The High Court Land Division has ordered dfcu Bank to vacate 48 leasehold properties belonging to the defunct Crane Bank.
In a ruling issued on October 24, 2023, Justice Tadeo Asiimwe also ordered dfcu Bank to pay former Crane bank Shs2.4 billion in damages with 8% interest per year for trespassing on property of the defunct bank.
“A declaration that the transfer of the leasehold interests in the suit properties from Crane Bank Limited into the names of the 1st Defendant was tainted with illegality and fraud and is therefore invalid,” he ruled.
“A declaration that there are no valid leases in respect of the suit properties. The said leases are therefore declared to be invalid and absolutely determined on account of breach and illegality,” he added.
Justice Asiimwe also ordered the Commissioner Land Registration to immediately cancel 48 suit leases, lease variations and extensions registered as encumbrances on the mailo and freehold titles belonging to Crane Bank Limited.
“The 2nd Defendant is hereby ordered to cancel the entry of the suit leases, lease variations and lease extensions registered as encumbrances on the Mailo and freehold titles of the Plaintiff,” he ruled.
Justice Asiimwe also issued a permanent injunction restraining the dfcu Bank Limited, its agents and servants from trespassing on the Crane Bank Limited properties.
“An order of a permanent injunction is hereby issued restraining the 1st Defendant, its agents and servants from continued trespass on the suit properties,” the judge added.
Since Crane Bank is defunct, court ordered that dfcu Bank pays costs of the suit to Meera Investment Limited, the mother company of Crane Bank Limited that instituted the suit on behalf of its child company, Crane Bank Limited.
The plaintiff had initiated this legal action against the defendants, namely dfcu Bank and the Commissioner of Land Registration, for their alleged illegal and fraudulent sale and possession of 48 leasehold properties. Mera Investments based its claims on its status as the registered proprietor and lessor of 48 Mailo and freehold titles, from which the lease agreements in question stemmed.
The battle centred around the possession of these properties, and the subsequent transfer of titles and lease possession in favour of dfcu Bank. In contrast, dfcu Bank refuted these allegations, maintaining that they had lawfully acquired their interest in the 48 leasehold properties through a purchase from the Bank of Uganda as a receiver of Crane Bank Limited.
Furthermore, the bank argued that no consent was required from Mera Investments before the transfer or the taking of possession of the disputed properties, as the transfer was executed under the provisions of the Financial Institutions Act.