NCBA ordered to refund Sh1 million company spent on trailer at auction

NCBA headquarters in Upper Hill, Nairobi. 

Photo credit: File | Evans Habil | Nation Media Group

NCBA Bank Kenya has been ordered to refund more than Sh1 million to a firm that purchased a trailer in an auction three years ago but later discovered that the chassis number had been falsified.

Justice David Majanja ruled that Blue Pearl Logistics Ltd was entitled to a refund of Sh900,000 it spent on the trailer, interest plus costs of Sh30,000.

This is because the firm could not transfer the trailer to itself, as the chassis number did not correspond with the registration certificate presented by NCBA.

“Whereas it is possible that the Appellant (NCBA) may not have been aware that the trailer’s registration details were not matching with its chassis, it cannot lay blame on the Respondent for not conducting such due diligence before the sale,” the judge said.

Evidence presented to the court was that the lender advertised a number of motor vehicles and trailers it had repossessed from defaulting customers in December 2019.

The company successfully bid for and purchased a trailer for Sh900,000 but when the haulage company tried to transfer and register the trailer with the National Transport and Safety Authority (NTSA), it was informed that the serial number on the trailer did not match those presented.

The matter was investigated by the Directorate of Criminal Investigations, where the same was confirmed.

Blue Pearl Logistics then sought a refund by filing the case before the Small Claims Courts.

The adjudicator ruled in favour of the firm but the lender was not satisfied with the decision and challenged it at the High Court.

The adjudicator had ruled that the company was an innocent purchaser, paid for a trailer that was in fact not transferable due to illegality and falsification of records.

Justice Majanja said in the ruling that with or without any due diligence, the fact remained that NCBA did not have a right to sell the trailer and it could "not pass any good title" to the company or any other person for that matter.

NCBA defended itself, saying the terms and conditions declared that the trailer was being sold on “as is, where is” basis and there was no warranty, express or implied and it was the duty of the buyer to investigate and establish “all vehicle-related information” before placing a bid.

PAYE Tax Calculator

Note: The results are not exact but very close to the actual.