KCCA sued over loan advanced against cancelled title
Kampala Capital City Authority offices. PHOTO / FILE
Court has given Kampala Capital City Authority (KCCA), Commissioner Land Registration and Attorney General (AG) 15 days within which they must defend themselves against claims of failure to advise a money lending firm not to lend money to a company whose land title had been cancelled.
In a case filed before the Commercial Division of the High Court, GroFin Africa is seeking recovery of about Shs2.5b from KCCA, Commissioner Land Registration, AG, Victoria Best and guarantors of the loan among them Ms Justine Namugenyi, Mr Alex Patrick Ssemanda, Mr Herman Ssenyondo Sekaziga, Ms Barbra Namanda Sekaziga.
Court documents indicate that GroFin, on September 4, 2014, advanced Victoria Best $400,000 at a 12.50 per cent repayable in 60 monthly installments.
The loan had been secured by a mortgage that Victoria Best took out in favour of GroFin on property comprised on Plot 348 in Namirembe, Kampala, which was successfully registered in December, 2014 by KCCA.
Documents also indicate that Ms Namugenyi, Ms Ssemanda, Ms Ssenyondo and Ms Namanda also issued personal guarantees as additional security.
However, acting through S&L Advocates, GroFin contends that in 2015 all attempts to have a Deed of Variation registered failed and was advised to submit the original title to the Commissioner Land Registration with a request to have the Deed Variation registered manually.
At the time, court documents indicate, Victoria Best had already defaulted on loan repayment with the total amount due growing to $453,264 due to unpaid interest.
The Deed Variation was dully registered by the Commissioner Lands Registration. However, a request to issue GroFin a special title was rejected on claims that the title on the land had been cancelled in 2015 after the original owners of the land had been found.
Therefore, Grofin faults KCCA and the Commissioner Land Registration that despite numerous advertisements, none of the two ever raised any claim and even went ahead to issue search reports that reflected the existence of a special certificate of title.
In documents before court, GroFin said it had relied on information provided by KCCA and Commissioner Land Registration to make the lending decision.
GroFin says it will at trial prove that the process had been shrouded in illegalities and negligence of duty or even fraud for which KCCA and the Commissioner Land Registration are liable.
Therefore, GroFin wants court to issue an order for aggravated damages against KCCA, Commissioner Land Registration and AG.
GroFin is also seeking judgment against all the defendants for payment of $717,962 (Shs2.5b) at contracted commercial interest, general damages and cost of the suit, among others.
