[2020] UGSC 59

#### **REPUBLIC OF UGANDA**

## IN THE SUPREME COURT OF UGANDA

### AT KAMPALA

## **CIVIL MISC. APPLICATION NO. 40 OF 2020**

(Arising out of Civil Application No. 39 of 2020 and Civil Appeal No. 7 of 2020)

**APPLICANT** SUDHIR RUPARELIA ::::::::::::::::::::::::::::::::::::

#### **VS**

## 1. CRANE BANK LTD (IN RECEIVERSHIP)

**\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*** 2. BANK OF UGANDA

#### **RULING**

This is an application by Sudhir Ruparelia seeking for the following orders:

- interim injunction doth issue restraining the $2^nd$ 1. An Respondent, their agents or anyone acting under their authority from placing the 1^st Respondent under liquidation pending the hearing and determination of **Civil Appeal No. 7 of 2020**; - 2. An interim injunction doth issues restraining the $2^nd$ Respondent, their agents or anyone acting under their authority form continuing with liquidation process of the 1^st respondent pending the hearing and determination of **Civil Appeal No. 7 of** 2020;

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3. An interim mandatory injunction doth issue returning the status quo of the 1"t respondent to what it was at the time of hling Civil Appeal No. 7 of 2O2O;

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4. Costs of the Application be provided.

The applicant filed an affidavit in support of the motion and an affidavit in rejoinder, both sworn by the applicant himself.

The respondents opposed the application and jointly filed an affidavit in reply sworn by Ms. Margaret K. Kasule, Lega-l Counsel of Bank of Uganda.

# Background

The facts giving rise to this application are as follows:

The Applicant, Sudhir Ruparelia, was one of the shareholders and a member of the Board of Directors of Crane Bank Ltd, a comp€rny licensed by the 2nd respondent to carry out the business of a hnancial institution.

Owing to alleged mismanagement and unresolved liquidity problems, Bank of Uganda (2"d respondent) intervened, in its capacity as regulator of financial institutions, and placed the 1", respondent under statutory management pursuant to sections 87(3) and 88( l) (a), (b) of the Financial Institutions Act, 2OO4, on 2Ott October,2016.

On 24t January, 2017, the 2"d respondent, pursuant to section 94 of the Financial Institutions Act, placed the Crane Bank Ltd under receivership.

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On 25,h January, 2017, the 2"d respondent being the receiver of the l"t respondent entered into a purchase of assets and assumption of liabilities agreement with DFCU Bank Ltd, in which the title, benefits, and interests of Crane Bank Ltd were acquired by DFCU Bank Ltd.

On 30th June, 2O17, Crane Bank Ltd (in receivership), filed HCCS IYo. 493 of 2017, against the Applicant and Meera Investments Limited seeking the recovery of money allegedly misappropriated by the Applicant as a director and shareholder of Crane Bank Ltd. Crane Bank Ltd (in receivership) also sought the delivery of freehold certificates of titles to 48 properties and a refund from Meera Investments Ltd for payment made on "Void leases".

On 3.d August 2017, the Applicant and Meera Investments Ltd, filed their defence. In their written statement of defence, they denied the allegations made against them and stated that they would raise preliminary objections against the then plaintiff Crane Bank Ltd (in receivership) to the effect that the Plaintiff had no loans standi, no cause of action and that the suit property was barred in law.

Indeed, they hled H. C Misc. Application 32O of 2019, seeking orders that: the plaintiff had no loans standi to commence actions under HCCS IYo. 493 of 2OL7 against the Applicant and another, that the plaint did not disclose a cause of action against the Applicant & Anor, that the orders sought by Crane Bank Ltd (in receivership) were barred in law with costs; and that the costs of the application be provided for.

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David Wangutusi, J, allowed the application and dismissed HCCS No. 493 of 2OL7 for lack of cause of action, locus standi and for being barred in law. He also ordered the 2"d respondent to pay costs of the application.

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Being dissatisf,red with the decision and orders of the High Court, Crane Bank Ltd (in receivership) unsuccessfully appealed to the Court ofAppeal. The Court ofAppeal decreed that:

- (i) The I \*t respondent's receivership ended on the 20th Januarlr, 2018 - (ii) That the appeal is hereby dismissed - (iii) The Bank of Uganda is to pay costs herein and in the Court below.

