The High Court has ordered Mukesh Shukla and his companies to pay Shs14b to the family of the late Bonney Katatumba for unlawfully occupying his property.
In his judgment delivered on December 23, Justice Stephen Mubiru found Shumuk Springs Development Ltd, Springs International Hotel Ltd, Shumuk Financial Services Ltd, and their director Mukesh liable for wrongful possession of condominium units at Plot 2 Colville Street, also known as Black Lines House in Kampala.
The companies and Mukesh went to court challenging transactions of the property. They accused Katatumba and other defendants, including Virani Bahadukali Mohamedalli, Joseph Sempebwa, and Peter Lule, of selling or claiming interests in condominium units they said formed part of the property sold to them.
The plaintiffs also sued Tecton Group, Arvind Patel, and the Registrar of Titles, alleging wrongful transfers, registration of titles, and dealings.
The dispute stems from August 16, 2008, when Katatumba agreed to sell the property comprising 92 condominium units to Shumuk Springs Development Ltd for $5m (Shs18.5b). The company paid an initial deposit of $101,000 (Shs370m), with the balance due within 60 days.
However, the court found that the firm failed to clear the balance within the agreed time but took possession of the property, collected rent, and interfered with the rights of other unit owners. Evidence showed that although payments were made toward redeeming a mortgage, the contractual purchase price was never fully paid.
The judgment also addressed the role of Springs International Hotel Ltd, which became involved through a later agreement dated November 10, 2008, under which Katatumba purportedly resold the same property after Shumuk Springs Development Ltd failed to complete payment.
The court noted that this second agreement had earlier been declared void as the property had already been sold under a subsisting contract. The court ordered that any transfers or registrations effected in favour of Springs International Hotel Ltd be cancelled.
The court declared that ownership of the property remains vested in the Katatumba estate until the August 2008 agreement is fully performed.
In addition to the corporate defendants, the case involved third-party purchasers who had acquired individual condominium units before the Shumuk transaction. These included Joseph Sempebwa, who purchased 13 units, and Peter Lule, who bought 11 units from Katatumba.
Court findings
The court found that the Shumuk companies wrongfully deprived these purchasers of possession and rental income. Based on evidence that each unit could earn rental income equivalent to about Shs5.5m per month, the court assessed the loss at about Shs72m per month for the 13 units.
Over 196 months, the court quantified recoverable mesne profits at Shs14b. The court ordered Shumuk Springs Development Ltd, Springs International Hotel Ltd, and other related defendants to jointly pay the Shs14b in mesne profits.
With regard to Lule, the court recognised his proprietary interest in the units he purchased and faulted the plaintiffs for interfering with his rights, although specific monetary compensation in his favour was not quantified in the mesne profits award.