By DailyNewsUG Correspondent,
On August 26th 2019, Crane-Bank-in-Receivership (Bank of Uganda) appealed against the decision given by Hon. Justice David Wangutusi as per Notice of Appeal Application 320 of 2019 filed in the High Court.
The High Court Judge Hon. Justice Wangutusi had in August 2019 decided that Crane Bank (in Receivership) did not have any jurisdiction to file Civil Suit No. 493 of 2017 against Mr. Sudhir Ruparelia and Meera Investments Limited, and therefore dismissed the suit.
Bank of Uganda (which technically is Crane-Bank-in-Receivership) was thereby dissatisfied with the decision of the Hon. Justice Wangutusi. Bank of Uganda then served a copy of the Notice of Appeal to Kampala Associated Advocates, the legal representatives of Mr. Sudhir Ruparelia and Meera Investments Limited.
Court of Appeal has today 23rd June 2020 sat in Kampala and dismissed a case in which Bank of Uganda appealed the 26th August 2019 ruling of the commercial court in favour of Dr Sudhir Ruparelia.
However in a ruling read by the registrar court of appeal on behalf of the 3 judges led by Justice Owiny Dollo the deputy Chief justice, the three judges found no reason to dismiss the case against the respondents Dr Sudhir Ruparelia and Rajiv Ruparelia the Managing Director Crane Management services.
The case has therefore been dismissed with costs to be paid by Bank of Uganda.
On June 30, 2017, Crane Bank Limited (in Receivership) took Mr. Sudhir Ruparelia and his Meera Investments Ltd. to court for causing financial loss amounting to UGX 397 billion to Crane Bank in fraudulent transactions and land title transfers.
Crane Bank (in receivership) in its Civil Suit No. 493 of 2017 sought High Court to compel Mr. Ruparelia to pay back the:
- US $ 3,560,000.00,
- US$990,000.00 and
- UGX 52,083,995.00 as compensation for breach of fiduciary duty.
While Hon. Justice Wangutusi dismissed the UGX397 billion case against Mr. Ruperalia on a technicality, alleging that Crane Bank (in Receivership) lost its powers to “sue” and to “be sued”, thus rendering its suit a nullity, Crane Bank (in Receivership) maintains that receivership is a management situation, and hence no legal change as to capacity of a company to sue and be sued.
While dismissing the Shs397b case against the city tycoon last year Justice Wangutusi held that once Crane Bank was placed under receivership, it was insulated against legal proceedings according to Section 96 of the Financial Institutions Act and therefore had no powers to sue Mr Ruparelia.
The judge also went ahead and ordered BoU to pay costs that Mr Ruparelia used to successfully to prosecute this matter.
“Interestingly, the Central Bank sold and did away with the respondent (Crane Bank-in-receivership) on 24th 2017, four days after it had been placed under receivership. In my view, after conveying all these assets to dfcu Bank together with the liabilities including deposits, the respondent was left high and dry with no property interest in any of the assets that had originally belonged to it,” ruled Justice Wangutusi.
“In my view, the receivership was exhausted with that transfer and conveyance. The respondent (Crane Bank-in-receivership) therefore, had no locus standi (the right to appear in court) to file any suit claiming any property because it had ceased to exist. Nonetheless, the receivership would have in any case expired by now within 12 months from 24th January 2017,” he added.
“The sum total is that the respondent (Crane Bank-in-receivership), at the time it filed this suit, was not in existence, its life time having been terminated when it was surrendered to dfcu Bank whose consideration was the dfcu assumption of the respondent’s liabilities, which assumption was paid by conveying her assets to dfcu Bank,” the judge further ruled.
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