Businessman Shukla Muskesh and his businesses, Shumuk Springs Development Ltd, Springs International Development Hotel Ltd and Shumuk Financial Services Ltd have been illegally occupying part of Shumuk House, the High Court Commercial Division has ruled. This follows a protracted legal battle between the late Kampala businessman Bonney Katatumba and Shukla Mukesh and his companies over the ownership of Shumuk House.
However, alongside the battle for the ownership of entire Shumuk House, there was another mini-battle between Mukesh and two other individuals Joseph Ssempebwa and Peter Lule. Both Lule and Ssempebwa claimed that they had bought 24 of the 92 condominium units that comprise Shumuk House. In his ruling, Justice Stephen Mubiru formerly of the Commercial Division of the High Court but has since been transferred to Mukono as resident Judge, noted that indeed, both Lule and Ssempebwa had equitable interest in part of Shumuk House that can’t be extinguished.
“As regards the twenty-seven (sic) of the ninety-two (92) condominium units that are the subject of this suit, I find that the two agreements for the sale of property comprised in LRV 3606 Folio 13 Plot 2 Colville Street executed between Bonney Mwebesa Katatumba and the counter defendants did not in any way affect the rights of the 1st counterclaimant Mr. Joseph Sempebwa in respect of the thirteen (13) units he purchased from Mr. Virani Bahadukali Mohamedalli, nor the eleven (11) units which the 2nd counterclaimant Mr. Peter Lule purchased from the late Bonney Mwebesa Katatumba,” the judge ruled.
According to court records, Katatumba who was the registered proprietor of a commercial building located at Plot 2 Colville Street, Kampala, known as “Blacklines House” but renamed Shumuk House. He had a 99yyear lease which commenced on 1st March, 1912 and expired 1st March 2011. Katatumba sold 13 of the 92 condominiums units to a one Virani Bahadukali Mohamedalli.
Katatumba also sold 11 condominium units to Peter Lule at US $375,000. Subsequently Mohamedalli also sold the 13 condominium units to Joseph Ssempebwa at $ 725,000 but was never given possession of the units because when he went to the land registration for transfers, he found when Katatumba had lodged a caveat on the land. Katatumba subsequently sold the entire 92 units to Shumuk Springs Development Ltd at $ 5,000,000 and was to pay an initial instalment of US $ 101,000 and the balance of US $ 4,899,000 within sixty days. The agreement also indicated that $759,000 was to be paid to Mohamedali and $400,000 was to be paid to Lule. However, Shumuk Springs Development Ltd failed to pay leading to the nullification of the agreement.
Katatumba then sold the property to Springs International Hotel Ltd which was to pay $4000,000 starting with $ 361,000 and the balance of US $ 3,639,000 within sixty days. It was also agreed that Mohamedalli was to receive $ 675,000 while Lule was to receive US $ 450,000. But according to records, Springs International Hotel Ltd was only able to pay $ 420,000 leaving a balance of $3,580,000. A case on who is the rightful owner between Shukla Mukesh and the estate of the late Katatumba is still ongoing in the Court of Appeal. The High Court had ruled that the Katatumba estate was the rightful owner of Shumuk House.
It had ordered Shukla Mukesh and his companies to pay the Katatumba estate Shs 10billion. In his ruling, Justice Mubiru found that indeed Ssempebwa had the right of the 13 units he had purchased from Mohammedalli and that Lule had also rightfully bought the 11 units from Katatumba. Court held that it was illegal for Katatumba to sell the entire Black Line House without taking into consideration the interest of the two people whom he had initially sold the 24units to.
“Virani Bahadukali Mohamedalli as at 29 th July, 2009 owned the absolute, unconditional legal and exclusive title to the airspace of the specific units, defined by the units’ boundaries…Being the registered proprietor of the thirteen units, Mr. Virani Bahadukali Mohamedalli was by virtue of section 93 of The Registration of TitlesAct empowered to transfer any or all the said units, and upon the registration of the transfer, his estate or interest in the unit(s) would vest in the transferee who would then become and be deemed the proprietor thereof,” court ruled. When Mohamedalli sold his interest to Ssempebwa, he [Ssempebwa] should have taken possession of the 13 units.
However, in the subsequent transactions, Katatumba sold the entire Black Line House without consulting those who had interest in part of the buildings. Court held that this was illegal. “The contracting parties to the two agreements purported to bind each of the counterclaimants to their private arrangement, by way of the counter defendants’ undertaking to pay them off. For lack of mutual agreement and consideration, a third party who never agreed to the contract, cannot on account of the doctrine of privity of contract, be bound by the contract. An agreement cannot unilaterally create legal duties or liabilities for a non-consenting third party; it cannot impose direct obligations on a third party without their consent.
The only way a third party can be bound by a contractual obligation is if they provide their informed consent and become a party to the contract, often through assignment, novation, or by explicitly agreeing to assume the obligations. None of these occurred in the instant case,” the judge ruled. He thus ruled that Lule who had taken possession of his 11 units be given a lease of the property and Ssempebwa who had not yet taken possession of the 13 units he had purchased be compensated for the rent he has not been able to collect in the last 16 years.
“The total number of months from 26th August, 2009 to-date (a period of over sixteen years) being 196 months, the amount recoverable by the 2nd counterclaimant from the 1st, 2nd and 3rd counter defendants as mesneprofits is therefore US $ 3,822,000,” Mubiru ruled. The court also awarded Ssempebwa an additional mesne profit of $58,500 all at an interest rate of 6%. For Lule, the judge ordered that he be compensated with UGX 50million in general damages. The court also ordered Mukesh and his companies to vacate the 24 condominium units by March 23, 2026 or risk being evicted
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