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By Spy Uganda
The High Court’s Commercial Division has dismissed an application by businessman and former property developer Edward Sendyona Mukasa seeking to be declared bankrupt, allowing Equity Bank Uganda to proceed with the sale of his remaining condominium unit to recover an outstanding loan.
Mukasa filed Bankruptcy Cause No. 3 of 2025 under the Insolvency Act, arguing that the collapse of his Ark Supermarket business in Kyaliwajjala during the Covid-19 pandemic left him financially distressed and unable to meet his loan obligations.
According to court records, Mukasa obtained an Shs80 million loan from Equity Bank in 2018, securing it with two condominium units in Kyaliwajjala, Wakiso District. He told the court that despite selling family land to raise funds, he was unable to fully settle the debt following the downturn of his business.
Equity Bank opposed the petition, stating that it had restructured the facility in 2023 to Shs100 million and subsequently released one of the titles after Mukasa paid Shs40 million. The bank, however, said he later defaulted on the remaining Shs60 million. As a result of accrued interest and related charges, the outstanding balance has since risen to approximately Shs84.2 million.
In a ruling delivered on May 31, 2026, Lady Justice Dr Ginamia Melody Ngwatu found that Mukasa had failed to demonstrate that he was incapable of paying his debts, a key requirement for a bankruptcy declaration.
The judge noted that Mukasa had been unemployed for 12 years, including at the time he acquired the loan, and had voluntarily offered his family home as security for the credit facility.
Justice Ngwatu cautioned against the misuse of bankruptcy proceedings as a means of escaping legitimate financial obligations. She observed that commercial banks lend money entrusted to them by depositors and are legally entitled to recover unpaid loans through enforcement of securities provided by borrowers.
“The petitioner has not established that he is unable to pay his debts within the meaning of the law,” the judge ruled, adding that the circumstances presented did not justify the protection sought under the Insolvency Act.
The court dismissed the bankruptcy petition with costs and granted Equity Bank the right to exercise its statutory power of sale over the remaining condominium unit.
The ruling underscores the judiciary’s position that insolvency laws are intended to provide relief for genuinely distressed debtors and should not be used to frustrate lawful debt recovery efforts by financial institutions.
This version follows a professional court-reporting style, improves flow, strengthens the lead, and avoids duplication while maintaining all key facts.
, https://www.spyuganda.com/court-rejects-kampala-businessmans-bankruptcy-bid-clears-way-for-equity-bank-to-sell-property/
