[2024] UGHC 521

**THE REPUBLIC OF UGANDA**

**IN THE HIGH COURT OF UGANDA AT FORT PORTAL**

**MISCELLANEOUS APPLICATION No. 70 OF 2023**

**ARISING FROM CIVIL SUIT No. 0068 OF 2022**

**SHASHI SUPER INVESTMENTS LTD=============================APPLICANT**

**VERSUS**

**CIPLA QUALITY CHEMICAL INDUSTRIES LTD====================RESPONDENT**

**BEFORE HON. JUSTICE DAVID S. L. MAKUMBI**

Applicant represented by Bagyenda & Co Advocates

Respondent represented by Kalikumutima & Co Advocates

**RULING**

**BACKGROUND:**

This Application is brought by way of Notice of Motion under Section 33 of the Judicature Act, Section 98 of the Civil Procedure Act, and; Order 36 Rule 11 and Order 52 of the Civil Procedure Rules seeking orders that:

1. The default judgment entered on 07/12/22 against the applicant be set aside and the applicant be granted unconditional leave to appear and defend Civil Suit No. 68 of 2022 on the merits. 2. The execution of the decree in Civil Suit No. 68 of 2022 be stayed. 3. Costs of this application be provided for.

The Application is supported by the affidavit of the Applicant’s Managing Director Muhammad Shahid Iqbal on the grounds that:

1. The Applicant was not properly and effectively served with the summons and the plaint for Civil Suit No. 68 of 2022 and only got wind of the suit when served with notice to show cause why execution should not issue. 2. The Applicant has a good cause in the matter to wit purchase orders relied upon by the Respondent/Plaintiff bear false signatures, falsified delivery notes lacking details of who received supply on applicant’s behalf, and; the Applicant has never entered any Memorandum of Understanding upon which the purchase orders and deliveries were made. 3. The Respondent/Plaintiff’s suit is wrongly brought under summary procedure yet it is an action for breach of contract. 4. The Applicant has a right to be heard and to defend Civil Suit No. 68 of 2022 on the merits and make a counterclaim for exemplary damages. 5. Allowing this application will serve to avoid a multiplicity of legal proceedings. 6. It is fair and just that the application be allowed.

In the Affidavit in Support of the Application, Muhammad Shahid Iqbal affirmed that on 7th July 2023 the Applicant received a Notice to Show Cause Why Execution Should Not Issue requiring attendance in court on 16th August 2023.

The Deponent further affirmed that there was no indication of who received service on behalf of the Applicant and that the process server had failed to deliver the court documents to Shop 31 Rwenzori Road in Kasese. However, having been directed to deliver the same to Allied Pharmacy the process server went to the post office and also utilized Whatsapp. The Deponent affirmed that the Affidavit of service was tainted with falsehoods as the Applicant was never served.

The Deponent further claimed that there was good cause in this matter as the supporting documents related to the transaction in issue were fraudulent and that there would be grave injustice if the fraud was left to stand.

Counsel for the Applicant prepared submissions in the matter based on three issues.

1. Whether the Applicant/Defendant was properly and effectively served. 2. Whether the Applicant/Defendant has established bona fide triable issues meriting being granted unconditional leave to appear and defend Civil Suit No. 68 of 2022. 3. What remedies are available to the applicants.

As concerns whether there was effective service Counsel for the Applicant argued that Order 29 Rule 2 governs service on corporations and requires service of summons on the Secretary, a director, or a principle officer or by sending post to the registered office or if there is no registered office, at the place where the corporation carries on business.

Counsel for the Applicant argued that on 12th October 2022, the process server went to Shashi Pharmacy at Shop 31 Rwenzori Road in Kasese but failed to serve employees there and that this was the first limb on which there was failure of service. Counsel then went on to argue that the process server had proceeded to Allied Pharmacy and served two gentlemen of Asian nationality who declined to sign. These gentlemen could not be confirmed as either secretary or directors of the Applicant. Counsel further argued that Allied Pharmacy was not the registered place of business of the Applicant and that this was the second limb on which service had failed.

Counsel for the Applicant argued that the service via the Post Office and Whatsapp would not have been necessary had the process server actually made physical service as he had claimed and that the deponent had not even found the summons at the Post office. Counsel further submitted that the Whatsapp contact belonged to Allied Pharmacy and not Shashi Pharmacy. Counsel cited the case of **Geoffrey Gatete and Another v William Kyobe – Supreme Court Civil Appeal No. 07 of 2005** in which it was held that service fails to have the desired effect of giving notice to the defendant of the filing of the suit against it.

