KAMPALA-UGANDA/NEWSDAY: The Supreme Court on Thursday dismissed with costs an application by Bank of Uganda to substitute Crane Bank (In Receivership) with Crane Bank ( In Liquidation).
The decision added to the many loses by BOU against businessman Sudhir Ruparelia and his Meera Investments Ltd in a dispute over the sale of the defunct Crane Bank.
Five Justices including Rubby Opio-Aweri, Faith Mwondha, Dr Lillian Tibatemwa, Ezekiel Muhanguzi and Percy Night Tuhaise all concured BOU’s application was wanting and therefor lacked merit.
The judges indicated the application would circumvent facts of the case in which the Central Bank is appealing against earlier court loses by BOU following two consecutive losses at the Hight Court and Court of Appeal. The Coram of justices also said that in law, Crane Bank Limited (in Receivership), Crane Bank Limited (in Liquidation), and Crane Bank Limited are three distinct entities with different rights, powers and obligations.
In an August 12, 2021 ruling, the judges said if the allowed the application, it would fundamentally alter the facts the case and deny both Dr. Sudhir and Meera a chance to justice.
Former Crane Bank Head quarters on Kampala road.
“The main appeal pending before this Court evolves around the powers of the Receiver to sue under High Court Civil Suit 493 of 2017. The findings of the lower courts, against which an appeal is pending before this Court, is that the Receiver, unlike the Liquidator, has no such powers to sue and be sued under the FIA. The appeal is thus based on the capacity of the Receiver to sue or be sued,” the five justices said.
They said that the very nature of the amendment sought, of substituting Crane Bank (In Receivership) with Crane Bank (In Liquidation), would no doubt pre-empt or pre-determine the main appeal in favour of the Appellant and to the prejudice of the Respondents without hearing the latter’s defence. It would also erode the gist of the appeal and alter the nature of the pleadings or cause of action.
The application sought to switch parties. It results from the October 20, 2016 statutory takeover of Crane Bank Limited under Sections 87 (3) and 88 (1) (a) of the Financial Institutions Act (FIA) and subsequently placed it under receivership on 20th January 2017, before BOU sold Crane Bank’s assets and liabilities to dfcu Bank on the 25th of January 2017.
Thereafter Bank of Uganda, through Crane Bank (In Receivership) sued Dr Sudhir, one of the Shareholders of the bank, together with Meera Investments Ltd vide High Court Civil Suit No. 493 of 2017. Before the main case could be heard, Dr Sudhir and Meera, raised preliminary objections through High Court Miscellaneous Application No. 320 of 2017, that among others contended that Crane Bank (In Receivership) had no basis for suing since the FIA did not allow a company in receivership any powers to sue or be sued. The High Court sustained the preliminary objections and dismissed HCCS 493 of 2017 and ordered that the costs of the suit be paid by BOU.
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