Swastik Investment Co. Ltd v Tororo Cement Ltd (Miscellaneous Application No. 0094 of 2017) [2020] UGHC 418 (17 September 2020)

**THE REPUBLIC OF UGANDA**

**IN THE HIGH COURT OF UGANDA AT MBALE**

**MISCELLANEOUS APPLICATION NO. 0094 OF 2017**

**(ARISING FROM CIVIL SUIT NO. 022 OF 2016)**

**SWASTIK INVESTIMENT CO. LTD ::::::::::::::::::::::::::::::::::::::::::::::::: APPLICANT**

**VERSUS**

**TORORO CEMENT LTD ::::::::::::::::::::::::: JUDGMENT CREDITOR /RESPONDENT**

**BEFORE: HON JUSTICE SUSAN OKALANY**

**RULING**

**INTRODUCTION**

1. This application is brought by Notice of motion under Section **98** of the **Civil Procedure Act** and Order **52 r 1 & 3** of the **Civil Procedure Rules**, for orders that: 2. The attachment and purported/impugned sale of Motor Vehicle registered as No. UAU 077G vide a warrant of sale of immovable property, dated 8th February 2017 be set aside; 3. The vehicle be released to the Applicant; and 4. Costs of the application be provided. 5. The grounds in support of the application were set out in the affidavit of Hirani Gopal, the managing partner of the Applicant company as follows: 6. That the Motor Vehicle registered as UAU 077G, was not the property of the judgment debtor at the time it was attached and sold; 7. That the said Motor Vehicle was at the time of the attachment in the Applicant’s actual and exclusive use; 8. That the Motor Vehicle Registered as No. UAU 077G, was at the time of attachment in constructive possession of the Applicant; 9. That the Applicant holds and owns the said vehicle on its own account and not on the account of the judgment debtor; 10. That the Vehicle registered as No. UAU 077G, is subject to ongoing proceedings vide Civil Suit No. 01 of 2017, a fact which ought to have been known to the judgment creditor and the bailiffs, had they undertaken due diligence; and 11. That the sale of the impugned motor vehicle was ill intended, illegal and meant to defeat the existing application to release the same from attachment.

**BACKGROUND**

1. The Applicant company purchased motor Vehicle registered as No. UAU 077G from a one Pappu Sayani on 20th May 2016. The consideration for the vehicle was sixty eight million shillings (68,000,000/=). The Applicant made a substantial payment of forty million shillings (40, 000,000/=) and then took possession of the motor vehicle. He used it until it was attached by the judgment creditor/plaintiff. The attachment was as a result of the execution of a warrant of attachment and sale of the properties of Pappu Sayani and Zyene Enterprises (judgment debtors) in Civil suit No. 022 of 2016, which included motor vehicle Reg No. UAU 077G. 2. The Applicant filed miscellaneous applications No. 52 of 2017 for release of the vehicle and No. 53 of 2017 for an interim order against the sale before this court. However, the judgment creditor through court bailiffs and its Attorneys M/S Shonubi, Musoke & Co. Advocates sold off the motor vehicle before the said applications could be heard and determined. The motor vehicle was also subject of a pending suit – No. 01 of 2017 between the Applicant and DFCU Bank as well as Uganda Revenue Authority.