Counsel submitted that the Applicant was never effectively served through its officials or registered place of business and that resorting to Whatsapp and the Post office was out of order as it did not have the desired effect of giving notice to the defendant of the filing of the suit.

Concerning the second issue, Counsel argued that there are triable issues of fact that warrant the grant of unconditional leave to appear and defend that suit. To that extent Counsel made reference to inconsistencies in various documents in relation to the transaction in issue. The inconsistencies were in relation to signatures of the directors suggesting forgery as well as discrepancies in the delivery notes all of which Counsel contended were triable issues.

Counsel for the Applicant further argued that to the extent that the Respondent/Defendant pleaded breach of contract in Paragraph 5 of the Summary Plaint this ought to have been formally proved by way of an ordinary suit as opposed to summary suit. He argued that the Respondent/Defendant had a right to defend against the claim of breach of contract and that the existence and validity of the impugned contract was an issue requiring a full hearing. Counsel cited the case of **Roko Construction Ltd v Ruhweza Transportation and Construction (U) Ltd – Civil Application No. 831 of 2020** to plead that where there was a bona fide triable issue of law or fact and a reasonable ground of defence then the plaintiff is not entitled to summary judgment.

Concerning remedies Counsel for the Applicant reiterated the prayers cited in the Application.

The Respondent subsequently filed two Affidavits in Reply. Bigirimana Jackson of Kalikumutima & Co. Advocates swore one affidavit with regard to service of the Summons in Summary Plaint while Richard Kiggundu of Kalikumutima & Co. Advocates swore the second affidavit with regard the transaction in issue in the summary suit.

Deponent Bigirimana stated *inter alia* in his affidavit that he delivered summons and a copy of the plaint to Shashi Pharmacy in Kasese but the Applicant’s employees directed him to deliver the same to Allied Pharmacy where the Applicant’s principal officers sit. The Deponent also drew attention to the fact that this was the same place where the Notice to Show Cause was delivered and referred to the affidavit of service attached and marked “A”. To that extent he stated that the Directors had knowledge of the suit having been served with summons at the same place the Notice to Show Cause had been served.

Deponent Bigirimana went on to state that the Applicant’s principal officers declined to acknowledge receipt of documents and made reference to a copy of his affidavit of service attached and marked as “B”. The Deponent further stated that due to the behavior of the Applicant’s officers concerning the service of the Summons in the Summary Suit he had taken the additional step of taking a picture while serving the Notice to Show Cause and referred to the photo attached and marked “C”. The Deponent also went on to state that due to the difficulties faced in service of the Summons in the Summary Suit he had been instructed by the Respondent’s Counsel to post the Summons to the Applicant’s registered mail box P. O. Box 303 Kasese. He was further instructed to send the Summons electronically to the Applicant’s principal officer whose number 0781-777-998 was on the signpost of Allied Pharmacy. The Deponent further secured a general receipt for posting and referred to a screenshot of the Whatsapp message attached and marked “D”.

Deponent Kiggundu’s affidavit in reply focused primarily on the transactions on which the summary suit was founded and was to the effect that the Applicant/Defendant was indebted to the tune of USD 47,577.40. The Deponent outlined the circumstances by which the debt arose and attached a copy of the Applicant’s statement of account marked “P” as well as various other documents towards proving the existence and validity of the debt.

Counsel for the Respondent responded by way of written submissions to the issues as follows.

Concerning whether the service was effective, Counsel cited the case of **Geoffrey Gatete and Another v William Kyobe – Supreme Court Civil Appeal No. 7 of 2005** in which it was held that the desired and intended result of serving summons on the Defendant is to make him or her aware of the suit so that he has the opportunity to respond to it by either defending the suit or admitting liability and submitting to judgment.

Counsel further placed reliance on Section 274 of the Companies Act as well as the cases of **James Musajjalumbwa v Bitumastic Ltd (1982) HCB 103** and **J. F Ijjala v Corporation Energo Projekt (1988-90) HCB 157.** Counsel submitted that the foregoing authorities read together establish that service on a company is done by serving the company secretary, director or principal officer or by leaving summons at the registered office or place of business. Furthermore, that if summons are left at the principal place of business or head office of the defendant, that is effective service.

