Court Bars Sudhir from Recovering Shs 8Bn from DFCU Bank

dfcu bank has secured a temporary reprieve from the High court after justice Steven Mubiru of the Commercial Division stayed the execution of a Shs 8.069 billion garnishee order issued in favour of Crane Management Services, a company owned by businessman Sudhir Ruparelia.

The order had been sought by Crane Management to recover outstanding rent and damages from a previous tenancy dispute. The funds were to be recovered by attaching dfcu’s account held at the Bank of Uganda, a move justice Mubiru said posed a real danger to the bank’s operations if not halted.

Crane Management Services manages properties on behalf of Meera Investments Ltd, which owns several of Sudhir’s commercial buildings. In October 2013, the company signed a five-year tenancy agreement with dfcu bank for occupancy of one of Meera’s properties.

However, following the controversial closure of Crane Bank Limited and the transfer of its assets and liabilities to dfcu, the latter allegedly defaulted on its rent obligations. Crane Management subsequently sued for recovery of $385,728 and Shs 2.998 billion, along with damages.

In 2024, the High court ruled in favour of Crane Management, ordering dfcu to pay the full sum, including Shs 400 million in damages with 10% interest, pushing the total to over Shs 8 billion.

Dfcu appealed the judgment and applied for a stay of execution, arguing that the Court of Appeal could reverse the ruling and that enforcing the order now would render any future success on appeal meaningless.

In his ruling, justice Mubiru agreed, noting that the issues raised on appeal had a reasonable basis in law and equity.

“It is therefore possible that the Court of Appeal could reasonably conclude differently from the trial court… the applicant has established a reasonable basis for sustaining the belief that there is a real prospect that the appeal may be rendered nugatory,” the judge ruled.

He also cast doubt on Crane Management’s financial capacity, suggesting that if the appeal succeeds, recovering the funds might be difficult. The case now awaits determination by the Court of Appeal.

Adopted from URN

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