Uganda’s High Court reinforces key mortgage law principles—rejecting mental illness as a defence to default and affirming the purchaser’s right to vacant possession after foreclosure.

 Introduction

Generally, in commercial transactions, the presumption is that a person is of sound mind and capable of contracting unless proven otherwise. In a legal dispute, courts are reluctant to disturb this presumption without cogent, specialized medical evidence. A party cannot claim unsoundness of mind in one breath and affirm contractual capacity in another; such contradictions go to the root of credibility.

Moreover, in Uganda Section 54 of the Mental Health Act, provides that only a psychiatrist or senior mental health practitioner may competently assess and attest to mental incapacity in a legal dispute.

Equally significant in mortgage transactions is the bank’s discretion in loan recovery. Where a loan agreement provides options—such as recovery from terminal benefits or by foreclosure—the lender is not bound to exhaust one before invoking another. Thus, failure to deduct from terminal benefits does not preclude a valid foreclosure if default occurs and requisite notices are duly issued.

This case also highlights a critical real estate principle: vacant possession must be actual, not just symbolic or documented. Issuing a handover report is insufficient if the buyer is left unable to take physical, exclusive control of the property. The legal burden to deliver vacant possession rests squarely with the seller or mortgagee, and failure to fulfill that obligation may attract liability, notwithstanding a valid transfer and registration.

In this matter, the Plaintiff, Nalumansi Lilian Dorcus, contested the sale of her mortgaged home by Centenary Rural Development Bank Ltd (1st Defendant) to Joy Kabatsi Kafura (2nd Defendant), asserting fraud, premature sale, and mental incapacity. While the Plaintiff sought to annul the transfer and regain the property, the 2nd Defendant counterclaimed, demanding vacant possession and damages for prolonged denial of access

.

The Court, however, reaffirmed that:

1. A valid mortgagee sale, where based on default and due process, is not rendered void by speculative or unsupported defences.

2. Mental incapacity, if not diagnosed by a qualified psychiatric expert, is legally inconsequential.

3. Vacant possession must be both formal and factual—mere reports or bailiff visits cannot override continued unlawful occupation by a prior owner.

The decision is a reminder that property rights go beyond registration; actual possession matters, and obligations under sale contracts—especially by lenders—must be honored fully, not just procedurally. It also clarifies that force majeure, especially when grounded in personal medical conditions, requires proof and is rarely sustained in contractual defaults absent extraordinary, verified circumstances.

Facts

The dispute arose from the sale and transfer of land comprised in FRV 456 Folio 3 Plot 1661 Block 269, Lubowa Estate, Kyadondo, Wakiso District (the suit property). The Plaintiff, Nalumansi Lilian Dorcus, sued the 1st Defendant, Centenary Rural Development Bank Ltd, and the 2nd Defendant, Joy Kabatsi Kafura, contesting the legality of the sale and transfer of the suit property.

Plaintiff’s Case

In August 2014, the Plaintiff obtained a staff real estate loan of UGX 100,000,000 from the 1st Defendant, which was secured by a mortgage over the suit property.

The loan was to be repaid in monthly installments over 15 years, primarily deducted from her salary.

In July 2016, her employment with the 1st Defendant was terminated. She alleges that the loan should have been recovered from her terminal benefits and insurance.

In June 2017, she was diagnosed with mental illness, and the 1st Defendant was informed in March and August 2018.

Despite this, the 1st Defendant allegedly unlawfully advertised and sold the property to the 2nd Defendant.

She argued the sale was premature, fraudulent, and at gross undervalue (UGX 45,000,000) while the loan balance was UGX 102,855,144.

The Plaintiff sought:

1. A declaration that the sale was fraudulent, wrongful, and premature,

2. A permanent injunction,

3. An order of redemption,

4. Cancellation of the 2nd Defendant’s title,

5. General damages and costs.

   
   

1st Defendant’s Defence

The Bank denied fraud and stated the Plaintiff had defaulted on repayment even after reminders.

It issued a notice of default (9 September 2017) and notice of sale (4 December 2017).

The suit property was sold to the 2nd Defendant on 24 June 2019 and possession was attempted on 5 March 2020.

The sale was conducted lawfully after default and in compliance with statutory mortgage procedures.

2nd Defendant’s Defence and Counterclaim

The 2nd Defendant asserted that she lawfully purchased the property after seeing an advert placed by the Bank.

She was registered as the proprietor following the sale and has made several unsuccessful attempts to gain vacant possession.

