Court blocks sale of Cedric Babu’s Kololo home

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The High Court has issued a temporary injunction stopping Kenya Commercial Bank Uganda Ltd from selling the late Cedric Ndilima Babu’s residence in Kololo, pending the determination of a substantive suit challenging the bank’s actions.

In a ruling delivered on February 23, 2026, assistant registrar Mulondo Mastula restrained the bank, its agents and auctioneers from advertising, auctioning, evicting or otherwise dealing with Condominium Unit No. 2 on LRV KCCA 119/19 at Plot 1, Fumu Lane, Kololo until the main case is heard and determined.

The application was filed by Olive Zaitun Kigongo and Alison Gallagher, respectively the mother and widow of the deceased, who are co-administrators of his estate.

The dispute

The applicants contend that the deceased obtained a mortgage from KCB in July 2023 to purchase the Kololo home, where he lived with his three sons. They state that he serviced the loan until his death in May 2025 after suffering a sudden heart condition in Kigali, Rwanda.

According to the estate administrators, the mortgage facility required insurance coverage, including protection against death, to be arranged through the bank’s bancassurance structure, with the bank as first loss payee.

They argue that Clause 7.17 of the facility agreement obligated the bank to ensure renewal of the group mortgage protection policy if the borrower failed to do so in time, at the borrower’s cost. They maintain that had the policy been maintained, it would have cleared the outstanding loan, provided sh1 million in funeral expenses and paid a critical illness benefit equivalent to 30 percent of the outstanding loan, amounting to sh150 million.

Instead, they argue, the bank issued demand and default notices and threatened foreclosure. The estate has filed a substantive suit alleging breach of contract and negligence.

The bank’s response

In reply, KCB, through an affidavit sworn by its officer Sheila Catherine Abamu, stated that the deceased secured a credit facility of which about $182,710.17, equivalent to sh657 million, remains outstanding, inclusive of interest.

The bank contends that the responsibility to obtain, maintain and renew insurance rested squarely with the borrower. It argues that although it had a discretionary right to renew insurance in certain circumstances, this did not remove the borrower’s obligation.

According to the bank, the group mortgage protection policy lapsed on August 11, 2024, after the deceased failed to provide funds for renewal. As a result, the policy was not in force at the time of his illness and death in 2025.

KCB maintains that it acted within its contractual and statutory rights in issuing a notice of default and moving to realise its security. It also argues that the applicants have not met the legal threshold for a temporary injunction and that any loss could be compensated by damages.

Court’s findings

In determining the application, the court framed five key issues, including whether the applicants had established a prima facie case, whether they would suffer irreparable harm, where the balance of convenience lay and whether they were required to deposit 30 percent of the outstanding loan under the Mortgage Regulations, 2012.

On the first issue, the court found that there was a serious question to be tried regarding interpretation of Clause 7.17 of the facility agreement. The use of the word “shall” in the clause, the court noted, raised an arguable question as to whether the bank had a mandatory duty to ensure continuous insurance cover.

The assistant registrar held that resolving the competing interpretations of the contractual documents is a matter for the trial court, but that the applicants had established a prima facie case with a probability of success.

On irreparable harm, the court found that the threatened sale would expose the widow and her three children to loss of their family home, an injury that could not adequately be compensated by damages. Citing established principles, the court held that eviction from one’s residence constitutes substantial and material harm.

The court further held that the balance of convenience favoured preserving the status quo. It noted that the family remains in occupation of the property and that proceeding with the sale before determination of the substantive dispute could render the suit nugatory.

30 percent deposit not required

On the issue of the 30 percent deposit under Regulation 13 of the Mortgage Regulations, the court found that the requirement was not automatically triggered in the circumstances.

Mastula observed that the main suit and injunction application had already been filed when the bank later served a 21-day notice of sale on February 9, 2026. The application was therefore not merely an attempt to halt a scheduled auction.

Additionally, Regulation 13(6) gives the court discretion where the applicant is a spouse of the mortgagor. Given that the second applicant is the widow residing in the family home, the court declined to require payment of the deposit as a precondition for hearing the application.

Orders

The court granted a temporary injunction restraining KCB, its agents and auctioneers from advertising, selling, auctioning, evicting or otherwise dealing with the Kololo property pending determination of the main suit.

The applicants were directed to maintain the property and avoid any actions that would prejudice the bank’s security. Costs of the application will be determined in the main case.

The substantive suit will proceed to hearing, where the court will determine whether the bank breached its obligations regarding renewal of the mortgage protection insurance and enforcement of the loan.