Dinesh Patel Kumar v SP Finance Limited (Miscellaneous Application 340 of 2025) [2025] UGCommC 147 (16 May 2025)

# 5 **THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA (COMMERCIAL DIVISION) MISC. APPLICATION NO. 340 OF 2025 (ARISING OUT OF CIVIL SUIT NO. 87 OF 2025)**

# **DINESH PATEL KUMAR :::::::::::::::::::::::::::::::::::::::::::::::::: APPLICANT**

#### **VERSUS**

**SP FINANCE LIMITED ::::::::::::::::::::::::::::::::::::::::::::::::: RESPONDENT**

# **BEFORE: HON. LADY JUSTICE PATIENCE T. E. RUBAGUMYA**

#### **RULING**

# 20 Introduction

This application was brought by way of Notice of Motion under **Section 98**

**of the Civil Procedure Act, Cap. 282, Order 36 rules 1 and 8 and Order 52 rules 1 and 3 of the Civil Procedure Rules, SI 71-1,** seeking orders that:

- 1. The Applicant be granted unconditional leave to appear and defend *Civil Suit No. 87 of 2025*. - 30 2. The costs of this application be provided for.

# Background

The background of this application is contained in the affidavit in support

35 deponed by **Mr**. **Dinesh Patel Kumar,** the Applicant herein, and is summarized below:

- 1. That the Respondent is the Plaintiff in *Civil Suit No. 87 of 2025* instituted on 23rd January, 2025. - 2. That it is true that he and the Respondent entered into a Loan 40 Agreement in which he was advanced USD 34,000.

- 3. That he has since made several payments in instalments, reducing the initial money advanced. - 4. That as per the summary *Civil Suit No. 87 of 2025*, the Respondent 10 is now claiming two separate sums of USD 25,000 and USD 22,000, respectively. - 5. That the two figures in the summary suit not only create ambiguity as to the exact claim, but also a great surprise to him, since he has 15 continued to make payments consistently, and the sum owed is significantly less than what the Respondent claims. - 20 6. That the Respondent also bases his claim on two separate agreements in the summary suit, one entered into on 5th May, 2022, and the other on 5th May, 2023, which is very confusing to him since he only recollects entering into one agreement with him. - 25

- 7. That he has a good defence to the main suit, and it is in the interest of justice that this application is allowed. - 30 In his affidavit in reply, the Respondent, through an affidavit deponed by **Mr. Hussein Karamali**, opposed the application, contending that: - 1. In paragraph 3 of the application, the Applicant admits having borrowed USD 34,000 from the Respondent Company and that the borrowing was pursuant to the facility letter dated 5th May, 2023. - 35 - 2. A copy of the payment voucher dated 5th May, 2023, is attached to the plaint as annexure "**B**", for the sum of USD 34,000. That on the same day, the Applicant issued postdated cheques in favour of the Respondent as security for the loan. That, however, on presentation, 40 the cheques were returned.

- 5 3. As per the meeting held in November, 2024, the Applicant undertook to make monthly payments in November, 2024, in the sum of USD 10,000, December, 2024, in the sum of USD 5,000, January, 2025, in the sum of USD 5,000, and February, 2025, in the sum of USD 5,000. That however, the Applicant made a payment of USD 3,000, 10 leaving a balance of USD 22,000, hence the suit. - 4. The Applicant has no defence whatsoever to the current suit.

Representation

Issues for Determination

15 The Applicant was represented by Learned Counsel **James Munguriek** of **M/s Barenzi & Partners-Advocates, LLP** and the Respondent was represented by Learned Counsel **Stephen Zimula** of **MMAKS Advocates**.

- 20 - 1. Whether the Applicant has raised sufficient grounds to warrant the grant of unconditional leave to appear and defend *Civil Suit No. 87 of 2025*? - 25 2. What remedies are available to the parties?

Issue No.1: Whether the Applicant has raised sufficient grounds to warrant the grant of unconditional leave to appear and defend *Civil Suit No. 87 of 2025***?**

# Analysis and Determination

I have taken into consideration the affidavit in support of the application and the affidavit in reply. Further, Counsel for both parties made oral 35 submissions when the matter came up for hearing on 14th May, 2025. I have not seen the need to reiterate the submissions herein but I have considered the same before arriving at my decision.