**SUBMISSIONS OF COUNSEL FOR THE APPLICANT**

1. Mr. Bernard Mutyaba represented the Applicant. He submitted that the purported sale of motor vehicle registered as No. UAU 077G, flouted the enabling law on the sale of movable properties, having been conducted before the expiry of the mandatory period of 15 days. Hereferred to section **43(1) of the Civil Procedure Act** thatempowers the court executing a decree to determine any matters arising out of enforcement. Such matters include impropriety or illegality that mars any processes, attendant to the sale of the property. 2. He further cited **Order 21 Rule 64 of the Civil Procedure Rules,** that sets out the parameters within which the sale of movable property should be conducted. That any sale that does not conform to the 15 days requirement, would be void abinitio and liable to being set aside. For that principle, he referred this court to the case of ***James Kabaterine Vs Charles Oundo & another, HCCS 177 / 94.*** 3. Counsel averred that a public notice of sale/advertisement was published in the observer newspaper on the 10th day of February 2017, with an indication of the date of sale as *“at the expiry of 15 days”.* The alleged sale was conducted on 27 February 2017. That the mandatory 15 days envisaged under **Order 22 Rule 64** of the rules, did not include Sundays or any public holidays and referred to **Order 51 Rule 2**, in support of this position. 4. He submitted that the dates, of 12th, 19th and 26th of the month of February 2017, fell on a Sunday, while the 16th day fell on a public holiday, which is Archbishop Janani Luwum day. That when those days are excluded as required by law, it means that the impugned sale took place after only 14 days from the date of the advertisement, which rendered it improper in respect of sale of movable property. 5. Counsel contended that the Respondent was aware of the pending applications (No. 53 of 2017 and No. 52 of 2017) filed by the Applicant to stop the stated sale, but still went ahead to illegally sell the suit property in a bid to defeat the applications. He argued that the said act was an illegality that this court should not condone and asked the court to set the sale aside and order for the restoration of the property to the Applicant. He cited the case of ***Makula International Ltd vs His Eminence Cardinal Nsubuga and another Civil Appeal No 4 of 1981*** to support of his submissions that the car sale transaction in issue was illegal, having been conducted before the mandatory 15 days had elapsed as required by the law. He invited this court to invoke its powers conferred under **Sec 98 of the CPA** and grant the reliefs sought in the motion.

**SUBMISSIONS OF COUNSEL FOR THE RESPONDENT**

1. In response, Mr. Kawesi Paul, Counsel for the Respondent, faulted the Applicant for failing to comply with the court’s directive of the filing and service of this application within the stipulated time. He cited Order **17 Rule 4** of the **Civil Procedure Rules** to support his argument. 2. Counsel raised two issues as follows: 3. Whether the application is incompetent; and 4. Whether the sale of Motor Vehicle registered as No. UAU 077G, was valid.

**Whether the application is incompetent**

1. Mr. Kawesi submitted that the application was incompetent, having been served upon the Respondent after the expiry of 21 days from the date of its issuance. That the Deputy Registrar signed and sealed the Notice of Motion on 21st March 2017, but the same was served on to the judgment creditor on 13th July 2017 at 10:00 am, 93 days later. 2. He further submitted that a notice of motion or chamber summon must be served in accordance with **Order 5 Rule 1(2)** of the **Civil Procedure Rules.** Counsel referred this court to the decision in the case of***Diary Corporation Vs Opio (2001-2005) HCB 113*, w**here Justice Mukibi held that it has been a practice of court to treat the notice of motion as summons*.* He further cited the case of***Fredrick Madhivani Group Ltd and Another, Misc. Application No. 688 of 2015*,** in which the Hon. Justice Bashaija Andrewheld:

*“Applications whether chamber summons, notice of motion, hearing notices are by law required to be served following after the manner of the procedure adopted for service of summons under O5 r1 (2) CPR. ……….……..the procedure of service of summons under O 5 (supra) also applies to service of hearing notices and applications for purposes of the provisions relating to the issuance and service”.*

1. Additionally, Counsel cited the case of***Western Uganda Cotton Co. Ltd v Dr George Asaba and others, H. C. C. S No. 353 of 2009***where the Hon. Justice Hellen Obura held:

“Order *5 r1 (2) is couched in a mandatory language and O5 r1 (3) clearly provides for sanction where summons weren’t served within twenty one days and there is no application for extension of time, the sanction is dismissal of the suit without notice. This makes O 5 r1 (2) mandatory because failure to comply with it has consequences.”*

