[2024] UGHC 1220

## THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA **LAND DIVISION**

# **MISCELLANEOUS CAUSE NO. 011 OF 2024**

BYENGOMA NICHOLAS::::::::::::::::::::::::::::::::::::

#### **VERSES**

## GREENLAND BANK (IN LIQUIDATION):::::::::::::::::::::::::::::::::::: **BEFORE:** HON. LADY JUSTICE NABAKOOZA FLAVIA. K **RULING**

This Application was brought under Section 33 of the Judicature Act, Section 98 of the Civil Procedure Act and Order 52 rule 1 of the Civil Procedure Rules for the following reliefs:

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a. That the Respondent vacates the mortgage registered on the Certificate of Title for land comprised in Busiro Block 277 Plot 140 at Kigoma in favor of the Respondent under Instrument Number KLA 178190 (herein after referred to as, 'the Suit land').

b. That the Respondent releases the Certificate of Title for land comprised in Busiro Block 277 Plot 140 Land at Kigoma to the Applicant.

c. The costs be provided for.

The grounds of the application are contained in the notice of motion; and supported by an affidavit deposed to by Mr. Byengoma Nicholas (the Applicant herein). Briefly, the 15 grounds are; that on 13/06/1997, the Applicant purchased two adjacent Plots comprised in Block 277 Plot 58 and 140 from the Late Sebukima Davis. That at the time of purchase, the vendor had pledged both titles with UCB and Greenland Bank. Plot 140 was pledged with the Respondent Bank whose obligation was later assigned to the Applicant by the vendor. That the Applicant fully paid the outstanding loan balance but 20 the Respondent was put under receivership by Bank of Uganda in December 1998 before he could retrieve the Certificate of Title. That the Respondent has for the last 25 years refused to release the Title to the Applicant stating that the same can only be released to administrators of the Late Sebukima Davis. That the Applicant has been in possession and occupation unchallenged since October 1997 but has failed to transfer 25 the title to his names or obtain a vesting order due to the existence of the mortgage. That it is in the interest of justice that the Application is granted.

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The application was opposed by the Respondent through the Deputy Legal Counsel of Bank of Uganda Mr. Titus Mulindwa, who averred that the Respondent was closed and placed under statutory liquidation by Bank of Uganda in 1999. That the events pleaded by the Applicant occurred before closure of the Respondent and the statutory Liquidator's officials did not find all the records pertaining Sebukima Davis' both loan and operating accounts. That the records available reflect that the loan secured by the suit property was fully settled and the Statutory Liquidators have no knowledge of the dealings between the Applicant and Sebukima Davis.

He admitted that the Applicant has written to the statutory Liquidator on several occasions alluding that Sebukima Davis died before the transfer was concluded. However, that the executors or administrators are the persons in position to be handed the Certificate of title if indeed the registered proprietor passed on. He added that the exercise of sale and transfer of mortgaged property without consent of the mortgagor can only be exercised under a mortgagee's power to sale wherein there is default as envisaged under the law. He prayed that the application should be dismissed with costs.

The Applicant filed an affidavit in rejoinder reiterating his earlier averments and prayed that this court should grant a vesting order to enable the Respondent to handover the certificate of title to him without any worry of future claims.

At the conclusion of the hearing, this court visited the locus in quo and made the following observations. That the Applicant is in occupation of the suit land farming elephant grass for his animals; and that it also has a farm house. Further details of the visit are on record.

### **Representation**

The Applicant was represented by Counsel Ezra Mugabi while the Respondent was represented by Counsel Eric Mugarura.

Only Counsel for the Applicant filed written submissions which shall be relied on in this ruling.

Counsel for the Applicant raised only one issues for determination, to wit; -65

i. Whether the Certificate of Title for Land Comprised in Busiro Block 277 Plot 140 Land at Kigoma should be released to the Applicant?

It was counsel for the Applicant's submission that the land sale agreement was initially between the Applicant and the Late Sebukima Davis but the Respondent became a party when the late Sebukima Davis assigned his loan obligations secured by the subject

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ceftificate oftitle to the Applicant. That the deceased also instructed the Respondent to release the said cerlificate of title to the Applicant upon completion of payment of the outstanding arnount. IIe added that the Iate Sebukirna Davis' actions ofexecuting a land sale agreement, receiving the lull purchase plice, handing over possession of the land, signing the outstanding loan obligation secured by the suit land and turther executing a transfer lorm in lavor of the Applicant shows that he transferred and relinquished all his rights and interest in the suit land and cannot be claimed by any other person other than the Applicant. That the Respondent's refusal to release the title to the Applicant on ground that it can only be released to the administrators of the estate of the late Sebukima Davis is misconceived.

