The Central Bank has withdrawn a case against Dr. Sudhir Ruparelia and his Meera Investments Limited in which it sought to compel the businessman refund shs 397 billion which he had allegedly picked from Crane Bank before it was placed under receivership.
The case was now in Supreme Court, following Bank of Ugandan(BoU) losses with costs, at both the Commercial Court and Court of Appeal.
The two Courts had ruled that Crane Bank (In receivership) has no locus to sue since the Financial Institutions Act 2004 only allowed Banks in liquidation and statutory management to sue and be sued.
The court ruled that a bank under receivership cannot sue.
The two Courts also ruled that Crane Bank (In Receivership), over and above not being able to sue, can’t also sue to own freehold land, since it was majority-owned by a foreigner and therefore forbidden under the Constitution of Uganda from owning land. Hence thus Supreme Court of Appeal, Civil Appeal No. 7 of 2020- Crane Bank Limited (In Receivership) versus Sudhir Ruparelia and Meera Investments Limited.
“Take notice that the Appellant does not intend further to prosecute the appeal. Take further notice that the Appellant will pay the costs of the appeal and in the courts below to the Respondents,” read the notice filed by BoU with the Supreme Court on 15th August 2021.
Just a few weeks ago, on 12th August 2021, five Supreme Court Justices unanimously dismissed Bank of Uganda’s application to replace Crane Bank (In Receivership) with Crane Bank (In Liquidation), saying that the application was in bad faith and intended to circumvent facts of the original appeal.
The 5 justices, Rubby Opio-Aweri, Faith Mwondha, Dr Lillian Tibatemwa, Ezekiel Muhanguzi and Percy Night Tuhaise in unison said that allowing BoU to switch the parties in the case would fundamentally alter the facts of the case and deny both Dr. Sudhir and Meera a chance at justice.
The justices also reiterated that in law, Crane Bank Limited (in Receivership), Crane Bank Limited (in Liquidation), and Crane Bank Limited are three distinct entities with different rights, powers and obligations.
It is therefore not surprising that they have now withdrawn their appeal.
BoU’s withdrawal now exposes it to huge costs at all levels of court, bringing to home earlier fears and expert advice to the Central Bank to drop the appeal, when it first lost the case.
On 20th of October 2016, BoU took over Crane Bank Limited (CBL) under Sections 87 (3) and 88 (1) (a) of the Financial Institutions Act (FIA) and subsequently placed it under receivership on 20th January 2017, before summarily selling its assets and liabilities to dfcu Bank on the 25th of January 2017.
On 30th June 2017, Bank of Uganda, through Crane Bank (In Receivership) files Civil Suit No. 493 of 2017 against Dr Sudhir Ruparelia and Meera Investments. BoU alleges that Dr. Sudhir Ruparelia owned 100% of Crane Bank, contrary to Sections 18 and 24 of the Financial Institutions Act.
It also claims that Dr. Sudhir wrongfully extracted a sum of USD 92,830,172 from Crane Bank, which they sought to recover from him. BoU also claimed another UGX. 52,083,953,995 which they claimed was owed to NSSF. BoU also lays a claim on 48 freehold titles, previously occupied by Crane Bank, but belonged to Meera Investments.
On 26th August 2019 Commercial Court’s Hon Mr. Justice David K. Wangutusi agreed with Dr. Sudhir’s lawyers that indeed BoU/Crane Bank had no locus standi and the orders sought were barred in law.
He dismisses BoU’s case in whole and also awards Dr. Sudhir and Meera Investments the costs of the suit. In September 2019, dissatisfied with the Commercial Court Ruling, BoU/Crane Bank (in receivership) filed Miscellaneous Application No. 320 of 2019 in the Court of Appeal on 9 grounds, maintaining that Justice Wangutusi erred in ruling that BoU/Crane Bank (In Receivership had no locus standi and that the orders sought were barred in law.
On Tuesday, June 23rd, 2020, three Court of Appeal Justices, Alphonse Owiny Dollo; Cheborion Barishaki and Stephen Musota unanimously dismissed all the nine (9) appeal grounds on which Bank of Uganda through Crane Bank (In Receivership) had sought to overturn an earlier August
26th, 2019 ruling by Commercial Court Judge. BoU was also ordered to pay costs, both at the Court of Appeal and the courts below.
Crane Bank Limited (In Receivership) then appealed against the decision of the Court of Appeal by filing Civil Appeal No. 7 of 2020 in the Supreme Court, which it has now withdrawn.