Still being dissatisfied with the decision of the Court of Appeal, Crane Bank Ltd (in receivership) filed a memorandum of appeal based on 11 grounds. The appeal is now pending before this court vide SCCA No. 7 of 2O2O, Crane Bank Limited (in receivershipf vs. Sudhir Ruparelia & Meera Investments Limited.

Following the decision of the Court of Appeal, the Applicant's counsel, Kampala Associated Advocates, wrote a letter to the Registrar, Uganda Registration Services Bureau dated 28th September, 2O2O, informing him that the receivership of Crane Bank Ltd had ended on 2otn JanuarJi, 2018. The Registrar was further informed that the Bank of Uganda no longer had any legal authority over the a{Iairs of Crane Bank Ltd and that the Board of rectors and shareholders of

Crane Bank Limited are back in full control of the company and its affairs. The letter required the Registrar to adjust the oflicia-l records accordingly.

Pursuant to that letter, Crane Bank Ltd (in receivership) made an application vide SC Misc. Appl. No. 33 of 2O2O, Crane Bank Limited (ia Receivership) \xs. Sudhir Ruparelia & Uganda Reglstration Senrices Bureau, for orders that: an interim order doth issue against the Applicant preventing him from claiming, taking control, repossessing or in any way interl'ering with the management of Crane Bank Ltd (in receivership) or its receiver until the hearing and determination of the SCCA I{o. 7 of 2O2O that is pending before this court, an interim order doth issue against the 1"r respondent, his agents, associates or any person acting with him or on his behalf preventing him from registering any resolutions in respect of the applicant until the hearing and determination of SCCA No. 7 of 2O2O; an interim order doth issue against the 2"d respondent preventing it from registering any resolutions in respect of the appticant until the hearing and determination of SCCA No. 7 ol2O2O.

The Appticant (then respondent) opposed the said application arguing that the then l"t respondent (then applicant) did not demonstrate that there was a serious and imminent threat of execution arnong other reasons.

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On 9th November, 2020, Mugamba JSC, dismissed the application on grounds that the applicant had failed to demonstrate that there was a serious threat of execution.

Later that day, the 2nd respondent issued a memo recommending that the 1"' respondent be progressed into liquidation. On 13th November, 2O2O,lhe 2"d respondent in exercise of its powers under section 99(1) & (2) of the Financial Institutions Act, 2OO4, placed the l"t respondent under Liquidation and ordered for the winding up of its affairs. The notice was made public on 15th November, 2020 in the Sunday Vision.

Following this development, the Applicant ltled SC Misc. Appl. No. 39 ol 2O2O, an application for substantive injunction restraining the 2"d respondent, their agents or any one from placing the l"t respondent under liquidation and continuing the liquidation process pending the determination of SCCA No. 7 of 2ol2o.

The applicant also filed the instant application seeking an interim injunction restraining the 2"d respondent, their agents or anyone acting under their authority from placing the l"' respondent under liquidation pending the hearing and determination of Appeal No. 7 of 2020.

The application was premised on the following grounds;

1. That the Applicant was the successful party in Court of Appeal Civil Appeal No. 252 of 2O19 Crane Bank Limited (In Receivershtpl vs. Sudhir Ruparelia & Anor, in which the decision of the High Court tn HCGS No. 493 of 2O17, was ttc

upheld to wit, the l"t Respondent had no loans standi to institute proceedings against the Applicant and its plaint did not disclose a cause of action.

- 2. That the 1"r respondent has appealed against the decision of the Court of Appeal to this court vide Civil Appeal No. O7 of 2O2O. - 3. That immediately after dismissal of MA 33 of 2O2O, the 2"d respondent issued a memo (Liquidation Notice) that is in the public domain stating that this court decided in MA 33 of 2O2O that the power of management and control over Crane Bank Ltd remained with Bank of Uganda. - 4. That the 2"d respondent, who purports to be the controlling mind of the 1"t respondent is in the process of trying to change the status of the Appellant and progress the Appellant / l"t respondent for receivership which has already been decided upon by the court or appeal to liquidation purportedly pursuant to the 1"t respondent's powers under the Financial Institutions Act. - 5. That the act of the 2nd respondent is prejudicial to the Applicant and if not restrained would render the main appeal nugatory. - 6. That the act would also irreversibly alter the stahrs quo and would be an attempt to bypass and overturn the decision of the Court ofAppeal. - 7. That the Applicant has a high chance of success in the main appeal since he was successful in two lower courts.

