International Credit Bank Ltd (In Liquidation) v Sanyutex Limited (MISC. APPLICATION NO. 22 OF 2001) [2001] UGHC 122 (22 February 2001)

THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA MISC. APPLICATION NO. 22 OF 2001 (Arising out of H. C. C NO. 25 OF 2001)

INTERNATIONAL CREDIT BANK LIMITED RESPONDENT/PLAINTIFF (IN LIQUIDATION)

VERSUS

SANYUTEX LIMITED APPLICANT/DEFENDANT

BEFORE: THE HONOURABLE MR, JUSTICE R. Q. OKUMU WENGI

RULING

This is an application for leave to defend a summary action by ICB in liquidation to recover an overdrawn A/C. The applicant accepts having run an account with the plaintiff, but denies that it was overdrawn. He also states that ifit was overdrawn which is denied such overdrawing was not *^U^p* authorised by a resolution. Learned counsel for the applicant Mr. Musika has contended that the application raises triable issues such as authority for the borrowing the proof ofthe action and drawings hence the terms of any alleged overdraft, and interest on the same. He concludes that the summary action is not satisfactory on these critical elements and the suit ought to proceed to trial. He has submitted a draft w.s.d to the same effect.

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On the other hand the respondent in his reply has annexed documents indicating a statement of balance. He has also drawn on the argument that the overdraft came about whilst the directors ofthe plaintiff bank were also the directors ofthe defendant company and as such were estopped from denying the truth ofthe 0/D transaction or authority for it.

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IP

*&*

Having perused the pleading and the documents in this case and heard counsel, I must state that summary actions are meant to recover liquidated debts. This would clearly include a debt stated in an account. My understanding ofthe law is that when a customer writes a cheque on his account and such drawing would result in an overdraft that cheque is itself tire application for the overdraft. Ifit is honoured by the bank whether or not there was no resolution the overdraft is legitimate if drawn. I have seen the statement and the fact that an account existed is not denied. I do not think that the liquidator confirmed the statement. I am not satisfied that there is any triable issue as to whether there was an overdrawn account in this case. Indeed I am satisfied that the defendant has no possible defence to this action which iftried would in my view succeed. For this reason I must dismiss this application with costs. I would add that the application is in

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effect frivolous and vexations in so far as the officers ofthe ICB bank and that ofthe applicant were the same persons whose authority was needed to perfect the transactions.

In the premises the plaintiffis entitled to a decree vs the defendant with costs tire same to bear interest at 28% w.e.f. the date offiling this action till 4.0 payment.

R. O. Okumu Wengi

Judge

22/2/2001

Ruling read in open court in presence of all parties. *2&*

R. O. Okumu Wengi

Judge

22/2/2001

CERTIFIED CORRECT Sgd.^Lrrrrvrrt...... DEPUTY REGISTRAR

THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA AT KAMPALA

CIVIL SUIT NO. 25 OF 2001

INTERNATIONAL CREDIT BANK LIMITED (IN LIQUIDATION) PLAINTIFF

VERSUS

SANYUTEX LIMITED DEFENDANT

ORDER

THIS SUIT coming before The Hon. Justice Richard Okumu-Wengi this 22nd day of February 2001 in the presence ofMasembe Kanyerezi, Esq., Counsel for the Plaintiff and L. B. Musika, Esq., Counsel for the Defendant;

IT IS HEREBY ORDERED as follows:-

- (a) That the Defendant pays to the Plaintiff Ug. Shs. 37,695,155/=. - (b) That the Defendant pays interest at the rate of 28% on the decretal sum from the date of filing this action till payment in full. - (c) That the Defendant pays costs ofthis suit.

Q ,2001. Given under my hand and the Seal ofthe Court this.^r.^rday of.

\_\_\_\_\_ /p(------ . JU&QfE/DEPUTY REGISTRAR