Consolidated Bank has been stopped from repossessing and auctioning 33 carrier trailers over more than Sh35 million debt that a transport company owes it.
A Mombasa court made the order after Exon Investment Ltd went to the court lamenting that its properties were likely to be auctioned by the financial institution which had instructed an auctioneer to sell the assets.
The company had borrowed Sh200 million and used some of its assets including the trucks as securities to the loan.
The ruling by Mombasa High Court Judge Dorah Chepkwony has come as a relief for the company whose property faces auctioneers’ hammer for defaulting on the loan it borrowed in 2013.
"In the meantime, there will be no disposal of any of the motor vehicles that are the subject of these proceedings by either party pending the hearing and determination of the matter," said the judge.
The bank has been directed to file and furnish the company with a statement of accounts stating the outstanding arrears as well as documents they intend to rely on to prosecute their respective cases.
The company entered into a hire purchase agreement with the bank for the purchase of 33 carrier trailers, with the lender financing the purchase to the tune of Sh100million inclusive of interest.