Equity Bank Kenya has been given the green light by the High Court of Kenya to proceed with the auction of Wida Highway Motel to recover debt owed to it by the Kiambu-based hotel.
In his ruling Justice Nixon Sifuna dismissed an application by the hotel that was seeking to stop the forced sale, stating that the hotel had not made any effort to even star paying the loan owed to Equity Bank.
“May I remind litigants in applications of this nature that the courts will not adventurously and foolhardily rush to the aid of a chargor or mortgagor who alleges repayments without providing proof thereof by way of receipts, payments, slips or bank deposit slips,” the judge said.
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The hotel moved to court five months ago seeking to restrain the bank from selling the land that was charged to the lender to obtain a loan of Kes 89 million in 2015. The court heard that the lender had appointed Mbuli Auctioneers to sell the property through public auction.
When arguing the case in court, Daniel Wainaina Njuguna, a Director at Wida, alleged that Equity was intending to to auction the hotel for Kes 200 million, which he claimed was a gross undervalue. However, the court overruled him.
“In any case ,there being a valuation report, it then means the value or approximate value of the charged property is known. Hence, in the event the intended sale later turning out to be irregular, improper or illegal, the plaintiff may sue and be compensated by way of damages,” the judge said.
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Justice Sifuna also dismissed a claim by the director that the hotel had employees who would loose their livelihoods in the event the hotel was auctioned. The judge said that the employees were not party to the loan agreement entered between Wida and Equity bank.
He ruled that the equity of redemption does not operate to exempt, excuse or release a charge of the mortgagor from obligations under the charge of the mortgage
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