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- 8. That the attempt to transition the $1^{st}$ respondent to liquidation is not only an attempt to circumvent the decision of the Court of Appeal but is also illegal. - 9. That the 2^nd respondent would not be prejudiced if the application is granted. - That winding up of the $1^{st}$ respondent would render the 10. appeal nugatory and that all the assets of the 1st respondent will be depleted if the 2^nd respondent is allowed to wind it up hence resulting into irreparable injury. - That the application has been brought without undue 11. delay.

In response to the Applicants Averments M/s Margaret K. Kasule, legal counsel for the $2^nd$ respondent averred as follows:

- 1. That the application is barred by section 101 of the Financial Institutions Act, (FIA). - 2. That the $1^{st}$ respondent is still a licensed financial institution under the FIA as the $2^nd$ respondent has never revoked its license. - 3. That the suit in High Court was filed on 30^th June 2017 when the 1st respondent was still under receivership even if the decision of the lower courts that the receivership ended on 20^th January were left to stand. - 4. That the decision that the receivership had ended is contentious and is one of the grounds of appeal, in the Supreme Court Civil Appeal No. 7 of 2020, Crane Bank Limited (In Receivership)

v Sudhir Ruparelia & Meera Investments Limited, pending determination before this court.

- 5. That the 2"d respondent determined that since the l"t respondent would never again carry on financial institution business, it should be liquidated. - 6. That the purchase and Assumption of Liabilities Agreement with DFCU bank date shows that there were excluded assets as well as liabilities which remained in the 1"t respondent and are still under management and control of the 2"d respondent as a statutory liquidator. - 7. That under that agreement, there are indemnit;r clauses and that also DFCU by letter dated 22"d September 2020, forwarded a list of properties which it returned to the receiver and shared a list of expected receivables in the sum of UGX +5,798,t40,663/=. - 8. That the Applicant and his associates are some of the persons indebted to the 1"t respondent as partly shown in the confidential settlement and release agreement wherein he under took to pay and/or procure the payment to the 2"d respondent as receiver the amount of US \$ 60,00,000 (Sixty million United States Dollars) - 9. That there are also insider credit facilities which the Applicant advanced to his associates in contravention of the FIA in the total sum of UGX 67,542,491,832 l=. That the 1st respondent has not yet recovered the said sum and that the 1"t respondent is prosecuting and defending numerous suits, some of which

Tt) were commenced before the 2^nd respondent's intervention in the $1^st$ respondent.

- That it is not true that the "memo" is in public domain and 10. use of the same in this application is fraudulent and an abuse of this court because the applicant obtained the same through fraudulent means. - That the $2^{nd}$ respondent is dealing with the assets, 11. liabilities and all the affairs of the 1st respondent as liquidator and that the appeal cannot be rendered nugatory. - That the Court of Appeal judgment did not stop the 2^nd 12. respondent from dealing with the stressed financial institution in accordance with the FIA, or remove it from that situation or restore it to the applicant and his associates, who are not fit and proper persons to manage or control a financial institution. - That the main appeal is not concerned with liquidation of 13. the $1^{st}$ respondent, the appeal before this court is by the $1^{st}$ respondent, not the applicant, the liquidation of the 1st respondent is well in progress and the court cannot stop the 2^nd respondent from exercising its statutory powers and duties under section 101 of the FIA. That the $2^nd$ respondent, who was not party to the appeal, would be prejudiced by that fact as it would be prevented from exercising its statutory powers and duties under the FIA and constitutional functions under Article $162(1)(c)$ . - That there is no *status quo* to which the $1^{st}$ respondent can 14. legally be returned to and the performance of the 2^nd

respondent's constitutional and statutory duties is protected and prescribed section 101 of the FIA.

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In his affidavit in rejoinder, Dr. Sudhir Ruparelia stated as follows;

- 1. That the application is not barred by section 10i of the FIA or any other law as alleged in the reply. - 2. That the l"t respondent is not a financial institution as alleged in the afhdavit in reply, according to the list of licensed Iinancial institutions

#### ReDresentation.

The Applicant was represented by Mr. Peter Kabatsi, Mr. Joseph Matsiko, Mr. Bruce Musinguzi and Mr. Ellison Karuhanga, all from Kampala Associated Advocates.