5 **Order 36 rule 3(1) of the Civil Procedure Rules**, stipulates that a Defendant served with summons, issued upon the filing of an endorsed plaint and affidavit under **rule 2** of this Order endorsed, "Summary procedure", shall not appear and defend the suit except upon applying for, and obtaining leave from Court.

It is thus trite that for leave to appear and defend a summary suit to be granted, an Applicant/Defendant must show by affidavit or otherwise that there is a bona fide triable issue of fact or law.

15 A triable issue is one capable of being resolved through a legal trial, that is, a matter that is subject to or liable to judicial examination in Court. It has also been defined as an issue that only arises when a material proposition of law or fact is affirmed by one party and denied by the other (See: *Jamil Senyonjo Vs Jonathan Bunjo H. C. Civil Suit No. 180 of* 20 *2012*).

A defence raised by the Applicant should not be averred in a manner that appears to be needlessly bald, vague or sketchy. If the defence is based upon facts, in the sense that material facts alleged by the Plaintiff in the 25 plaint are disputed or new facts are alleged constituting a defence, the Court does not attempt to decide these issues or to determine whether or not there is a balance of probabilities in favour of one party or the other.

In essence, where the Applicant raises a good defence, the Plaintiff is 30 barred from obtaining summary judgment. In the case of *Bhaker Kotecha Vs Mohammed [2002] 1 EA 112,* it was held that where a suit is brought under summary procedure on a specially endorsed plaint, the Defendant is granted leave to appear if he/she can show that he/she has a good defence on merit, or that a difficult point of law is involved; or, a dispute 35 as to the facts which ought to be tried; or, a real dispute as to the amount

5 claimed which requires taking an account to determine; or, any other circumstances showing reasonable grounds of a bona fide defence.

Furthermore, in the case of *Geoffrey Gatete & Another Vs William Kyobe SCCA No. 7 of 2005*, the Court noted that in such a case;

10 "*The Defendant is not bound to show a good defence on the merits but should satisfy the Court that there was an issue or question in dispute which ought to be tried and the Court shall not enter upon the trial of issues disclosed at this stage.*"

- In the instant case, according to the pleadings, the Respondent vide a 15 summary plaint, instituted *Civil Suit No. 87 of 2025* against the Applicant for payment of USD 22,000 being the outstanding amount under a Loan Agreement dated 5th May, 2023, interest on the outstanding amount at the Court rate, and the costs of the suit. - The suit is premised on the background that by a Loan Agreement dated 20 5th May, 2023, the Respondent availed the Applicant with a loan of USD 34,000 payable before 25th January, 2024, and cheques drawn on NCBA Bank and Eco Bank were availed as security. That upon the Respondent presenting the cheques to the Bank, they were dishonored. That in November, 2024, the parties had a meeting and the Applicant 25 acknowledged the indebtedness to the tune of USD 25,000 and agreed to repay the outstanding debt in four instalments as follows;

USD 10,000, on or by 30th November, 2024, USD 5,000 by 31st December, 2024, USD 5,000 by 31st January, 2025 and USD 5,000 by 28th February, 2025. That despite the above undertaking, the Applicant only paid USD 30 3,000, leaving a balance of USD 22,000. In evidence, the Respondent attached a copy of the Loan Agreement, as annexure "**A**", a copy of the

5 payment voucher as annexure "**B**", copies of the cheques as annexure "**C**" and copies of the dishonored cheques as annexures "**D(i)** to **D(vii**)" attached to the plaint, respectively.

The Applicant then filed this application, and as evidenced by his pleadings and submissions, it is noteworthy that he does not dispute the 10 indebtedness to the Respondent, but the amount claimed in the plaint. According to paragraph 4 of his affidavit in support, it is his contention that he made several payments in instalments reducing the initial money advanced. However, no proof was attached to show how and when the payments were made. The Applicant does not even mention the amount 15 he paid and how much he thinks is outstanding.

The Applicant also contends that as per paragraphs 4(f) and 4(g) of the plaint, the Respondent seeks two different amounts of USD 25,000 and USD 22,000 arising from two agreements of 5th May, 2022 and 5th May, 2023, yet he only contracted to one agreement.