Counsel argued that the Applicant’s officers were in the habit of deliberately refusing to acknowledge receipt of court process as their conduct regarding receipt of the Summons was repeated when they were served with the Notice to Show Cause Why Execution Should Not Issue. Counsel further argued that under Order 29 Rule 2(b) of the Civil Procedure Rules service can be effected upon a corporation by post addressed to the corporation at its registered office or at the place where the corporation conducts business. Counsel argued that Paragraphs 9 and 10 of Deponent Bigirimana’s affidavit prove that service was done where the Applicant does business and where the principal officers sit and then further posted to the registered postal address P. O. Box 303 Kasese.

Concerning electronic service Counsel for the Respondent argued that Section 274 of the Companies Act and the Constitution (Integration of ICT into the Adjudication Processes for Courts of Judicature)(Practice) Directions 2019 permit service on known electronic address. Counsel pointed out that Objective 3(a) of the aforementioned Directions is to provide for electronic service of court documents. Counsel further relied upon the case of Male H Mabirizi K Kiwanuka v AG – HCMA 918 of 2021 wherein it was held that service by email or Facebook or Whatsapp or any other technologically advanced means are calculated at provided parties with notice of existence of a suit or hearing date for their response or attendance. Counsel therefore argued that service via the Applicant’s principal officer’s number displayed on the Allied Pharmacy signpost was effective service.

Counsel concluded the issue of service by arguing that the Respondent had exhausted all the recognized modes of serving the Applicant/Defendant in Civil Suit No. 68 of 2022. Counsel contended therefore that the Applicant/Defendant had deliberately ignored the opportunity to seek leave to appear and defend the summary suit and default judgment was entered against it. To that extent Counsel contended that service in Civil Suit 68 0f 2023 was effective.

Concerning the second issue about whether there are bona fide issues of fact or law warranting leave to appear and defend Civil Suit 68 of 2022, Counsel for the Respondent argued as follows.

Counsel contended that contrary to the decision in **Maluku Interglobal Trade Agency v Bank of Uganda (1985) HCB 65** the Applicant had failed to prove a bona fide triable issue of fact or law. Counsel outlined the details in the affidavit in reply sworn by Richard Kiggundu and argued that by those facts the Applicant was well aware of the claim. This was further evidenced by emails from Applicant director annexed and marked collectively as “Q” Counsel contended that in those emails the Applicant director Muhammad Shahid Iqbal was apologizing for delays in payment and promising payment.

Counsel further referred to an email annexed and marked as “O” wherein the Applicant director sent proof of payment of USD 13,000 and promised to pay the outstanding balance.

Counsel further argued that by virtue of Order 6 Rule 8 of the Civil Procedure Rules a party denying an allegation of fact in any pleading must not do so evasively but answer the point of substance. He pointed out that whereas director Muhammad Shahid Iqbal swore the Affidavit in Support of the Application, the Affidavit in Rejoinder was sworn by director Muhammad Younas and contained general and evasive denials. Counsel specifically pointed out that no point of substance was raised in response to the email communications of Muhammad Shahid Iqbal.

Counsel argued that there was no bona fide triable issue disclosed as even the Memorandum of Understanding that the Applicant was denying was between the Global Fund and the Respondent with the Applicant only a beneficiary.

With regard to the question of the summary suit being misconceived having been founded on an action for breach of contract, Counsel for the Respondent argued that this was misconceived. He made reference to Order 36 Rule 2(a)(i) of the Civil Procedure Ruleswhich allows a plaintiff to recover by way of summary procedure a debt or liquidated demand in money payable by the Defendant with or without interest arising upon a contract, arising upon a contract. To that extent the Respondent had filed Civil Suit No. 68/2022 against the Applicant for recovery of a liquidated demand of USD 47,577.40 arising from unpaid fees for drugs supplied plus interest at court’s rate and costs of the suit. Counsel subsequently invited court to treat the suit was rightfully instituted.

Concerning remedies Counsel for the Respondent prayed court to find that service in this matter was effective. As concerns the bona fides of the suit Counsel cited the case of Post Bank (U) Ltd v Abdul Kasozi – SCCA No 8 of 2015 wherein the Supreme Court held regarding the rationale of Summary Procedure that Order 36 was enacted to facilitate the expeditious disposal of cases involving debts and contracts of a commercial nature to prevent the defendants from presenting frivolous or vexatious defences in order to unreasonably prolong litigation.

