Businessman Sudhir Ruparelia through his companies Meera Investments Ltd and Crane Management Services has dragged Dfcu Bank to court in three separate cases relating to illegal takeover of former Crane Bank branches and breaching tenancy contracts that Dfcu had inherited from Crane Bank.
In the third case, Sudhir wants court to compel Dfcu Bank to pay his Meera Investments close to Shs32billion arising from breach of contract of Plot 38 and Plot 40 A Kampala Road, that used to be the headquarters of the defunct Crane Bank.
In October 2016, Bank of Uganda put Crane Bank under receivership. Three months later, BoU announced Crane Bank as having taken over assets and liabilities of Crane Bank.
Through their lawyers Magna Advocates, Meera is suing Dfcu on account of being the successor in title to Crane Bank (in receivership) who, by virtue of having inherited its assets and liabilities, expressly inherited all tenancy agreements and, therefore, “assumed the rights and obligations under the tenancies in respect of the suit properties.”
This particular case arises from a December 16, 2014 tenancy agreement in which Meera Investments let the basement, ground, 1st, 2nd, 3rd and 7th Floor of Plot 38 Kampala Road (Crane Chambers) and all of Plot 40A Kampala Road for a period of 10 years.
“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 10 years,” reads part of the plaint filed by Meera.
In the agreement, Crane Bank would pay $46,980 in monthly rent and $46,980 in ground rent per month with a 7% annual increment for Plot 38 Kampala Road and $9,890 in rent and $9,890 in ground rent for Plot 40A Kampala Road, payable a year in advance.
Following the takeover, Dfcu took over the entire premises previously rented by Crane Bank and rebranded them. Dfcu also undertook to pay to Crane Management Services (Managers for Meera) $531,000 in restoration costs and arrears in utility bills.
According to the plaint by Meera, Dfcu, in February 2017, entered into a revised contract in “respect of the basement and ground floors of Plot 38 Kampala Road for a fixed period of three years.”
Dfcu, however, continued to occupy 1st, 2nd 3rd and 7th Floors of Plot 38 Kampala Road and PLot 40A Kampala Road “under the terms and conditions of the tenancy agreement dated 16th December 2014” until 30th of April 2017, when it vacated them.
According to Meera, this constituted a breach of clause 3(c) of the surviving tenancy agreement, that covenanted that the “tenancies shall remain firm and binding on them until the expiry of ten year” and for this breach, Dfcu is “liable to pay the plaintiff the sum constituting rent for the unexpired period of 84 months being $8,660,462.34.”
Meera is suing for payment of the $8,660,462.34 (about Shs32billion) as well as “Interest on the sum aforementioned at the prevailing commercial rate from the date the defendant was in default until payment in full.”
The business man is also locked in a battle recover 46 properties that Dfcu “illegally took over with the help of commissioner land registration (click here to read the story) and rental arrears and breach of contract on 13 other properties in Kampala and Mbale that used to house Crane Bank branches, ATMS and staff quarters (click here).