the particulars of facts against it but goes ahead to prematurely delve into the merits of the case. That therefore, the 2nd Defendant's Counsel's submissions go to the merits of the case and require production of evidence. - 20 1st Defendant's submissions in rejoinder

In rejoinder, Learned Counsel for the 1st Defendant contended that when the matter came up for mention on 26th March, 2025, the parties were given directions for filing their written submissions regarding the preliminary objections so raised. That on 7th May, 2025, after receiving the 25 1st Defendant's submissions wherein it contested the 1st Plaintiff's legal capacity, the Plaintiffs sought leave to file their submissions at a later date on grounds that they were seeking restoration of the 1st Plaintiff on the company register. That the retrospective act of curing the 1st Plaintiff's illegality constitutes an abuse of Court process as was defined in the cases

30 of *Ivan Samuel Ssebadduka Vs Chairman Electoral Commission and*

- 5 *3 Others Presidential Election Petition No. 1 of 2020* and *Attorney General & Another Vs James Mark Kamoga & Another SCCA No. 8 of 2004.* Learned Counsel prayed to Court to disregard the Plaintiffs submissions. - Learned Counsel then opposed the 1st Plaintiff's restoration on the 10 company register contending that it was null and void as it was contrary to **Regulation 42(1) of the Companies Regulations, 2023**, which provides for an application for restoration to be made within 12 months from the date of striking off as was upheld in the case of *Male H. Mabirizi*

# *K. Kiwanuka Vs Registrar General & Another Misc. Cause No. 38 of* 15 *2023*.

In the alternative and without prejudice, Learned Counsel submitted that since the 1st Plaintiff has regained its legal capacity, all actions taken by it between 14th August, 2023, and 12th May, 2025 be rendered devoid of legal effect. That this includes its instructions to file and prosecute *Misc.*

20 *Application No. 2853 of 2023* seeking reinstatement of the present suit that was filed on 23rd November, 2023, and granted on 19th January, 2024, following its dismissal on 27th October, 2023. Owing to the above, Learned Counsel prayed for the dismissal of the suit.

# 2nd Defendant's submissions in rejoinder

25 Learned Counsel for the 2nd Defendant reiterated his earlier submissions that the Plaintiffs have no grievance against the 2nd Defendant as it is only mentioned under paragraph 10 of the plaint. Learned Counsel went ahead to dispute in detail the allegations of fraud pleaded in paragraph 10 of the plaint.

## 5 Analysis and Determination

Having analyzed the gist of the preliminary objections and the submissions by Learned Counsel thereto, I find as hereunder;

In his submissions in rejoinder, Learned Counsel for the 1st Defendant submitted that the Plaintiffs' submissions should be disregarded 10 considering that the same were filed out of time. I do appreciate the submissions and authorities presented by Learned Counsel for the 1st Defendant regarding the importance of adhering to the Court schedules, however, this Court is enjoined under **Article 126(2)(e) of the Constitution of the Republic of Uganda, 1995**, to administer 15 substantive justice and avoid technicalities as was emphasized in the case of *Kasaala Growers Co-operative Society Vs Kakooza Jonathan & Another Supreme Court Civil Application No. 19 of 2010*. In the circumstances and considering the nature of this case, the Plaintiffs' submissions are hereby adopted.

20 Turning to the gist of the issue; the **Black's Law Dictionary, 9th Edition**, defines "*locus standi*" to mean the right to bring an action or to be heard in a given forum.

In the case of *Dima Domnic Poro Vs Inyani Godfrey & Another HCCA No. 17 of 2016*, Court held that:

25 *"The term locus standi literally means a place of standing. It means a right to appear in Court, and, conversely, to say that a person has no locus standi means that he has no right to appear or be heard in a specific proceeding."*

In the instant matter, it is undisputed that, at the time of institution of 30 this suit on 8th July, 2020, the 1st Plaintiff had *locus standi*. Learned

- 5 Counsel for the 1st Defendant now contends that the 1st Plaintiff has no *locus standi* to maintain this suit since it was struck off the company register on 14th August, 2023. According to the notice dated 14th August, 2023, issued by the Registrar of Companies showing the companies struck off the company register by notice, annexure **"A"** on the Court record, on - 10 14th August, 2023, the 1st Plaintiff Reg. No. 80010003391193 was struck off the company register for failure to file its annual returns for a period of five years. This was not disputed by the Plaintiffs.

