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KCB defends auction of borrower’s house in loan row
The bank maintained that the sale was lawfully carried out contrary to the businessman’s claim that it was done in violation of a court order or undertaking.
KCB Bank Kenya has defended the sale of a tour operator’s house in Nairobi’s Kilimani area, saying the auction was conducted lawfully.
The lender further dismissed claims by businessman James Mwangi Rukwaro that KCB’s lawyers had made an undertaking not to sell the property, adding that its officials cannot be cited for contempt because there were no orders in place restraining the sale.
“The sale of the suit property by the 1st defendant (KCB) was lawfully carried out, contrary to the applicant’s claims that it was done in violation of a court order or undertaking, the existence of which the applicant has failed to substantiate or annex to the instant application,” the bank’s recovery manager, Ms Emily Sigey said in an affidavit.
Mr Rukwaro wants a Milimani court to cite KCB officials, its lawyer and auctioneer for contempt of court for allegedly selling his property, yet he had obtained an order stopping the sale.
When the parties appeared before Magistrate Stephen Onjoro on Thursday last week, Mr Rukwaro’s lawyer Senior Counsel Kamau Kuria asked for more days to respond to KCB’s reply. The magistrate directed the matter to be heard on September 16.
Evidence tabled in court states that Mr Rukwaro obtained a loan of Sh7.5 million in December, 2014 to purchase a plot in Kiambu and used the apartment as a guarantee for the said loan.
As part of the loan appraisal, the bank valued the property and the valuer put it at a market value of Sh24 million and a forced sale of Sh19.2 million.
The parties agreed that the loan facility will be paid in monthly installments of Sh121,398 at an interest of 14 percent per annum for a period of ten years.
Mr Rukwaro said he dutifully and faithfully serviced the loan until about April, 2020, when the Covid-19 pandemic hit and he defaulted. Ms Sigey said Mr Rukwaro filed the first case in December 2023 and obtained orders blocking the sale, pending the hearing and determination of the case.
She said the application was later heard and dismissed for lack of merit on September 20, 2024. Five months later, Ms Sigey said, the businessman allegedly filed a second application, seeking similar orders and a review of the September 20, ruling.
The case was to be heard in February 2025 but he allegedly filed another case before the High Court, but when the matter came up for hearing, he allegedly withdrew the case.
The bank maintained that the sale was lawfully carried out contrary to the businessman’s claim that it was done in violation of a court order or undertaking. Other than reversing the sale, Mr Rukwaro wants the court to impose a fine of Sh100 million on the lender for contempt of court.
The businessman further alleges that the bank has undervalued the property by Sh11 million while the actual value of the house as per the prevailing market rate is over Sh30 million.
Ms Sigey said the businessman went back to the magistrate court but the case was dismissed on July 18, 2025.
Following the dismissal of the case, Mr Rukwaro sought a review of the matter and an interim order, restraining the bank from selling the property.
She said the court issued directions on July 30, certifying the case as urgent and directed the case to be heard on August 13 but that no interim orders were granted.
“The applicant has employed various mischievous tactics in this matter to prevent the 1st defendant (KCB) from exercising its lawful power of sale over the suit property, including filing numerous frivolous applications and now the instant application,” Ms Sigey.
