The decision made on Friday by Supreme Court Justice Professor Lillian Tibatemwa Ekirikubinza follows a disagreement that has been on for six months between the Bank of Uganda and Sudhir Ruparelia on whether the final order that needs to be enforced should also reflect that the bank is reverted back to the businessman.
City property mogul Sudhir Ruparelia
has today obtained a final order of the Supreme Court allowing them to
implement its earlier decision to revert the Crane Bank to its shareholders.
The decision made on Friday by Supreme Court Justice
Professor Lillian Tibatemwa Ekirikubinza follows a disagreement that has been
on for six months between the Bank of Uganda and Sudhir on whether the final order
that needs to be enforced should also reflect that the bank is reverted to
This decision arises from an appeal filed by Crane Bank in
receivership (Bank of Uganda) on August 1st, 2020 challenging the decision by
the Court of Appeal to dismiss the case in which they had accused Sudhir and
his company Meera Investments Limited of withdrawing 397 billion shillings from
Crane Bank in fraudulent transactions.
It all started on June 30th,2017, when Crane Bank in
receivership/Bank of Uganda sued Sudhir and his company Meera Investments
Limited before the Commercial Division of the High Court seeking to recover the
said monies that had reportedly been siphoned by Sudhir.
They also sought to
recover freehold certificates of title to 48 properties together with duly
executed transfer agreements and a refund of the monies for which they claimed were for invalid leases.
However, in 2019, the then Commercial Court Judge David
Wangutusi dismissed the case with costs on grounds that the Crane Bank in
receivership had no capacity to commence legal proceedings against Sudhir.
Not happy with the decision of Justice Wangutusi, Crane Bank
under receivership challenged Wangutusi's decision in the Court of Appeal
citing that the Judge erred in law by holding that the bank had ceased to own
property and its liabilities and assets had all been exhausted.
The appeal by the Bank of Uganda was however dismissed with
costs leading to an appeal to the Supreme Court. The Bank of Uganda on August 1st, 2020 however
withdrew the appeal before it could be heard by the Supreme Court. But Sudhir together
with his company Meera Investments Limited objected to the withdrawal saying
that they should be awarded costs.
The Supreme Court agreed with Sudhir and directed Bank of
Uganda to pay costs in its February 11th, 2022 decision. The Supreme
Court also ruled that receivership of Crane Bank Limited ended on January 20,
2018, and from that date, the management and control of Crane Bank returned to
But when Sudhir and his company who were the successful
party prepared a decree to be approved by the Court for enforcement of its
decision, the Bank of Uganda objected to the format on what the third order
The third order was that "the appellant's receivership
ended on 20th January 2018 and thereafter its management reverted to the
Bank of Uganda was not happy with the last part of the order
to the effect that ''thereafter its management reverted to the
It agreed with the rest of the orders that the appeal be
dismissed with costs to be paid by Bank of Uganda and that the dismissal is with effect from February 11th, 2022. But it was not contented with
reverting the management of Crane Bank to shareholders.
Bank of Uganda argued that the Supreme Court had no jurisdiction
to make an order reverting the management to the shareholders because when they
withdrew their case, the contention was on who should pay costs and that the Court
of Appeal had not ordered that it should be reverted.
In her decision on Friday, Justice Lillian Tibatemwa indicated that under the Financial Intelligence Act, after the expiration of 12
months from the date of takeover by the receiver, the receivership must be
deemed to have lapsed by operation of the law.
"It is a
position at common law that where a legal relationship is terminated by
effluxion of time then the rights accruing revert back to the owner," said
She added that Crane Bank existed as a legal entity before
it was licensed to operate as a financial institution and that the return of
management to the shareholders is a logical result of the fact that the Central
Bank is no longer a receiver and no longer the manager.
As such, the Court has emphasized that the Crane Bank
receivership ended on January 20th 2018 and consequently, its management has
to be reverted to its shareholders.
Sudhir’s lawyer Peter Kabatsi has welcomed the decision saying it has been a tough fight.