Court rules on Lweza Clays
Sep 13, 2009
JUSTICE Anup Singh Choudry has ordered Tropical Bank Limited to hand back Lweza Clays Limited to its proprietors.
By Hillary Nsambu
JUSTICE Anup Singh Choudry has ordered Tropical Bank Limited to hand back Lweza Clays Limited to its proprietors.
Choudry ruled last week that the receivers of the company had been wrongly appointed.
Formerly owned by Moussa Lutwama Kizito, a Kampala businessman, Lweza Clays Ltd was put under receivership last year after failing to pay a sh2.5b loan from Tropical bank.
However, Choudry dismissed an application in which Lweza Clays and its director, Kizito-Lutwama, had claimed that the company property had been fraudulently mortgaged and the transaction should be nullified as they could not sustain valid receivership.
In a ruling read by the deputy registrar of the court, Gladys Nakibuule Kisekka, the judge also said the bank had not paid the stamp duty when mortgaging the debentures.
“The purported charges on the different mortgage registered on the property at Kisugu, Kibuga, Kisingiri Road, Mengo-Lweza and Mengo are null and void. They are not properly registered without the payment of the requisite stamp duty for each of them,†the judge ruled.
Choudry oredered Tropical bank, the receiver manager and Askar Security Services Limited to release all the securities to Lweza Clays immediately. He also ordered the receiver to account for the money collected and disbursed during the period of receivership and refund it to Lweza Clays.
Choudry also ordered Muwema and Mugerwa Advocates to refund the money received for their services.
However, Timothy Masembe and Kiggundu Mugerwa, who represented the bank said they would ask the court to stay the execution of the ruling since they intended to refer the matter to the Constitutional Court for interpretation.
JUSTICE Anup Singh Choudry has ordered Tropical Bank Limited to hand back Lweza Clays Limited to its proprietors.
Choudry ruled last week that the receivers of the company had been wrongly appointed.
Formerly owned by Moussa Lutwama Kizito, a Kampala businessman, Lweza Clays Ltd was put under receivership last year after failing to pay a sh2.5b loan from Tropical bank.
However, Choudry dismissed an application in which Lweza Clays and its director, Kizito-Lutwama, had claimed that the company property had been fraudulently mortgaged and the transaction should be nullified as they could not sustain valid receivership.
In a ruling read by the deputy registrar of the court, Gladys Nakibuule Kisekka, the judge also said the bank had not paid the stamp duty when mortgaging the debentures.
“The purported charges on the different mortgage registered on the property at Kisugu, Kibuga, Kisingiri Road, Mengo-Lweza and Mengo are null and void. They are not properly registered without the payment of the requisite stamp duty for each of them,†the judge ruled.
Choudry oredered Tropical bank, the receiver manager and Askar Security Services Limited to release all the securities to Lweza Clays immediately. He also ordered the receiver to account for the money collected and disbursed during the period of receivership and refund it to Lweza Clays.
Choudry also ordered Muwema and Mugerwa Advocates to refund the money received for their services.
However, Timothy Masembe and Kiggundu Mugerwa, who represented the bank said they would ask the court to stay the execution of the ruling since they intended to refer the matter to the Constitutional Court for interpretation.