The High Court barred Mwananchi Credit Ltd from auctioning a house in Nairobi's South C area after the owner challenged the bid saying she was willing to repay a loan of Sh3.8 million.
Justice Josephine Mong’are noted that Ruth Chelagat Towett had demonstrated a willingness to repay the loan and had made a substantive payment towards clearing the loan but was being frustrated by the lender.
The judge further directed the micro-lender to provide Ms Towett with an account for the repayment of the loan balance forthwith.
“If the public auction is allowed to proceed while the Plaintiff is making efforts to redeem the loan balance, then I am persuaded that in this instance, she will suffer irredeemable harm as she will lose both the house and the money,” the judge said.
The woman told the court that she obtained a loan of Sh5.5 million from Mwananchi Credit, which was capped at Sh11 million with interest.
She used her house on Bandari Villas Phase 1 in South C as security.
Ms Towett said she has been servicing the loan and has so far paid a total of Sh7.2 million leaving a balance of Sh3.8 million.
All was well until February last year when the lender allegedly instructed its lawyers to stop receiving payments from the balance and asked an auctioneer to advertise the house for sale.
The advertisement was made on September 14, 2022.
Ms Towett told the court that she was committed to repaying the balance of the loan but the actions of the lender were an attempt to deprive her of her property instead of allowing her to repay the balance.
The lender opposed the case and accused Ms Towett of breaching the agreement leaving it no choice but to pursue other means of recovering the loan.
“I find and hold that the application herein has merit and I will allow the same with costs to the Plaintiff,” the judge said.