The Plaintiff has remained on the land unlawfully for over three years, despite not being a tenant and never executing a tenancy agreement.

In her Counterclaim, she sought:

1. Declarations affirming her lawful ownership,

2. Declarations of breach of contract by the Bank,

3. Eviction, vacant possession,

4. A permanent injunction,

5. General damages, mesne profits, interest, and costs.

   
   

Plaintiff’s Reply to the Counterclaim

She reiterated that the sale was unlawful and fraudulent,

The land was undervalued, and the sale agreement was invalid,

The 2nd Defendant was not entitled to possession or remedies.

Legal Representation

Plaintiff: Mr. Denis Kakeeto of M/s Denis Kakeeto Advocates

1st Defendant: Mr. Eriya Mikka of M/s MMAKS Advocates

2nd Defendant: Mr. Martin Mbanza Kalemera of M/s Birungyi, Barata & Associates

Issues

Issues for Determination in their Joint Scheduling Memorandum, the following issues were agreed upon by the parties:

1. Whether the Plaintiff was at the time of the sale of the suit property indebted to the 1st Defendant, and if so, to what extent?

2. Whether the Plaintiff breached the loan agreement between her and the 1st Defendant?

3. Whether the sale and transfer of the suit property by the 1st Defendant to the 2nd Defendant was procured unlawfully or fraudulently?

4. Whether the 1st Defendant handed over possession of the suit property to the 2nd Defendant?

5. Whether the 2nd Defendant/Counterclaimant is entitled to the Counterclaim?

6. What remedies are available to the parties?

Determination of Issues

⚖️ Issue No. 1: Whether the Plaintiff Was Indebted to the Bank at the Time of Sale

Plaintiff’s Submissions

The Plaintiff’s counsel argued that this was not a central issue and claimed that the Bank failed to exhaust alternative means of debt recovery, namely from the Plaintiff’s terminal benefits and insurance—citing Clauses E1(iii) and A11(iii) of the loan agreement.

1st Defendant (Bank)’s Submissions

The Bank contended that the Plaintiff was indebted to the tune of UGX 108,585,774 as of 4th December 2017. This was supported by a series of notices of default, demand letters, and a notice of sale.

The Bank argued that it was entitled to foreclose upon the Plaintiff’s persistent default under the facility agreement, citing:

“The 1st Defendant, as a mortgagee, derives its authority to sell the suit property from the Plaintiff’s failure to honour her obligations…” (Court record)

2nd Defendant (Purchaser)’s Submissions

Counsel for Joy Kabatsi aligned with the Bank’s position, noting it was uncontested that the Plaintiff obtained a loan and secured it with the suit property, and that she had defaulted.

Rejoinder by the Plaintiff

The Plaintiff maintained that the Bank ought to have recovered the debt from her employment benefits and from an insurance policy tied to the loan, and that its failure to do so disentitled it from foreclosing on the property.

🧑🏾‍⚖️ Court’s Analysis and Holding

The Court, relying on the Evidence Act (ss. 101–104) and established precedents, held that the burden was on the Plaintiff to prove her mental incapacity and challenge the enforcement of the mortgage. It found that:

1. The Plaintiff had defaulted on her loan obligations following her termination from employment.

2. The Bank had properly issued all required statutory notices of default and sale.

3. The amount outstanding at the time of the sale, UGX 108,585,774, was not contested by the Plaintiff and was therefore accepted as true.

“As was held in Habre International Co. Ltd v Ebrahim Alarakhia, SCCA No. 4 of 1999, where a party fails to challenge a particular piece of evidence, it is taken to be true.”

The Court further emphasized:

“Once a contract is valid, it creates reciprocal rights and obligations between the parties to it. I think it is the law that when a document containing contractual terms is signed, then in absence of fraud or misrepresentation the party signing it is bound by its terms.” — quoting William Kasozi v DFCU Bank Ltd, HCCS No. 1326 of 2000.

Accordingly, the Court held Issue No. 1 in the affirmative, confirming that the Plaintiff was indeed indebted to the Bank at the time of sale.

🧠 On the Mental Illness Defence

The Court's interpretation of Section 54 of the Mental Health Act, which states that only a Psychiatrist or Senior Mental Health Practitioner can determine a person’s mental status. The Plaintiff relied on a General Physician’s report to substantiate her mental illness, which the Court rejected.

