The ghost of the untimely death of Crane Bank which Bank of Uganda illegally sold to dfcu bank, has once again returned.
Kampala billionaire Sudhir Ruparelia through his Meera Investments Limited, has asked court to compel Dfcu Bank to pay $8,660,462 (Sh32 billion) for rent arrears.
It must be recalled that in January 2017 following the illegal closure of Sudhir’s bank ‘Crane Bank’, Dfcu Bank took over its management and started using Sudhir’s property to run the bank. Sudhir went ahead to challenge Bank of Uganda closure of Crane Bank, and all agencies including the Supreme Court ruled there were not satisfactory grounds of closure of then the second biggest bank on the market. Instead, it was found out that BoU had several internal problems which led to making several erroneous decisions including closing several banks whose assets were not properly accounted for in the aftermath.
Having defeated Bank of Uganda in all courts of law, now Sudhir has turned his focus on the bank which allegedly bought his Crane Bank.
According to Meera Investments Ltd lawyers before the Commercial Division of the High Court, Dfcu Bank breached the tenancy agreements concerning plots 38 and 40A on Kampala Road. Plot 38 Kampala was the headquarters of Crane Bank Ltd.
The lawyers argued that Dfcu Bank expressly inherited all tenancy agreements and, therefore, assumed the rights and obligations under the tenancies in respect of the suit properties.
“Under clause 3(c) of the tenancy agreement, it was specifically agreed by the parties (Crane bank and Meera) that the tenancies shall remain firm and binding on them until the expiry of ten years,” reads part of the document.
According to the tenancy agreement, Crane Bank would pay $46,980 (Shs171m) in rent and $46,980 (Shs 171m) in ground rent per month with a seven per cent annual increment for Plot 38 Kampala Road and $9,890 (Shs36m) in rent and $9,890 (Shs36m) in ground rent for Plot 40A Kampala road.
When dfcu bank took over, it inherited the entire premises that Crane Bank Ltd formerly rented and rebranded the entire premises. It also undertook to pay Crane Management Services (managers of Meera) $531,000 (Shs 1.93bn) as restoration costs and arrears in utility bills.
The document reveals that in February 2017, dfcu Bank entered into a revised contract in “respect of the basement and ground floors of Plot 38 Kampala road for a fixed period of three years.”
Dfcu Bank, however, reportedly continued to occupy the 1st, 2nd 3rd and 7th floors of Plot 38 Kampala Road and Plot 40A Kampala Road “under the terms and conditions of the tenancy agreement dated December 16, 2014” until April 30, 2017, when it opted to vacate them.
Nevertheless, this was a breach of clause 3(c) of the surviving tenancy agreement, which guaranteed that the “tenancies shall remain firm and binding on them until the expiry of ten years” and for this breach, dfcu is “liable to pay the plaintiff the sum constituting rent for the unexpired period of 84 months being $8,660,462.34 (Shs 31.6bn).”
Given the breach of the tenancy agreement by Dfcu bank, Meera Investments Ltd, now wants this money plus interest “at the prevailing commercial rate from the date the defendant was in default until payment in full.”
Meera Investment also contends that the non-payment of the rent has not only caused it losses, but also deprived it of the use of its money and interest, caused it more suffering and grave inconveniences and adversely affected its damages which it claims general damages and other orders of the court. The dfcu Bank has been commanded to file a defence.
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