Justice Dr Ginamia Melody Ngwatu of the Commercial Division of the High Court has allowed James Muge, a former worker with the United Nations Development Program (UNDP) in Uganda to defend the Shs215m suit against Housing Finance Bank Uganda.
In her ruling, the judge noted that there are indeed triable issues raised by Muge in his applicant that cannot be handled in a summary suit adding that there is need to establish whether the bank has a cause of action against the applicant.
The judge further explained that allowing the application will help court to determine whether there is a valid loan agreement which the bank claims that the applicant breached, and the amount due in question.
He explained that to determine all the said issues, a full trial must be allowed to enable court to establish whether the bank is entitled to recover its loan balance as claimed from the applicant.
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In his application, Muge admitted that he secured a loan of Shs215m from the bank but only Shs183m was released to him on 5th March 2021. He added that since then, he has been making a monthly remittance of Shs4,654, 785/= towards the repayment of the said loan facility.
However, upon losing his employment, he started defaulting on his monthly loan obligation which resulted in the bank to instituting a summary suit against him to recover their debt amounting to Shs196m which he contested.
He told court that the loan agreement between him and the bank was terminated upon the non-renewal of his employment contract since the unsecured salary loan was contingent upon his one-year employment contract which the bank was aware of and it is the reason why they deducted the amount of money from what he was supposed to receive including insurance for his loan.
He insisted that there is no cause of action disclosed by the bank against him.
However, in its response, the bank claims that the outstanding balance owed to it by Muge amounts to Shs196m which even though he disputes and claims that he paid, he has not availed a loan statement to determine the exact amount accruing to him and the amount he had paid.
