ABC Capital sues Tirupati over Shs1.58b
What you need to know:
- However, documents indicate, Tirupati defaulted on repayment of the monthly interest and by September 17, 2019 the loan had arrears of 40 days with accumulated interest of more than Shs23.7m.
ABC Capital Bank has sued real estate developer, Tirupati Development, over failure to pay Shs1.58b.
In a case filed at the Commercial Division of the High Court, ABC Capital accuses Tirupati, together with its directors, among them Mr Barot Kristi, Mr Barot Harshad and Mr Barot Miraj of defaulting on repayment of money advanced against an overdraft facility of Shs1.1b and a bank guarantee of Shs350m.
The two facilities, court documents indicate, were due to expire on November 1, 2019 with a repayment period of 12 months.
Acting through Kampala Associated Advocates, ABC Capital claim that the facilities have since grown to Shs1.58b as of May 24 and continue to attract interest.
The two facilities, according to court documents, were guaranteed by the three directors in a July 15, 2018 applications that was approved on August 29, 2018.
“The approved limit for the overdraft was Shs1.1b for a period of 12 months, expiring on November 1, 2019 [while] the limit for the bank guarantee was Shs350m, expiring on November 1, 2019,” documents filed before court, read in part, noting that the facilities had been secured by personal guarantee of Mr Kristi, Mr Harshad and Mr Miraj in favour of ABC Capital by way of a demand promissory cum lien and set off letter duly executed by Tirupati.
However, documents indicate, Tirupati defaulted on repayment of the monthly interest and by September 17, 2019 the loan had arrears of 40 days with accumulated interest of more than Shs23.7m.
Despite insurance of demand letters, personal visits, meetings, telephone calls, emails and WhatsApp chats between the parties, Tirupati has ignored or refused to pay, promoting ABC Capital to seek court intervention.
Court documents also indicated that on March 18, 2020, ABC Capital issued Tirupati with a notice of sale of mortgaged properties.
However, on May 6, 2020 Tirupati requested for a review of the loan facility and extension, which ABC Capital, on May 29, 2020 duly granted but was in a September 12, 2020 shocked to receive a letter in which Tirupati proposed a round off pay off Shs550m as full and final settlement of the outstanding debt.
ABC Capital declined the proposal and demanded that Tirupati pays the amount in full but no such payment, according to court documents, has been made to date.
Demand
ABC Capital wants court to enter judgement against Tirupati and its directors for the payment of Shs1.58b as of May 24, 2021, being the money due and accrued interest as well as meet the costs of the suit.