I-Ie further relied on Section 92 (1) olthe Registration of Titles Act which provides that:

o ⁸⁵ The proprietor of land or ofa lease or mortgage or of any estate, righl or interest therein respectively may transfer the same by a transJbr in one of the forms in the Seyenth Sclrcdule to this Act; bttl where the consideration for a transfer does not consist oJ ntonel,, the v,ords "lhe sum of" in lhe forms of transfer in that Schedule shall not be used to describe lhe consideralion, but the true consideration shall be 90 concisely stated.

> Counsel also relied on the case ol Pyrali Shunji Ganji & 3 Ors Vs Coffee Dcvclopmcnt Avothority CACA No.37 of 1997 where Hon. Justice Manyindo J cited Meggany & Wade, the law on Real Property' 3'd Edition 1966 at pages 582- 583 and held that 'once a consent of transfer was obtained, the deal was lhrottgh, and that nonregislralion of a trttnsfer form was inconsequenlial' .

o ¹⁰⁰ 105 Counsel (trther relied on Section I l4 ofthc Evidcncc Act and the case ofDFCU Bank Ltd Vs Magczi (CS No. 547 ot 2017) to submit that the Legal Secretary having written back to the Applicant on 7/08/1998 stating that, '...if the outstanding balance is oaid. the certilicate of title will be released to vou as advised bv Mr. Sebukimt', the Respondent became party. That the Applicant then fully paid the vendor's outstanding loar.r obligatiolr with the Respondent bank on that representation and assurance. That the Respondent should not only be precluded tl'onl denying l.raving knowledge of the dealings but be compelled to perfbrm its obligation in the assignment by releasing the subject certificate of title. Further, that the Applicant was prevented from applying for ^avesting order under Section 167 ofthe RTA due to existence ola subsisting mortgage registered under Instrument No. KLA I 781 90.


In my resolution of the above from the record, it is not disputed that the Commissioner for Land Registration implemented and/or created a mortgage over the suit property in favor of the Respondent on 1^st February, 1996 vide Instrument No. KLA 178190. It is apparent that the said mortgage was cleared and the Respondent deposited in this court the Certificate of Title together with the mortgage release instrument dated 19/04/2024.

Section 14 (1) of the Mortgage Act, 2009 provides for the right to discharge and release of mortgages upon completion of payment. The released document reads in part that,

## 'upon consideration of full payment of principal sums and interest on the mortgage to Greenland Bank Ltd (in liquidation). It was released and discharged from all claims under the mortgage'.

Consequently, it is evident that the mortgage on the certificate of title for the suit land was released from any claim by the Respondent as per the first relief sought in the notice of motion. However, the Applicant prayed for other reliefs through his Counsel's submissions. Therefore, the court has raised the following issues.

- ii. Whether the Applicant has any interest legal or equitable in land comprised in Block 277 Plot 140 at Kigoma? - iii. Whether the Certificate of Title for Land Comprised in Busiro Block 277 Plot 140 Land at Kigoma should be released to the Applicant? - iv. Whether the land comprised in Block 277 Plot 140 at Kigoma, Wakiso should be *vested in the Applicant's name?* - **Remedies?** $\nu$ .

Resolution of Issue 1: *Whether the Applicant has interest in the suit land*. It is trite law that a certificate of title is indefeasible and conclusive evidence of ownership, except in cases of fraud by the registered proprietor. (see Sections 64 Cap 240, 76 of Cap 240, 120 Cap 240 and 160 Cap 240 of the Registration of Titles Act). Nonetheless, Section 10 (1) of the Contracts Act, 2010 mandates courts to recognise mutual agreements between parties.

In the Supreme Court Case of Sharif Osman Vs Hajjo Haruna Mulangwa CA No. 38 of 1995, Tsekooko JSC (as he then was) pointed out that, "court respects the sanctity of freedom of contract, it does not make contracts for parties but only gives effect to the clear intention as gathered from the agreement". Further, in Ismail Jaffer Allibhai & 20rs V Nandlal Harjiva Karia & Anor Civil Appeal No. 53 of 1995, Oder J. S. C also pointed out that:

... on completion of a contract of sale of immovable property. property passes to the purchaser, and the vendor holds it as a trustee for the purchaser. The legal title, on the other hand, remains with

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the vendor ttntil transfer is fficted. The equitable title which passes to the purchaser is considered to be superior to the vendor's legal litle, v,hich is extinguished on payment of the purchase price by the purchaser.

