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Widow battles bank over Sh100,000 loan that has grown to Sh12.9m

Rift Valley
 A pile of Sh1000 notes. [File, Standard]

A widow is fighting with a financial institution over a Sh100, 000 loan borrowed by her late husband four decades ago.

The loan taken in 1983 at Thabiti Finance Company, currently in liquidation, has accumulated interest to the tune of Sh12.9 million.

Jacqueline Mwikali Ngondi is accusing the company and Regen Auctioneers of exercising their statutory power to sell the property known as Kyangwithya/Misewani/150 registered in her late husband Joel Kivisu Ngondi's name.

Mwikali claims the company and the auctioneer have refused to avail bank statements showing tabulations on how a loan of Sh100, 000 taken in 1983 rose to over Sh12.9 million.

She pleads that the suit property used as collateral by her late husband was an ancestral rural home and that although her husband defaulted, she was unaware of the arrangements made by him and how the loan accumulated arrears to the tune of Sh12, 976,380 as of June 2021.

Suit property 

In court papers filed at the High Court in Kitui, Mwikali said Thabiti Finance Company instructed Regen Auctioneers to advertise the suit property on July 12, 2021, and undertake a public auction on July 30, 2021, in a bid to exercise its statutory power of sale but maintains that she was unaware of the outstanding balance.

She claims that some people visited her home in 2020, informing her that the property was to be auctioned due to some loan taken by her late husband and that another auctioneer went back in 2021 in an attempt to auction the said property.

She conceded that she was yet to file succession proceeding with respect to the estate of her deceased husband but insisted that the suit properly is an ancestral land where she lives with her parents.

She pleaded with this Court stating that the amount demanded by the bank is too huge making it unpayable.

 Statutory notices 

She doubled if her late husband ever got statutory notices or any communication pointing out that the Postal Address used to send letters by the company and auctioneers were wrong and denied ever receiving any communication from them regarding the suit property.

Mwikali submits that Thabiti Finance Company is in violation of the Banking Act as the loan is said to have accrued interest to the tune of Sh12,976,380.

She wanted the court to issue a declaration that the Sh12.9 million or any other amount is not payable at all. The court she said should issue permanent orders barring the government from interfering with her possession of the suit land and the title deed be released to her.

Thabiti Finance Company has since denied the claims by Mwikali. The company claims it sent several reminders and demand letters to the deceased notifying him of the increase in interest due to default in repayment of the loan, adding that it followed all the legal procedures.

It pleads that under the old land regime, there was no legal requirement for spousal consent before one could offer land as collateral.

The court while determining the case, noted that there was no evidence that the deceased ever got any notice given that the company acknowledges that the notices were sent to the wrong address.

Redemption notice 

Judge Robert Kipkoech Limo said after the 90-day notice, Thabiti was required to issue a 40 days’ notice as prescribed under 96 (2) of the Land Act, while Rule 15 of the Auctioneers Rules describes a redemption notice of at least 45 days.

“The redemption notice is in line with Section 89 of the Land Act on the equity of redemption. At the same time, the notice under Section 96 (2) gives the charger at least 40 days to remedy the default or else the Chargee will proceed to sale. The notice to sell was in the form of a letter dated September 23, 2019. There is no evidence that the 45 days’ redemption notice was issued,” stated Justice Limo.

Though he found the suit by the woman incompetent, the judge said the court cannot disregard due process.

“So while I have found the suit herein incompetent, this court cannot disregard the legal requirements of due process,” read a judgment delivered one week ago.

The judge went further to strike out the suit but directed the company to fully comply with legal requirements by issuing fresh notices to the deceased family.

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