According to the said notice, any company desirous of being restored onto the register was required to apply for restoration by 30th August, 2024. No 15 evidence was adduced to show that the 1st Plaintiff, after being struck off the register, applied for restoration by 30th August, 2024.

As a result, as of 14th August, 2023, the 1st Plaintiff ceased to legally exist and therefore, had no *locus standi* to maintain this suit. In light of the above, it was illegal for the 1st Plaintiff to continue holding out as an 20 existing company duly registered under the Laws of Uganda.

In a letter dated 7th May, 2025, on the Court record, the Plaintiffs acknowledged the 1st Defendant's preliminary objection regarding the 1st Plaintiff's capacity to maintain the suit and then informed Court that they had applied for restoration of the 1st Plaintiff on the company register. The

25 Plaintiffs do not reveal when they actually applied for restoration, however, according to the URSB notice attached to the said letter, reference is made to a letter dated 22nd April, 2025, regarding the 1st Plaintiff's activation on the company register. Therefore, it can be inferred that the 1st Plaintiff applied to be restored on the company register after the 1st Defendant had 30 raised this preliminary objection.

- 5 In his submissions in reply filed on 12th May, 2025, Learned Counsel for the Plaintiffs informed Court that the 1st Plaintiff had been restored onto the company register as evidenced by annexure **"A"**, a URSB User portal showing that as of 12th May, 2025, at 10:12am, the 1st Plaintiff was registered. To that, Learned Counsel for the 1st Defendant contended that 10 this retrospective act of restoring the 1st Plaintiff on the company register in light of this preliminary objection, was an abuse of Court process. In the case of *Attorney General & Another Vs James Mark Kamoga & Another, SCCA No. 8 of 2004* **Mulenga JSC (RIP),** in his lead judgment - 15 *"Abuse of Court process involves the use of the process for an improper purpose or a purpose for which the process was not established."*

relied on the **Black's Law Dictionary, 6th Edition** and stated that:

In light of the above holding, I find that the act of the Plaintiffs, of applying for restoration of the 1st Plaintiff on the company register after the Defendants had raised this preliminary objection and the delay in filing 20 their written submissions as scheduled by this Court, was intended to cure a manifestly evident illegality.

I have however considered **Regulation 48 of the Companies Regulations,** which empowers the Registrar to extend time for any action. It stipulates that;

"*The registrar may, on such terms as he or she considers just and expedient, extend the time for filing, registration of documents or other matter required to be done under these Regulations*."

30 From the foregoing, I find that the Registrar is empowered to extend time for any act meant to be done under the Regulations, including time for extension of restoration of the company on the register under **Regulation**

**42(1) of the Companies Regulations**.

- 5 In light of the above, as of 14th August, 2023, the 1st Plaintiff ceased to exist and any subsequent actions taken during the period when the 1st Plaintiff was off the register were an illegality. **Section 263(2) of the Companies Act** is to the effect that a company struck off the register shall cease to carry on business. Further, in the case of *M/s Schenker N. V Vs* - 10 *Uganda Revenue Authority & Another Misc. Cause No. 94 of 2023*, this Court held that:

*"A company struck off the register ceases to have legal existence and is required to cease its operations…"*

