KAMPALA, Uganda — dfcu Bank and the Commissioner of Land Registration have been ordered by a Ugandan court to pay a total of 810 million Ugandan shillings in damages to 27 individuals for withholding land titles.
Commercial Division High Court Judge Suzan Abinyo ruled that dfcu Bank improperly refused to transfer titles for land purchased by the plaintiffs from Hosanna Real Estates Ltd. The land in question was part of a larger parcel previously used as collateral by Hosanna for a loan from Global Trust Bank (GTB).
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Court documents showed that in 2011, Hosanna Real Estates secured a UGX 2.5 billion loan from GTB, using 43.22 acres of land in Wakiso district as security. When Hosanna defaulted, with the debt reaching UGX 3.153 billion, GTB sued to recover the loan.
A consent agreement was reached in which Hosanna agreed to cede 34.26 acres to GTB, retaining 8.96 acres. However, GTB was subsequently liquidated by the Bank of Uganda before the title for the remaining 8.96 acres could be transferred back to Hosanna.
In the interim, Hosanna had subdivided the 8.96 acres and sold plots to the 27 plaintiffs who later filed the lawsuit. Their efforts to have dfcu Bank, which took over some GTB assets, effect the title transfers were unsuccessful, leading to the legal action.
Judge Abinyo found that the 8.96 acres were not part of GTB’s assets acquired by dfcu. dfcu argued it only managed selected GTB transactions on behalf of the Bank of Uganda and that the land was not included.
The judge rejected dfcu’s argument, stating the bank, as GTB’s successor in title, inherited the liabilities related to the land. “Consequently,…the titles in respect of Block 171, which were subdivided into 33 plots from the 8.96 acres that was returned and registered in the name of Hosanna Real Estates Limited as a result of the consent was meant to benefit the Plaintiffs,” the ruling stated.
The court also faulted the Commissioner of Land Registration for failing to facilitate the title transfers.
Each of the 27 plaintiffs was awarded UGX 30 million in damages, with an annual interest rate of 8 percent. The court further ordered the immediate transfer of the land titles to the plaintiffs. dfcu Bank was also ordered to pay the costs of the suit.
