Company Law

African Textile Mill Limited (in liquidation) v Co-operative Bank Limited (in liquidation) (HCT-00-CC-CS-020 of 2005 ) [2005] UGCOMMC 39 (13 July 2005);

Flynote: 

Search Summary: 

The application was filed under s.229, 301(1),
305 and 308 of the company act 2010 seeking
determination whether it was lawful for the
respondent to enforce its mortgage during
winding up and whether it was lawful for the
respondent to institute civil proceedings in
enforcing the mortgage.

Headnote and Holding: 

The court considered whether the respondent
should not exercise its rights. The court held
that since the applicant was not a liquidator or
creditor, the respondent should not be stopped
from realizing its security where the applicant
has defaulted in payment and that in matters of
voluntary winding up, the court ought not to
say any proceeding were one is realizing his
security even court has discretion to do so. The
court was satisfied that it had no basis of
exercising its discretion.
Accordingly court denied the reliefs sought as
the matter was procedurally and as a matter of
law instituted. The application was dismissed
with costs.

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