Tycoon Mukesh ordered to pay sh14b for illegally occupying part of Shumuk House

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It is a huge legal blow for city businessman Mukesh Shukla aka Shumuk, as this year closes.The commercial court has ordered him to pay shillings 14 billion in mesne damages for illegally occupying part of Shumuk House.

In a judgment dated December 22, 2025, High Court judge Stephen Mubiru ruled that Mukesh has been illegally occupying 24 of the 92 condominium units of Shumuk House.

“As regards the 24 condominium units of the 92 that are the subject of this suit, I find that the two agreements for the sale of property comprised in LRV 3606 Folio 13 Plot 2 Colville Street executed between Bonney Mwebesa Katatumba and the counter defendants did not in any way affect the rights of Joseph Sempebwa in respect of the thirteen (13) units he purchased from Virani Bahadukali Mohamedalli nor the eleven (11) units, which Peter Lule purchased from the late Katatumba,” Justice Mubiru ruled.

Consequently, Mukesh and his companies have been ordered to pay $3,822,000 (about shillings 13.7 billion) in mesne profits and an aggregate mesne profits of $ 58,500 (about shillings 211 million) for each of the 13 units per month to Sempebwa from the date of judgment until March 23 next year, being the due-date for handing over vacant possession. Mukesh has also been ordered to pay shillings 50 million to Lule in damages.

Having bought the units from Mohamedalli and Katatumba respectively, Justice Mubiru said that while Sempebwa and Lule are unregistered proprietors of their respective units, they acquired proprietary rights in the property enforceable under the law since Mukesh was not a bona fide purchaser for value without notice of prior equitable claim.

Justice Mubiru noted that the transaction between M/s Shumuk Springs Development Ltd and the late Katatumba was wrought with a number of fatal anomalies because upon conversion of the building on LRV 3606 Folio 13 (previously LRV 131 Folio 1) Plot 2 Colville Street into condominium units, upon registration of condominium plan no. 0045 and creation of independent titles for the ninety-two (92) units, the original “parent” or “mother” land title was closed, nullified or revoked by the Registrar of Titles, and thus it ceased to exist as an active, single title for the entire parcel of land.

“Therefore, a contract whose subject is the original “parent” or “mother” land title, after it has been replaced by condominium titles, is void. This is because the original title ceases to exist in its previous form once the new titles are issued, meaning the contract’s subject matter is legally non-existent at the time the agreement is made,” Justice Mubiru noted.

He said that for a contract related to a condominium property to be valid, it must refer to the current valid condominium certificate of title for a specific unit and its associated common interest.

“The late Katatumba had ceased to own the 24 units. It is only a registered owner (even if fraudulent) capable of passing a good title to an innocent buyer. Save in the case of bona fide purchasers, if someone does not own land, they cannot sell it to give valid ownership,” Justice Mubiru ruled.

Land registration commissioner has been ordered to issue, in Sempebwa’s name, the title deeds to all leaseholds in respect of the said condominium units once renewed by the Kampala District Land Board (KDLB), which has been granted leave to renew his lease forthwith.

Background

Mukesh and his companies, M/s Shumuk Springs Development Ltd, Springs International Hotel Ltd and Shumuk Financial Services Ltd filed the case on October 8, 2009.

They sued Katatumba, Mohamedalli, Sempebwa, Lule, Tecton group, Arvind Patel and the registrar of titles. However, Katatumba, Sempebwa and Lule filed a counter-claim.

Genesis of the dispute

Comprised in LRV 3606 Folio 13 (previously LRV 131 Folio 1) Plot 2 Colville Street in Kampala city, the property formerly belonged to the late Katatumba.

Later during the year 2006, under Condominium Plan No. 0045, the property was divided into ninety-two (92) condominium units in respect of which separate 99-year leasehold titles were created for each unit with effect from March 1, 1912, valid until March 1, 2011.

By an agreement dated June 21, 2005, Virani Bahadukali Mohamedalli purchased thirteen (13) of those condominium units from the late Katatumba and caused their transfer into his name.

Subsequently, by an agreement dated August 26, 2009, Sempebwa purchased the 13 condominium units from Virani Bahadukali Mohamedalli at a cost of $ 725,000 (about shillings 2.6 billion).

On August 13, 2007, Lule also purchased eleven (11) condominium units (numbered 52-62) directly from Katatumba for which he paid in full a sum of $375,000 (about shillings 1.3 billion) as the agreed purchase price. Consequently, he took possession of the units.