In this application, there is an ur.rdisputed agreement which was executed by the Applicant and a one Davis Sebukima attacl'red to the affldavit in support as,4nnexure A dated 13/0611997 for property comprised in Busiro Block 277 Plot 58 and 140 Gombe Wakiso. Block 221 Plot 58 is currently registered in the names of the Applicant (Nicholas Byengoma) vide Instrument No. KLA ²³I 564 while Plot 140 is stitl registered in the name of Sebukima Davis (See. The secu'ch statement and certi.ficate qf lille narked annexure B lbr Plol 58 and a secu'ch statement lbr Plot 110 dated 7/06/202 I ).

o ¹⁶⁵

1,10 775 The evidence also shows that after sale of the suit land to the Applicant, the vendor signed transl'er lbrms ir.r his favor and the I{espondent undeftook to handover the certificate of title lbr Block 277 Plot 140 upon completion of the payment loan. Therefore, considering the reasoning in Pyrali Shunji Ganji & 3 Ors Vs Coffee Dcvclopmcnt Authority (supra), I do find that once the said transfer forms were signed, the deal was ttu'ough, and that non-registration of a transfer form was inconsequential. This then implies that Sebukima Davis' absolutely relinquished his irrterest in Block 27'7 Plot 140 in favor olthe Applicant regardless of the Respondent's averment of ignorance of the dealings between the Applicant and Sebukima Davis is untenable.

In conclusion, I resolve the llrst issue above ir.r the afllrmative.

180 lssue 2'. Ll'ltetlrcr the Certificate of Titlefor Land Comprised in Busiro Block 277 Plot 140 Land at Kigomo shoultl be releosed to the Applicant? It was the Respondent's evidence that the Applicant is not the proper person to be handed the impugned Certificate of Title but the Adninistrators of the estate if at all the Registered proprietor has since passed on.

o

On the contrary, the Applicant asserted dtat he fully paid the purchase price; and paid the loan assigned to hirn by Davis Sebukima, who executed transfer forms in his favour hence becoming entitled to all legal rights in the property in issue. That the respondent is obligated to handover the certificate of title to him as the vendor's successor in title.

#### Ilcsolution of thc above issue

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At the time of signing the sale agreement, the property in issue was subject to a mortgage from Greenland Bank. Thus, under paragraph 3 of the sale agreement dated 13/6/1997, it was 'further agreed between the parties hereto that the vendor shall discharge his obligation with Ms. Greenland Bank within a period of 3 months from 195 the 20^th June, 1997 and thereafter deliver unencumbered Certificate of Title to the purchaser'. There is further evidence to that effect in form of a supplementary agreement for Plot 140 Block 277 between Davis Sebukima and the Applicant dated 02/10/1997; transfer forms for Block 277 Plot 140 signed by Davis Sebukima in favor of the Applicant; a letter dated 14/04/1998 addressed to the Credit Manager Greenland 200 Bank by Davis Sebukima in which he assigned the out-standing loan obligation on his account to the Applicant and a request the said Bank to transfer the title in Block 277 Plot 140 to the Applicant upon liquidation of the outstanding obligation. The Applicant further attached a reply from Greenland Bank dated 17/08/1998 addressed to him to effect that the said Account was indebted to the tune of 3,498,000/- and that the 205 certificate of title would be released to him as advised by Mr. Sebukima if the balance was paid.

It is evident that the communication, by letter, from the Respondent's Legal Secretary 210 (Yusuf Nsibambi) to the Applicant puts the Respondent under duty to perform its assurance to the Applicant especially since he relied upon it and paid the outstanding loan balance. Therefore, it is improper for the Respondent to refuse handing over the certificate of title in issue on any condition except that of non-payment of the outstanding loan balance. Having fulfilled the said condition, the Respondent was and 215 is under duty to handover the certificate of title for the land in issue to the Applicant.

In Bank of Uganda & Anor Vs Kaweesi & Ors HCMA No. 1047 of 2022, my brother Mubiru J relied on Section 100 (d) and (e) (ii) of The Insolvency Act, 2011 and pointed out that, 'as regards the rest of the claims, it is trite that a liquidator acts on behalf of the company to administer its affairs." In this case, therefore, since the Respondent is under liquidation, its agent, Bank of Uganda, is under duty to fulfill the Respondent's obligation by handing over the certificate of title of the land in issue to the Applicant.

225 Consequently, the second issue is answered in the affirmative.

Issue 2. Whether the Applicant should be granted a vesting order?

It suffices to state that the prayer of a vesting order/consequential order was made by Counsel for the Applicant in the submissions; specifically, the last two paragraphs of 230 the submissions. The said prayers did not form part of the notice of motion, which implies that facts upon which they are claimed were not pleaded.

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" lt i.s nov, u,ell estcrblished that a party connol be granted reliefwhich it has not claimed in the plaint or claim" (Ms Fang Min vs. Belex Tours and Travel Ltd SCCA No.6 of 2013). It is noted that the cited decision was made by the Supreme Court and therefbre binding on this court. h.r this case also, I find that the Applicant is not entitled to a vesting order or consequential order as argued by his Counsel. Consequently, the issue is found in tl.re negative.

o

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Finally, the application succeeds and the orders sought as stated in the notice of motion are granted. I will make no orders to costs of the application. Let each pa(y bear their own costs.

1'-,- ²⁴⁵ Signed, dated and delivered at Kampala tfris..t3.?.. day ol 2024

abakoo Judge