Counsel submitted that there were clearly no bona fide triable issues in this matter and that the default judgment should be upheld in that regard. Counsel also submitted that in the event of leave being granted to defend the suit then such leave should be granted upon condition that the Respondent deposits the sum demanded in court.

Counsel for the Respondent submitted in rejoinder as follows.

On the issue of service, Counsel argued that the process by which the process server effected service was fishy because having served the same there was no need to proceed to the post office and also send the same via Whatsapp.

Concerning the question of bona fide triable issues Counsel for the Applicant reiterated the arguments about forgery and insisted that they required examination by court.

Counsel reiterated the prayer for the application to be allowed unconditionally pleading that deposit of the sum claimed would be harsh.

**ANALYSIS AND RESOLUTION OF THE APPLICATION:**

Having had the benefit of looking at the application and the submissions of the parties, the issues apparent for determination of the court are as follows

1. Whether the Summons in Summary Suit and the Plaint were effectively served upon the Applicant/Defendant 2. Whether the Applicant/Defendant has established bona fide triable issues meriting being granted unconditional leave to appear and defend Civil Suit No. 68 of 2022. 3. Remedies available.

**ISSUE 1:**

In considering and determining this issue, I bear in mind that the contention revolves around what constitutes effective service of corporations such as the Applicant company.

Order 29 Rule 2 of the Civil Procedure Rules provides that,

*“Subject to any statutory provision regulating service of process, where the suit is against a corporation, the summons may be served –*

1. *On the secretary, or on any director or other principal officer of the corporation; or* 2. *By leaving it or sending it by post addressed to the corporation at the registered office, or if there is no registered office, then at the place where the corporation carries on business.”*

According Paragraph 3 of the Affidavit in Reply of the process server Bigirimana Jackson he went to Shashi Pharmacy situated on Rwenzori Road in Shop 31, Kasese to deliver Summons in the Summary Suit and the Plaint. He further stated that the Applicant’s employees directed him to Allied Pharmacy where the Applicant Principal Officers sit.

According to Paragraph 7 of the Affidavit in Reply, Deponent Bigirimana stated he served the Applicant’s Principal officers but they refused to acknowledge receipt. He further stated in Paragraph 9 that upon their refusal to acknowledge receipt, Counsel for the Respondent advised him to post the documents to the Applicant’s registered postal address P. O. Box 303 Kasese and furthermore to send the same to the Whatsapp number 0781-777-998 displayed on the Allied Pharmacy signpost.

The Affidavit in Reply is consistent with the copy of the affidavit of service annexed and marked “B”.

Counsel for the Applicant submitted that the service described above was not effective because the Summons were not delivered at Shashi Pharmacy which is the registered office and place of business for the Applicant. He further submitted that service at Allied Pharmacy was not effective either as there was no way to determine who received the Summons and Plaint and it was not the registered office and place of business for the Applicant.

Counsel for the Applicant further submitted that the service via Whatsapp was made to a phone number associated to Allied Pharmacy and that the Applicant had not received the Summons and Plaint allegedly posted to their Post Office Box. Counsel submitted that it was suspicious for the Respondent’s process server to have gone to the Post Office having already served the documents on two persons of Indian nationality at Allied Pharmacy.

There are questions surrounding service in three different modes. I will address them separately as follows:

1. Personal Service:

The Respondent’s process server Bigirimana Jackson effected personal service on two gentlemen that he described as being of Indian nationality on 12th October 2022. While the Applicant directors tried to deny this service, the Respondent process server pointed out in his Affidavit in Reply that he had effected service of the Notice to Show Cause Why Execution should not Issue at Allied Pharmacy. The Notice to Show Cause Why Execution Should Not Issue is clearly referred to in the Affidavit in Support of the Notice of Motion in this matter. In Paragraph 2 of the said Affidavit, Muhammad Shahid Iqbal, the Applicant Managing Director stated that the Applicant received a notice from court requiring the Applicant to attend court on 16th August 2023 to show cause why execution should not issue.

In light of the foregoing, the question in my mind is that if service of the Notice to Show Cause at Allied Pharmacy resulted in the Applicant filing the current application then why would the service of the Summons and Plaint at the same location not have been effective? It appears to me that the Applicant directors were shifting goalposts and picking and choosing when service of court process in this matter should be effective or not.

