Court cancels titles, bank mortgages on Ndejje Muslim land

By Ahmed Idriss

The High Court has cancelled land titles and bank mortgages over property in Kyambala-Kitiko, Wakiso District, which hosts Ndejje Quality School, a mosque and a Muslim cemetery, after finding that it was fraudulently transferred to a private company.

In a judgment delivered by Justice Anna B. Mugenyi of the Commercial Division, the court declared the Uganda Muslim Supreme Council (UMSC) the rightful owner of the disputed land and ordered the cancellation of titles registered in the name of Mirembe Executive Group of Companies Limited.

The court also nullified mortgages obtained from Centenary Bank and Absa Bank Uganda using the land as security, and directed the Commissioner for Land Registration to register UMSC as proprietor.

The dispute involves about five hectares originally donated to the Muslim community by the family of the late Ismail Kizito. An error in the issuance of titles led to an exchange of two plots, a matter resolved by the High Court in 2010. The court then recognised Plot 61 as belonging to UMSC and Plot 20 to the Kizito family.

Following that judgment, the administrators of Kizito’s estate signed transfer documents in favour of UMSC and handed over the duplicate title.

In April 2017, UMSC leased 2.5 acres to Ndejje Quality Education Services Limited for 20 years at an annual ground rent of Shs5 million. The company developed the site and established the school.

But in June 2018, the land was transferred to Mirembe Executive Group using documents the court later found to be forged. The company subdivided the property and mortgaged two resulting plots to banks.

Plot 1170, which accommodates the school and mosque, was used to secure a Centenary Bank loan, while Plot 1169 was mortgaged to Absa Bank.

The court heard that the Kizito family administrators had neither sold the land nor signed the disputed transfer documents. A forensic examination by the Uganda Police Directorate of Forensic Services found significant differences between the signatures on the documents and the administrators’ genuine signatures.

Justice Mugenyi found that the transfer had been obtained through forgery and linked Habibu Muweesi, who controlled Mirembe Executive Group, to the transaction.

The judge also noted conflicting accounts from Muweesi about how the company acquired the land. His defence claimed he bought it directly from the administrators for Shs150 million, while his statement to police indicated that he negotiated the purchase through the then Wakiso District Khadi for Shs200 million.

The court further questioned how a special certificate of title was issued on the claim that the original had been lost, when the duplicate had already been handed to UMSC following the 2010 judgment.

BANKS FAULTED OVER DUE DILIGENCE

Justice Mugenyi found that Centenary Bank had failed to carry out adequate due diligence before accepting Plot 1170 as security.

The bank’s own valuation report identified the property as an operational school, with classrooms, dormitories, staff quarters and a mosque. However, it did not establish the legal basis of the school’s occupation or seek clarification from UMSC and the school management.

The judge said the bank had ignored obvious warning signs and could not claim to have acted in good faith without knowledge of the fraud. Its mortgage was therefore declared null and void against the plaintiffs.

Absa Bank was not found to have participated in or known about the fraud when it advanced its loan. However, the court ruled that it had not proved that it held a registered mortgage capable of overriding UMSC’s earlier interest in the property. Its security was also declared incapable of supporting a sale of the land.

The court permanently barred the defendants, their agents and anyone claiming through them from selling, transferring, mortgaging or otherwise interfering with the two plots.

Ndejje Quality Education Services Limited was recognised as the lawful lessee of the school premises for the 20-year period beginning April 20, 2017.

Muweesi and Mirembe Executive Group were ordered to jointly pay UMSC Shs40 million in damages and Ndejje Quality Education Services Limited Shs30 million. The plaintiffs were also awarded costs against Muweesi, the company and Centenary Bank.

However, the banks retained their claims against the borrowers despite losing the mortgages over the land.