1. Counsel invited Court to dismiss the application.

**Whether the sale of motor vehicle Reg No. UAU 077G was valid**

1. Counsel submitted that on 11th October 2016, the Court entered judgment against the judgment debtors, Zyene Enterprises and Pappu Sayani in Civil Suit No. 22 of 2016 for the sum of four billion, ninety five million, three hundred and five thousand, six hundred and seventy nine shillings (4,095,305,679/=) inclusive of costs of the suit. That on 8th February 2017 the Court issued a warrant of attachment and sale of the judgment debtors’ properties, which included motor vehicle Registered as No. UAU 077G. On 9th February 2017, the Court appointed a bailiff who seized the said vehicle from the judgment debtor’s driver. 2. He invited the Court to note that prior to the issuance of the warrant of attachment, the bailiff carried out a search with Uganda Revenue Authority and confirmed that the said vehicle was registered in names of Pappu Sayani, the second judgment debtor. In that regard, Counsel averred that a person in whose name a motor vehicle is registered is deemed the owner of the vehicle. To buttress his argument, he cited the case of Fred ***Kamanda vs Uganda Commercial Bank, SCCA No. 17 of 1995****,* where Justice Odoki (as he then was) held that:

“*A registration card is therefore evidence of ownership as a person in whose name the vehicle is registered is presumed to be the owner of the vehicle unless proved otherwise. A registration card is prima facie evidence of title, and I would hold that it’s a document of title.”*

1. Further he quoted Wambuzi C. J (as he then was) in the same case observed:

“*It seems to me however, that the plain meaning of this section is that unless the contrary is shown, the name in the registration book is proof of ownership of the vehicle to which it relates. The person named in the registration book would be entitled to dispose of the motor vehicle to* *which it relates. I would accordingly be inclined to the view that in Uganda a registration book is a document of title unless the contrary is proved.”*

1. Counselalso averred that, since the motor vehicle was registered in the name of Pappu Sayani one of judgment debtors, the Applicant could not claim ownership. Besides, he submitted that , the Applicant had furnished no proof to show that the vehicle was in its possession and exclusive use as claimed in paragraphs (b), (c) and (d) of its affidavit . 2. Counsel submitted that the application brought under sections 98 and 33 of the Civil Procedure Act and Judicature respectively, to set aside the execution and was not an objector suit, provided for under **Order 22 Rules 55, 56, 57, and 58 of the Civil Procedure Rules** wherein possession is a paramount issue. That the Applicant had earlier filed and withdrawn Application No. 52 of 2017, then it subsequently filed this application (0094 of 2017). 3. Mr. Kawesi contended that the objector application that was withdrawn would have addressed the issues of possession. That the Applicant did not have absolute interests in the motor vehicle because the purchase price had not been paid by the time of the attachment, with an outstanding balance of twenty eight million shillings (28,000,000/=) as per the Applicant’s affidavit. 4. Counsel refuted the claims that there was no valuation of the vehicle and that the same had been sold before the mandatory 15 days has expired. He referred this court to paragraph 10 of the Respondent’s affidavit in reply, where it stated that the vehicle was advertised in the newspaper on 10th February 2017, after its valuation and approval of the same by court on 24th February 2017 and that the sale was by public auction on 27th February 2017. He cited **Order 22 Rule 64**, which mandates that sale of movable property shall be conducted only after 15 days of the advert. That in fact, the bailiff sold the said vehicle 17 days from the date of its advertisement and the return was filled in court. 5. Mr. Kawesi submitted additionally that the assertion in paragraph 9 of the Applicant’s affidavit that the vehicle was the subject of a pending suit between the Applicant and DFCU Bank confirmed that the Applicant did not have absolute rights in the said motor vehicle. That the judgment debtor and creditor were not aware of the pending suit but even then, that the pending suit could not bar the sale of that vehicle. He supported his argument with the decision in the case of J. W. ***Kazoora Vs M. L. S Rukuba, SCCA No. 13 of 199*2**, where Justice Oder held:

*“…..there does not appear to be in existence any pendency legal rule to the effect that transfers or other dealings in land should be registered before a suit contesting such a transfer or dealing is disposed of ….. I am not aware of any Lis Pendens rule in our jurisdiction which forbids dealings in land which is the subject matter of a pending suit*.”

