The Court of Appeal has dismissed Bank of Uganda's Shs 397 billion appeal case against city businessman, Sudhir Ruparelia.
This is the second time court is throwing out the case and disputes filed by BOU against the businessman. This particular case follows an appeal by the Central Bank, in which the chairman Ruparelia Group was accused of taking Shs 397 billion out of Crane bank as a director and shareholder in alleged fraudulent transactions and 48 land title transfers.
In August last year 2019, the Commercial court sitting in Kampala dismissed the BoU and Crane bank (in receivership) suit against Sudhir and Meera Investments over lack of legal basis to sue.
Delivering the ruling on August 26, Justice David Wangutusi, ordered BoU to pay legal costs to Sudhir. Under civil suit no. 493 of 2017 that had been instituted by the Crane bank (in receivership) against the applicant, Sudhir and Meera Investments sought to dismiss the suit on the grounds that it was barred in court and did not disclose a course of action.
At the onset of this suit, Sudhir had another battle in a conflict of interest case where the lawyers of MMKAS Advocates, David Mpanga of AF Mpanga-Bowmans and Sebalu & Lule Advocates were barred from representing BoU and any party in cases involving Ruparelia Group. The conflicted lawyers formerly worked for the Ruparelia Group.
Now, in a unanimous verdict this week, three justices led by deputy chief justice Alfonse Chagamoy Owiny-Dollo, Cheborion Barishaki and Steven Musota, agreed with the decision of then Commercial court judge, David Wangutusi that once Crane bank was placed under receivership, it lost its powers to sue Sudhir.
“Turning to the facts of this case, under Section 96 of the Financial Institutions Act, it is clear that there is a protection granted to the financial institution in receivership against being sued. In light of Meera Investments decision, it would be unfair to say that the financial institution can sue and on the other hand, it cannot be sued,” the justices ruled.
“A person who is protected from suits under the law is also prohibited from suing. It’s, therefore, our finding that this ground should be decided in the negative." the ruling added.
In July 2017, Bank of Uganda, as receiver of Crane Bank Limited (Crane bank) and regulator of the banking sector sanctioned filing of a suit against Sudhir and Meera Investments Limited to recoup funds that were allegedly extracted from, as well as losses that were caused to Crane bank.
The suit sought to recover a total of $93.8 million and Shs 60.3 billion, together with the freehold titles to Crane bank’s branches, general damages, interest and costs.
“The facts giving rise to Crane bank’s claim are set out in detail in the papers that were filed in the High court and the defendants shall be given an opportunity to formally respond, as is their right” a statement that BOU posted on their website said.
“We have observed that there is a lot of unfounded speculation in the media regarding this Court case. We wish to assure the public that any allegations that the suit is being brought by the Bank of Uganda and/or its lawyers for purposes other than the recovery of the funds and properties due to Crane bank are false,” BoU statement added.
Dr Joseph Byamugisha and Albert Byamugisha represented Bank of Uganda while Peter Kabatsi, Joseph Matsiko, Ellison Karuhanga, Jet Hohn Tumwebaze, Bruce Musingunzi, Barbara Muniment, Rayner Mugyezi and Joacim Kunta Kinte represented Sudhir.