Dr. Joseph Byamugisha and Albert Byamugisha represented the Respondents.

The applicant was in Court.

Both counsel filed written submissions.

At the hearing, counsel for the Applicant made an oral application for an interim order under rule 2(2) of the rules of this court pending the determination of this application. On 25th November, 2O2O, ^I dismissed the oral application and undertook to give a detailed ruling with reasons alongside this ruling.

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## Applicant's submissions

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Presenting the applicant's case, learned counsel submitted that the applicant seeks an order for stay in the interim injunctive order to preserve the status quo pending the disposal of the substantive application for stay now pending before this court.

He contended that the application falls within the ambit of rule 2(2) of the rules of this Court and that the Applicant has satisfied the pre-conditions for the grant of an injunctive order. Counsel relied on authorities such as Mathew Rukikaire vs. Incafex, SCC Appl. No. 11 of 2O15, Zubeda Mohamed & Anor vs Laila Kaka trIallia SC Civll Refereace No. 07 of 2O16 for the argument that for court to grant an interim order, the following conditions have to be satisfied; to wit, competent Notice of Appeal, a substantive application and; a serious threat of execution.

Counsel submitted that the fact that there is an appeal and a substantive application for an injunctive order pending before this court is not in contention.

He submitted that the only issue for this court's determination is whether or not there is an imminent threat against the applicant.

Counsel argued as per the Court of Appeal Judgment, that the l"t respondent was no longer in receivership and that the issuance of the public notice by the 2"d respondent stating that the l"t respondent had been placed under liquidation was an attempt to alter the aforementioned stofus quo which amounted to contempt of the Court of Appeal decision. LK\

He further argued that if the 2"d respondent's attempt to liquidate and wind up the affairs of the l"t respondent is not stopped, the Applicant's interests as shareholder of the l"t respondent will be permanently extinguished before the determination of the substantive application of the injunctive order and the appeal pending before this Court. He further contended that the liquidation is an attempt by the 2"d respondent to avoid the effect of the Court of Appeal judgment in Civil Appeal IIo.252 of 2Ol9 which this Court should not permit.

He also argued that the attempted liquidation is barred by sections 95(1) and 101 of the Financial Institutions Act.

He thus prayed Court to allow the application for an injunctive order pending the disposal of the substantive application.

### ResDo ndent's submissions:

In response to counsel for the Applicant's arguments, Dr-Byamugisha, Learned Counsel for the respondents opposed the application.

He argued that this court is empowered under rule 6(2) (b) of the rules to grant an application for an injunction or stay only if the applicant has filed a Notice of Appeal under rule 72 of the Court's rules and applied for certihed copies of the record of proceedings to enable him file a memorandum of appeal and a substantive application for stay; there is a serious threat of execution and where the application has been made without undue delay. He challenged

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the competency of the application before this court. He argued that the Applicant in this case is not the appellant in the appeal pending before this court but the respondent and that he cannot be granted an interim injunctive order.

On the issue of the slafus quo, counsel for the respondent argued that although the Court of Appeal decreed that the receivership ended on 20,h January, 2018, the court did not place the management of the l",respondent in the hands of the Applicant and other shareholders.

He contended that the 2nd respondent still has the mandate to supervise all linancial institutions. That the 2"d respondent as receiver of the l"t respondent entered into a settlement and release agreement which it has the duty to enforce. Counsel further argued that even if the Court of Appeal decision found that the l"t respondent's receivership had ended on in January, 2018, this decision did not bar the liquidation of the 1"t respondent by the 2"d respondent.

Counsel questioned the manner in which the applicant obtained the memo in question, which is not in the public domain as claimed by the applicant. He argued that annexLlre "F" is a private document shared between legal counsel and the governor and deputy governor of the 2"d respondent. That the document was not obtained through honest means and should therefore not be relied on by this court. Counsel submitted that sections 6,7 and 14(2) (b) (i) of the Judicature Act empower this court to exercise its isdiction in accordance with

common law and the doctrines of equity. Counsel added that it is trite that he who seeks equity must come with clean hands. That the applicant's hands are not clean having obtained the document fraudulently.

