Diamond Trust Bank has suffered a setback in a legal war it is fighting to recover Shs1.28bn from city businessman Mohammed Ssebaggala the proprietor of Ssebaggala and Sons Electro Centre and Light the World electro centre limited
The businessman and his wife Hajjat Shamim Namuddu through their lawyers led by Commercial law giant Derrick Bazekuketta rushed to the Court Appeal to stop the bank’s ongoing process where it wants to execute the orders issued by Justice Anna Mugenyi of the Commercial Division of the High Court in 2019 who allowed the bank to recover its money.
In 2022, the bank secured execution orders of the judgement against the businessman and his wife after Justice Mugenyi dismissed their application to stay the execution orders on grounds that they had appealed against her judgement and that there are high chances of them succeeding at the Court of Appeal.
After losing at the High Court, the businessman hired the service of Counsel Bazekuketta who pleaded with Justice Musa Ssekaana of the Court of Appeal to stay the execution orders against his clients on grounds that they are determined to prosecute their appeal to its logical conclusion and if an order of stay of execution is not granted their appeal is likely to be rendered nugatory and academic.
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Bazekuketta submitted that he has already submitted all the required documents to the Court of Appeal and their appeal is in advanced stages given that the parties have already filed their respective conferencing notes pending scheduling dates for hearing before the Justices of the Court of Appeal.
The lawyer is also questioning Justice Mugenyi’s mathematical formula she used when directing his clients to pay each Shs400m to the bank with 18% annual interest since 2023 and the Shs22m as costs of the suit after taxation insisting that it was an error made and the Justices of the Court of Appeal should investigate it noting that his clients have been services their loans and were only demanded Shs43m.
“The applicant averred that the execution is very likely to cause hardship and loss against him as the monies to be executed are hefty amounting to over Shs800m the very sums that he paid in servicing the loan and beyond. So the trial court did not consider his defence that he serviced the loan,” Bazekuketta submitted.
He added that their client entered a deal with a one Hood Ssentongo who accepted to pay all the amount of money the bank was demanding from him and he has evidence that he paid the said money even though Justice Mugenyi ignored the said overwhelming evidence.
However, the bank through their lawyers led by Ernest Ssembatya protested the application noting that the applicants are not honest. They averred that Ssebaggala himself secured a loan from the bank using his land situated on Block 22, plot 1965 land at Nalyako and after defaulted. He connived with his wife Namuddu to institute a lawsuit against the bank claiming that the mortgage deal was sealed without the spouse’s consent even though on record it is clear that the wife signed the mortgage papers.
Ssembatya added that the same Ssabaggala did the same thing in 2013 when he secured a mortgage from Stanbic bank using his land situated on Block 250 plot 54 land at Bunga Makindye Division Kampala city.
After default, he connived with his other wife a one Mariam Nalubega Kiwanuka Ssebaggala to institute a lawsuit against the bank.
“That in the judgment of High court in (Land Division) civil suit No. 591 of 2013 (details set out in paragraph 1.6(ii) above), the court expressly made a finding that the applicant was not honest in his dealings with Stanbic Bank in respect of the suit property which was the residence of his other wife, Namayanja Mariam Kiwanuka, and to date,, his finding has not been set aside on appeal” lawyers submits.
He added that there is no threat that after winning the appeal, that the applicant will not recover the money they lost during the execution of Justice Mugenyi’s orders noting that the bank has more than Shs250bn as security in the Bank of Uganda.
However, after analysing the evidence brought by both parties, justice Ssekaana stayed the execution orders noting that the applicants have exhibited determination to execute their appeal before the Court of Appeal and that they are very sure that they will secure success.
“Therefore, the refusal to grant an order of stay would cause the applicant such hardship as would be out of proportion to any suffering a respondent might undergo while awaiting the hearing of an appeal. This court would accept that as a factor amounting to rendering the success in the pending appeal nugatory,” the judge stated.
He added that, “ln light of the foregoing, this court finds that the applicants have satisfied the conditions for the grant of a stay of execution pending the hearing and determination of Civil Appeal No. 136 of 2019.”
