Court has ordered businessman Rajni Tailor to pay more than $40,048 (UGX141.8m) as compensation for defaulting on loan repayment to a financial institution.
Justice Susan Abinyo of the Commercial Division of the High Court dismissed an application in which Tailor had asked the court for permission to defend himself against the financial institution.
She ruled that Tailor failed to raise triable issues and plausible defence to warrant the grant of permission for him to appear to defend himself.
“Under order 36 Rule 5 of the Civil Procedure Rules, once the court has declined to grant an application by the defendant for leave to appear and defend the case, the plaintiff is entitled to a decree for an amount not exceeding the sum claimed in the plaint and costs against the defendant,” the judge ruled.
However, the court observed the Prime Finance Company Limited is entitled to a decree in the sum of less $13,500 which Tailor had paid so far.
Court records show that Prime Finance Company, under the proprietorship of businessman Rajiv Ruparelia, sued and obtained a default judgment and decree requiring Tailor to pay the monies he defaulted.
The move prompted Tailor to file an application to be granted permission to defend himself in vain.
According to the court, Prime Finance Company Limited was claiming for recovery of $53,548 as of July 2019 resulting from breach of contractual loan agreement.
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Court documents show that in August 2016, Tailor, also a former Buganda Minister, entered into a loan agreement with Prime Finance Company Limited for $20,000 (UGX70.8m) which he was to pay in three weeks.
Tailor had argued that he fully paid the $20,000 in three equal instalments before the lapse of the loan period and that he was not indebted to the financial institution.
Court heard that Tailor defaulted on the loan repayment and made commitments to clear the loan facility which he partially fulfilled and that by January this year he had paid $13,500.
According to the documents in court, as at January this year, Tailor was indebted to the financial institution to the tune of $68,823.
Justice Abinyo wondered: “I find that the applicant (Tailor)’s assertion that he paid the loan facility of $20,000 in three equal instalments before the lapse of the loan period unacceptable in the circumstance and the question arises is why then did he make partial payments.”
