The Directors of Biyinzika Enterprises Limited led by Dinah Mukasa and Isaac Mukasa are in tears after Commercial Division of the High Court Judge Harriet Grace Magala allowed the auctioning of their multibillion properties over Cairo Bank Loan.
In her ruling, Justice Magala dismissed with costs the application filed by Biyinzika Enterprises limited through their lawyers led by Anthony Bazira of M/s Byenkya, Kihika & Co. Advocates seeking to set aside a notice of default issued by Cairo Bank dated 14th June 2023.
They also wanted Court to set aside a notice of sale of the mortgaged property issued by the said bank dated 11th September 2023. They also wanted Court to issue a Court Order cancelling an advertised sale of their securities by the bank.
They even asked court to issue an injunction against the bank and its agents preventing them from taking further action in respect of the notices auctioning their properties.
Biyinzika was seeking for an audit to be ordered in respect to a re-scheduled term loan facility between them and the bank to ascertain whether the principle and interest amounts were properly computed and applied to the term loan.
They also wanted Court to order the bank to grant them a grace period in respect of repayment of principal amounts under the re-scheduled loan for a period of 12 months or such period as court deems fit, to allow them clear all interest arrears and put their loan facilities in order.
During the hearing of the matter, Dinah Mukasa who did not deny its indebtedness to the bank implored the bank to allow them pay interest over a period of eight months and be given a further period of one year to normalize the loan.
She further informed court that there were prospects of bringing a business partner on board who would avail the much needed finances. However, Mukasa’s prayers were strongly objected to by Bank lawyers led by Ivan Kyateka of M/s Tumusiime, Kabega & Co. Advocates who told Court that the proposal the applicant was suggesting was not in good faith because she had never approached them with such plans.
He added that the Bank has for more than a year given the applicant more time to normalize the loan repayment which has cost them heavily each time they have to make a provision for such a huge debt because the said money in debt belonged to depositors.
According to Court documents as of 5th October, 2023, Biyinzika arrears stood at Shs1,864,395,800 and USD $ 13,745.23.
In her ruling, the Judge noted that the applicant was not specific on what kind of injunction was being sought for from Court.
He wondered whether it was a permanent injunction or a temporary injunction.
The judge stated, “It is clear that the Applicant is still indebted to the Respondent. If the court was so inclined to issue a temporary injunction halting the sale, this would beg the question as to when the dispute(s) between the parties would be finally resolved seeing that this is a miscellaneous cause- a suit in its own right.”
“A notice of motion which does not bear rule under which it is premised, does not have a mother suit from which it originates and which seeks for final determination of contentious matters cannot be brought under section 33 of the Mortgage Act and section 98 of the CPA,” the judge added.
She divulged that the applicant has also failed to meet the requirement under Regulation 13 of the Mortgage Regulations 2012 to deposit 30% of the mortgage under contestation.
“I therefore find that this application is improper before court and is dismissed with costs to the Respondent,” Judge noted.
Biyinzika is among the private companies which government, through the Ministry of Finance Planning and Economic Development, was planning to bailout.
Other include flamboyant city tycoon Patrick Bitature and Mathias Magoola of DEI Group companies.
Shadow finance minister and also Butambala county legislator Muhammad Muwanga Kivumbi revealed that over Shs700m was put aside in the supplementary budget to be used to bailout Magoola.
It was also established that over Shs240bn was put aside to bailout Bitature.
Recently, when finance Minister Matia Kasaija was asked about the chances of helping Biyinzika, he said that he doesn’t know about any plans of bailing out struggling private companies in the country.
By Sengooba Alirabaki
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