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Commercial Court Justice Lameck N. Mukasa in a temporary injunction issued against the bank and others said it was not proper at this stage to take over property that were advanced as securities to secure the loan claimed before considering the merits of the main case.
The ruling is arising from a case filed by three companies belonging to Mr Joseph Behakanira and his wife Goodra Tumusiime Behakanira objecting to the manner in which the bank is demanding payment of the loan.
The bank had invoked the company law thereby taking over management of three companies which included, Betuco (U) Ltd, J&M situated along Entebbe Airport Road and carrying out hotel and leisure business and Avemar Shopping Mall along Luwuumu Street in Kampala.
Other property include three premises situated at Kisugu, a Kampala surburb. The bank, through its lawyers MMAKS Advocates appointed City lawyer, Victor Mathias Ssekatawa, Mr Marima Kereto and KK Security (U) Ltd as joint receivers and managers of the companies.
The receiver's had given tenants in the affected premises 60 days within which to prepare their rental payments to recover the loan.
However Justice Mukasa in his ruling ordered: "Considering the respective interest of both parties the sale value of the affected property was set at Shs11.7 billion much below the actual value. In the event the main case was decided in favour of the bank, it will realise the loan from sale of the securities,"
"However if the case was to be decided in favour of Betuco (U) Ltd after the property is sold, it will not have gained considering the ever-rising construction costs of such developments. In the premises a temporary injunction is hereby issued restraining the respondents from selling the properties in question pending determination of the main case".
Mr Blaze Babigumira while appearing before the Judge to argue the application asked Court to grant a temporary injunction because the main case has high chances of success. Babigumira while relying of the affidavit of Behakanira accused the bank of using a wrong procedure to appoint the receivers to manage affairs of the affected properties.
He said his clients were not given a demand notice to claim for the alleged loan.
According to Mr Babigumira the two directors of the company did not have powers of Attorney to sign the Mortgage deed for the execution of the loan from the bank as claimed.
"Neither I nor Tumusiime had powers of Attorney from the companies to sign and seal the mortgage deed and the debenture as required by law. I will not have accommodation if my property in Kisugu is sold off" read part of Behakanira's affidavit.
Mr Babigumira accused the receivers of writing to all banks blocking the accounts of the two company directors.
However Mr Kanyerezi Massembe opposed Babigumira saying the two directors signed the mortgage deed in their personal capacity as directors of the companies.
He said the receivers were appointed using the formal company law. This he said was done after the bank gave prior notice to the two directors asking them to effect payment of the loan and they did responded saying payment of the loan would be effected in 2014.
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