MP Electronics Limited & Another v Ashishi & 2 Others (Civil Application 1266 of 2023) [2024] UGCA 291 (11 October 2024)

#### THE REPUBLIC OF UGANDA

#### IN THE COURT OF APPEAL OF UGANDA AT KAMPALA

### **CIVIL APPLICATION NO. 1266 OF 2023**

(Arising from High Court Miscellaneous Application No. 510 of 2023) and Civil Suit No. 0705 of 2022)

#### 1. MP ELECTRONICS LIMITED **.....................................** 2. NEW MASTER ELECTRONICS (SPARE PARTS) LTD

$\mathsf{S}$

#### **VERSUS**

### 1. ASHISHI SHANTAL KAMANI

**::::::::::::::::: RESPONDENTS** 2. TRIPUTI ASHISHI KAMANI

3. HIRJI ABDUL HAMID MOHAMED KARIM

$15$

#### **BEFORE: HON JUSTICE OSCAR KIHIKA, JA**

*(Sitting as a single Justice)*

#### **RULING OF COURT**

This application was brought under Rule $2(2)$ , $6(2)(b)$ and 43 of the Judicature (Court of Appeal Rules) Directions seeking for orders that; $20$

1. A Temporary injunction doth issue restraining the $1^{st}$ & $2^{nd}$ Respondents from alienating, taking possession of, managing or otherwise evicting the Applicants from property comprised in LRV 330 Folio 11 Plot 56 Seventh Street, Industrial Area, Kampala and LRV 301 Folio 21 Plot 58 seventh Street,

Page 1 of 9

industrial Area Kampala pending hearing and final determination of the intended appeal.

2. A Temporar5r injunction doth issue restraining the 3'd Respondent from alienating, taking possession of, managing or otherwise evicting the Applicants from property comprised in LRV 4OO9 Folio 11 Plot 88 South Street, Kampala pending hearing and final determination of the intended appeal.

3. Costs of the Application be provided for.

The grounds upon which this application is premised are stated in the Notice of Motion and the affidavit in support of the application deponed by SALIM PYARALI HIRANI on the 30th of November 2023. The grounds are briefly that; 10

- 1. DFCU Bank filed H. C. C. S No. 7OS of 2022 against the Commissioner Land Registration challenglng the statutory powers of the commissioner to conduct a public hearing in respect of the defunct Crane Bank mortgages which appeared on the 2"a Applicant's properties. - 2. Before the suit could be heard inter parties, DFCU Bank and the Commissioner Land Registration entered into a consent judgment on the l2th. of April 2023 declaring that the bank was the lawful assignee of all Crane Bank mortgage charges and was required to register its assignment and became the registered mortgagee and effected a transfer of the suit properties.

'L?::

- 3. The Applicants filed H. C. M. A No. 051O of 2023 seeking an order to set aside the consent and a temporary injunction restraining the Respondents from taking possession of the suit properties. - 4. The application was dismissed and the Applicants filed a Notice of Appeal against that decision and a letter requesting for proceedings on the 13th day of November 2023. - 5. The Applicant's appeal discloses pertinent and arguable grounds of appeal with a likelihood of success. - 6. The suit properties are already registered in the names of the - Respondents and are likely to evict the Applicants and take possession of the suit properties. - 7. The balance of convenience favors the Applicants who are in occupation of the suit premises and yet have never received any loan monies from the defunct Crane Bank Ltd. - The Respondents filed an affidavit in reply deponed by MOHAMMAD SENOGA on behalf of all the Respondents and sworn on the 6th of December 2023 opposing the application on the grounds that; 15 - <sup>1</sup>. The 1", Applicant was a burrower of Crane Bank Ltd pursuant to loan facility agreements dated 6th May 2Ol4 and the borrowings were secured by mortgages over various properties registered in the names of the 2"a Applicant. - 2. The 1"t Applicant defaulted in servicing the loan facilities resulting into the issuance of several default notices by Crane Bank Uganda Limited.

t0

ge 3 of9 N, Pa

- 3. On 2Ob October 2016, Bank of Uganda took over the management of Crane Bank by reason of its insolvency and placed it under statutory management. - 4. On 25th January 2Ot7, Bank of Uganda, as receiver, sold and assigned to DFCU Bank the Crane Bank loan portfolio and the mortgages and securities held in respect thereof including the 1", Applicant's loan and mortgage securities held over the suit land. - 5. The Applicants since 2Ol9 have fiIed several suits against Crane Bank, DFCU challenging their indebtedness to Crane Bank Limited and the validity and enforceability by the DFCU Bank of the mortgage securities over the suit property. - 6. The Commissioner Land Registration served a Notice of Intention to EEfect Changes in the Register and purported to re-open questions that had been determined in a prior suit pursuant to Section 91 of the Land Act. - 7. DFCU Bank filed a suit against the Commissioner Land Registration and a consent was entered and sealed by court on 4tt May 2022. - 8. The suit properties were eventually valued for bids and the properties were sold to the 1"t and 2nd Respondents with the purchase prices paid in fu1l. 20 - 9. The l"t and 2nd Respondents registered their interests on the title and effectively transferred title to the Respondents. - 10. The lst, lnd and 3'd Respondents have through their agent Spear Link Auctioneers and Bailiffs, served the tenants of ttre 25

Page 4 of 9 <sup>a</sup> M respective properties the new owrrership and also changed the security companies guarding the suit properties

- <sup>1</sup>1. The Respondents are in possession of only Plot 88 as tenants of the premises and are not in occupation of Plot 56 and 58. - 5 L2. The Applicants will not suffer irreparable loss because the said properties were mortgaged by them with full knowledge that they would be sold for value if the debts were not paid.

