A High Court judge has declined a legal challenge by a former assistant minister to reverse the auction of a prime residential house sold by NCBA Bank over a Sh75 million loan.
Justice Wilfrida Okwany dismissed the suit lodged by Mr Stephen Tarus, formerly Internal Security assistant minister in President Kibaki’s administration, arguing the bank is entitled to exercise its power of sale to recover the loan.
“Once the auction of the property was conducted, the applicant (Mr Tarus) extinguished the equity of redemption,” ruled the judge.
Mr Tarus argued that the bank had irregularly sold his double-storey home sitting on a 0.4708-hectare parcel at Karen-off Marula Lane.
He claimed no statutory notice was served on him and the sale was fraudulent and the land was disposed of at a gross undervalue.
In a sworn statement, Mr Tarus said he obtained a loan of Sh75 million from NCBA and started repaying from his salary until he stopped working.
He further admitted in his affidavit that although the loan repayment was not regular, the bank advertised his property for sale without prior notice to him as provided by the law.
But the lender opposed his application, arguing that Mr Tarus voluntarily offered his parcel of land LR 2259/463 as security for the loan. “When he defaulted in the loan repayment, the bank triggered the process of realising its security by auctioning the property,” said NCBA.
The lender also tabled evidence to show that indeed Mr Tarus was duly served with statutory notice and a 40-day redemption period of sale.
The bank maintained the property was sold at the correct forced sale value.
On whether the property was undervalued, Justice Okwany said she was not satisfied that Mr Tarus demonstrated an arguable case to save his residential house.
The judge, however, observed that undervaluation of a property “cannot form a ground for the issuance of orders of injunction to stop the bank from exercising its statutory power”.
Mr Taru’s property was sold on May 9, 2020 by Garam Auctioneers.
The former minister’s wife, Jane Jeptanui Rotich, had in another suit made a futile bid to stop the sale. She argued that the house was the matrimonial home where three of their children, Martin Kipchumba Kiyeny (22), Getrude Jeptoo Tarus (20) and a minor, had lived for more than a decade.
Ms Rotich argued that she bought the property jointly with her husband and that at no time did she give the former MP consent to charge the house for the loan.
But NCBA dismissed her claims, saying Mr Tarus had freely and voluntarily executed a spousal consent on June 24, 2015 to charge the property against the loan.
Mr Tarus also served as Kenya’s High Commissioner to Australia between 2009 and 2012 after losing his bid to be re-elected as MP for Emgwen in 2007. He was the Emgwen MP between 2003 and 2007.