Being heavily indebted at the time to multiple creditors who included M/s Crane Bank Ltd, Ben Kavuya, Arvind Patel and others, the late Katatumba decided to dispose of some of his property.

By an agreement dated August 16, 2008, at a price of $5,000,000 (about shillings 18 billion), Katatumba sold to M/s Shumuk Springs Development Ltd, the entire property comprised in LRV 3606 Folio 13 Plot 2 Colville Street, inclusive of all developments, furniture and fixtures and all condominium units comprised therein.

The agreement dictated M/s Shumuk Springs Development Ltd make an initial instalment of $101,000 (about shillings 364 million).

The balance of $4,899,000 (about shillings 17.6 billion) part of which was to be applied towards redeeming titles of the condominium units already sold, was to be paid within 60 days, lapsing on October 15, 2008.

Mohamedalli, who later sold his units to Sempebwa, was to receive $750,000 (about shillings 2.7 billion) while Lule was to receive $400,000 (about shillings 1.4 billion).

However, M/s Shumuk Springs Development Ltd later repudiated this contract. On November 10, 2008, Katatumba resold the same property to M/s Shumuk Springs Development Ltd at $4,000,000 (about shillings 14.4 billion).

M/s Shumuk Springs Development Ltd was to pay an initial instalment of $361,000 (about shillings 1.3 billion) and pay the balance of $3,639,000 (about shillings 13.1 billion) within 60 days.

Part of the balance was for redeeming titles of the condominium units already sold to Mohamedalli and Lule. However, Mohamedalli and Lule were never paid.

Consequently, Mohamedalli and Lule embarked on selling their interests in the property.

Shumuk's Suit

On October 8, 2009, M/s Shumuk Springs Development Ltd, Springs International Hotel Ltd, Shumuk Financial Services Ltd and Mukesh sued Katatumba, Mohamedalli, Sempebwa, Lule, Tecton group, Arvind Patel and the registrar of titles seeking a permanent injunction forbidding them from transferring or dealing in any of the condominium units on grounds that this would defeat his contingent interest in the property.

Condominium land title conditions

Citing section 3 of the Condominium Property Act, Justice Mubiru held that upon the registration of a condominium plan, condominium titles are created and the original “parent” or “mother” land title is closed (or revoked) by the Registrar of Titles.

It thus ceases to exist as an active, single title for the entire parcel of land in the same form as before, as it is legally dissolved and replaced by the collective ownership structure defined by the condominium plan and the individual unit titles issued under it.

“If the parent title was freehold, the unit titles will be freehold,” Justice Mubiru ruled.

Where the parent or mother title was a leasehold, Justice Mubiru said the condominium unit titles issued from it will also be leasehold titles and are subject to the same expiration and renewal terms as the original lease.

Mubiru said the mother title in a condominium property merely serves as a reference in the Registry but is no longer an active instrument for transferring the entire property as a single unit.

“Therefore, the property does not revert to a previous owner upon death or sale in the traditional sense,” Mubiru added.

The judge added that the property may only revert to being held as a single parcel under a reconstituted parent title often with the former unit owners as tenants in common when the building is destroyed or when the unit owners unanimously agree to terminate the condominium status often to facilitate a bulk sale to a single investor or developer or when it becomes impractical or uneconomical to continue the condominium regime.

Until the condominium status is terminated, Justice Mubiru said each unit exists as a separate legal entity with its own certificate of title, and thus the building as a whole does not exist as a single saleable legal interest.

Dismissing Mukesh’s case, Justice Mubiru noted that a purchaser buying the building as a single unit requires a clean and unified title.

“Each unit, together with its common interest, for all intents and purposes, constitutes real property,” Justice Mubiru noted.

He said the owner holds an absolute, unconditional legal and exclusive title to the airspace and physical boundaries of their specific unit, defined by the unit’s boundaries.

This ownership lasts indefinitely if freehold and for the duration of a fixed term, if it is a leasehold and it can be sold, leased, mortgaged or passed down to heirs.

Condominium ownership

Under a condominium arrangement, a building is divided into several units individually owned, though the land on which it is established is collectively owned.

It is a system of separate ownership of individual units in a multiple-unit building, the individual units of which are designated for separate ownership and the remainder of which is designated for common ownership solely by the owners of those units.

The land on which the building is established as well as the shared common areas such as hallways, elevators, swimming pools, gyms and parking lots, are jointly owned by all unit owners under a condominium association.

The underlying land, support structures and shared amenities are owned by all the unit owners as tenants in common in shares proportional to their unit factor.