Sudhir Ruparelia Tasks Court To Compel Dfcu Bank To Pay Over UGX 32 Billion Rent Arrears
City businessman Sudhir Ruparelia under his real estate company Meera Investments has asked Commercial Court to compel dfcu Bank to pay over UGX 32 billion in rent arrears.
According to Meera Investments, this comes after dfcu violated the tendency agreement regarding plots 38 and 40A Kampala road that housed the headquarters and main branch of defunct Crane Bank which dfcu took over.
On account of being the successor in title to Crane Bank (in receivership), dfcu expressly inherited all tenancy agreements and, therefore, “assumed the rights and obligations under the tenancies in respect of the suit properties.”
The case stems from a December 16, 2014 tenancy agreement in which Meera Investments let out the basement, ground, 1st, 2nd, 3rd and 7th floor of Plot 38 Kampala Road (Crane Chambers) and all of Plot 40A Kampala Road to Crane Bank for a period of 10 years.
”The agreement was a fixed tenancy of 10 years for six floors which hinds the successor DFCU which continued occupying the premises. The rentals were not an excluded liability,” Sudhir contends
According to Sudhir dfcu renegotiated part of the rental agreement but, one month later, decided to relinquish the 1st, 2nd, 3rd and 7th floors of Plot 38 Kampala road as well as the entire Plot 40A before the expiry of the 10 years without attempting to renegotiate with Meera.
”No reasonable tenant as a bank would behave in that manner, dfcu bank was in breach of the tenancy agreement” he further noted.
“Under clause 3(c) of the tenancy agreement, it was specifically agreed by the parties (Crane bank and Meera) that the tenancies shall remain firm and binding on them until the expiry of ten years,” reads part of the plaint filed by Meera.
In the above tenancy agreement, Crane Bank would pay $46,980 (Shs 171m) in rent and $46,980 (Shs 171m) in ground rent per month with a seven per cent annual increment for Plot 38 Kampala road and $9,890 (Shs36m) in rent and $9,890 (Shs 36m) in ground rent for Plot 40A Kampala road.
Meera further noted that dfcu breached the above tenancy agreement and seeks to recover rent arrears for the unexpired period of over 80 months amounting to $8,660,462(UGX 32 billion) adding that the non-payment of the rent has not only caused it losses but deprived it of the use of its money, interest, caused it more suffering and grave inconveniences that adversely affected its businesses.
Now, Meera wants dfcu to pay the rent on account of being the successor in the title to crane bank limited (now In receivership)as a tenant in the premises and being the transferee of the assets and liabilities.
Meera also wants interest on the sum at the prevailing commercial rate from the date the said sums became due until payment in full, general damages plus all costs of the suit all rising from breaches allegedly committed by dfcu bank.
It’s worth noting that in 2020, dfcu bank relocated 15 of its branches including Cranes Chambers, Arua and Entebbe centres among others from Meera Investment Properties.
“As part of the implementation process of our digitisation agenda, we would like to inform our esteemed customers that the following branches will be relocated effective Monday 3rd February,” the public notice dated January 31 2020 noted.
The move came after dfcu Bank had first downplayed the development in 2019 and had asked Bank of Uganda to take back titles for the 48 properties that belong to Meera Investments.
At that time,dfcu Bank issued a statement denying the bank was shutting down 20 branches housed in the disputed Meera Investments Ltd buildings, but insisted that a review of the bank’s branch network as part of its digital strategy.
Governor Emmanuel Tumusiime Mutebile in the 2018/2019 annual report confirmed that dfcu Bank had indicated to the central bank that they will exit the properties in the wake of legal suits, where city Sudhir had repeatedly defeated both the central bank and those conjoined in the decided court cases
