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Court stops Coop from auctioning home over Sh53mn loan

Co-operative Bank Tassia
Judge temporarily suspends public auction of family's Tassia residence by Co-operative Bank of Kenya. FILE PHOTO | NMG 

A city family has been saved from spending nights in the cold after the High Court stopped a leading lender from selling their house in order to recover millions owed.

Lady Justice Grace Nzioka granted the family of Mzee Eric Muchina Kimani a reprieve by suspending public auction of their Tassia residence by Co-operative Bank of Kenya #ticker:COOP pending determination of a case over a Sh53 million loan dispute.

“Unless this court intervenes and stops the sale scheduled for tomorrow (Tuesday) the family of Mzee Kimani in his 60’s will be thrown into the cold by auctioneers who are set to sell the house anytime between 8am and 6pm,” lawyer Titus Koceyo for Mr Kimani told Justice Nzioka Tuesday.

The judge directed that status quo be maintained then instructed Mr Koceyo to serve the bank and Mr John Ngunjiri Mwangi, trading as Ebenezer Autospares & Motorcycles, with the suit papers.

She directed the plaintiffs (Mwangi and Kimani) and the defendant (Co-op Bank) to file evidence within days.

Guarantee

Pressing for intervention by the court, Mr Koceyo disclosed that Mr Kimani had guaranteed the trader a loan of Sh12 million but to his astonishment five months later, the lender sent him a demand to pay Sh34,266,371.

The lawyer said Mr Kimani was approached by Mr Mwangi on September 24, 2014 to furnish him with a title deed to help secure a facility from the lender but discovered later that the property was used to guarantee loans advanced to the borrower way back in 2012 and 2013 and not the September 2014 facility.

The judge heard that the bank then issued a notice that the property of Mr Kimani would be sold by July 11, 2018 pursuant to a purported charge executed and dated September 24, 2014.

Mr Kimani disputes the charge saying he only signed a one page affidavit which sought to verify about his marital status “in readiness for the transaction.”

"Tricked"

“The said document did not indicate the loan to be advanced to Mr Mwangi nor the name of the bank to lend the money but was marked as page 33 and drawn by Maina Muiruri and Company Advocates,” Mr Kimani says in the supporting affidavit he has filed in court.

He further says, “Unbeknown to him and in a rather fraudulent and illegal manner a purported charge prepared between Mr Mwangi and the bank was executed by two people - Mr Joseph Kariuki Njoroge and David Kimani Njoroge - purporting to be his (Kimani) “attorneys” to commit the security.”

He states that he was shocked when the bank then sent a him statutory notice to sell his property unless he paid Sh34,266,371.45 in February 13, 2015.

Currently, the lender is demanding payment of Sh53,020,828.68, failure to which his property will go under the hammer.

The house is valued at Sh40 million.

Mr Kimani says he was tricked into securing the facilities granted to Mr Mwangi who operates five different accounts with the lender.

He said the bank did not comply with Section 96 (2) of the Land Act No 6 of 2012 which requires that a 40-day notice be issued by a financial institution to an alleged defaulter before advertising a security for sale.

The judge ordered the case be heard on July 16, 2018.

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