## Representation

At the hearing of this application, Mr. Fred Muwema appeared for the Applicants together with Mr. Charles Nsubuga, while Mr. Ernest Sembatya appeared together with Mr. Timothy Lugayrzi for the Respondents. Both parties filed written submissions which were adopted as their legal arguments with leave of court. 10

## Consideration of the application

I have carefully considered the affidavits, the submissions of both parties and the authorities provided by both counsel for which I am grateful. 15

The jurisdiction of this court to grant a temporary injunction stems from Rule 6 l2l Fl of the Rules of this Court which provides as follows;

"6. Suspension of sentence and stag of exea.ttion.

(2) Subject to subrule (1) of this rtile, the institution of an appeal shall not operate to suspend any sentence or to stay exeafiion, but the court maa-

> Page 5 of 9 I

(a) ..

(b) in anA ciuil proceedings, where a notice of appeal has been lodged in accordance with rule 76 of these Rules, order a stay of exeantion, an injunction, or a stag of proceedings o/z such terms as the court maA

5 think just."

Thus, a temporary injunction is intended to maintain the status quo of things pending the determination by court of some serious cause pending before it. In Robert Kanruma Vs Hotel Intentatlonal Supreme Court, Ctt tl Appeal JVo.8 of 7990, Wambuzi CJ, as he then was, held:-

u. It is generallg accepted that for a temporary injunction to issue, the court must be satisfied:-

i. That the Applicant has a prima facie case with a probability of success.

ii. That the Applicant might otherutise suffer irreparable damage which would not be adequatelg compensated for in damages. 15

iii. If the court is in doubt, on the aboue two points, then the court will decide the application on a balance of conuenience. In other words, whether the inconueniences which are likely to issue from withholding the injunction would be greater tLwn those which are likely to arise from granting it".

Thus, the granting of a temporary injunction is an exercise of judicial discretion and the purpose of granting it is to preserve the matters in

ge6of9

the status quo until the question to be investigated in the main suit is finally disposed of.

The conditions for the grant of a temporary injunction are;

- 1. Firstly, that, the applicant must show a prima facie case with a probability of success. - 2. Secondly, such injunction will not normally be granted unless the applicant might otherwise suffer irreparable injury which would not adequately be compensated by an award of damages. - 3. Thirdly if the Court is in doubt, it would decide an application on the balance of convenience.

An order for a Temporarf/ Injunction is granted so as to prevent the ends of justice from being defeated.

# L. Prlma facle case urith likelihood of success

15 20 The Supreme Court in the case of Gashumba Maniraguha vs Sam Nkudiye Civil Application No. 24 of 2o^15, in effect held that the likelihood of success, is the most important consideration in an application for stay of execution. Therefore, it is incumbent upon the Applicant to avail evidence, or material to the court in order for it to establish whether or not the Applicant has a prima facie case on appeal.

I have carefully read the submissions by counsel for the Applicant and the Respondent, the affidavits on record and the law applicable.

Page 7 of 9

The Respondents raised an important issue regarding the validity of the appeal pending before this court. The order from which the appeal in this court arises was a dismissal of an application for review. The Respondent argues that under Order 44 Rule 1 ( 1) and I(21 of the Civil

- 5 Procedure Rules SI 7 L-L, orders that are appealable as of right are expressly stated and an order dismissing an application for review is excluded. The order in the underlyrng matter that the Applicants seek to appeal against arose from an application for review of a consent Judgment and is not appealable as of tight. - At the time of filing this application, the Applicants had not filed any application, in this court or in the High Court, seeking for leave to appeal. On 5tr, Aprrl 2024, the Applicants filed before the High Court Miscellaneous Application No. 0581 of 2024 seeking leave to appeal arudlor validation of the appeal pending before this court. A ruling was delivered on Sft June 2024 dismissing the application for leave to appeal. 10 15

As it stands now, the Applicants have no appeal pending in this court; and leave to appeal cannot be granted within the ambit of this application for a temporary injunction.

I therefore find this application void of merit and dismiss it for the reasons given above. 20

This application is thus dismissed with costs to the Respondent.

I so order.

Page 8 of 9 v ,

Dated this ....................................

$\sqrt{}$ **.............** OSCAR JOHN KIHIKA<br>JUSTICE OF APPEAL

$\mathbf{.}$ $\mathbf{S}$

$\mathbf{x}^{k-3} =$

$\mathsf{S}$

$\, , \,$