“I find that the Plaintiff failed to prove mental illness at the material time since she did not adduce evidence from a qualified psychiatric professional as required under the Mental Health Act.” — Hon. Justice Henry Kawesa

🔁 Purchaser’s Counterclaim: Vacant Possession and Damages

The 2nd Defendant, Joy Kabatsi, successfully counterclaimed for general damages. Although she lawfully acquired the property, the Plaintiff refused to vacate it post-sale. The Court awarded damages against both the Bank and the Plaintiff, reasoning that the Bank should have ensured vacant possession.

The Court noted:

“The 1st Defendant’s failure to deliver vacant possession occasioned loss to the 2nd Defendant. The Plaintiff's continued occupation post-sale is unlawful.”

Thus underscoring a mortgagee’s duty to facilitate vacant possession to purchasers under the statutory power of sale.

🧾 ISSUE 2

Whether the Plaintiff breached the loan agreement with the 1st Defendant, and whether her alleged mental illness constituted force majeure sufficient to excuse performance.

⚖️ SUBMISSIONS OF THE PARTIES

🔹 Plaintiff’s Case

The Plaintiff argued that she did not breach the contract as her failure to repay was due to mental illness — specifically grand mal epilepsy and mental disturbance — which rendered her unable to work, constituting force majeure.

She relied on the testimony of PW2, a general physician, who had treated her at Mulago Hospital since 2018.

Medical documents (PEX 14–21) were tendered, showing treatment for epilepsy, fatigue, and memory loss.

She argued that under the loan agreement (PEX 1), the Defendant should have recovered the loan from her terminal benefits or the loan insurer.

🔹 1st Defendant’s Case

The 1st Defendant argued that the Plaintiff had no valid legal excuse for non-payment and had breached the agreement:

PW2 lacked a valid practising certificate, was not a mental health specialist, and performed no brain scans or EEGs.

Citing the case of Iwa Richard Okeny v. Obol George Okot, stating that expert evidence must be grounded in recognized expertise and proven facts.

Argued that letters PEX 2 & PEX 3 (notifications of illness) were insufficient to warrant an insurance claim.

The Plaintiff, in her own witness statement, described herself as of “sound mind”, contradicting her claim.

🔹 2nd Defendant’s Case

Supported the 1st Defendant and added that the Plaintiff's non-payment constituted breach, entitling the lender to sell the mortgaged property under Section 25(1) of the Mortgage Act.

COURT’S ANALYSIS AND HOLDING

Justice held in favour of the 1st Defendant, finding that the Plaintiff breached the loan agreement. The Court rejected the force majeure defence, holding:

🔸 Lack of Expert Evidence

1. PW2 was a general physician, not a psychiatrist or qualified mental health practitioner under the Mental Health Act, Cap. 308.

2. The diagnosis lacked clinical rigor: no EEG, no psychiatric report, and no specialist findings.

3. The Plaintiff failed to present a mental health status report from a psychiatrist or senior mental health professional, as required under Section 54 of the Act.

“PW2 confirmed to Court that he is a general Physician... he had not renewed his licence... and he referred the Plaintiff to a specialist... However, no further evidence was adduced in that regard.”

No Valid Force Majeure Defence

The Court reaffirmed that force majeure applies only when performance becomes impossible due to events unforeseeable and uncontrollable.

“Force majeure is a limited defence... it must be established that it was an act of God... of so extraordinary a nature that it could not reasonably have been foreseen…” – Ryde v. Bushell (1967) EA 817

The Plaintiff failed to discharge the burden of proving her medical condition qualified as such.

“The Plaintiff has not adduced sufficient evidence to invoke the defence of force majeure to justify her breach of contract.”

Loan Recovery Alternatives Were Discretionary

While the contract allowed the Bank to deduct from terminal benefits, it was not mandatory.

The Bank had lawful recourse to recover from the mortgaged property, which the Plaintiff had voluntarily pledged.

📑 “It was not mandatory for the 1st Defendant to recover the loan from the Plaintiff’s terminal benefits... the Bank had another option for recovery of the outstanding loan sum in accordance with the law.”

Issue 3

Whether the sale and transfer of the suit property by the 1st Defendant (mortgagee bank) to the 2nd Defendant (purchaser) was procured unlawfully or fraudulently.

Plaintiff’s Submissions

The Plaintiff contended that:

The power of sale under the Mortgage Act had conditions precedent including proper service of notices under Sections 18 and 19 of the Mortgage Act and Regulation 11 of the Mortgage Regulations, 2012.

