A transport and logistics company based in Mombasa has gone to court seeking to stop Bank of Africa (BoA) from auctioning its land over a Sh58.8 million loan.
East Africa Transport Logistics Ltd is also seeking a declaration that the purported auction of the prime parcel located in Shanzu is null and void.
The company says that the loan was used to purchase five trucks from the UK and part of it invested in the business as working capital, but notes in its suit papers show that only two of the trucks were delivered.
Further, the firm says that it landed a business deal to transport containers from the port of Mombasa to Juba, South Sudan but that a civil war in 2015 affected its business leading to huge losses, thus making it difficult to repay loan instalments to the bank.
It argues that the intended sale of its land is tainted with grave illegalities since no statutory notice of the sale of the property has been served by the bank as required by law.
“As provided in Rule 15 of the auctioneers rules, no valuation has been carried out of the charged property with involvement of the plaintiff,” argues the company.
Bank of Africa, through Mr Titus Ikarot, in response, says the loan was governed by terms and conditions contained in the loan documents.
“The bank did engage the applicant to remedy the default and accorded it all available opportunity to service the facility,” he said, noting that the loan continues to accrue and currently stands at Sh76.1 million.
“The plaintiff was well aware that at the time of taking out the facility that the security was to secure the facility and in case of default, the same would be liable for sale to recover the amounts due,” he adds.