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Uganda's legal tender. PHOTO/COURTESY 

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Court sets rules on mistaken payments

What you need to know:

  • The actions, Justice Gidudu said, constituted theft. 

It is quite common for some Ugandans to rush to the nearest agent and withdraw money from their mobile money accounts even before establishing who sent them the money they have received.

Similarly, some Ugandans will rush to the nearest Automated Teller Machine (ATM) and withdraw money from their bank account before establishing the source of the funds.

A new ruling has now made clear that you will be deemed to have stolen should you spend money that, through no fault of your own, was sent to either your mobile money account or bank account.

In a landmark case, Justice Lawrence Gidudu of the Anti-Corruption Court ruled that it is criminal for one to spend money that they know they are not entitled to.

“The legitimate expectation is for the account holder finding unexplained money on their account to report it to the bank to ascertain its source and purpose instead of treating it like the Biblical manna from heaven in the Book of Exodus 76:37 when God dropped food from heaven for Moses to feed the Israelites who were starving in the desert,” the judge pointed out in a ruling issued on January 14.

Justice Gidudu made the comments as he delivered judgment in a case in which Ronald Jimmy Ajuk was arraigned before court for causing financial loss contrary to Section 20(1) of the Anti-Corruption Court. 

The charges arose out of an error made by Absa Bank in June 2022 when it credited Ajuk’s account with $6 million (Shs22 billion) instead of Shs6 million, which he had borrowed from a colleague, Ms Ann Kamwine.

Mr Ajuk spent $429,307 (Shs1.5 billion) within three days even when he was said to have been aware that what had been deposited exceeded what he had been expecting. 

Whereas the bank was able to reverse some of the transfers that had been made on the account and recovered some of the money spent, $219,931 (Shs807.1 million) remained outstanding. It was upon his failure to repay the said amount that he was arrested and arraigned before the court.

Defence

According to court documents that Monitor has seen, Mr Ajuk had in his defence said he had no hand in creating the money that ended up in his bank account.

He further argued that he had not been aware that the bank’s system was faulty, an argument that the court did not agree with.

“A court of justice cannot allow a person to spend money mistakenly credited to their account without reasonable cause. On the contrary, if no reasonable explanation is given, the court would punish such conduct,” Justice Gidudu ruled.

Mr Ayuk had also told the court that he had no knowledge or reason to believe that by utilising the money, he was causing financial loss to the bank.

Mr Ayuk also presented before court copies of emails and a business financing agreement pertaining to a protracted business negotiation with foreign partners to back up claims that he used the money thinking it had been deposited on his account by his foreign-based partners.

He also used as proof evidence that he received a screenshot from Ms Kamwine to show that she had deposited only Shs6m.

“That there was no evidence of actual loss because the same was not reflected in the accounts of the bank. That the loss was not reported to the Bank of Uganda. That the money is not totally lost because it is recoverable by suit against the accused,” he also argued.

Ayuk also expressed a readiness to refund the money, but the judge ruled that “this was a form of theft and even when the thief intends to refund it later, the crime is committed the moment money is moved from the account”.

Criminality 

Mr Ajuk also argued that when summoned by the bank, he acted honestly and did not flee. However, the prosecution called on the court to convict him for “acting criminally”. 

According to court documents, Mr Ajuk spent part of the money on June 10, June 11 and June 1, 2022. On June 10, he is said to have made nine transactions amounting to $134,131 (about Shs491m) at the ATM. That included five cash transfers, including two of $25,000 (about Shs92m); two of $27,500 (Shs100.5m) and one of $27,800 (Shs 101m).

 On June 11, 2022, he made three more transfers. They totalled $63,665 (Shs233m), and included a transfer of $27,000 (Shs99m), another of $8,665 (about Shs32m) and one of $28,000 (Shs102m). On June 13, 2022, he made five transactions, including two transfers of $11,500 (Shs42m) and $26,000 (about Shs95m). That also included three cash withdrawals of $285 (Shs1m), $570 (Shs2m) and $28 (Shs100,000).

 Justice Gidudu said. “A person who is broke and whose dollar account has never had a credit of more than $8,000 (about Shs29m) between January 1, 2020, and until June 2022 when it was hit by a massive credit of $6 million, should have been surprised or even shocked by such a development. He should have called Kamwine, the bank and others he deals with to verify where such an unsolicited credit had come from instead of going on a spending spree.”

The actions, Justice Gidudu said, constituted theft. 

“Withdrawing money that was mistakenly deposited into your account is theft. The court held inter alia that any appropriation of funds mistakenly credited to the bank account with knowledge that you are not entitled to, constitutes theft.”

The judge noted that Mr Ayuk’s defence was implausible. Taking note of Mr Ayuk’s failure to inquire about the funds from the bank or financiers and the speed of transactions, the judge pointed out that he found Mr Ayuk’s behaviour deliberate.

“There is no credible defence to the charges. The prosecution has proved the charge against the accused beyond reasonable doubt. I find him guilty on the charge of causing financial loss contrary to Section 20(1) of the Anti-Corruption Act…I convict him accordingly,” Justice Gidudu ruled.

 Sentencing will be made on notice.