The 2"d respondent has the responsibilitlr for ensuring performance of the contract with l"t respondent and DFCU Ltd, of recovering the USD 60,000,000 which the applicant undertook to pay under the conhdential agreement. Counsel submitted that this application cannot stand because the applicant did not fiIe any Notice of appeal in this court and is not an appellant before this court. He submitted further that there is no threat to execute because applicant seeks to restrain the 1"t respondent from progressing into liquidation and yet the liquidation has already commenced.

The applicant executed a conhdential settlement and release agreement which reveals that the applicant and his associates have been engaging in illegal activities in respect of the shareholding, control, management and capitalization of the l"trespondent fot 2l years from 1995 to 261h October 2O16 and is therefore not a fit and proper person to manage the l"t respondent and is not before court with clean hands.

Counsel concluded that the applicatior-r is barred by section 1O1 of the Financial Institutions Act.

In their submissions in rejoinder counsel reiterated their earlier submissions and prayers.

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### Consideration

I have had the benefit of considering the submissions of both counsel. The respondent's submissions raise an issue of competence of the application before this Court which I wish to deal with first. It is crucial to determine this issue at an early stage in order to determine whether or not the Court can proceed to entertain this application.

It was argued for the respondents that this court does not have the jurisdiction to entertain the instant application.

The term lurisdiction" is defined by Black's Law Dictionary 6th Edition Centennial Edition (189 1-199 l)to mean:

# "It is the pou)er of the court to decide a matter in controaersg and presupposes the exlstence of a dulg constidfied court utlth control ouer the subJect matter.'

It is trite that jurisdiction is a creature of statute. The proceedings and the decision of a court that purports to exercise jurisdiction outside the provisions of a statute are a nullity. It is therefore of paramount importance that a party that seeks to avail himself or herself the benefit of a remedy should comply with the conditions set out in the statute granting the court jurisdiction.

The Jurisdiction of this Court to grant a stay of execution or any other injunctive order is set out in Rule 6(2) (b) of the Rules of this Court. The rule provides as follows:

"(2) Subject to sub rule (1) of this rule, the institution of an appeal shall not operate to suspend any sentence or to stay execution, but the Court may-

(bf In any civil proceedings, where a notice of apPeal has been lodEed in accordance with rule 72 ofthese rules. order a stay of execution, an inJunction of proceedings as the Court may consider just." (Emphasis mine)

The basic requirements that ought to be satisired by an applicant for the grant of an interim order for stay of execution are the following:

- 1. The applicant should have filed a notice of appeal and requested for a certified copy of the judgment and proceedings to enable him or her file a memorandum of appeal. - 2. The applicant should have lodged a substantive application for stay of execution. - 3. The applicant must show that there is a serious threat of execution of the judgment and orders being appealed against. - 4. It must be shown that the substantive application and the appeal witl be rendered nugatory if court does not grant the interim order of stay. - 5. It should be shown that the appeal stands a reasonable Iikelihood of success. - 6. It must be shown that the applicant will suffer irreparable loss if the court does not grant the interim order of stay of execution. (See Francis Drake Lubega rrc. A. G & Anor, SC Mtsc. Appl. No. 13 of2O15, Theodore Sekikubo & Others vs. A. G, SCCA

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No. 4 of 2OL4, Hwang Sung Industries vs. TaJdin, SCC Appl. No. 19 of 2OO8, Belex Tours & Travel Ltd vs. Crane Bank Ltd, Misc. Appl.21 of 2O15.

The aforementioned Rule 72(1) provides as follows:

Ang person who desires to appeal to the court sholl glue noHce ln wrltlng, which shollbe lodged ln duplicate withthe reglstrar of the Cour-t, of Appeal. (Emphasis mine).

It is clear from the foregoing that applications for stay of execution or an injunction are the preserve for appellants. The import of the a-forementioned rules is that the application for stay is restricted to an appellant.

The record is clear. The appeal pending before this court vide SCCA No. 7 of 2O2O, Crane Bank Limited vs. Sudhir Ruparelia & Anor, was filed by the 1", respondent, the Applicant having been the successful party in the Court of Appeal vide 252 of 2019. This fact is also averred to in clause 3 of the Applicant's affidavit in support of the motion. It is therefore, not in contention that the Applicant is not the appellant in the said appeal.

