Motorist loses vehicle she bought during auction at police station

When wise men urged people to think twice about sweet deals, perhaps they foretold Gladys Jeruto's predicament. Jeruto bought a vehicle for Sh100,000 two years ago after the magistrate's court ordered a public auction of vehicles at Rongai Police Station. Little did she know that the vehicle was collateral in a hire purchase deal between Stanbic Bank and Gilbert Rono, who had an outstanding loan. She has now lost the vehicle after High Court Judge Asenath Ongeri ruled that the bank's right to repossess the vehicle upon default has never been challenged. The judge said that the auction was irregular and directed that it be restored to Rono, subject to the bank's rights under the hire purchase agreement. "In this case, the vehicle was sold while subject to a hire purchase agreement, and the Bank's proprietary interest was never extinguished. The appellant's failure to conduct due diligence on the vehicle's history further negates her claim of good faith," said Justice Ongeri. The case started before the small claims court. Stanbic sued Rono and Jeruto, arguing that the latter had not paid Sh342,837.92, which was meant to offset the loan against the vehicle. According to the bank, Rono stopped servicing the loan at one point, leading to Westminster Auctioneers being instructed to recover the loan. However, the lender came across a notice indicating that the car was to be sold on May 30, 2023, following a court order from Ngong Magistrate's court in a criminal case. The lender searched for the vehicle at the National Transport Safety Authority (NTSA) and found that it had been registered in Jeruto's name. On his part, Rono stated that he rented the vehicle to James Gichuhi Macharia on 21 February 21, 2022 for two days. However, he claimed that Gichuhi did not return the vehicle and he was subsequently charged. Jeruto defended herself, saying she bought the vehicle after becoming the highest bidder. While faulting the small claims court for ordering that the car should revert to its initial owner, she asserted that the auction was legal and that she innocently bought the car. In its case, Stanbic said the auction was illegal as the car was an active exhibit in a criminal investigation. Stanbic stated that the Rongai's Officer Commanding Station (OCS) illegally conducted the auction despite objections raised by the investigating officer. "The appellant cannot claim bona fide purchaser status because the doctrine requires lawful acquisition, which was absent here," argued Stanbic. In addition, the bank argued that the auctioneer did not adhere to the rules on proclamation and valuation, as the car was sold for Sh100,000, as opposed to Sh750,000, which was its actual value. At the lower court, the adjudicator found that Jeruto was aware of an ongoing criminal case and that the vehicle and the bank had a prior interest in it before she bought it. However, Jeruto said she purchased it after the police withdrew the criminal case.

Motorist loses vehicle she bought during auction at police station

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