Patel v Karia and Others (Civil Suit 62 of 2016) [2025] UGHC 196 (18 April 2025)

### **THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT MASAKA CIVIL SUIT NO. 062 OF 2016**

**KULSUM PATEL::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::PLAINTIFF VERSUS**

- 1. **SHASHIKANT AMRATLAL KARIA:::::::::::::::::::::::::::::::::::::::::DEFENDANTS** - 2. **SAMALIYA (KIGANJA) TEA ESTATE LTD** - 3. **SHEILA SHASHIKANT KARIA**

### **Before: HON. JUSTICE LAWRENCE TWEYANZE**

# **JUDGMENT**

### **Introduction**

- 1. This matter arises from a Civil Suit filed by the Plaintiff, Kulsum Patel, both in her personal capacity and as the Administrator of the Estate of the late Chandrakant Patel, against the Defendants: the Estate of the late Shashikant Amratlal Karia (1st Defendant), Samaliya (Kiganja) Tea Estate Ltd (2nd Defendant), and Sheila Shashikant Karia (3rd Defendant). The Plaintiff seeks a refund of Ug. Shs. 160,000,000/= allegedly paid for the fraudulent sale of the 2nd Defendant company and Masaka Tea Estate Ltd, as well as Ug. Shs. 78,295,950/= paid to Bank of Baroda (U) Ltd to settle a concealed debt, totaling Ug. Shs. 238,295,950/= in special damages. Additionally, the Plaintiff claims general and special damages for fraudulent misrepresentation and the costs of the suit. - 2. The Defendants, having filed Written Statements of Defence on 2nd November 2016, did not participate in subsequent proceedings after service was duly effected, as confirmed by the affidavit of substituted service on record. This Court proceeded to hear the matter ex-parte pursuant to Order 9 Rule 25 of the Civil Procedure Rules, having been satisfied of proper service.

## **The Plaintiff's Case**

3. The Plaintiff alleges that, pursuant to a written agreement dated 27th November 1997, the deceased 1st Defendant and the 3rd Defendant fraudulently sold the 2nd Defendant company and Masaka Tea Estate Ltd to the Plaintiff and the late Chandrakant Patel for Ug. Shs. 100,000,000/= and Ug. Shs. 60,000,000/=

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respectively, sums which were fully paid. The Plaintiff further contends that the Defendants concealed a debt of Ug. Shs. 78,295,950/= owed to Bank of Baroda (U) Ltd, which the Plaintiff and her late husband were compelled to settle post-transaction. The Plaintiff asserts that the sale agreements were nullified in High Court Civil Suit No. 539 of 2001, with the subsequent dismissal of Civil Appeal No. 20 of 2004 by the Court of Appeal, revealing the Defendants' fraudulent misrepresentation regarding shareholding and ownership.

4. Particulars of fraud include: (a) misrepresentation to the Court in Civil Suit No. 539 of 2001 leading to the nullification of the sale agreements; (b) concealment of the Bank of Baroda debt; (c) shielding the 3rd Defendant's property from attachment while targeting the Plaintiff's assets; (d) abandoning the 2nd Defendant company post-payment to evade the debt; and (e) reclaiming ownership after the Plaintiff settled the debt.

# **The Defendants' Case**

5. The 1st and 2nd Defendants, in their Written Statements of Defence filed on 2nd November 2016, raise preliminary objections, asserting that the suit is timebarred under the Limitation Act, given that the transactions occurred on 27th November 1997, and the Court of Appeal dismissed the Plaintiff's appeal on 25th August 2009 more than six years before the suit was filed on 4th October 2016. They further argue that the 3rd Defendant's actions under a Power of Attorney were unauthorised and personal, rendering the sale agreements void, and that the 2nd Defendant had other shareholders, contravening the Companies Act. The Defendants also Counter - claim Ug. Shs. 1,000,000,000/= in general damages for the Plaintiff's occupation of their properties from 1997 to 2004.

## **Representation and Proceedings**

6. The Plaintiff was initially represented by M/s C. Mukiibi & Co. Advocates and later by M/s CCAKS Advocates, who filed written submissions on record. The Defendants, having filed their defences, did not participate further, leading to an ex-parte hearing. This Court has considered the pleadings, evidence, and submissions on record.


