Absa Bank has been sued by a real estate development firm in the High Court in Mombasa for allegedly frustrating its bid to invest in a multi-billion housing project in Kilifi.
Delta Connections Limited accuses the lender’s predecessor Barclays Bank of going against an agreement to release a title deed held by the bank for a 51.3 acre property in Kilifi North to enable the petitioner invest in the housing project.
Delta says the former Barclays Bank declined to free the title deed presented by Mohamed Ali Motha from whom the petitioner claims to have bought the property.
The petitioner alleges Motha used the title deed to secure a Sh454 million loan from the bank.
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Parties have been invited for a pre-trial conference on October 12.
The petitioner claims the bank declined to free the title deed used to secure the loan.
The petitioner further claims that due to the bank’s conduct it lost a Sh2 billion investment besides being subjected to criminal and civil litigation by individuals it sold the same property but was unable to transfer the title.
But in a replying affidavit filed before the High Court in Mombasa, Absa has denounced its inclusion in the suit claiming it has been unfairly dragged into the matter.
Delta Connections Limited has sued the bank alongside Motha, his two associates Juma Mohamed Ali and Ramadhan Juma Ali.
The petitioner claims that between 2012 and 2013 it entered into a sale agreement with Motha for purchase of the property.
Also sued is Abdulrahim Ebrahim Haroon Luhar, who, allegedly, was sold the same property after the alleged failed initial transaction with Delta Connection. Also named as defendant is the Registrar of Titles in Mombasa, accused of allowing the transfer of title to Luhar against an existing caveat/legal restriction secured by Delta Connections Limited.
In its defence, Absa argues that it cannot be invited into the dispute between the petitioner and the defendants because it never entered an agreement with Delta Connections as alleged.
The bank says its only involvement in the matter was a loan secured by Mafuta Products Limited, associated with Motha using the title deed as a security.
The bank says this charge existed between 2001 and 2019.
Under the alleged project, the petitioner also intended to hive off a section of the property to sell for profit.
Documents filed by Delta allege that Motha, the registered owner of the property, agreed to sell it to the petitioner for Sh454million on the understanding that a Sh330 million loan he had taken from Barclays Bank would be offset by the new owner (Delta Connections Limited).
“Agreements for sale provided that the completion of the transaction was subject to the issuance of a discharge of charge by Barclays Bank of Kenya Limited,” says the affidavit by Delta in part.