1. Service at the Post Office:

Order 29 Rule 2 cited above clearly establishes service of court process by way of a corporation’s registered address as effective service. It does not matter that the Respondent process server did it after having already served the same court process at Allied Pharmacy. Given the behavior of the Applicant Principal Officers and staff who were clearly unwilling to go on record as having received the court process, it was only prudent for the Respondent process server to take the extra measure of posting the court process. The only way this service would not have been effective is if it was posted to the wrong address, which was not the case here. It does not matter that the Applicant Managing Director claims that the court process was not at the Post Office. Once the Respondent Process Server produced evidence of having dispatched the court process (General Receipt annexed to Affidavit and marked “D”), this was sufficient proof of service for purposes of Order 29 Rule 2. It was incumbent upon the Applicant to adduce evidence rebutting this service beyond simply denying receipt of the same in the post office.

1. Service By Whatsapp:

Concerning the question of electronic service, it is now a common and accepted practice for court process to be served by way of electronic means. The Courts of Judicature have long embraced this form of service to the extent of issuing the **Court (Integration of ICT into the Adjudication Processes for Courts of Judicature)(Practice) Directions 2019.** There is therefore no room for arguments in this day and age disputing the effectiveness of service via electronic means.

In this application, Counsel for the Applicant contended here that the number to which the Respondent sent the Summons and Plaint was not the official line linked to the Applicant’s registered place of business. However, for the same reasons attached to the question of personal service, I find this argument unsustainable and evasive. Allied Pharmacy may not have been the registered place of business for the Applicant but to the extent that service of the Notice to Show Cause at Allied Pharmacy was effective and also the fact that the Respondent Process Server was directed there by staff of the Applicant at Shashi Pharmacy proves that it is an alternative business location for the Applicant.

In summary when I consider all three modes of service employed by the Respondent Process Server I find that it was not suspicious conduct at all but rather prudent and diligent conduct given the tendency of the Applicant staff not to acknowledge receipt of court process.

In the case of **Geoffrey Gatete and Another v William Kyobe (supra)** as cited above by both Counsel the Supreme Court made it clear that the desired and intended result of serving summons on the Defendant is to make him or her aware of the suit so that he has the opportunity to respond to it.

In this case the Applicant directors claim not to have been aware of the Summons and Plaint because they were served at a location other than their registered place of business. This claim is contradicted by evidence on two levels. First, is the fact that by the Applicant Managing Director’s own admission, the Notice to Show Cause upon which this application is founded was received at the location where he claimed not to have received the Summons and Plaint in Civil Suit 68 of 2022. It is impractical to deny a location for purposes of service of one set of court process only to later confirm that another set of court process was received there.

Secondly, the Respondent Process Server took the added precaution of two other forms of service for which he retained proof, those being service by postal mail and electronic service. In the case of postal service, it was clearly sent to the registered postal address for the applicant and by and of itself can conclusively prove that the Applicant was served. As for the electronic service, the same argument regarding physical service applies here. The Applicant is estopped from denying the contact number linked to Allied Pharmacy because it is the same location from where the Notice to Show Cause was received.

In light of the foregoing, I do find that the Respondent did properly and effectively serve the Applicant with Summons in Summary Suit and Plaint in Civil Suit 68/2022. This issue is resolved in the affirmative.

**ISSUE 2:**

As concerns whether there are triable issues, ordinarily I would not allow this application to proceed beyond this point as to me I feel that service of Notice to Show Cause was actually effective and the Applicants are simply being evasive and insincere about the said service. However, in the event that I am wrong and given that they are claiming now that there is fraud inherent in the Respondent’s liquidated demand, I am constrained to find that there is a triable issue and on that ground alone I resolve this issue in the affirmative.

**ISSUE 3:**

Having found that there was effective service in my view but the possibility of a triable issue raised by the Applicants, I consider it just and fair and accordingly hereby exercise my discretion under Order 36 Rule 8 and order as follows.

**ORDERS:**

1. The Default Judgment against the Defendant in Civil Suit 68 of 2022 is set aside. 2. Leave to appear and defend is hereby granted on condition that the Applicant pays the liquidated sum claimed in the suit above in the amount of USD 47,577.40 (Forty-Seven Thousand Five Hundred Seventy-Seven United States Dollars and Forty Cents) or its equivalent in Uganda Shillings at the prevailing Central Bank Rate into the Court Account pending determination of the suit. 3. Costs in the cause.

So ordered.

**David S. L. Makumbi**

**JUDGE**

**24/05/24**