This set of facts formed the premise of counsel for the respondents' opposition against the application. He argued that the application is alien to our laws and does not satisfy the pre-requisites of rule 6(2) (b) of the rules which requires for the Applicant to have ltled a notice of Appeal. r{2

Counsel for the Applicant on the other hand seems to suggest that as long as there is an appeal pending before this Court, any of the parties to the pending appeal can apply for an order of stay of execution. With due respect to counsel for the applicant, I disagree. This argument goes against the spirit of rule 6(2) (b), and 72 of the rules of the Court. An application for stay of execution or injunction is rooted in the fact that there is an appeal by the Applicant.

"The term "appeal" is defined by Black's l-aw lHctlonary @ 96, (supra/ to mean a complalnt to a htgher trlbunal of an error or lnjustlce commllted bg a louter trlbunal, ln uthlch the enor or inJustice is sought to be conected. or reaersed. "

Indeed, the memorandum of Appeal fiIed by the l"trespondent shows the dissatisfaction with the Court of Appeal's decision. The 1"' respondent seeks to overturn the decisions of the Court of Appeal which conhrmed the decisions of the High Court. The law permits such an appellant who is desirous of having this Court as the last appellate court to consider the complaints raised in the grounds of appeal, and faced with the threat of execution of the lower court's decision and orders before the determination of the appeal, to apply for the invocation of court's discretion to grant an injunctive order against the successful party pending the disposal ofthe appeal.

The grant of an order of stay or injunction is meant to protect the appellant's/applicant's right of appeal. This position was illustrated in the case of Kiganda John & Anor vs. Yakobo M. N Senkungu, SCCA No. 16 oJ 2017, Tumwesigze, JSC explained thus: ¹⁹ rrl

"The essence of an order for interim stay of execution is that when a party pursues his/her right of appeal, the appeal should not be rendered nugatory should it be successful; the stay will preserve the status quo pending the disposal of the appeal. (See also Hon. Theodore Ssekikubo & Others vs. A. G, SCCA No. 4 of 2014.

The Applicant having been the successful party, in the High Court and the Court of Appeal, falls outside the ambit of this rule 6(2) (b) of the rules of this Court. Although there is a Notice of Appeal on record filed in accordance with rule 72 of the rules, it was not filed by the Applicant.

It, therefore, follows that this Court has no jurisdiction to entertain this Application. This is in line with the decision of this court in **Belex** Tours & Travel Ltd vs. Crane Bank Ltd, SC Misc. Appl. No. 21 of 2015, where the fact that there was no Notice of Appeal filed in the Court by the applicant was the sole ground for the dismissal of the applicant's application for interim stay.

It was argued for the Applicant that this Court is empowered with wide discretion under rule $2(2)$ to entertain such applications and to make such orders as may be necessary to achieve the ends of justice or to prevent the abuse of its process. This is a true representation of the power of rule $2(2)$ . The rule provides as follows:

"Nothing in these rules shall be taken to limit or otherwise affect the inherent power of the Court, and the Court of Appeal

## to make such orders as mau be necessctru for achievlno the ends of lustice or to preaent abuse of the orocess of anu sttchcourt..," (Emphasis Mine). This provision is reiterated in the case of G. Afro vs. Uganda Breweries Ltd, SCC Appl. No. L2 of2OO8.

The drafters of Rule 2(21 were aware that the rules of this court could not exhaust all circumstances that warranted court's indulgence. It is on this premise that the court was empowered with wide discretion to entertain matters that were not specifically provided for yet warranted the court's intervention.

The rider to this provision is that the orders made under this rule should be necessary for achieving the ends of justice and to prevent the abuse of the process of court.

Rule 2(2) of the rules has two limbs, namely:

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- (i) orders necessary for achieving the ends of justice and; - (ii) orders to prevent abuse of court process.

The 1"t limb is more notorious to litigants.

The application of the first limb can be illustrated by the case of Kiganda John & Anor vs. Yakobo M. N. Senkungu (supra) in which the court allowed an application for stay of execution of the orders of this Court pending the determination of the substantive application for stay in a case where no Notice of Appeal was allowed.

The application for stay arose out of an application for review of the judgment of this court in SCCA No. 17 of 2014.

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The facts of the case were that Kiganda John & Tayebwa Robert, were beneficiaries of Ezekiel Rwankanlnrzi, the registered proprietor of the suit land.