20 I have considered the basis for summary procedure as summarized by the Supreme Court in the case of *Post Bank (U) Ltd Vs Abdul Ssozi SCCA No. 8 of 2015* wherein it was held that:

"*Order 36 was enacted to facilitate the expeditious disposal of cases involving debts and contracts of a commercial nature to* 25 *prevent Defendants from presenting frivolous or vexatious defences in order to unreasonably prolong litigation*."

As espoused in the authorities discussed above and as laid out in the case of *Twentsche Overseas Trading Co. Ltd Vs Bombay Garage [1958] EA 741*, summary procedure is resorted to in clear and straightforward cases,

5 where the demand is liquidated and there are no issues for determination by the Court except for the grant of the claim.

As shown by the background of the application, *Civil Suit No. 87 of 2025*, was premised on an Agreement between the parties dated 5th May, 2023,

- 10 and attached to the plaint as annexure **"A".** The Loan Agreement shows that the Applicant was loaned USD 34,000, which is undisputed as per paragraph 3 of the affidavit in support of this application. Paragraph 4(f) and (g) of the plaint, show that at the time the parties had a meeting in November, 2024, for a payment schedule, it was agreed that the Applicant - 15 owed the Respondent USD 25,000. That after the meeting, the Applicant only paid USD 3,000 reducing the debt to USD 22,000. The loan repayment schedule or the meeting held in November, 2024 where the payment schedule was agreed upon was not rebutted or denied by the Applicant. In my view, the Applicant has not raised any triable issue of 20 fact or law to warrant the grant of leave to appear and defend the suit. - In the premises, it is only fair and just for the Applicant to settle the outstanding balance. Accordingly, I decline to grant the application.

Issue No. 1 is therefore resolved in the negative.

# Issue No.2: What remedies are available to the parties?

30 This Court having found issue No. 1 above in the negative, further finds that this application for leave to appear and defend is devoid of merit.

It is settled law that summary procedure provides a quick way for the 35 Plaintiff who demands a liquidated sum to obtain judgment where there is no evident defence. (See: *Post Bank (U) Limited Vs Abdul Ssozi (supra),* and *Ndibazza Naima Vs Acacia Finance Limited HCMA No. 1144 of 2014).*

5 Accordingly, this application is dismissed, and the Respondent/Plaintiff is entitled to a Decree under **Order 36 rule 5 of the Civil Procedure Rules.**

The Respondent/Plaintiff prayed for interest at the Court rate. **Section 26(2) of the Civil Procedure Act** is to the effect that the Court has the discretion to award interest. As was held in the case of *Milly Masembe Vs*

10 *Sugar Corporation (U) Ltd and Another SCCA No. 1 of 2000,* the guiding principle is that interest is awarded at the discretion of the Court but the Court should exercise the discretion judiciously taking into account all the circumstances of the case.

In light of the above and given the fact that the Applicant has not paid the 15 outstanding sum being claimed, I hereby award interest at the rate of 6% per annum on the decretal sum from the date of filing the suit until payment in full.

- 20 Regarding costs, **Section 27(2) of the Civil Procedure Act** provides that costs of any cause follow the event unless otherwise ordered by the Court. In the case of *Uganda Development Bank Vs Muganga Construction Co. Ltd [1981] HCB 35,* **Hon. Justice Manyindo** (as he then was) held that: - 25 "*A successful party can only be denied costs if it is proved, that but for his or her conduct, the action would not have been brought, the costs will follow the event where the party succeeds in the main purpose of the suit."*

The Respondent/Plaintiff being the successful party in this matter is 30 therefore entitled to the costs of this application and the suit.

Accordingly, Judgment is hereby entered for the Respondent/Plaintiff against the Applicant/Defendant in the following terms:

- 1. The Applicant/Defendant shall pay the Respondent/Plaintiff USD 22,000 (United States Dollars Twenty-Two Thousand Only) in *Civil Suit No. 87 of 2025.* - 2. The Applicant/Defendant shall pay interest on the sum in (1) above 10 at the rate of 6% per annum from the date of filing the suit until payment in full. - 3. The Respondent/Plaintiff is awarded the costs of this application and the suit. - 15 I so order.

Dated, signed and delivered electronically via ECCMIS this **16th** day of **May, 2025**.

Patience T. E. Rubagumya 20 **JUDGE** 16/05/2025

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