NCBA Bank of Kenya and Equity Bank are embroiled in a heated court fight over the legitimate ownership of a building in Nairobi which they both claim to have financed at a cost of Sh160 million each. The building is owned by Kinjunje Gardens Ltd but Equity is accusing NCBA of forging documents to show that it gave out the loan that constructed the property in June 2014 is a forgery.
NCBA has also maintained that its charge is valid and the one tabled by Equity is illegal as the lender seeks permission to auction the building to recover the loan. Justice David Majanja rejected Equity’s request to stop NCBA from auctioning the property, pending a determination of the case.
He said that it is difficult to conclude at this stage that Equity, which is asserting the validity of its documents and challenging those of presented by NCBA, would not have exercised due diligence to probe the entire transaction.
“Even if I were to accept that the material and evidence proffered by Equity is new, it is not important because it is not based on what is pleaded and no relief is sought by Equity against the suit property,” Majanja said.
Court documents show that Kinjunje approached NCBA for a loan of Sh160 million in June 2014 to buy the property in Nairobi. The asset was charged to the bank but Kinjunje defaulted on repaying the loan prompting NCBA to move to auction the property.
Equity Bank moved to court seeking injunction to block the auction as it claimed that it also advanced the company Sh160 million to purchase the property. It argues that NCBA’s claim was fake because the building was already charged to it when Kinjunje obtained the loan.
Justice Majanja noted that the two banks are accusing each other of fraud, forgery and illegalities with respect to the title deeds and securities, but all the claims can only be determined after a full hearing.
In a ruling made in July, he noted that NCBA’s charge was registered on July 18, 2014, while Equity’s was registered on October 9, 2014. He directed that NCBA’s security must prevail as he refused to stop it from auctioning the property.
Equity went back to court to have the order reviewed as it claimed to have obtained fresh evidence, which was not available to it when it filed the case.
The new evidence shows that Henkam, which sold the property to Kinjunje received payment from Equity and not NCBA Bank and that the previous owner did not execute the sale agreement dated January 20, 2014, which formed the basis of the sale of the property as financed by NCBA.
Equity maintains that the sale agreement presented by NCBA was forged and the discovery of the new facts was significant as it challenges the validity of NCBA’s charge.