The demand and sale notices were not properly served, as they were sent to the wrong address (P.O. Box 7026 instead of P.O. Box 1892).

She was of unsound mind when the notices were issued.

The suit property was significantly undervalued, having been sold at UGX 45,000,000/= despite a valuation of UGX 205,000,000/= four years later.

The Defendants acted fraudulently, citing discrepancies in valuation, notice, and transfer documents.

1st Defendant’s (Bank’s) Submissions

The Bank argued that:

The Plaintiff defaulted, triggering a valid loan recall under Clause 15 of the loan agreement.

Proper notices were served at the address on the Certificate of Title (P.O. Box 7026), which the Plaintiff acknowledged during cross-examination.

A valuation was conducted on 16th March 2018, showing a market value of UGX 140,000,000/= and forced sale value of UGX 91,000,000/=.

The property was sold at UGX 120,000,000/= — within reasonable range of market value.

2nd Defendant’s (Purchaser’s) Submissions

Claimed to be a bonafide purchaser for value who bought the property through public auction after due diligence.

Denied any involvement in the alleged forgery or tenancy agreement.

Cited the principle that a purchaser’s duty is to the mortgagee, not the mortgagor.

Court’s Analysis and Holding

The Court dismissed all allegations of illegality and fraud, finding:

1. Proper Notice Was Served:

“Owing to the above, since it was established that P.O. Box 7026 Kampala was the Plaintiff’s address as indicated on the certificate of title… I find that on a balance of probabilities, the Plaintiff was served…”(Judgment, p. 24–25)

2. Loan Recall Was Valid:

“Much as the loan was to be repaid within 180 months, the same was recalled due to the Plaintiff’s default… the advertisement and sale of the suit property were not premature.”(, p. 26)

3. No Fraud or Undervaluation Proven:

“The Court is convinced… that the suit property was purchased at a consideration of UGX 120,000,000/=… Since the market value was UGX 140,000,000/= and the forced sale value was UGX 91,000,000/=… it was not undervalued.”(Judgment, p. 28–29)

4. Forgery and Distress Claims Failed

   The Court found the Plaintiff and the 2nd Defendant had never met, undermining the claim of a forged tenancy agreement. Distress proceedings were initiated under the mistaken guidance of the bank’s bailiff.

“In the circumstances, no acts of illegality or fraud have been proved by the Plaintiff… the sale and transfer of the suit property… was not premature, wrongful, unlawful or fraudulent.”(Judgment, p. 30)

This issue is therefore, answered in the negative.

Issue No. 4: 

Whether the 1st Defendant handed over possession of the suit property to the 2nd Defendant

Submissions of the Parties

Plaintiff's Submissions

Counsel for the Plaintiff argued that she has always been in actual possession of the suit property and had never vacated it. She maintained that the 2nd Defendant had never taken over the premises, and therefore the 1st Defendant did not validly hand over possession.

1st Defendant’s Submissions

The 1st Defendant contended that:

The property was handed over via PEX 10, a handover report by Koi Auctioneers dated 21st June 2019.

A second handover was done on 5th March 2020, evidenced by DIEX 12.

PEX 12, a tenancy agreement, and PEX 13, a court order in a distress for rent application, implied the 2nd Defendant had taken control and entered a landlord-tenant relationship with the Plaintiff.

During cross-examination, the 2nd Defendant reportedly confirmed engaging Fazaal Auctioneers to recover possession.

They argued that the seller’s obligation was limited to handing over possession, not maintaining it thereafter.

2nd Defendant’s Submissions

Whereas, the 2nd Defendant’s Counsel submitted that:

She had not taken possession and continued to press the 1st Defendant to hand it over, as shown by D2EX 3 and D2EX 4—letters requesting vacant possession.

The handover reports lacked critical evidence (like photographs) and were not conclusive proof of possession.

She had never signed a tenancy agreement with the Plaintiff and had never personally engaged in the alleged handover.

The bailiffs involved acted on the 1st Defendant’s behalf, not hers.

Plaintiff’s Rejoinder

Counsel reiterated that the Plaintiff remained in possession and had never been evicted or voluntarily vacated.

Court's Analysis and Holding

The Court began by reiterating the legal standard for vacant possession as set out in Blaise Twagirayesu v Abdul Latif Kamulegeya HCMA No. 1349 of 2024:

“In general terms, vacant possession means that a property which is to be sold is free from people, animals and chattels allowing the Judgment Creditor (or purchaser) to assume and enjoy immediate and exclusive possession, occupation and control of it.”

