By The Weekly Vision Business Desk
NCBA Bank Kenya has been granted permission to auction nine parcels of land in Kisumu that had been charged as security for a KSh 72 million loan advanced to a couple. The bank moved to exercise its statutory power of sale after Aseko Sombo Limited, a company associated with George Otieno Otwal, defaulted and fell into substantial arrears.
The charged properties are:
- LR No. South Gem/Ndori/1640,
- LR No. South Gem/Ndori/1710,
- LR No. West Asembo/Nyagoko/2153,
- LR No. West Asembo/Nyagoko/2154,
- LR No. Kisumu/Kogony/3471,
- LR No. Kisumu/Kogony/3199,
- LR No. Kisumu/Kogony/6827,
- LR No. Kisumu/Kogony/6362,
- LR No. Kisumu/Korando/3976.
Otwal and his wife, Lilian Anyango Otieno, filed an application on 28 October filed an application seeking to restrain NCBA Bank from auctioning the properties pending the hearing and determination of their main suit.
They argued that the properties were matrimonial property, that no spousal consent had been obtained to create the charges, and that the bank had ignored a proposal from a third party willing to take over 50 per cent of the security. In a replying affidavit sworn on 12 November by Christine Wahome on behalf of the bank, it was submitted that the couple had not denied being in default, that spousal consent had in fact been obtained (with the relevant charge documents exhibited), and that the application amounted to an abuse of the court process because two previous related suits had not been disclosed.
Delivering his ruling on 18 November in Kisumu, Justice Alfred Mabeya applied the principles established in Giella v Cassman Brown (1973) EA 358, noting that an applicant seeking an interim injunction must establish a prima facie case with a probability of success, that irreparable harm would be suffered if the injunction is refused, and, where the court is in doubt, the application should be determined on a balance of convenience. The judge found that the applicants had failed to establish a prima facie case. Although Lilian Anyango Otieno alleged she had never given spousal consent, the bank produced the charge documents containing consents purportedly executed by her.
She neither denied her signatures nor filed a further affidavit challenging their authenticity. Justice Mabeya held that the evidentiary burden had shifted to her and that she had failed to discharge it. Regarding the alleged third-party offer, the judge observed that neither the identity of the third party nor the terms of the proposed transaction had been disclosed, and the bank’s failure to respond to the couple’s letter did not amount to bad faith.
The court further noted that the applicants had failed to disclose a related suit pending before the High Court in Siaya (HCOM No. E001 of 2024) involving the same properties, securities, and parties. This non-disclosure constituted material suppression of facts and bad faith, rendering the application defective under section 6 of the Civil Procedure Act.
On the question of damages, Justice Mabeya ruled that any loss arising from the sale of the charged property could adequately be compensated by an award of damages. As for the balance of convenience, it tilted in favour of the bank, which was entitled to realise its security without further delay that might diminish its value.
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