THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF UGANDA HOLDEN AT KAMPALA
HIGH COURT CIVIL SUIT NO.94 OF 2006
KAYKAY ELECTONICS SALES AND SERVICE LIMITED …………………………………………………………………………..PLAINTIFF
HITECH INDIA (U) LTD ……………………………………….. DEFENDANTS
BEFORE THE HON. JUSTICE GEOFFREY KIRYABWIRE
The case for the plaintiff is that on 1st June 2001, they entered into an agreement with the defendants under which the plaintiff was appointed as a distributor of M/S Hitech India. That the plaintiff was requested by the second defendant who was the managing director of both the defendant company and M/S Hitech India (located at plot 9/50, Kirti Ngar Industrial area, New Delhi 110015 hereinafter referred to as “Hitech India”) to deposit Ug.Shs.79, 200,000/= (equivalent of US $ 40,000) which money was passed on to the second defendant as a security deposit for performance and payment. A blank cheque was then issued, signed and presented by the second defendant to the plaintiff as receipt to be refunded in the event that the arrangement was revoked. However in January 2006 the plaintiff ceased being a distributor and requested for a refund of the deposit from the defendants and that this was not done
The defendants in their Defence deny the allegations and aver that the first defendant never had any agreement with the plaintiff. They aver that the agreement was between the plaintiff and M/S Hitech India which was a separate and independent legal entity from the defendants. The second defendant averred that he had never received Ug.Shs.79,200,000/= (an equivalent of US $ 40,000) from the plaintiff and that they never issued to the plaintiff the cheque No. 0142284. The defendants further averred that the cheque No. 0142284 on which the plaintiff’s claim is premised was stolen from the first defendant’s premises and a report was made to Bank of Baroda on 15th October 2001.
The parties at the pre trial conference agreed to the following facts:-
2. The first defendant is a private limited company incorporated in Uganda.
3. The plaintiff and the defendant have at different times acted as Agents /Representatives OR customers of M/S Hitech India based at 9/50, New Delhi -110015.
4. On 1st June 2001 the defendants on behalf of M/S Hitech India based at 9/50, New Delhi -110015 appointed the plaintiff as the latter’s agent to deal in its goods until 31st December 2003 and the period was subject to extension.
2. Whether the defendants owe the plaintiff the sum of Shs. 79,200,000/=?
3. What are the remedies available to the parties?
The defendants in their amended written statement of defence prayed that the first defendant be struck off as a party to this suit since the distributorship agreement made between the plaintiff and M/S Hitech India and not with the first defendant. During the trial, it was an agreed fact by both the plaintiff and the second defendant in their testimonies that there were no direct dealing between the plaintiff and the first defendant. I have carefully reviewed the evidence in this area. Whereas the plaintiff company’s witnesses testified that they did not deal directly with the first defendant, both the certificate of distributorship (Exh. P 1) and the letter to The Bank of Baroda stopping suit cheque no. 0142284 were written on the first defendant’s letter heads. The second defendant is also the principal director in the first defendant company and therefore directly controls its actions. The two defendants are really the same and the first defendant is really a cloak of the second defendant. Consequently the first defendant shall not be struck out as a party to the suit.
It was the testimony of Mr. Kishan Charid Kewlani that he got to know Mr. Anil Gupta Since 1993 and that they entered into agreement in contention in 1999. He was given the certificate of distributorship in 2001 upon giving Anil Gupta a deposit of Shs. 79,200,000/=. It was Kewlani’s testimony that the letter that he was given appointed him the sole distributor of Tactics Radio in Uganda. He further avers that when he was giving the money to Anil Gupta, Mr. Amel Badhia the operational manager of KAYKAY Electronics was present and that he wrote on the cheque No. 0142284 after Anil Gupta had signed it because the second defendant’s handwriting is very poor. This evidence was confirmed by the testimony Mr. Amel Badhia.