The name of the applicants' father had been struck off the register without according him, or his successor, an opportunity to be heard contrary to the provisions of Article 28 of the Constitution. This warranted the invocation of the court's inherent powers to permit the stay of execution in the interest of justice. T\rmwesigie (JSC) while allowing the application stated as follows:

"It ls not in dispute tho,t the na,me of Ezeklel Ruankanguzl, tle father of the appllcants, wos strrrclc off the register utlthout gtutng hlm or his successors opporhtnltg to be heard. Thls to me, strlkes at the hedrt oJ the prlnclples relatlng to the a,dmlnlstratlon of fustice ln thls country and ls a breach of Artlcle 28(1) and 44(c) of the Constihttion."

He went on to state:

"This case must be distlnguished from the case of Belex Tours and Tours Ltd as. Crqne Bank (suptz) clted bg leqnted counsel for the respondent. In that case, I reJected the appllcationfor stag of executlon based. on the applicant's appllcatlon for reoieut of thts court's judgment. Rule 6(2) (b) of thts court's tttles requires that a notlce of appeal should be lodged ln accordance wlth ntle 72 of the ntles. The appltcant ln thts ccse dld not complg wlth the trrle. He dtd. not aduance ang speclal reasons

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## why his application for review should be regarded as a notice of appeal...."

The above extract goes on to show that for the court to invoke its wide discretion under rule 2(2) the applicant ought to show court that there exist special or extra ordinary circumstances to warrant the invocation of its power in order to achieve the ends of justice.

The second limb of rule $2(2)$ is the court invoking its discretion to prevent abuse of court process. This is the less familiar limb for parties seeking for the Court's invocation of inherent powers.

The term "Abuse of Court Process" was defined in Black's Law Dictionary (6^th Ed) $\textcircled{a}$ 11(supra).

## "A malicious abuse of the legal process occurs when the party employs it for some unlawful object, not the purpose which it is intended by the law to effect, in other words a perversion of it."

It is therefore, imperative for litigants and counsel to safeguard the integrity of Courts and to refrain from actions that lead to abuse of court process. (See Caneland Ltd & Others vs. Delphis Bank Ltd Civil Application No. 344 of 1999 (Kenya Court of Appeal)

In my view, the instant application falls short of those extra ordinary circumstances that would warrant the court to overlook the provisions of rule $6(2)$ (b) under the first limb of rule $2(2)$ of the rules.

On the contrary, this application goes against the purpose for which an order for stay of execution is intended. It is therefore, an abuse of

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court process as explained in limb two above. The applicant has no interest whatsoever in the success of the appeal. To the contrar5r, he would like for the Court to uphold the concurrent findings of the lower courts. Averment 14 of his affidavit in support clearly brings out the fact that he is not interested in the success of the 1"t respondent's appeal. He states as follows:

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"The Applicant has hlgher chances o.f success on appeol as the Applicant urcs successfttl both in the High Court, and. the Court of Appeal and the Respondent's ground.s of Appeal are substantlallg the so,me as theg utere in the Coutt of Appeal."

The same Applicant vehemently argued against the 1\*t respondent's application for the grant of an interim order against him and other shareholders from taking control and repossessing the management of the 1"t applicant pending the determination of the appeal in Misc. Appl. No.33 of2O2O.

It is therefore, inconceivable why the Applicant would ask this Court to aid him to stay execution well knowing that he does not wish to have the decision ofthe Court ofAppeal reversed.

I find that the justice of this case would permit the invocation of the court's wide discretion to disallow the application in order to prevent abuse of court process.

For the aforesaid reasons, I frnd it unnecessary to explore the other conditions for the grant of an order for stay. This is because question of jurisdiction overrides all the considerations mentioned.

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On 25ti, November, 2O2O, I dismissed the oral application for an interim interim order for being barred in law. The instant application formed the basis of the oral interim interim application. The discussion on rule 6(2)(b) clearly shows that the oral application fell outside the scope of the aforementioned rule. The applicant also failed to advance special reasons to warrant this court's invocation of its discretion under rule 212) to grant the relief sought for, which was alien to our law. Indeed, there is no single law that provides for an interim interim application and/or order.

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In the result, I find that the application is not properly before this court. I would, therefore, and do hereby, dismiss it.

Costs will be abide the outcome of the substantive application

Mike J. Chibita Justice of the Supreme Court Dated at Kampala ,rn\*A7-\l^, a 2020

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