The Supreme Court has dismissed, with costs, an appeal by Bank of Uganda against businessman Sudhir Ruparelia and his real estate arm—Meera Investments Limited.
The decision continues a series of consecutive losses the Central Bank has suffered at the hands of the businessman in a dispute over the sale of the now defunct Crane Bank.
Today, the Supreme Court has ordered the central bank to pay costs at all court levels, right from the Commercial Bank and directed that Crane Bank is reverted to its owners.
The February 11th, 2022 ruling brings to an end the long-standing commercial dispute between the businessman Sudhir and the Ugandan bank regulator, dating back to 2017.
With the ruling, Mr. Sudhir nolonger liable for the UGX397b that Bank of Uganda had claimed he had to pay, a figure also dismissed by the AuditorGeneral and a Parliamentary inquiry.
“Bank of Uganda stole my bank,” Sudhir, who attended the court session in Kampala, said after the decision was announced.
“They have to pay costs of suit right from the Commercial Bank to the Supreme Court,” he said
The court was presided over by Justices Rubby Opio-Aweri, Faith Mwondha, Lillian Tibatemwa and Ezekiel Muhaguzi.
A brief history
The Court of Appeal on June 23, 2020 dismissed an appeal and upheld the decision of the High Court in a suit filed by Bank of Uganda, on behalf of Crane Bank Ltd (in receivership) against Sudhir Ruparelia and Meera Investments Limited.
In dismissing the appeal, the Court of Appeal held that the trial judge was satisfied that the preliminary points of law which the respondents raised were based on the presumption that the facts in the plaint were true and that the points of law, if upheld, were sufficient to conclude the case.
Court of Appeal Justices, Alphonse Owiny Dollo; Cheborion Barishaki and Stephen Musota agreed with an earlier ruling by Commercial Court Judge Justice David K. Wangutusi’s August 26th 2019 that a bank in receivership (Crane Bank Limited in this case), under the Financial Institutions Act (2004) cannot sue or be sued and therefore Crane Bank (in receivership) cannot and should not have sued businessman Sudhir Ruparelia and his company Meera Investments Limited.
The other big contention was on ownership of land on which Crane Bank branches sit countrywide.
But the Justices, while delivering their ruling , Civil Appeal 252 of 2019 at the Court of Appeal, the trio also ruled that Crane Bank (in receivership) being a foreign [partly] owned bank, cannot own freehold land in Uganda and therefore has no legal basis to sue Sudhir for land it cannot own.
“The appeal consequently fails. It is thus dismissed with costs here and the court below,” ruled the justices. The costs would be met by Bank of Uganda.
As Sudhir lawyers – Kampala Associated Advocates – were starting to compile the costs and related damages, on June 30, 2020, Bank of Uganda (BoU) issued a statement informing the public of its decision to appeal the Court of Appeal’s dismissal of the case to the Supreme Court.
To stop Dr Sudhir and Meera Investments from enforcing the ruling of the Court of Appeal to regain their company, Crane Bank Limited (In Receivership) also filed Supreme Court Miscellaneous Application Nos. 32 and 33 of 2020 against Sudhir Ruparelia and Uganda Registration Services Bureau (URSB), for temporary and interim injunctions respectively against the businessman, to prevent him from claiming, taking control, repossessing or in any way interfering with the management of Crane Bank Limited (In Receivership). The application also sought to restrain URSB from registering any resolutions with URSB concerning Crane Bank (In Receivership) until Civil Appeal No. 7 of 2020 had been determined. The Supreme Court however dismissed this interim injunction with costs on 9th November 2020.
Following this court defeat of the Bank of Uganda on 15th November 2020, BOU issued a public notice in the Sunday Vision newspaper to the effect that it had placed Crane Bank Limited under liquidation and ordered the winding up of its affairs. Dr Sudhir Ruparelia then filed Supreme Court Miscellaneous Application Nos. 39 and 40 of 2020 against Crane Bank Limited (In Receivership) and BOU seeking interim and temporary injunctions respectively to stop BOU from continuing with the liquidation process. However, the court also dismissed this application on 22nd December 2020.
Following this ruling, Bank of Uganda, this time, through Crane Bank (In Liquidation) went to the Supreme Court asking to switch itself with Crane Bank Limited (In Receivership) as the substantive party in Supreme Court Appeal No. 7 of 2020, an appeal the five justices have now dismissed as an attempt to circumvent the main issue in the appeal- whether a company in receivership can sue or be sued.
