Equity Bank's appeal on award given to client gets nod

Equity Bank was sued by Westlink Mbo Limited on claims that the lender's employees, named as Peter Njuguna and Martin Njau, received Sh27 million from a client by the name Elina Zablon Tai but allegedly failed to credit the firm's accounts PHOTO: COURTESY

The Court of Appeal has allowed a case filed by Equity Bank after it was punished for alleged employee’s fraud.

The lender had filed an appeal after it was slapped with Sh39 million penalty by the High Court. However, Court of Appeal judges Asike Makhandia, Kathurima M'noti and William Ouko found that the lower court did not consider the lender's defence before making its final verdict.

"We are satisfied that this appeal has considerable merit and that the learned judge misdirected himself when he concluded that the appellant's (Equity Bank) defence did not raise any triable issues," the court ruled.

Equity Bank was sued by Westlink Mbo Limited on claims that the lender's employees, named as Peter Njuguna and Martin Njau, received Sh27 million from a client by the name Elina Zablon Tai but allegedly failed to credit the firm's accounts.

The court was told that the alleged tellers issued false deposit slips that were reprints of earlier deposit slips. The old slip would allegedly be given a new date. In reply before the High Court, the lender denied any liability and further denied that Njuguna and Ngochi were its employees.

The bank told the court that its was impossible for the two to receive the amount claimed to have been lost concurrently, adding that there was no money deposited since it was not reflecting in its systems.

On a counter claim, the bank claimed that Westlink and Tai had colluded to allegedly defraud it by relying on deposits which did not show which branch they had been deposited in.

The lender argued that the slips produced before the court did not have any bank transaction codes.

However, High Court Judge Muga Apondi struck out Equity's defence, noting that it did not raise any reasonable argument to have the case go into a full trial.

The Court of Appeal faulted the judge, noting that since a claim of fraud had been raised, he ought to have heard the parties before coming up with a final verdict.

The judges ruled: "The learned judge completely ignored the appellant's contention in its defence that the respondent had not lost the amount it had claimed by supplying goods to Tai. The respondent (Westlink) had to tender proper evidence instead of photocopies of cash sales. All we are saying the learned judge should have ordered proper trial before he could conclude."

They also said Westlink would pay the cost of the appeal.