Kyando, J:
The plaintiff, a limited liability company incorporated under the Companies Ordinance, F Cap 212, has brought a suit against the defendants seeking that they be restrained, by a permanent injunction, from putting it under receivership. It also claims damages for having been advertised as having been placed under receivership. Pending the determination of the suit it has filed an application in which it seeks that (1) the G respondents/defendants be restrained from `commission of illegal and unjustified acts of putting under receivership the applicant company'; (2) the respondents/defendants be restrained from harassing and/or interfering with the applicant's premises; (3) costs and (4) any other reliefs. H
The defendants, through their counsel, Mr Uzanda have raised points by way of preliminary objections to the application. These are that (1) Ubungo Garments Limited-in receivership-having been declared a specified Public Corporation under the Public Corporations (Amendment) Act (16 of 1993) have no locus standi to file the application I as the powers of the applicant/plaintiff company to institute or cause proceedings to be instituted have since been vested
entirely in the Presidential Parastatal Sector Reform Commission (PSRC); (2) the A applicant company having been put under receivership by the National Bank of Commerce effective 17 November 1995 it (the applicant) has no power to apply for a temporary injunction against the National Bank of Commerce and for the receivers appointed by the said Bank. B
I do not think the second point raised by the respondents is tenable in the circumstances of this case.
Mr Uzanda relies on the following passage from the case of Moss Steamship Co v Whitney (1) in support of his arguments on the point: C
`The appointment of a receiver and manager over the assets and business of a company does not dissolve or amibilate the company, but it does entirely support the company in the conduct of its business and deprives it of all power to enter into contracts in relation to that business or to sell, D pledge, or otherwise dispose of the property put into the possession or under the control of the receiver manager. The business of the company is carried on by the receiver and manager, but not as the company's agent. He supersedes the company and the transactions are his transactions on E which he is personally liable with a right to be indemnified out of the assets of the company in respect of liabilities which he may incur.'
But, in my view and with respect, this passage applies to a situation where the appointment of a receiver has been made and there is no resistance or challenge to it. In F the instant matter the very appointment of a receiver by the second respondent is being challenged and this in fact is the suit which the applicant company has brought. The passage above is no authority for saying that a company placed under receivership cannot challenge the appointment of a receiver or being placed under receivership. That G passage, as stated already is therefore inapplicable to the present case and I overrule Mr Uzanda on the second point above.
Concerning the first point Mr Uzanda submits that under GN 400 of 1995 upon a company or corporation being declared a specific public corporation its supervision, H management and control vest in the Parastatal Sector Reform Commission. He sites ss 39, 40 and 43 of the Public Corporations (Amendment) Act, 1993.
The applicant company on the other hand relies on s 42 which provides: I
`Notwithstanding that a public corporation may be declared a spe-
cified public corporation it shall be the duty of the Board of every Public Corporation. A
(a) to ensure that the corporation continues to carry out its functions in accordance with its statement of corporate strategy and
(b) to cooperate with and ensure that the officers and employees of such corporation cooperate with the commission in order to facilitate that the restructuring of the Public Corporation is B successfully achieved.'
So, according to the applicant/plaintiff company, declaration of a corporation as a specified public corporation does not affect its continuing to run its activities, until such C time that the said public corporation has been put under receivership. It is contended on behalf of the applicant/plaintiff company that supervision, management and control of the applicant company is not at all with the PRSC. `This is further, it is contended, proved' by the fact that to date the said Parastal Sector (sic!) has not issued a notice of D receivership to the applicant's company as it has been the case with other specified public corporations'.
Now it is undisputed that the applicant/plaintiff company has been declared a specified public corporation. Once a corporation has been so declared, its state in my view is E diminished, as Mr Uzanda rightly submits, it becomes subject to the supervision management and (though it continues to run it continues for the limited and specified purposes as provided for in s 42), and control of PRSC. It cannot on its own institute legal proceedings. It has to do so at least jointly with PRSC. This has not been done in F this case and I have, hereby do, uphold the first preliminary point raised on behalf of the respondents/defendants. The application for temporary injunction is struck out for incompetence, it having been led by a person with no locus standi to file it. The G respondents/defendants are awarded the costs of the application.
A
