COURT (UGNEWSLINE) – The High Court has restored ownership of land housing Ndejje Quality School, a mosque and a Muslim cemetery in Wakiso District to the Uganda Muslim Supreme Council, after finding that a private company fraudulently acquired the property and used it to secure loans from Centenary Bank and Absa Bank worth hundreds of millions of shillings.
In her judgment, Commercial Division Judge Anna B. Mugenyi found that Mirembe Executive Group of Companies Limited, controlled by Muweesi Habibu, used forged documents to transfer the land into its name before subdividing
In her judgement the Judge I’m recognised the Uganda Muslim Supreme Council (UMSC) as the rightful owner of the approximately five-hectare property and ordered the cancellation of titles and mortgages created following the disputed transfer.
The court found that Muweesi Habibu and Mirembe Executive Group of Companies Limited used forged documents to transfer the land into the company’s name before subdividing it and using two plots to obtain loans from Centenary Bank and Absa Bank Uganda.
The dispute arose from a previous ownership disagreement between the Muslim Council and the family of the late Ismail Kizito, which donated the land to the Muslim community.
In 2010, the High Court resolved the dispute by ordering an exchange of land titles, recognising Plot 61 as belonging to the Muslim Council and Plot 20 as belonging to the Kizito family.
Following the judgment, administrators of Kizito’s estate signed transfer documents in favour of the Muslim Council and handed over the duplicate certificate of title.
On April 20, 2017, the Muslim Council leased 2.5 acres of the property to Ndejje Quality Education Services Limited for 20 years at an annual ground rent of Shs5 million. The school subsequently developed the land and started operating there.
However, Justice Mugenyi found that the property was transferred to Mirembe Executive Group in June 2018 using forged documents, without the knowledge or consent of the administrators of the Kizito estate.
A forensic examination by the Uganda Police Directorate of Forensic Services found significant differences between the signatures on the disputed transfer documents and the genuine signatures of the estate administrators.
The judge also questioned Habibu’s explanation of how the company acquired the land, noting that his court defence and statement to police gave different accounts of the transaction and its purchase price.
The court found that Plot 1170, which houses the school and mosque, was subsequently mortgaged to Centenary Bank, while Plot 1169 was used to secure a loan from Absa Bank.
On Centenary Bank’s involvement, Justice Mugenyi faulted the financial institution for failing to carry out proper investigations before accepting the property as security.
The judge noted that the bank’s own valuation report showed that the land accommodated an operational school, including classrooms, dormitories, staff quarters and a mosque.
However, the bank did not establish the legal basis of the school’s occupation or seek clarification from the Muslim Council and school management about their interests in the property.
The court therefore ruled that Centenary Bank could not claim to have acted in good faith without knowledge of the fraud and declared its mortgage over Plot 1170 null and void.
Absa Bank was treated differently because the court found no evidence that it participated in or knew about the fraudulent transfer when it advanced the loan.
However, its mortgage security was also found insufficient to defeat the Muslim Council’s earlier ownership interest because the bank had not proved that it held a registered mortgage capable of overriding that interest.
The Commissioner for Land Registration was consequently ordered to cancel Mirembe Executive Group’s registration over Plots 1170 and 1169, together with the associated mortgages, and register the Muslim Council as the proprietor.
The court also issued a permanent injunction stopping Habibu, the company and anyone acting through them from selling, transferring, mortgaging or interfering with the properties.
Ndejje Quality Education Services Limited was also recognised as the lawful lessee of the school premises for the remaining period of its 20-year lease, which started on April 20, 2017.
In a compensation award, Habibu and Mirembe Executive Group were ordered to jointly pay the Muslim Council Shs40 million in general damages and Shs30 million to Ndejje Quality Education Services Limited.
The court also ordered them, together with Centenary Bank, to meet the plaintiffs’ legal costs.
However, the cancellation of the mortgages did not relieve Habibu and Mirembe Executive Group of their loan obligations to the banks.
The court ordered them to jointly pay Centenary Bank Shs453.3 million, with interest of 21 per cent per annum on the principal amount of Shs346 million from February 14, 2023, until full payment.
They were also ordered to pay Absa Bank Shs414.39 million, with interest of 21.75 per cent per annum on the principal amount of Shs230 million from May 20, 2025, until payment in full.
Justice Mugenyi further lifted Mirembe Executive Group’s corporate veil, making Habibu personally liable alongside the company for the debt owed to Absa Bank.
The judge, however, observed that the Muslim Council had contributed to the dispute by keeping the original title and signed transfer documents with its district religious leader for several years without registering its interest or placing a caveat on the land.
She nevertheless ruled that the council’s failure to protect its documents did not excuse the alleged forgery or make the disputed transfer and mortgages valid.
