People walk past a Consolidated Bank branch in Nairobi. PHOTO | FILE
Consolidated Bank of Kenya has sued Outer Ring Road-based Taj Mall for refusing to let the lender vacate to another building despite terminating its lease agreement signed in 2011.
The State-owned lender says in court filings that it terminated the lease agreement late last year following discovery that Taj Mall lies on a road reserve and had been earmarked for demolition.
Consolidated Bank adds that the revocation of Taj Mall’s lease automatically rendered its lease agreement null and void hence it sought and rented space in another building.
The bank holds that Taj Mall has, however, refused to let it leave for its new premises despite issuing a termination notice.
Taj Mall in its response denies that its building is set for demolition and insists that the National Land Commission (NLC) only called for it to merge the two title deeds related to the parcels of land it stands on. It says the bank can move only if it will pay rent for the entire two-year period in its lease agreement.
Consolidated Bank says the standoff has forced it to stay on past April — the last month for which rent had been paid — and that Taj Mall locked up its premises to compel it to continue honouring the monthly payments.
The bank now says it may be forced to pay rent for two spaces, one of which it won’t use.
“If Consolidated Bank remains in the suit premises and Taj Mall continues to hinder the applicant from the premises, the applicant will then be subjected to pay rent in two premises occasioning it great loss,” the bank says.
But Taj Mall reckons that there is no stalemate between it and Consolidated Bank as there is a binding agreement that the lender must abide by.
Rameshchandra Govind Gorasia, Taj Mall’s managing director, says that no notice of demolition has been issued in respect of the building.
The MD adds that he got assurances from the Kenya Urban Roads Authority (Kura) and the NLC that the building will not be pulled down for the completion of Outer Ring Road.
“No notice of demolition has been issued in respect of the property. To the contrary, both the Kura and NLC assured us that the building would not be affected or demolished for the current construction of Outer Ring Road,” Mr Gorasia says.
Taj Mall sits on two land parcels measuring 1.7 acres. The NLC last year claimed that one of the parcels had been illegally carved out of land reserved for Outer Ring Road’s expansion.
Tables, however, turned last month after Taj Mall threatened to attach its assets in the building over unpaid rent totalling Sh50 million.
Justice Mary Gitumbi has allowed Taj Mall to deposit Sh14 million in a joint account in the name of the law firms involved in the suit to account for potential damages the building stands to suffer pending determination of the suit.
The judge will mention the matter on September 27 to confirm whether both parties have filed their arguments.
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