On 27th October, 2023, this suit was dismissed for non-appearance of the Plaintiffs and their Counsel. However, the suit was reinstated on 19th 15 January, 2024, vide *Misc. Application No. 2853 of 2023*. At the time the suit was dismissed and its subsequent reinstatement, the 1st Plaintiff had been struck off the register for companies for failure to file annual returns. The 1st Plaintiff therefore during the period it was struck off the 20 register ceased to have legal existence. I therefore agree with Learned Counsel for the 1st Defendant to the extent that the 1st Plaintiff during the period it was struck off the register, lacked the requisite legal capacity to sue or be sued. Accordingly, since it had no legal capacity having been struck off the register on 14th August, 2023, the 1st Plaintiff could not 25 lawfully institute any legal action and this includes the application for reinstatement of the suit vide *Misc. Application No. 2853 of 2023* which was filed on 24th November, 2023, during which period the 1st Plaintiff was legally not in existence. It should however be noted that at the time the Plaintiffs' suit was reinstated, the issue of the Company being struck off 30 the register was not brought to the attention of Court. 5 Therefore, as was laid down in the case of *Makula International Limited Vs His Eminence Cardinal Nsubuga & Another SCCA No. 4 of 1981*, Court cannot sanction an illegality once it is brought to its attention.

The 2nd Defendant also raised a preliminary point to the effect that the 1st Plaintiff has no cause of action against it.

10 However, given the above finding on the fact that the 1st Plaintiff did not have legal capacity to file the application for reinstatement on 24th November, 2023, I shall not delve into consideration of the contentions of the 2nd Defendant.

In light of the above, since the 1st Plaintiff did not have the legal capacity 15 to file an application for reinstatement of the suit, which was dismissed on 27th October, 2023, the 1st Plaintiff lacks the legal capacity to maintain this suit against the Defendants and its suit is hereby dismissed.

Accordingly, this preliminary objection is upheld.

Issue No.2: Whether the 2nd Plaintiff suing through her lawful Attorney has 20 *locus standi* to bring the current suit?

1st Defendant's submissions

Learned Counsel for the 1st Defendant referred to paragraph 2 of the amended plaint, wherein the 2nd Plaintiff is described as the director of the 1st Plaintiff and Administratrix of the estate of the late Amirali Virji 25 Tarmohamed, suing through the appointed attorney, Nizarali Sayani as per the powers of attorney attached to the amended plaint as annexure

"**A**".

Learned Counsel then contended that **Section 261 of the Succession Act, Cap**. **268** is to the effect that upon the grant of probate or letters of

- 5 administration, no person other than the person to whom the same was granted, shall have power to sue or prosecute any suit as representatives of the deceased as was emphasized in the cases of *Juliet Bbosa Namitala Vs Louis Bakyenga & 3 Others HCMA No.1535 of 2021* and *Nakabuye Agnes Vs Martin Strokes & Another Misc. Cause No. 38 of 2021*. In - 10 conclusion, Learned Counsel submitted that the donee of powers of attorney is not authorized to institute and/ or maintain the present suit, on behalf of the 2nd Plaintiff.

#### 2nd Defendant's submissions

Learned Counsel for the 2nd Defendant submitted that it is the proposition 15 of the law that an administrator and executrix does not have the power to delegate their authority and that therefore, the power of attorney is improper.

#### Plaintiffs' submissions

In reply, Learned Counsel for the Plaintiffs argued that **Section 261 of**

20 **the Succession Act** does not expressly bar the holder of letters of administration from giving powers of attorney to another person, but prohibits suing in personal capacity in the presence of an administrator. That the cases relied on by the Defendants' Learned Counsel are distinguishable from the current ones. That in these cases, the holders of 25 the powers of attorney signed documents on behalf of the estate that deponed an affidavit and lodged a caveat, which is distinct from this case. Further, that under the circumstances, the Courts have only invalidated the powers of attorney and maintained the suit, since the suit was in the names of persons with the capacity to sue.

5 Owing to the above, Learned Counsel prayed that, should the Court invalidate the powers of the attorney, then the 2nd Plaintiff should be found with the capacity to maintain the suit as she attached the probate evidenced by annexure "**C**" attached to the submissions.

### 1st Defendant's submissions in rejoinder

- 10 In rejoinder, Learned Counsel for the 1st Defendant reiterated his previous submissions and further opposed Learned Counsel for the Plaintiffs' submissions on the distinction of the cited cases above, arguing that it is unsustainable as the principle is unchallenged. That the Plaintiffs' submission that the invalidity of the power of attorney should not affect - 15 the competency of the suit is misconceived.

