Court fines firm for using money received in error
What you need to know:
In her judgment delivered on October 31, this year, Justice Flavia Senoga Anglin held that since Eseri Services Ltd directors unlawfully withdrew and used the money accredited to their bank account in error, justice demands that interest be paid.
Kampala. The Commercial Court in Kampala has fined a company that used money it received after an error double entry by a financial institution, Uganda Finance Trust Ltd.
Eseri Services Ltd and its two directors Ms Jane Daka and Mr Tom Wiso Daka were told to pay a 21 percent interest for a period of about three years that it took to pay back Shs72m that was credited to it in excess and in error.
Court documents show that the Permanent Secretary of the Works ministry, in writing, stated that the Shs72m was the final payment it owed Eseri Services Ltd. About two days later, Eseri Services Ltd account was again credited with an extra Shs72m but in error.
This brought the total amount deposited on Company account to Shs144m and the company directors went ahead to withdraw all the money.
On April 20, 2011 when the Uganda Finance Trust realised the double credit and withdraw of funds in excess by Eseri Services Ltd directors, they approached them to that effect to refund the said money they got in excess.
Ms Daka and Mr Wiso said they had already used the money and that they needed time to repay it.
The Eseri Services Ltd directors had also in their defense stated they were anticipating Shs168m from the Works ministry but they instead received Shs144m which they withdrew in good faith.
They also filed a counter suit against Uganda Finance Trust Ltd for harassment before their families, detention of Mr Wiso at police and also being labeled a fraudster.
“Despite the plaintiff’s (Uganda Finance Trust Ltd) repeated requests, the defendants individually and collectively declined to make a commitment to repay or refund Shs72m,” the court papers read, in part.
But, after about three years, Eseri Services Ltd was able to pay back the Shs72m that they got in excess.
Despite recovering the money paid in excess to Eseri Services Ltd, Uganda Finance Trust Ltd, through its lawyers, wanted court to give them a 30 per cent interest. The judge, however, settled for 21 per cent.
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