The Kampala Central, Member of Parliament, Muhammad Nsereko has been sued over a botched land deal in which he was advanced sh2.9b.
Nsereko was sued at the Commercial Division of the High Court, Kampala and Aisha Trading Limited, dealing in cars indicted him through Kampala Associated Advocates, prompting the court to summon him.
The company alleges that the legislator purported to sell to it land titles at Banda measuring 1.87 hectares, knowing they were forged.
It is also alleged that the MP offered the company an alternative piece of land in Mityana district, which belongs to Uganda Peoples’ Defence Forces (UPDF).
The buyers want their money back but Nsereko has not honoured their request since August 3, 2020.
According to the summons signed by deputy registrar Lillian Bucyana on Friday, the legislator is expected to file a written statement of defence within 15 days from the date of receipt of summons, lest the matter will be decided in his absence.
“Should you fail to file a written statement of defence in the suit on or before the date, the plaintiff may proceed with the suit and judgement may be given in your absence,” she warned.
Court records indicate that the company entered into a series of land sale agreements with Nsereko, who had presented himself as the owner of pieces of land in Banda, Mubende and Northern by-pass in Kampala.
The company contends that it gave Nsereko sh2.9b in cash and motor vehicles for the pieces of land.
However, the ownership of the land was disputed and the parties agreed to rescind the sales agreement.
As a result of the rescission, according to court documents, the parties entered into a memorandum of understanding (MoU) dated July 9, 2019 in which Nsereko agreed to refund the money.
Following the MoU, Nsereko issued eight post-dated cheques of sh 396.8m each, all amounting to sh3.2b. The cheques were supposed to be payable every six months.
On February 8, 2020, the parties agreed that the first cheque would be banked within 45 days from the date of execution.
On March 24, 2020, the company banked the cheque and was informed by the drawee that Nsereko had cancelled it.
On July 9, 2020, the company banked another cheque and the payment was similarly countermanded by Nsereko.
“Under Clause 4 of the addendum it was agreed that if any of the cheques bounced and/or dishonored, the whole amount outstanding would become due,” part of the court documents reads.
The company contends that Nsereko’s actions of refusing to fulfill his obligations under the MoU amount to breach of the binding contractual terms.
“The defendant has refused to pay the money despite repeated reminders,” the company added.
The company also claims that it has suffered inconvenience and financial loss, for which Nsereko is liable.
The company said it issued a demand notice to Nsereko but he ignored it
and therefore seeks a court declaration that Nsereko is in breach of his contractual obligation.
It also wants the court to compel Nsereko to pay its interest at a commercial rate from the date of breach of the MoU, damages and costs of the suit.