Court Orders Businessman Mukesh Shukla to Deposit Shs 5bn in Bank of Baroda Debt Dispute

The Court of Appeal in Uganda has ordered businessman Mukesh Shukla, the proprietor of Shumuk Aluminium Industries Limited, to deposit Shs 4.8 billion and $36,870.02 within 30 days as security for an outstanding debt. The directive comes as a condition for a stay of execution regarding a previous High Court judgment won by Bank of Baroda (Uganda) Limited.

In her ruling, Justice Esta Nambayo also restrained the bank and its agents from selling or transferring two mortgaged properties in Kampala while Civil Appeal No. 398 of 2026 is pending. The judge warned that the stay orders would automatically lapse if the applicants failed to meet the 30-day deposit deadline.

The underlying legal battle stems from credit facilities extended by Bank of Baroda to Shumuk Aluminium Industries, which were secured by mortgages over properties on Mukabya Road and at the UMA Lugogo Showground. Shukla had also provided a personal guarantee for the company’s indebtedness.

Previously, High Court Judge Patience Rubagumya dismissed a suit by Shumuk challenging the bank’s enforcement and ruled in favor of the bank’s counterclaim. The company was ordered to pay Shs 16.03 billion and $122,900.05, while Shukla was held personally liable for Shs 6.36 billion, alongside interest and legal costs.

Dissatisfied with the outcome, Shukla and his company turned to the appellate court, arguing that their appeal raises substantial questions regarding currency conversion, interest computation, and account reconciliations. Their legal team emphasized that executing the judgment would disrupt the company’s manufacturing operations and displace its factory.

While Justice Nambayo noted that the appeal raised arguable questions, she declined an alternative proposal to use third-party land as security. Instead, she ordered the monetary deposit representing 30 per cent of the decretal principal sums, stating that the arrangement fairly balances the applicant’s right to appeal with the bank’s recovery interests. Read more from The Observer.