By KT Reporter
DFCU Bank and the Commissioner of Land Registration have been ordered by the court to pay 810 million Shillings to 27 people in damages for refusing to release their land titles for land they had bought from Hosanna Real Estates.
Judge Suzan Abinyo of the High Court Commercial Division found that DFCU Bank had refused to transfer the titles of the land, which Global Trust Bank had agreed to return to Hosanna Real Estate. According to court records, in 2011, Hosanna Real Estates Limited obtained a loan of 2.5 billion Shillings from GTB with 43.22 acres of land located at Lugala Nakwero in Wakiso district as security.
However, Hosanna failed to pay the loan, which had by then increased to 3.153 billion Shillings. In 2013, GTB sued Hosanna seeking to take over the land to recover its loan. The two entities entered into a consent agreement where Hosanna agreed to give GTB 34.26 acres out of the 43.22 acres, retaining the balance of 8.96 acres. Unfortunately, GTB was liquidated by the Bank of Uganda before it could transfer the land title of the 8.96 acres back to Hosanna.
In the meantime, Hosanna had already subdivided the land and sold it to the 27 people who now instituted the suit. Efforts to have DFCU effect the transfer to the new owners failed to materialise, which forced them to drag the bank together with the commissioner of land registration to court.
In her ruling, the judge found that indeed the 8.96 acres of land were never part of the assets of GTB that DFCU took over.
DFCU had told the court that it had never had any transaction with the plaintiffs and therefore, there was no way it would be sued. It argued that it took over only the management of selected transactions and accounts of GTB on behalf Bank of Uganda and that the said land was not part of them.
“Consequently,…the titles in respect of Block 171, which were subdivided into 33 plots from the 8.96 acres that was returned and registered in the name of Hosanna Real Estates Limited as a result of the consent was meant to benefit the Plaintiffs, which did not materialize when GTB went into liquidation, a process that brought the 1st Defendant[DFCU] on board as a successor in title to GTB in liquidation. Accordingly, this Court finds that DFCU the successor in title, took over the assets and liabilities of GTB in liquidation, and not that DFCU Bank was contracted by the Third Party to manage certain assets of Global Trust Bank Limited on behalf of the Third Party and take over only deposits, as Counsel for the 1st Defendant wants this Court to believe in the absence of contrary evidence,” the judge ruled.
The judge, therefore, found that the plaintiffs had established that they enjoyed a right to the subdivided plots, which was violated by DFCU Bank Limited. The judge also blamed the commissioner for land registration for failing to transfer the plot to its owners. “In the given circumstances, I find no reason to deny the Plaintiffs’ costs, which follow the event as required under section 27(2) of the Civil Procedure Act, Cap. 282. The Plaintiffs are accordingly awarded the costs of this suit,” the judge ruled.
For each of the 27 plaintiffs, the judge awarded damages of 30 million Shillings at an annual interest rate of 8 percent. The judge also ordered that the registrar of titles immediately effect the transfer of land titles in the names of the plaintiff-URN. Give us feedback on this story through our email: kamwokyatimes@gmail.com