The Court found:

1. PEX 10 and DIEX 12 purported to hand over possession, but they were insufficient.

2. The 2nd Defendant was absent during the second handover, casting doubt on its effectiveness.

3. Letters written by the 2nd Defendant (D2EX 3 and D2EX 4) after the handovers requesting possession proved that no actual possession had been achieved.

4. The Court noted the Plaintiff’s uncontroverted testimony that she remained in possession throughout.

“Considering PW1’s testimony that she has been and is still in physical possession of the suit property, it can be concluded that despite D1EX 12/PEX 11, the 2nd Defendant was never given vacant possession of the suit property.” — Justice Stephen Mubiru

Accordingly, the Court answered Issue No. 4 in the negative, concluding that the 1st Defendant did not hand over vacant possession to the 2nd Defendant.

Issue No. 5: 

Whether the 2nd Defendant/Counterclaimant is entitled to the Counterclaim

Submissions of the Parties

Plaintiff/2nd Counter Defendant’s Submissions

The Plaintiff, who is also the 2nd Counter Defendant, submitted that:

1. The Counterclaimant’s registration of the property was illegal and fraudulent.

2. No tenancy agreement existed between the Plaintiff and Counterclaimant, thus invalidating the claim.

3. Accordingly, the Counterclaim lacks merit and the prayers should be dismissed.

1st Defendant/1st Counter Defendant’s Submissions

Counsel for the 1st Counter Defendant disputed the Counterclaim, arguing:

1. There was sufficient evidence proving the 1st Defendant had handed over vacant possession of the property.

2. Therefore, the Counterclaim lacks merit and should be dismissed with costs.

2nd Defendant/Counterclaimant’s Submissions

The Counterclaimant, relying on testimony and exhibits (DEX 1 - DEX 4), submitted that:

1. She lawfully purchased the property in June 2018.

2. Despite lawful purchase, for over seven years she has been attempting in vain to be granted vacant possession by the 1st Defendant.

3. She fulfilled all legal duties related to the purchase.

4. The Court should rule in her favor on this issue.

Plaintiff’s Rejoinder

The Plaintiff reiterated previous submissions disputing the validity of the Counterclaim.

Court’s Analysis and Holding

The Court noted the reliefs sought by the Counterclaimant, including:

1. Declaration of lawful purchase and transfer.

2. Declaration of breach by the 1st Counter Defendant for failure to deliver vacant possession.

3. Declaration of unlawful actions by the 2nd Counter Defendant.

4. Eviction orders and injunctions.

5. General damages, mesne profits, interest, and costs.

Having earlier established that:

The sale and transfer of the property to the 2nd Defendant/Counterclaimant was lawful,

The 2nd Defendant/Counterclaimant was not given vacant possession, the Court found that:

“I find that the 1st Defendant breached the land sale agreement by not according the Counterclaimant vacant possession of the suit property.”

Thus, the Court resolved the issue in the affirmative, holding that the Counterclaimant is entitled to the Counterclaim.

“Having established that the sale and transfer of the suit property to the 2nd Defendant/Counterclaimant was lawful and that she was not given vacant possession, I find that the 1st Defendant breached the land sale agreement by not according the Counterclaimant vacant possession of the suit property.”

Issue No. 6 

What remedies are available to the parties?

Plaintiff’s Remedies Sought in the Plaint:

1. Declaration that the sale by Defendants was fraudulent, wrongful, and premature

2. Permanent injunction restraining Defendants from selling or threatening to sell the property

3. Order for redemption

4. Order to deregister the 2nd Defendant as proprietor

5. General damages and costs

Counterclaim Remedies Sought by 2nd Defendant/Counterclaimant:

1. Declaration of lawful purchase and transfer

2. Declaration of breach by 1st Defendant for failure to deliver vacant possession

3. Eviction of Plaintiff/2nd Counter Defendant

4. Order granting vacant possession to Counterclaimant

5. Permanent injunction restraining Plaintiff and agents from dealing with the property

6. General damages, mesne profits, interest, and costs

   
   

Court’s Findings and Awarded Remedies

The court held that

“I have considered the financial inconvenience and anguish suffered by the 2nd Defendant/Counterclaimant for over five years due to the actions and omissions of the Counter Defendants after purchasing the suit property lawfully and I hereby award the Counterclaimant general damages of UGX 40,000,000= (Uganda Shillings Forty Million Only).”