1. According to the Respondent’s Counsel, there was nothing stopping the bailiff from attaching and selling the vehicle, since there was no court injunction procured by either the Applicant or the DFCU Bank, to stop the sale during the 15 days in which the advert of sale was running. That any irregularity in publishing or conducting the sale of movable property could not vitiate the sale and that the Applicant if aggrieved, may commence an ordinary suit against the judgment creditor for compensation. He cited **Order 22 Rule 71** of the **Civil Procedure Rules,** stating that the property in the vehicle had already passed to a bonafide purchaser for value. 2. Lastly, Counsel contended that the Applicant had abused the court process when it filed numerous applications and withdrew them, namely, Misc. Application No. 052 of 2017 for release of the vehicle and the instant application (No. 0094 of 2017), which sought orders that were also in the withdrawn objector application. Counsel prayed for this Court finds that the sale proper and lawful and dismisses the application with costs.

**DETERMINATION OF THE COURT**

1. I have considered the application, the submissions of both Counsel and the law applicable. 2. I will first resolve the objection raised by Mr. Kawesi, concerning non-compliance with the time stipulated for service summons under **Order 5 R 1(3)** of the **CPR** which provides as follows:

*“Where summons have been issued under this rule, and-:*

1. *service has not been effected within 21 days from the date of issue;* 2. *there is no application for an extension of time under sub-rule(2) of this rule; or* 3. *the application for extension of time has been denied, the suit shall be dismissed without notice”*. 4. In the instant case, a duly endorsed notice of motion was issued by the Registrar on 21st March 2017. The Applicant only effected service of the application on the Respondent on 13th July 2017, which was 93 days after its issuance. Clearly such service, is outside the time prescribed by law and since there is no evidence that an application for extension of time within which to serve the Notice of motion was made by the Applicant and issued by this court. This application is incompetent before this court. Mr. Kawesi’s objection is upheld.

**Whether or not the sale of the motor vehicle was valid**.

1. The major aspect for resolution herein is whether the vehicle was sold after the expiration of 15 days prescribed by law. **Order 22 Rule 64** of the Civil Procedure Rules provides that:

“*No sale hereunder shall take place until after the expiration of at least 30 days in the case of immovable property, and, except in the case of property of the nature described in rule 40(2) of this Order, of at least 15 days in the case of movable property, calculated from the day on which the public notice of sale has been advertised as provided in these rules; except that in the case of movable property the judgment debtor may consent in writing to a lesser period.”*

1. Counsel for the Applicant’s contention was that the vehicle was sold before the expiration of the mandatory 15 days. The advert was published on 19th February 2017, the sale was conducted on 27th February 2017. I do agree with Mr. Mutayaba’s submission that the 15 days envisaged under **O22 R 64** of the **CPR** do not include Sundays and public holidays. 2. In consideration of the calendar days of the month of February 2017, Counsel for the Respondent noted that 12th, 19th and 26th of February fell on Sunday, while 16th February was a public holiday (Archbishop Janani Luwum Day). According to him, when those days are excluded, it follows that the sale took place only after 14 days from the date of running the advert. 3. **Order 51** of the **CPR** provides:

*“ where any limited time less than six days from or after any date or event is appointed or allowed for doing any act or taking any proceedings, Sunday, Christmas day, good Friday and any other day appointed as a public holiday shall not be reckoned in the computation of the limited time.*

1. I am thus in agreement with Counsel for the Applicant that the sale actually took place on the 14th day from the date of the commencement of the advert. The act of selling the motor vehicle before the mandatory 15 days is illegal. It is unfortunate that the execution succeeded and the vehicle was purchased by a one Robert Arinatwe. This application has been overtaken by events. This court shall not issue its orders in vain. In any case, the application is incompetent, as already declared above. 2. In the result, I dismiss this application with no order to costs.

I so order,

Susan Okalany

**Judge**

17/9/2020