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THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF UGANDA AT KAMPALA
COMMERCIAL COURT
DIVISION
HCT-00-CC-OS-0005-2005
KAJOBA GEORGE WILLIAM
SEBAGALA FRED
KAJOBA PATRICK
NDAKA ENOCK FOR
AND ON BEHALF OF
ENOS BAGENDA FOUNDATION ................................ PLAINTIFF
VERSUS
STEPHEN KISITU
EVELYN KISITU
.................................................... DEFENDANTS
BEFORE: HON JUSTICE LAMECK N.
MUKASA
JUDGMENT:
The plaintiffs were by a Representative Order in Miscellaneous Application
No. 12 of 2005 issued on 19th April 2005 appointed to represent all
members of Enos Bagenda Foundation, a voluntary, non-profit making association
with forty-nine
members. The plaintiffs claimed to have interest as mortgagees
of the land comprised in Freehold Registrar Volume 326, Folio, Kyadondo
Block
269 Plot 158 Lubowa Estate, and file his application against Stephen Kisitu and
Evelyn Kisitu. By way of originating summons
under Order 34 rules 3A and 7 of he
Civil Procedure Rules for determination of the following questions:-
1. That the Defendants (mortgagors) pay all the money due and owing to the plaintiffs (mortgagees) under the mortgage.
2. That an account be taken of what is due to the plaintiffs from the defendants under and by virtue of the said mortgage as principal sum, interest and costs thereon.
3. That a declaration be made that the plaintiffs/mortgagees are entitled to a charge on the mortgaged property/land and order be made empowering the mortgagees or their agents to have a right of access to the mortgaged land.
4. That failure to pay the sum due and owing, pursuant to the mortgage within 14 days from the date of service hereof on the Defendants, the said mortgage be enforced by the sale of the mortgaged property and an order be made setting down the terms for such sale.
5. That the plaintiffs be awarded costs of this suit.
6. That the plaintiffs be granted any further and other relief as this Honourable Court may deem fit.
Order 34 rule 3A CPRs
provides:
“Any mortgagee a mortgagor whether legal or equitable, or
any person entitled to a legal or equitable charge, or any person
having the
right to foreclose or redeem any mortgage, whether legal or equitable, may take
out of course an originating summons,
returnable before a judge in chambers, for
such relief of the nature or kind following as may be by the summons specified,
and as
the circumstances of the case may require, that is to say, sale,
foreclose, delivery of possession by the mortgagor, redemption,
reconveyance or
delivery of possession by the mortgagee”
The Originating Summons
were by Order of Court served on the Defendants by way of substituted service.
The Defendants did not file
any affidavit in reply or attend the hearing.
Therefore hearing proceeded exparte.
The application is supported by an
affidavit sworn by Kajoba George William the chairman of Enos Bagenda
Foundation. The affidavit
and anextures thereto give the background to this
cause. By letter annexture F the said Kajoba George Bagenda in response to the
Defendants loan, inquiries informed the Defendants, who are also members of the
association, that the association was in a position
to lend the Defendants money
free of interest for 3 months on condition that they repay the entire sum in one
lump sum at the end
of the 3 months, failure of which the amount advanced shall
attract interest at 5% per month. By their letter dated 8th
September 2004 (Annexture C) addressed to the association the Defendants
requested for a loan of Ughs.20,000,000/= to be granted
against the Defendants
Certificate Title in respect of land comprised in Free hold Register Volume
326, folio 1 area 0.202 Hectares
Kyadondo Block 269 Plot 158 Lubowa Estate as
security. In the letter the Defendants agreed on the terms and conditions of
repayment
of the association and undertook to pay the loan in three months from
the date of receiving the whole amount. They appointed William
Kajoba the
chairman in and deponent to the affidavit in support, to receive the money from
the association on their behalf.
In paragraph 4 of the affidavit Kajoba
George William states that upon the defendants instructions, he passed the said
sum of Shs20,000,000/=
to the Defendants agent one Alice Kirunda. Annexture E
shows that Shs.5,000,000 was paid out on 14th September 2004,
Shs.10,000,000/= on 22nd September 2004 and Shs.5,000,000/= on
13th October 2004 and receipt acknowledged by one Alice Kirunda. The
total advance was Shs.20,000,000/=.
In paragraph 3 of the affidavit the
deponent avers that the Defendant deposited the little deed to the above
described property as
security. In paragraph 6 the avers that no mortgage deed
was executed in respect of he said mortgage but that the defendants deposited
their title deed with the deponent in his capacity as chairman of the
association as security for repayment of the loan. Photocopy
of the Certificate
of Title was annexed as annexture “D”. The evidence outlined above
shows that M/S Enos Bagenda Foundation
is an equitable mortgagee in respect of
the Certificate Title to the above described land.
In paragraphs 5,7and 9
the chairman avers that the loan was to be paid at the end of the third month
interest free, but if unpaid
thereafter, it was to attract interest of 5% per
month if the sum remained unpaid. That the defendants have since defaulted in
payment
of the principle sum plus interest and finally that the amounts due
are:
(a) Amount of advance Shs.20,000,000/= (b) Monthly interest of 5% (per month for four months) Shs.4,000,000/=
To
make the total claim of Shs24,000,000/=. Annexture “C” to the
affidavit show that the terms and conditions of repayment
were accepted by the
Defendants.
Annexture E shows that the final instalment of the loaned
money was paid to Alice Kirunda on 13th October, 2004. According to
the Defendants letter, annexture “C,” the loan was to be repayable
in three months from
the date of receiving the whole amount and according to
annexture F for the first three months the loan was interest free. Therefore
the 5% monthly interest starting accruing after 13th January 2005 and
only on the principle sum. Therefore monthly, effective from 13th
January 2005 the principle sum of Shs20,000,000/= is earning the
plaintiff’s an interest in the sum of Shs.1,000,000/=. By
the hearing of
this application on 19th September, 2005 the principle sum had earned
interest in the total sum of Shs.7,000,00/=. In paragraph 10 of the affidavit
the chairman
avers that the plaintiffs have not received any money or anything
of value as regards the realization of the said sum. In absence
of any evidence
to the contrary I find that defendants still owe money to the plaintiff on the
loan advanced in the following sums:-
1. Principal sum Shs20,000,000/=
2. Monthly interest of 5% for 7 months Shs.7,000,000/=
Making a
total of Shs.27,000,000/= due and owing from the Defendants to the
Plaintiff.
In the circumstances I find that the plaintiff are entitled to
the orders below:-
1. The defendants pay all the money due and owing from the plaintiff under the mortgage in the sum of Shs.27,000,000/=, plus the taxed costs occasioned by this application.
2. The plaintiffs as mortgagees are entitled to a charge on the mortgagee property situate and known as Freehold Register Volume 326 folio 1 Kyadondo Block 269 Plot 158 Lubowa Estate and the mortgages or their agents are hereby granted a right of access to the mortgaged land.
3. In the event of failure to pay the sum due and owing, pursuant to the said equitable mortgage and the costs of this application within 21 days from the date of service of this order on the Defendants, the said mortgage be enforced by sale of the mortgaged property upon the following terms:-
(i) The sale shall be by private treaty (ii) The proceeds from the sale shall be used as follows:- (a) Pay the costs and charges, if any, involved in the sale. (b) Pay the sum due and owing pursuant to the mortgage plus the costs of this application. (c) Any balance to the passed over to the Defendants
I so
order.
Hon. Lameck N. Mukasa
Judge
30th September, 2005
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