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Trader reclaims Sh200m property after two decades of legal battle

By Willis Oketch | Updated Mon, February 27th 2017 at 00:00 GMT +3
Welsa Bange Oganda (right) and his son Fredrick Oganda outside their controversial premises at Buxton in Mombasa County on Friday 24th February 2017. Oganda won a suit to have back his premises from Coast Professional Freighters Limited. Photo/Kelvin Karani

A businessman has reclaimed his prime property after a 20-year legal battle.

In 1998, a financial institution auctioned Welsa Oganda's property, including a hotel, to recover a loan he had borrowed in 1975.

However, in 2010, High Court judge Mary Kasango ruled the decision by Industrial and Commercial Development Corporation (ICDC) to auction Mr Oganda's property was illegal as he had followed the right procedure in repaying the loan.

But Ms Kasongo's order was not implemented because a company belonging to one Patrick Mutune, which bought the property in the auction, appealed the judgement. 

Last Friday, the Court of Appeal upheld the decision by the High Court and ordered the eviction of Coast Professional Freighters Ltd from the land hosting Bridge View Hotel, which the freight firm has been occupying for the last 20 years.

At the time, the property was valued at Sh22 million; Mr Mutune bought it for Sh4.5 million. The current value is Sh200 million.

The Court of Appeal also ordered Coast Professional Freighters Company and ICDC to pay Oganda Sh8 million as compensation for not being able to use his property for 18 years. He was also unable to collect rent from his flats on the same property since he was evicted from the hotel he built in 1998 using the loan.

The three appellate judges declared that plot number MSA/Block/X/291 was bought illegally by Mr Mutune's firm during the auction on September 17, 1997.

They dismissed the appeal against the ruling to hand the property back to Oganda, saying the applicant failed to convince the court why they wanted to retain the property.

LEARNED JUDGE

"In the absence of submissions by Industrial and Commercial Development Corporation and Nadhia Auctioneers Company, we have no basis or material upon which we can fault the learned judge for making the award," said the judges.

Justices Miltone Makhandia, William Ouko and Kathurima M'Inoti noted that ICDC advanced a loan of Sh300,000 to Oganda after he deposited the title deed number of the land as security.

"As security for the loan, Oganda charged his property known as Mombasa/Block/X/291 to Industrial and Commercial Development Corporation. The purpose of the loan was to develop a hotel and rental flats," the judges noted.

They said that after some time, Oganda approached ICDC for more money and he got another loan of Sh294,000 on March 19, 1981. In 1985, the two loans were amalgamated for ease of repayment management.

The bank asked him to repay the loan at Sh9,104.50 per month for 10 months. However, Oganda defaulted and the arrears accumulated.

As a result, in 1996, ICDC issued a notice of intention to sell the property. Oganda responded with a proposal to sell part of the land at Sh22 million after which the bank would take what was due to it, including interest.

However, on September 17, 1997, through public auction by Nadhia Auctioneers, the property was sold to Coast Professional Freighters Ltd without Oganda's knowledge despite the earlier agreement.

The proceeds were used to settle the money Oganda owed ICDC.

Oganda sued the bank, the freight company and Nadhia on February 10, 1998, seeking orders to declare the sale of his property null and void.

He also asked the court to annul the sale, saying it was illegal and fraudulent, revoke its transfer to the freight company and be declared the rightful owner.

In his petition, Oganda argued he did not take part in the auction. He also dismissed claims that Coast Professional Freighters Company were the highest bidders.

 



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