## Analysis and Determination

As to whether an administrator/executor of an estate can delegate his or her duties;

## **Section 261 of the Succession Act** stipulates that:

- 20 "*After any grant of probate or letters of administration, no person other than the person to whom the same has been granted shall have power to sue or prosecute any suit, or otherwise act as representative of the deceased, until the probate or letters of administration has or have been recalled or revoked*." - 25 As portrayed in the above provision, other than an Administrator, no one can sue or be sued as a representative of the deceased in respect of the estate. This means that the powers derived from the letters of administration or probate regarding representation of the deceased in a suit cannot be delegated.

- 5 In the case of *Re: Estate of Krishan Murti Maini (Deceased) [2011] eKLR*, the High Court of Kenya at Nairobi, while determining whether the Administrators' powers can be delegated stated that their representation of the deceased is personal to them and cannot be delegated to someone else, not even their Advocates. This decision was adopted in the cases of - 10 *Rose N. Namukasa Vs Namayanja Mayanja Margret & 4 Others HCMA No. 890 of 2024, Kampala Financial Services Vs Commissioner for Land Registration Misc. Cause No. 149 of 2020* and *Nakabuye Agnes Vs Martin Strokes and Another (supra)*.

In the instant case, the 2nd Plaintiff, the Administratrix of the estate of the 15 late Amirali Virji Tarmohamed, instituted this suit through her lawful attorney Nizarali Sayani as per the powers of attorney, annexure **"A"**, on the Court record. Under the said powers of attorney, the 2nd Plaintiff permitted her attorney to;

"*On her behalf, benefit and names, to bring or defend any other* 20 *action or proceedings in respect of or affecting the Estate of the late Amiraili Virji Tarmohamed and to settle or compromise the same and to compromise or submit to arbitration any accounts claims and disputes between me and any other person.*"

The above shows that the 2nd Plaintiff granted her lawful attorney, 25 authority to sue and defend any actions arising from the estate of the late Amirali Virji Tarmohamed. From the foregoing, guided by the above authorities, I find that Khatunbhai Amirali Tarmohamed, the Administratrix of the estate of the late Amirali Virji Tarmohamed cannot delegate her administrative powers in relation to the estate and therefore, 30 the powers of attorney to Nizarali Sayani are null and void.

- 5 The question, therefore, is whether the 2nd Plaintiff's suit can be maintained against the Defendants as argued by the Plaintiffs' Counsel? It is my considered view that if the appointed attorney through whom she brought this suit lacks *locus standi*, then the 2nd Plaintiff cannot maintain this suit. - 10 Accordingly, this preliminary point is also upheld.

Issue No.3: Whether the 3rd Plaintiff has a cause of action in the current suit?

### 1st Defendant's submissions

Learned Counsel for the 1st Defendant relied on **Order 7 rule 1(e) and 11**

15 **(a) of the Civil Procedure Rules** as well as the case of *Auto Garage & Others Vs Motokov (supra)* for the principles that govern the establishment of a cause of action. That in the case at hand, under paragraphs 3 and 6(g) of the amended plaint, the 3rd Plaintiff asserts her cause of action against the 1st Defendant on grounds that she is a 20 beneficiary to the estate of the late Amirali Virji Tarmohamed.

Learned Counsel then contended that since she is a beneficiary to the estate of the late Amirali Virji Tarmohamed, the 3rd Plaintiff is barred under **Sections 176 and 261 of the Succession Act** and the decision in the case of *Juliet Bbosa Namitala Vs Louis Bakyenga and 3 Others* 25 *(supra)*, from instituting the present suit.

Further, that the 3rd Plaintiff does not have an interest in the suit since the same was not bequeathed to her. That, as pronounced in the case of *Israel Kabwa Vs Martin Banoba Musiga SCCA No. 52 of 1995,* cited with approval in the case of *Hajat Nambi Lugwisa Vs Sheik Hussein*

30 *Ssengendo Civil Appeal No.4 of 2021*, it is a fundamental principle of

5 law that for a beneficiary to sue in their name, they must have a direct or sufficient interest in the subject matter.

