By Karanja Njoroge and Stella Mwangi

A Nakuru Court has allowed the National Bank of Kenya to sell assets of the Kenya Farmers Association (KFA) to recover a loan.

KFA risks losing its prime property after Nakuru High Court judge Justice William Ouko allowed NBK to dispose off the assets to recover a Sh450 million loan.

In his judgement Justice Ouko said there was no basis to restrain the bank from exercising its statutory powers of sale as KFA had failed to prove that it had paid off the loan as it claimed.

"It was necessary for the applicant to present proof of how the debt had been liquidated between the time of that judgement and this present suit, however, it did not do that," he said.

KFA had gone to court alleging that most of its assets had been sold off by the bank and had exceeded Sh466 million, which was higher than the Sh450 million it owed the bank.

He ruled in the matter even as KFA sought to be allowed to amend its plaint to incorporate more properties in the suit that so far involves up to 40 different assets in Nairobi and Nakuru.

The organisation had told the court that since filing the suit, the bank had gone ahead to advertise the sale of more assets and thus wanted to be allowed to include those assets in the suit seeking to block their sale.

Lawyer Gatu Magana, representing KFA, had told Ouko that the bank should not be allowed to claim interest on the loan extended to it as an earlier court ruling had found the same to be irregular.

Lawyer Kamonjo Kiburi, for the bank, had told the court that the farmers’ association had stopped servicing its loan in 1996 despite having properties and assets that it could liquidate to pay the loan.

The bank alleged that though some properties had already been sold off, it had so far received only Sh72 million from the sale and thus wanted to be allowed to continue with the sale to recover its monies.