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Kenya: Bank to sell trader’s property over loan arrears

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A businesswoman has lost the legal fight to save her mortgaged property valued at Sh100 million from the auctioneer’s hammer.

High Court judge Christine Meoli allowed the Gulf African Bank to auction the land and buildings in Thika, Kiambu County to recover more than Sh110 million advanced to Mrs Hannah Wairimu Mutura in April 2014.

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The judge said Mrs Mutura’s acts and omissions together with her persistent default and dishonouring of accommodations made by the bank, disentitled her from equitable relief.

“He who comes to equity must come with clean hands,” ruled the judge, as she declined to exercise her discretion to allow Mrs Mutura more time to settle the bank’s loan and accrued interest. The judge said the two key factors which militated against the exercise of discretion in Mrs Mutura favour was, firstly, her admission of habitual default in her various correspondences with the bank and in her replying affidavit.

Secondly, justice Meoli said Mrs Mutura filed the present suit on June 18, 2018 and proceeded to lodge yet another case in the Commercial and Admiralty Division at the High Court in Nairobi and concealed the information from the court.”

The judged noted the defaulter was admittedly in arrears and her replying affidavit chronicled the history of non-payment since 2015, barely one year after the commencement of the financing arrangement between her and the bank.

Mr Mutura obtained a loan from Gulf African Bank of Sh110 million in 2014 to finance the purchase of a prime property in Thika town. The loan was secured in part by a legal charge over the property and a further charge of another property valued at Sh10 million and a personal guarantee of her husband Mr David Njuguna Ngoi.

According to the court’s ruling, Mrs Mutura made several repayments at the initial stages but did not continue for long. The bank said as in April 2018, she was in arrears of Sh23.6 million. The bank, having previously served her with the statutory notice, instructed Garam Investment Auctioneers to proceed and sell the property by public auction on June 19, 2018.

But on June 18, 2018, a day before the intended auction, Mrs Mutura moved to court for a temporary injunction stopping the bank from carrying out the sale until her application was heard and determined.

She pleaded with the court to be allowed to liquidate the loan through monthly instalments of Sh1.5 million for the first 12 months and thereafter Sh200,000 monthly instalments until the entire loan amount was fully paid.

Mrs Mutura also sought to be given adequate time within which to sell the property by private treaty and use the proceeds to pay the entire debt.

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