The High Court has ordered the release of a truck impounded at Kajjansi Police Station, to Pride Bank so that the bank can sell it to recover an outstanding loan of more than Shs 106 million owed by businessman Edmund Natumanya.
The order was issued by Justice Patience Rubagumya, who ruled that Pride Bank had proved both its legal right to enforce its security and the borrower’s continued default.
The dispute dates back to August 2022, when Natumanya obtained a Shs 120 million loan from the bank’s Mbarara branch. According to court documents, he was expected to repay the loan within 24 months through monthly instalments of Shs 6.75 million.
As security, Natumanya pledged several assets, including a yellow truck, registration UBH 894J, which he owned. Pride Bank registered a caveat on the vehicle and, through a mortgage agreement, obtained the right to seize and sell it in the event of default.
However, the bank told the court that Natumanya failed to keep up with repayments, and the loan was recalled. By October 2024, the outstanding balance stood at Shs 106 million according to the detailed loan statement on file.
The bank later discovered that the truck had been impounded and was being held at Kajjansi Police Station, preventing it from exercising its legal right to repossess the collateral. It therefore asked the court to order its release.
Pride Bank’s lawyer, Jacinta Nabakka, argued that the financial institution had a clear legal right to the vehicle under the Movable Property Act.
Nabakka told the court that Section 47 of the Act allows a creditor to sell collateral when a borrower defaults, and that the bank had fully perfected its interest in the truck.
“The Applicant is entitled to proceed with the sale of the security without judicial process,” she said, adding that efforts to obtain the truck from the police had been futile.
She further argued that the bank risked suffering financial loss since it lends out funds deposited by customers.
Natumanya did not file a defence despite being served. Justice Rubagumya noted Natumanya’s silence but added that the bank still bore the burden of proving that the order should be granted.
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After reviewing the evidence, Justice Rubagumya agreed with the bank. She found it undisputed that Natumanya had obtained the loan, defaulted on it, and left an outstanding balance of more than Shs 106 million.
It was also undisputed that the vehicle had been pledged as security, that the bank had perfected its interest in it, and that it remained in police custody.
She emphasised that the mortgage agreement explicitly allowed Pride Bank to “seize, have custody and possession as well as sell the pledged suit motor vehicle in the event of any default”.
Because the bank could not enforce its rights while the truck was held at Kajjansi Police Station, the judge invoked the court’s powers to intervene.
She ordered that the truck be released and handed over to Pride Bank so that it can recover the outstanding loan amount.
