The High Court Commercial Division has this morning dismissed with costs the Central Bank and Crane Bank (In Receivership) case worth USD100M against City businessman Dr. Sudhir Rupareila
The judge dismissed the suit over lack of legal basis to sue and ordered BOU to pay costs to the businessman, who had been accused of taking Shs397b out of the financial institution in fraudulent transactions and land title transfers.
It should be remembered that Dr. Sudhir had earlier on said that when Crane Bank went into receivership, it lost its powers to “sue” and to “be sued”, rendering its suit against him and Meera Investments Company, a nullity.
Mr Ruparelia, in an affidavit, had also contended that under Uganda’s Constitution and the Land Act, Crane Bank in receivership could not own or hold freehold property and was, therefore, not capable of holding the suit property in its names. He further argued that the Supreme Court has since ruled in a similar case that it would be wrong for any court to confer the right to sue when Parliament did not find it necessary to do so and it was because of these reasons that Justice David Wangutusi ruled to dismiss the case.
During last month’s court hearing, Mr Joseph Matsiko, one of Mr Ruparelia’s lawyers, argued that on October 20, 2016, Bank of Uganda (BoU) took over the management of Crane Bank pursuant to Sections 87 (3) and 88 (1) a & (b) of the Financial Institutions Act and that on January 20, 2018, BoU placed it under receivership.
“The suit was filed on the 30th day of June 2017 when Crane Bank Ltd was in receivership. The issue, therefore, is whether a suit can be filed by a financial institution in receivership,” Mr Matsiko submitted.
But Dr Joseph Byamugisha, who represented Crane Bank in receivership, argued that when a financial institution is placed under receivership, it does not lose powers to commence or continue with lawsuits.
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