Premier Credit Limited’s sh105m loan case dismissed

The High Court has dismissed a case in which Premier Credit Limited sought to recover sh105m from two city businessmen, Ibrahim Kyotanalya and Mike Aswa.

Justice Henrietta Wolayo rejected the originating summons filed by Premier Credit Limited, stating that the court cannot inquire whether Premier Credit Limited is entitled to vacant possession of a piece of land used as collateral for the loan.

"I have found that the court cannot inquire into whether the plaintiff is entitled to vacant possession before addressing other fundamental questions. These include whether Mike Aswa paid off the loan, whether the defendant was party to an earlier mortgage that was settled, the actual outstanding loan amount, and the defendant's liability to repay the loan since there is a claim that it was settled. Therefore, the originating summons are dismissed. The plaintiff has the liberty to commence an ordinary suit against the defendants. The plaintiff shall pay the costs of the suit," stated Wolayo.

According to the affidavit supporting the application sworn by Rashid Kasujja from Premier Credit Limited, Kyotanalya and Mike Aswa approached Premier Credit Limited on September 19, 2018, seeking a loan of Sh105 million to finance their business. They pledged to repay the loan within 18 months. The loan was secured by land in Plot 734, Block 60 in Nampunge, Luwero district, and unregistered land in Zirobwe, Gayaza Bulemezi.

Premier Credit Limited disbursed the money, but Aswa allegedly defaulted, leading the company to issue demand notices. However, these attempts were unsuccessful, and as a result, the outstanding balance increased to Sh151 million, including interest.

Following the statutory days' expiration, Premier Credit Limited initiated recovery procedures, leading the company to advertise the property.