The High Court Commercial Division has dismissed the Bank of Uganda and Crane Bank suit against Sudhir Ruparelia and Meera Investments, with Justice David Wangutusi ruling that Crane Bank (in Receivership) has no legal basis to sue.
The judge dismissed the suit over lack of legal basis to sue and ordered BOU to pay costs to the businessman, who had been accused of taking Shs397b out of the financial institution in fraudulent transactions and land title transfers.
Background
Mr Ruparelia had objected to the case in which Bank of Uganda (BoU) sued him for allegedly fleecing defunct Crane Bank Limited (CBL) of Shs397 billion in fraudulent transactions.
Ruparelia through his lawyers of Kampala Associated Advocates on July 3, 2019 presented a preliminary objection against BoU case before Justice Wangutusi.
His lawyers asked court to dismiss the BoU case, arguing that the central bank overstepped its mandate in filing the case that has dragged on for years now.
“When dissolving a bank, BoU had three options. It can put someone in management in what is called statutory management, receivership or liquidation and it chose to go for receivership. Under the law, specifically, only the manager and the liquidator can sue. The case cannot be filed by a receiver,” said Mr Ellyson Karuhanga, one of the lawyers representing Sudhir.
He argeud that under the law, BoU has four functions to dissolve and not selling the financial institutions.
“The receiver cannot be sued on that act and cannot sue anyone. His action is protected by the law. The second point we are raising is that the receivership is limited by time, the law gives the receiver 12 months to carry out its function and after this, he cannot do anything,” the lawyer argued.
READ MORE: COURT TO RULE ON SUDHIR-CRANE BANK SHS397B CASE