### **Burden and Standard of Proof**

7. In civil proceedings, the burden of proof rests on the party asserting a fact, as provided under *Sections 101, 102, and 103 of the Evidence Act, Cap 8 (Revised Edition)*. The standard is proof on a balance of probabilities, whereby the evidence must demonstrate that it is more likely than not that the alleged facts exist (see *Miller vs. Minister of Pensions* [1947] 2 All ER 372). However, where fraud is alleged, as in this case, the burden is elevated beyond a mere balance of probabilities, requiring clear and cogent evidence to substantiate the claim (see *Kampala Bottlers Ltd vs. Domanico (U) Ltd* [SCCA No. 22 of 1992]).

#### *Preliminary Objection: Limitation of Action*

8. The 1st and 2nd Defendants contend that the suit is barred by the Limitation Act. *Section 3(1)(a) of the Limitation Act Cap 290 (Revised Edition)* stipulates that actions founded on contract must be brought within six years from the date the cause of action arose. The Plaintiff's claim arises from the alleged fraudulent sale agreements of 27th November 1997, with knowledge of the concealed debt emerging soon thereafter, as pleaded. The suit, filed on 4th October 2016, exceeds the six-year limitation period by nearly two decades from the transaction date and over seven years from the Court of Appeal's decision on 25th August 2009.

### *Analysis*

- 9. The principle of limitation is a substantive legal bar designed to ensure certainty and finality in litigation. In *Madvani International S. A. vs. Attorney General* [*CACA No. 48 of 2004]*, the Court of Appeal held that the determination of limitation is confined to the pleadings, requiring no extrinsic evidence. The Plaintiff's amended Plaint avers that the fraud was discovered "soon after" the 1997 transactions, implying immediate or proximate awareness. Furthermore, the Plaintiff's participation as a Defendant in Civil Suit No. 539 of 2001, where the sale agreements were nullified, and the dismissal of Civil Appeal No. 20 of 2004, indicate that any claim based on fraud was, or ought to have been, pursued by 2009 at the latest. - 10.*Section 25(a) of the Limitation Act Cap 290* provides an exception where the action is based on the Defendant's fraud, delaying the limitation period until the Plaintiff discovers the fraud or could reasonably have done so with diligence. In *Hammaann Ltd & Anor vs. Ssali & Anor HCMA No. 449 of 2013*, the Court

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emphasised that this exception requires the Plaintiff to plead and prove the date of discovery and the reasons for delay. *Order 7 Rule 6 of the Civil Procedure Rules* mandates that a Plaint filed beyond the limitation period must specify grounds for exemption, failing which it is liable to rejection under *Order 7 Rule 11(a) and (d)* (see *Uganda Railways Corporation vs. Ekwaru D. O & 5104 Others* [C. A. Civil Appeal No. 185 of 2007] [2008] HCB 61; *Murome Sayikwo vs. Kuko Yovan & Anor* [1985] HCB 68).

- 11. The Plaintiff has pleaded fraud but failed to specify when it was discovered or why the suit was delayed beyond the limitation period. The payment to Bank of Baroda post-1997 suggests condonation of the debt, and the Plaintiff's Counter - Claim in Civil Suit No. 539 of 2001, dismissed in 2003, indicates prior awareness. Even if the discovery date is pegged to the Court of Appeal's decision in 2009, the suit filed in 2016 remains time-barred. - 12. The Plaintiff has not demonstrated grounds for exemption from the six-year limitation period under Section 25(a) or otherwise. The cause of action, rooted in the 1997 transactions and known to the Plaintiff shortly thereafter, is statutebarred. This Court finds the suit unsustainable and declines to address the merits or other preliminary objections. - 13. In light of the foregoing, the suit is dismissed as time-barred pursuant to Section 3(1)(a) of the Limitation Act, Cap 290 (Revised Edition), and Order 7 Rule 11(a) of the Civil Procedure Rules. No order as to costs is made, given the Defendants' non-participation beyond filing their defenses.

Orders;

- a. The suit in Civil Suit No. 062 of 2016 is hereby dismissed. - b. No order as to costs is made.

It is so ordered.

Judgment delivered electronically at Masaka this 18th day of April 2025.


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