High Court Rejects KCB's Demand for Shs200m Deposit in Cedric Babu Family Mortgage Dispute

The High Court in Uganda has turned down an appeal by Kenya Commercial Bank (KCB) against the Babu family in a heated mortgage dispute. Justice Susan Odongo upheld a prior unconditional temporary injunction that prevents the bank from auctioning the family’s Kololo residence.

The conflict arose from a $200,000 mortgage taken by Cedric Ndilima Babu in 2023, which defaulted after his death in May 2025, leaving roughly $182,710 unpaid. KCB sought to enforce a 30% deposit—about $56,550 or over Shs200 million—under the Mortgage Regulations, 2012, before halting foreclosure proceedings.

Justice Odongo acknowledged the regulation’s applicability once a default notice is issued but exercised judicial discretion to waive it. She cited the status of estate administrator Allison Gallagher as Babu’s widow, living in the property with three minor children and lacking alternative housing.

The judge described demanding the deposit from a widow contesting the bank’s alleged negligence on mortgage protection insurance as ‘undue hardship.’ Evidence showed the policy had lapsed, potentially leaving the debt uncovered despite Babu’s passing.

While upholding two minor technical points for KCB, such as striking an unauthorized affidavit, the court dismissed the main appeal. Costs were awarded to the respondents—Olive Zaitun Kigongo and Allison Gallagher—keeping the property safe pending the primary lawsuit.

Justice Odongo praised the lower court’s ‘legal precision and judicial compassion’ in the ruling.

Source: Daily Monitor (Uganda)