Court Orders Bank To Compensate Client For Impounded Commercial Vehicle 

By The Weekly Vision

The trouble-ridden Kenya Women Finance Trust has lost an appeal against a client who sued them for impounding her commercial vehicle. Margaret Waithera claims that her Matatu was impounded and used by the bank in the matatu business, they then collected money but failed to repay the loan. In a ruling delivered on 20/08/2020 in Eldoret, Chief Magistrate’s Court Civil Case No. 140 of 2014, the trial Court awarded her Ksh. 1,609,290 for unlawful impounding of her household goods and a motor vehicle.

Waithera had obtained a loan facility from Kenya Women Finance Trust of Ksh. 600,000, on the security of her businesses and of some other chattels together with a requirement to raise savings of at least 1/5 of the loan and legal charges of at least Ksh. 30,000, aggregating a sum of at least Ksh.160,000. She started repaying at a sum of Ksh. 39,000 per month vide a standing order. The money was for the expansion of her business in the Republic of South Sudan. In a bid to take care of her business in South Sudan, she approached the bank and informed them through one of their branch Managers, that she will be in the Republic of South Sudan longer than anticipated and requested the bank, in her absence, to be taking a monthly sum of Kh.39,000 from the proceeds of her motor vehicle registration number KAT 879Y, which was engaged in the business of transportation of passengers (matatu) and be depositing the same into her bank account to pay off the loan.

She also deposited a sum of Ksh.50,000 to take care of any deficit that may arise from the running of the motor vehicle. The bank however, without any colour of right whatsoever, impounded her said motor vehicle valued at Ksh.600,000 and converted the same to its use, notwithstanding the impounding of the motor vehicle, the bank never applied the proceeds of sale to clear the loan which was outstanding at Sh389,400 at the time of the seizure of the motor vehicle, the amount outstanding was Ksh.389,400 had the motor vehicle has been sold, albeit illegally, it would have cleared the loan and a sum of Ksh.211,200 remained in credit.

In her prayers, she sought a declaration that the impounding of the motor vehicle and confiscation of her household goods were illegal, in breach of contract and without any basis in law. She also prayed for orders that the Appellant pays for the value of the household goods, repairs, damages for conversion, illegal impounding of goods and breach of contract, loss of a user of the motor vehicle at Ksh.1,000 per day from the date of confiscation till the return of the motor vehicle.

She was awarded Ksh.1,263,400 damages for jewellery impounded, Ksh. 730,400 damages for motor vehicle loss of user Ksh. 384,110 less outstanding loan. The net amount payable was Ksh. 1,609,290. Being aggrieved by the Judgement, the bank instituted an Appeal vide the Memorandum of Appeal filed on 6/04/2022.  

The appeal by Judge Wananda J.R Aturo dated 26th May 2023 reads in part “In view thereof, again, I cannot fault the trial Court for ordering that only the amount of Ksh.384,110 that was due as per the bank statement be offset from the damages awarded to the Respondent in settlement of the loan. In the premises, I find that this Appeal lacks merits. The same is hereby dismissed with costs to the respondent”.

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