“No evidence was presented to determine the amount of the mesne profits. For this reason, I decline to grant the same.”

“Interest is awarded on the general damages awarded at the rate of 6% per annum from the date of Judgment until payment in full, which in my view is reasonable.”

1. Plaintiff’s Claims Denied

The Court denied the Plaintiff’s claims because it found that the suit property was lawfully sold and transferred to the 2nd Defendant. Consequently, the declarations of fraud and injunctions restraining sale were refused.

2. Counterclaim Remedies

a) General Damages

1. The Court applied established principles on general damages, referencing Kabandize John Baptist and 21 Others v Kampala Capital City Authority and Takiya Kashwahiri & Another v Kajungu Denis to emphasize compensatory nature and discretion in awards.

2. The Counterclaimant prayed for UGX 50,000,000/= for loss of business and deprivation of possession for over seven years.

3. Considering the financial and emotional impact of denial of possession, the Court awarded UGX 40,000,000/= (Forty Million Uganda Shillings) as general damages.

   
   

b) Mesne Profits

1. Mesne profits require evidence of actual or potential profits earned by the wrongful possessor.

2. The Court, citing Vivo Energy (U) Ltd v Lydia Kisitu, held that the Counterclaimant failed to provide evidence quantifying profits earned by the Plaintiff during unlawful possession.

3. Therefore, mesne profits were declined due to lack of proof.

   
   

c) Interest

1. Exercising discretion under Section 26(2) of the Civil Procedure Act and guided by Milly Masembe v Sugar Corporation (U) Ltd and Mohanlal Kakubhai Radia v Warid Telecom Uganda Ltd, the Court awarded interest.

2. The rate was set at 6% per annum from the date of judgment until payment in full to reasonably compensate for inflation and currency depreciation.

   
   

d) Costs

1. Costs follow the event under Section 27(2) of the Civil Procedure Act, supported by Uganda Development Bank v Muganga Construction Co. Ltd.

2. Costs of the suit were awarded to the Defendants (successful in main suit), and costs of the Counterclaim to the Counterclaimant (successful in counterclaim).

   
   

Final Court Orders

1. Declaration: The 2nd Defendant/Counterclaimant lawfully purchased and holds title to the suit property at Lubowa Estate.

2. Eviction: Plaintiff/2nd Counter Defendant is evicted from the suit property.

3. Vacant Possession: The 2nd Defendant/Counterclaimant is granted vacant possession.

4. Permanent Injunction: Plaintiff, her agents, or anyone acting on her behalf are restrained from dealing with the suit property.

5. General Damages: UGX 40,000,000/= awarded to the Counterclaimant.

6. Interest: 6% per annum on damages from judgment date until full payment.

7. Costs: Suit costs awarded to Defendants; Counterclaim costs awarded to Counterclaimant.

   
   

📌 Key Takeaways

1. Lawful Sale and Registration Prevail:

   A duly executed and registered sale overrides unsubstantiated claims of fraud or undervaluation. Purchasers who conduct due diligence are protected.

2. Vacant Possession Must Be Actual:

   Sellers/mortgagees must ensure exclusive and physical possession is handed over. Documentary handovers alone are inadequate without factual occupation.

3. Failure to Deliver Possession Breaches Contract:

   Even where legal title transfers, failure to provide actual possession entitles the purchaser to relief, including damages and eviction orders.

4. Mental Illness Claims Require Expert Proof:

   Only psychiatrists or senior mental health practitioners can validate claims of unsoundness under Section 54 of the Mental Health Act. General practitioners’ reports are legally insufficient.

5. Force Majeure is Narrowly Applied:

   Medical conditions must be unforeseeable and must render performance impossible. Courts require credible, specific evidence to excuse non-performance.

6. Contractual Obligations Are Binding:

   Borrowers remain bound by loan contracts unless fraud or incapacity is proved. Self-contradictory statements weaken any such defences.

7. Mortgagee's Discretion in Loan Recovery:

   Where the agreement provides options (e.g. terminal benefits or foreclosure), banks are not obligated to prioritize one over another.

8. Proper Notice is a Legal Prerequisite:

   Valid service of default and sale notices to the registered address satisfies statutory requirements, even if the mortgagor disputes receipt.

   
   

   Read the case below

Nalumansi V Centenary Bank & Anor.pdf

Download PDF • 2.56MB