[2003] UGHC 115
The court found that the Plaintiff had advanced Shs.50 million to the 1st Defendant, secured by guarantees and a mortgage, and that the Defendants had defaulted on repayment. The 4th Defendant had executed guarantee forms, and the Plaintiff had served demand notices which were acknowledged. The Defendants failed to...
Source-derived case information.
- Citation
- [2003] UGHC 115
- Parties
- Plaintiff: Bank of Baroda; Defendant: M/S Arkay (U) Ltd; Defendant: Mr Arun Kumar Sharma; Defendant: Mrs Poonam Sharma; Defendant: Mr Henry Senkooza
- Court
- High Court of Uganda
- Jurisdiction
- Uganda
- Case Number
- HCCS NO. 319 OF 1999
- Procedural Posture
- Civil Suit / Judgment
- Outcome
- judgment for the plaintiff
- Judges
- Arach-Amoko J
- Legal Topics
- Loan Default, Guarantee Liability, Mortgage Enforcement, Overdraft Facility
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Bank of Baroda
Plaintiff
M/S Arkay (U) Ltd
Defendant
Mr Arun Kumar Sharma
Defendant
Mrs Poonam Sharma
Defendant
Mr Henry Senkooza
Defendant
Procedural Posture
Civil Suit / Judgment
Legal Issues
- 1 Whether the Plaintiff advanced the amount claimed to the 1st Defendant.
- 2 Whether the 4th Defendant guaranteed the loan.
- 3 Whether the Defendants have paid the money claimed.
Ratio Decidendi
The court found that the Plaintiff had advanced Shs.50 million to the 1st Defendant, secured by guarantees and a mortgage, and that the Defendants had defaulted on repayment. The 4th Defendant had executed guarantee forms, and the Plaintiff had served demand notices which were acknowledged. The Defendants failed to pay the outstanding sum, and the 1st, 2nd, and 3rd Defendants did not contest the claim. The court held that the Plaintiff was entitled to judgment for the outstanding amount, interest, and costs, as the evidence established the loan, the guarantees, the default, and the Defendants' liability.
Court Disposition
judgment for the plaintiff
Orders
- Judgment entered in favour of the Plaintiff against the Defendants jointly and severally for Shs.116,683,013/.
- Interest at 20% per annum from date of filing until payment in full.
Full Case Text
Judgment text and source record
32 paragraphs
DRAFT:
### **THE REPUBLIC OF UGANDA**
## **IN THE HIGH COURT OF UGANDA AT KAMPALA**
## **HCCS NO. 319 OF 1999**
**BANK OF BARODA :::::::::::::::::::::::::::: PLAINTIFF**
#### **VERSUS**
# **1. M/S ARKAY (U) LTD ] 2. MR ARUN KUMAR SHARMA ] 3. MRS POONAM SHARMA ] ::::::::::::::::::::: DEFENDANTS 4. MR HENRY SENKOOZA ]**
#### **BEFORE: THE HON. LADY JUSTICE M. S. ARACH - AMOKO**
# **JUDGMENT:**
The Plaintiff sued the Defendants jointly to recover Shs.111,683,013/ plus interest thereon at 25% p.a, plus bank charges, being the outstanding sum due and owing as at 31/1/99, for an overdraft facility granted to the 1st Defendant by the Plaintiff in October 1997 allegedly at the express instance of the 1st Defendant and upon guarantees by the 2nd, 3rd and 4th Defendants. To secure the facility, the Defendants also gave a demand promissory note,
- a letter of continuing security. - a debenture creating a floating charge over the current and movable assets of the 1st Defendant and, - a legal mortgage on plot No. 209 Block 32, Kibuga.
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The Plaintiffs case is that the Defendants have defaulted in the payment of the facility. A demand notice and a notice of intention to sue were served on the Defendants but they have neglected, ignored, failed and/or refused to pay the said sum or any part thereof. Hence this suit.
The 4th Defendant filed a written statement of defence denying that he executed <sup>a</sup> Power of Attorney for the 1st Defendant or any guarantee as alleged; and shall put the Plaintiff to strict proof.
The Defendant replied and maintained its position.
The matter proceeded exparte as Mr. Kavuma; learned counsel for the 4th Defendant did not attend Court on the hearing date without any reason. The 1st, 2nd and 3rd Defendants did not file defences within the prescribed time. Judgment in default was accordingly entered against them by the Registrar.
The following issues were framed for determination by the Court:
- 1. Whether the Plaintiff advanced the amount claimed by the Plaintiff to the 1st Defendant. - 2. Whether the 4th Defendant guaranteed the loan. - 3. Whether the Defendants have paid the money claimed. - 4. Reliefs, if any.
The Plaintiff adduced the evidence of Mr. Alison Mutakirwa, a Banking Officer at its Kampala Road main branch attached to the advances department at the material
time. He testified that he knows the Defendants. His duties include disbursement of loans and loan recovery. The Defendants were clients of the Plaintiff bank. Sometime in 1997 they requested for an overdraft facility. Their request was sanctioned and they were given Shs.50m. The draft was secured by property on Block 32 plot 209 belonging to Mr. Henry Senkooza. The Defendants including Mr. Senkooza also signed other documents - namely:
1. A guarantee forms - in 1997 and 1998 - Exhibit Pl.
2. A memorandum of deposit of his title deed - signed in 1997 - Exhibit P2.
3. A mortgage deed - Exhibit P3.
The money was advanced on A/C No. 01760008308 belonging to ARKAY (U) LTD. The Defendants did not pay any money and the outstanding amount as at 1/3/99 was Shs. 114,224,633/ inclusive of interest. He tendered the bank statement as Exhibit P4. The bank demanded the money in vain several times and a copy of the demand notice was tendered as Exhibit P5. The witness therefore prayed Court to help the bank to recover the money.
Based on this evidence, it is clear that the Plaintiff did advance Shs.50m to the 1st Defendant on it's A/C No. 01760/008308 on the date mentioned in the plaint, (see Bank statement Exhibit P4).
There are two guarantee forms by the 4th Defendant dated 20/4/98 and 21/3/97 duly executed by the 4th Defendant (Exhibit Pl). The documents were guaranteed by Mr. Solankee, Senior Manager, Credit, Bank of Baroda (U) Ltd.
PW1 stated that the 1st Defendant did not pay the money. There is an outstanding sum of Shs.114,224,633/ as at 31/12/99 (see Bank statement Exhibit P4). A demand notice was served on the Defendants (Exhibit P5). The 4th Defendant received the same and did acknowledge receipt thereof. The issues <sup>1</sup> - 3 are therefore answered in favour of the Plaintiff.
The final issue is reliefs. The Plaintiffs prayer is for the Court to assist it to recover its money with accrued interest at 25% p.a from date of filing till payment in full, plus costs. The Plaintiffs counsel repeated the prayer in his submissions. I am persuaded by the submission and on the basis of the foregoing, I hereby enter Judgment in favour of the Plaintiff against the Defendants jointly and severally for Shs.116,683,013/ plus interest at 20% p.a from date of filing till payment in full. The Defendants shall also pay the costs of the suit.
M. S. Arach - Amoko
JUDGE
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