Justice Samuel Emokor of the High Court has dismissed an application by Meera Investments Limited seeking more than Shs 40 billion from DFCU Bank for alleged contempt of court.
In his ruling, Justice Emokor of the Land Division held that although DFCU vacated dozens of properties without restoring them, its failure to do so was not wilful disobedience of court orders because execution had been suspended by interim and substantive stay orders.
The dispute stems from a long-running land battle dating back to 2017, when Meera Investments sued DFCU Bank and the Commissioner for Land Registration over dozens of commercial properties across the country.
Most of these properties housed former branches of Crane Bank which DFCU had taken over.
In October 2023, the High Court ruled in Meera’s favour, declaring that DFCU’s occupation and continued use of the properties amounted to trespass. The court found that Meera was the lawful registered proprietor and entitled to vacant possession.
The court ordered DFCU to vacate all the properties within three months and restore them to a tenantable condition before handing them back.
But when the three-month deadline expired in January 2024, Meera accused DFCU of defying the judgment by vacating most of the properties without restoring them.
Through its lawyers at Magna Advocates, Meera returned to court seeking declarations that DFCU was in contempt and asking for punitive damages of Shs200 million. It also demanded Shs40.1 billion as restoration costs, based on a valuation conducted by its quantity surveyor.
Meera argued that DFCU had peacefully handed over 47 of the 48 properties but had left them in a dilapidated state, with missing tiles, damaged air conditioners, cracked walls, flooded floors, missing generators and vandalised fittings.
According to Meera, the estimated cost of repairs stood at Shs33.9 billion, plus Shs6.1 billion in VAT.
“The respondent [DFCU] has in blatant disregard of the judgment and decree of this court adamantly refused and or failed to restore and or pay restoration costs,” Meera argued in court.
Sudhir Ruparelia, a director of Meera Investments, told court that DFCU neither appealed the restoration order nor obtained a valid stay within the three-month compliance window.
Meera insisted that filing an appeal did not automatically suspend execution and that the bank selectively complied by vacating but refusing to restore.
DFCU, represented by Katende, Ssempebwa & Co Advocates, rejected the contempt claim, arguing that it had lawfully appealed the judgment and secured court orders staying further execution.
The bank said it lodged an appeal challenging the High Court decision and also filed applications for interim and substantive stay of execution.
DFCU relied on an administrative interim stay issued in November 2023 by the then head of the Land Division, Justice Alexandra Nkonge Rugadya, as well as a substantive stay later granted by the trial judge.
“The application is premature, misconceived and an attempt to circumvent the stay of execution,” DFCU’s lawyers argued.
In his ruling, Justice Emokor agreed that the key issue was whether DFCU’s failure to restore the properties amounted to wilful disobedience of a court order.
He said for court to prove whether there was wilful disobedeince of a court order, Meera must prove the existence of a clear order, knowledge of the order, and intentional refusal to comply.
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Justice Emokor found that while the original judgment clearly required DFCU to vacate and restore the properties within three months, the bank had obtained an administrative interim stay before that period expired.
“The notion raised by counsel for Meera that the administrative order was not an order of court is rather misplaced,” Justice Emokor said.
He noted that the interim stay halted further execution to preserve the subject matter of the intended appeal and that Meera never challenged that order.
He also rejected Meera’s argument that the restoration order was not part of the appeal.
Justice Emokor further held that the subsequent substantive stay of execution covered restoration works and payment of costs.
On that basis, the court found that DFCU’s non-restoration of the properties was lawful and could not amount to contempt.
The court dismissed Meera’s application in its entirety and declined to award the Shs40.1 billion sought. Court told each party to bear their legal courts.
However, the appeal lodged by DFCU challenging the original judgment remains pending before the Court of Appeal.
