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Commercial Court judge David Wangutusi
Commercial Court judge David Wangutusi. Courtesy photo

Dfcu Ordered to Pay Over Shs80m to Ex-Crane Bank Employee

posted onJanuary 15, 2019

By Max Patrick Ocaido

The Commercial Court in Kampala has ordered Dfcu Bank to pay Shakil Pathan Ismail, a former employee of the defunct Crane Bank Limited (CBL) over Shs80m in damages for unlawfully blocking his bank account and deducting his salary.

In his ruling delivered on Tuesday, January 15, 2019, Justice David Wangutusi said that Dfcu that took over Crane in 2017 unlawfully blocked/deducted Shakil’s salary for the period of March 2015 to March 2016 and is liable to pay all the monies plus damages because they (Dfcu) purchased assets and liabilities during Crane Bank receivership.

Shakil who was earning a monthly salary of $2,200 sued Dfcu as the Defendant seeking a recovery of Shs62m being monies unlawfully blocked/deducted from his salary account, general damages, exemplary damages, interests and cost of the suit. Dfcu terminated Shakil’s employment contract before settling a case regarding his salary deduction by Crane Bank.

Justice Wangutusi entered the judgement in favour of the plaintiff-Shakil and ordered the Dfcu to pay Shs62m, general damages amounting to Shs20m and interest of 21% per annum from April 2016 till payment in full and another interest of 6% per annum from date of judgment till payment in full and costs of the suit.

“It is without doubt that the Defendant [Dfcu) kept the plaintiff out of use of his money. The bank must have used this money for commercial purposes. It is also without doubt that if the plaintiff had borrowed that money from the bank he would have paid it back at commercial interest rate. What is good for the goose should also be good for the gander,” Wangutusi said in his ruling.

In their defense, Dfcu said that they are not liable to pay Shakil because at the time they took over Crane Bank, certain liabilities were exempted and they remained with the defunct bank in receivership.

However, Justice Wangutusi quashed their defense on grounds that the plaintiff was not privy to the agreement “because legally the Defendant assumed the position of Crane Bank when she took over the Bank.”

Section 28(2) of the Employment Act states that, where a trade or business is transferred in whole or in part, the contracts of service of employees employed at the date of transfer shall automatically be transferred to the transferee, all rights and obligations between each employee and the transferee shall continue to apply as if they had been rights and obligations concluded between the employee and transferee.

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