That the property in issue is registered in the names of the 2nd Plaintiff as the Administrator. In his conclusion, Learned Counsel contended that the 3rd Plaintiff has no l*ocus standi*.

# 10 2nd Defendant's submissions

Learned Counsel for the 2nd Defendant contended that the 3rd Plaintiff has no *locus standi* as she is not a beneficiary to the said property. Learned Counsel insisted that the 3rd Plaintiff is not mentioned in the will, and that there is no specific bequest made to her.

## 15 Plaintiffs' submissions

Learned Counsel for the Plaintiffs submitted that the 3rd Plaintiff is a beneficiary to the estate of her late father, who died intestate as per **Section 20 of the Succession Act**. Learned Counsel also submitted that as per **Section 21 of the Succession Act**, all the property of an intestate 20 is held by his or her representative in trust for the beneficiaries. That under clause 4 of the will, the deceased bequeathed to his children all portions of his estate, as the wife would, at her directive, give them. Based on the above, Learned Counsel argued that the 3rd Plaintiff has the capacity to sue. In support of his submissions, he relied on the cases of

25 *Aidah Tumushemereirwe Bajuna and Another Vs Yosamu Rubyakana and Others HCCS No. 67 of 2019 and Israel Kabwa Vs Martin Banoba Musiga (supra*).

# 30 1st Defendant's submissions in rejoinder

Learned Counsel reiterated his submissions and distinguished the cases relied on by Learned Counsel for the Plaintiffs and reiterated that the 3rd

- 5 Plaintiff is not vested with the requisite *locus standi* to institute this suit. Further, that in the case of *Mulindwa George William Vs Kisubika Joseph SCCA No. 12 of 2014* it was held that justice must be administered according to the law, not based on sympathy. - 10 2nd Defendant's submissions in rejoinder

Learned Counsel also reiterated his submissions and contended that the 3rd Plaintiff has no cause of action in this case. He relied on **Section 191 (now Section 187) of the Succession Act** and the case of *Prince Kalemera H. Kimera and Another Vs The Kabaka of Buganda & 3*

15 *Ors CS No. 535 of 2017* to emphasize the same. That the case of *Israel Kabwa Vs Martin Banoba (supra)* is distinguishable from this case and does not help the 3rd Plaintiff.

# Analysis and Determination

20 It is undisputed that Khatunbhai Amirali Tarmohamed, is the current Administratrix of the estate of the late Amirali Virji Tarmohamed, which estate includes the suit property. The 3rd Plaintiff was described in the amended plaint as the biological daughter of the 2nd Plaintiff and beneficiary of the estate of the late Amirali Virji Tarmohamed. As to 25 whether the 3rd Plaintiff has sufficient interest, her interest in the suit property was not established thus leaving the *locus standi* to the Administratrix of the estate.

In the case of *Juliet Bbosa Namitala Vs Louis Bakyenga & 3 Others (supra),* the Court held that:

30 *"… it is true a beneficiary can institute and defend actions meant to protect and preserve the estate. This is especially so where there is no administrator officially appointed by Court… it is the administrator*

5 *who has a right to initiate proceedings concerning estates of deceased persons in the Courts of law."*

Therefore, since there is an Administratrix officially appointed by the Court, she is the person with the authority to institute legal proceedings in the case at hand in her own name.

10 In the premises, given that there is an Administratrix in charge of the estate in issue; then the 3rd Plaintiff has no cause of action or *locus standi* to institute proceedings concerning the said property in Court.

Accordingly, this preliminary objection is also upheld.

Having upheld all the preliminary objections raised by the Defendants;

15 *High Court Civil Suit No. 397 of 2020* is hereby dismissed with costs to the Defendants.

I so order.

Dated, signed and delivered electronically via ECCMIS this **30th** day of **May, 2025.**

Patience T. E. Rubagumya

**JUDGE**

30/05/2025

20