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13 Jul 2005

Commercial And Corporate [2005] UGCommC 39

African Textile Mill Ltd (in liquidation) v Co-operative Bank Ltd (in liquidation) (HCT-00-CC-CS 20 of 2005)

African Textile Mill Ltd (in liquidation) v Co-operative Bank Ltd (in liquidation) (HCT-00-CC-CS 20 of 2005) [2005] UGCommC 39 (13 July 2005)

Court: Commercial Court of Uganda
Case number: HCT-00-CC-CS 20 of 2005

The court held that the application was improperly brought in the name of the company in liquidation rather than by the liquidator, a contributory, or a creditor as required by section 305 of the Companies Act. Substantively, the court found that a secured creditor, such as the respondent, is entitled to stand outside the winding up process and enforce its mortgage rights, including taking possession and selling the mortgaged property, even during voluntary liquidation. The law provides adequate safeguards to ensure the mortgagee acts in good faith and obtains a proper price. The court furthe…

Source excerpt

Company Liquidation
Secured Creditors
Mortgage Enforcement
Voluntary Winding Up

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1 Jan 1938

Commercial And Corporate [1938] EACA 95

Official Receiver v Sontag (Civ. App. No. 8 of 1938.)

Official Receiver v Sontag (Civ. App. No. 8 of 1938.) [1938] EACA 95 (1 January 1938)

Court: East African Court of Appeal
Case number: Civ. App. No. 8 of 1938.
Judge: Dalton, C.J(Tanganyika), Sheridan, (C.J. Kenya), Whitley CJ

The Court held that the process of attachment and seizure of immovable property as prescribed by the Tanganyika Civil Procedure Code, and carried out in this case prior to the winding-up order, constituted 'execution completed by seizure' within the meaning of section 263(2) of the Companies Ordinance. This completion of execution prior to liquidation preserved the judgment creditor's rights against the liquidator and other creditors. The Court found no grounds to exercise its discretion under section 176 to refuse the sale in execution, as the creditor acted bona fide and no fraud or bad fai…