The Counsel for the defendants on the hand submitted that the plaintiffs claim for Ug.Shs.79,200,000/= is premised on cheque No.0142284 as a deposit for the agency which was issued by the defendants to the plaintiff. He further submitted that the reading of Certificate of Agency unequivocally shows that the plaintiff is appointed by M/S Hitech India, New Delhi. Counsel for the defendants submitted that if any money was given as a security deposit in the manner alleged, then it is M/S Hitech India, that would be legally be liable as principle and not the present defendants. Counsel referred me to the case of
Montogomerie v United Kingdom Steamship Association (1891)1QB370 at page 3761 where Wright J held,
I have considered the submissions of both Counsel and evidence adduced before Court. The parties agree that the signature the cheque (Exh. P2) belongs to the second defendant; who does not deny it. However the point in contention is how the cheque came in to the possession of the plaintiff. I have considered the evidence before me I am satisfied that there was an oral transaction between the parties involving this cheque No.0142284 and I am convinced that the defendant willingly handed over the cheque to the plaintiff. I am not persuaded by the testimony of Mr. Anil Gupta that the cheque was stolen.
In the case of London Joint Stock Bank .v. Macmillan and Arthur  A.C 777 at page 789-790 Lord Finlay of the House of Lords held that;
I find therefore basing on the evidence before me that the cheque was never stolen from the defendants as alleged but was rather issued to the plaintiff by the second defendant to act as an acknowledgement of receipt of the deposit of $ 40,000 (Forty thousand United States Dollars).
Counsel for the defendants on the hand submitted that the defendants do not owe the plaintiff the sum of Ug.Shs.79,200,000/= as there was never a relation ship between the plaintiff and the first defendant. Counsel for the defendant further submitted that the plaintiff’s evidence was insufficient to prove any basis for a credit- debtor relationship between the plaintiff and the defendants. It is Counsel’s submission that the cheque in issue was stolen from the defendants and that the whole claim is fraudulently set up by the plaintiff.
According to R. W. Hodgin in the Law of Contract of East Africa published by Kenya Literature Bureau at page 12 a contract is defined as a legally binding agreement between two or more persons and it can be made either orally or in writing.
In the case of Printing and Numerical Registering Company v Sampson (1875) LR 19 Eq 462, Sir George Jessel said,
On the basis of the above It is therefore my finding that the second defendant owes the plaintiff the sum of Ug.Shs.79,200,000/= (seventy nine million two hundred thousand Uganda shillings).
Issue No. 3: What are the remedies available to the parties?
In light of my earlier findings, I award the plaintiff the sum of Ug.Shs.79,200,000/= (seventy nine million two hundred thousand Uganda shillings) against the defendants jointly and severally which was the amount deposited as security for the distributorship agreement.
The law presumes damage in respect of any unlawful act such as breach of a contract or any injury to a legally enforceable right or interest. In the instant case the plaintiff’s case for general damages was not well presented to court. Court was not guided on quantum to be given neither did the plaintiffs specify the amount to be awarded in general damages. In light of the above I award Ug.Shs.7,900,000/= (seven million Uganda shillings) as general damages against both defendants jointly and severally.
Regarding the question of interest, Kaykay Electronics Sale Service Limited prayed for interest at court rate from the date of cause of action.
The principle that emerges from decided cases, notably Sietco .V. Noble Builders (U) Ltd SCCA No. 31 of 1995 is that where a person is entitled to a liquidated amount or specific goods and has been deprived of them through the wrongful act of another person, he should be awarded interest from the date of filing the suit. Where, however, damages are to be assessed by the Court, the right to those damages does not arise until they are assessed. In such event, interest is only given from the date of judgment.
It is not clear why the plaintiff prayed for court and not commercial interest as a business entity. That notwithstanding since the termination was oral I accordingly award the plaintiff interest against both defendants jointly and severally on the award of Shs 79,200,000/= at 8% per annum from date of filing until payment in full and 8% on general damages from the date of judgment until payment in full.
Judgment read and signed in open court in the presence of;
- G. Byamugisha for Plaintiff
- Rose Emeru – Court Clerk