Court restrains bank from selling TSS properties

The High Court has extended orders temporarily restraining National Bank of Kenya from interfering with possession or advertising for sale five parcels of land used as collateral to secure a Sh3.6 billion loan by a company owned by the late Mombasa tycoon Tahir Sheikh Said, popularly known as TSS.

Justice Patrick Otieno extended the orders granted to Juja Coffee Exporters Ltd, which has sued the bank, seeking, among others, an order that notification of sale dated February 16 by the bank to the company be set aside.

Through lawyer Paul Munyao, the bank wanted the court to extend the orders on condition that the company deposits Sh100 million.

Mr Munyao argued that Juja Coffee Exporters Ltd are not disputing the debt, hence the need for the interim orders to be extended on condition.

Juja Coffee Exporters Ltd objected to the condition being placed on the extension of the orders, saying it would be prejudiced.

Justice Otieno declined to order a conditional extension of the orders, saying he would not interfere with the orders earlier issued before hearing the parties.
The company wants a temporary injunction issued, pending hearing and determination of the application restraining the bank from interfering with its possession, marketing, advertising for sale, leasing, subdividing, receiving or taking possession of the charged parcels of land to secure US dollars 36,095,495.41 (Sh4 billion) as outstanding amounts.
The application is based on the grounds that the company is the owner of the five properties, which were charged to the bank as collateral to secure a principal loan.
“A director with a major stake in the plaintiff (company) has since passed on and the surviving directors are willing to come to a structured settlement on repayment plan,” the application read in part.
According to the company, the bank auctioneers had on February 16 issued a Notice of Sale to sell the properties to secure the money, plus Sh12 million interest and other charges.
It further claims that the bank did not issue a Statutory Notice over the non-payment of any monies due under the charge to give it an opportunity to redeem or rectify the same within three months as required under the Land Act 2012.
“Unknown to the plaintiff, the bank engaged Garam Investments Auctioneers to auction the mentioned properties on April 24 which is unlawful and in breach of the Land Act 2012,” the application states.
The application will be heard on July 13.