Court summons Muhakanizi, ESO boss over Shs35b rent arrears

Mr Keith Muhakanizi

KAMPALA- Three senior government officials have been ordered to appear before court for failure to pay rent arrears to the tune of more than $9.7 million (about Shs35 billion) to a city property owner.

On April 13, 2017, High Court Judge Andrew Bashaija ordered Attorney General (AG) William Byaruhanga, Secretary to the Treasury Keith Muhakanizi, and Director General of External Security Organisation (ESO) Joseph Ochwet to appear and explain why they should not be committed to civil prison for failure to enforce a court order.
The trio is expected to appear before the court on Friday.

In 2013, the High Court in Kampala ordered the government to pay $8,131,890 (about Shs29b) and interest at 6 per cent per annum from June 2014 till payment in full to Mr Ramnicklal R. Popat, the landlord.

The court documents indicate that in April 2015, Justice Wilson Kwesiga ordered the Secretary to the Treasury to pay the said monies while the AG, and Director General of ESO were directed to hand over the vacant property on Plot 12 Army Avenue (formerly Mackinnon Road) in Kampala to Mr Popat.

However, in an April 22, 2016 letter to the High Court Registrar, the landlord through his lawyers, Didas Nkurunziza and Company Advocates, wrote that in spite of the court orders and lengthy time given, the government officials had failed to comply.

“As a result, the suit property remains illegally occupied by Government, our client continues to suffer loss and no payments whatsoever have been made in respect of the decretal sums,” reads the letter.
In December 2015, the High Court Assistant Registrar declared that the AG, Mr Muhakanizi, and Amb Ochwet had conducted themselves in contempt of court and were given 30 days within which to pay the said monies.

However, on March 13, Mr Henry Oluka, writing on behalf of the Solicitor General wrote that a meeting was held and that AG asked for time within which to negotiate with the landlord within one month to find a solution.

“This is therefore to seek your undivided position on what parameters of potential settlement your client would adopt as grounds of settling or bringing this matter to an amicable conclusion,” reads the letter.
But the landlord through his lawyers said the letter did not disclose “any meaningful proposal on your part as to how you wish to settle the orders and directives of the High Court.”

“Our client wishes to be paid the decretal sums and have vacant possession of its property which it has been deprived of for the past 21 years. No payment whatsoever has been made despite the court decree and order in contempt,” reads the March 14 response, which also called for serious proposals from government in settlement of the case.

“You will further note that the one month that you requested from the learned trial judge has since elapsed and still not a single coin has been paid. We are, as instructed, proceeding to serve the relevant parties with notice to show cause why they should not be committed to prison for contempt of court,” the letter read.

In an April 3, 2017 letter to the Secretary to the Treasury, and the Director General of ESO, the lawyers warned that in order for the officials to avoid committal to civil prison, the duo is required to handover the vacant premises to Mr Popat or his representative, pay $8,131,890 (about Shs29b) and interest of 6 per cent worth $1,667,040 (about Shs6b) as well as Shs323 million as legal costs incurred by the landlord.

Mr Jim Mugunga, the Finance ministry spokesperson, confirmed the development but said Mr Muhakanizi is currently out of the country.

“It is indeed true we received the notice. There is no way this matter could have escalated to that level without knowledge of government. The Ministry of Finance in collaboration with the other agencies involved will handle the matter with the complainants to the logical and mutual conclusion” he said in a telephone interview.

Asked why the money accumulated to Shs35 billion, Mr Mugunga said: “The ministry operates within a budget framework where payments are made according to funds allocated. But we respect court process and where we believe we have a good case we defend but courts are independent.”

Officials at the Finance ministry who declined to be mentioned said last Friday that government is indebted to the tune of Shs4 trillion arising out of non-payment of court awards for the last 20 years.

“This is not because of the amount in the judgments, but the interests that accumulate over a long period of time.

In some cases, there are economic saboteurs who have transformed themselves into whistleblowers by writing false reports and petitions and have contributed to this increment,” a source said.