Lawyers representing businessman Sudhir Ruparelia have objected to the case in which the Crane Bank (under receivership) and Bank of Uganda (BoU) sued Sudhir for allegedly fleecing his own bank (Crane Bank) of Shs397 billion in fraudulent transactions.
The lawyers of Kampala Associated Advocates Wednesday presented a preliminary objection against the Bank of Uganda case before the Commercial Court judge David Wangutusi.
The lawyers led by Peter Kabatsi argue that an institution in receivership has no right to sue or be sued since the Financial Institutions Act (FIA) which is a financial governing body does not say so.
“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 Ellyson Karuhanga, one of the lawyers representing Sudhir.
He explained 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,” Karuhanga argued.
On the contrary, Crane Bank in receivership lawyer led by Dr Joseph Byamugisha, submitted that when a financial institution is placed under receivership, it does not also lose its powers to sue or be sued since it still remains a corporate entity.
In May 2019, Sudhir Ruparelia and Meera Investments lodged an application seeking court to dismiss a suit in which CBL in receivership sued the two applicants yet it had no legal capacity to do so.
Court has set 26 of August as the date when Commercial Court judge, Justice David Wangutusi, will give a ruling in the case brought against city businessman Sudhir Ruparelia by Crane Bank in receivership.
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