Mineral Masters Company (MMC) Limited has suffered a setback after the High Court nodded the auctioning of their parcel of land after defaulting on a loan of Ksh 15 million by Simple Pay Capital Limited (SPCL).
Sitting at the High Court Milimani Commercial Tax Division, Justice Nixon Sifuna nodded to the intentions by SPCL to auction the land parcel Reference No.1338/130 (the suit property) after the plaintiff failed to pay a loan arrears amounting to Ksh 15,379,925 as outstanding by August 30, 2022.
Justice Sifuna stated that the plaintiff has unequivocally admitted to failing to comply with the repayment terms of the loan agreement and to being indebted to the defendant.
The judge noted that the plaintiff contested the interest rate charged by the defendant, but it did not produce evidence in support of the claim,
“Further, as has been held in various cases in our jurisdiction, this is not a sufficient ground to grant an injunction to prevent a chargee from the exercise of its statutory power of sale,” Justice Sifuna said.
In determining the suit, Justice Sifuna dismissed the application with costs stating it lacks merit to grant such orders.
Mineral Masters Company had file a suit before the High court seeking temporary order of injunction restraining (SPLC) either by themselves or their appointed agents, servants, assignees and or any other persons from auctioning, selling, disposing, transferring and or in any other manner interfering with the parcel of land known as Land Reference No. 1338/130 pending the hearing and determination of this suit.
The grounds of the application were that SPLC breached the terms of the loan agreement as it delayed the loan disbursement, disbursed the loan in tranches, failed to provide proper accounts for loan performance and charged interest exceeding the principal loan amount, contrary to Section 44A of the Banking Act.
The plaintiff further alleged that the defendant acted arbitrarily by imposing unilateral interest and penalties outside the loan agreement, altering timelines contrary to the agreement, making illegal and unjustified deductions and demanding recovery of unlawful interest.
They stated that the claimed outstanding loan amount of Ksh 24,041,559/66 lacks proper justification due to incomplete accounts and the scheduled auction is unlawful.
In opposition, the defendant filed a replying affidavit sworn by Yashika Sagar. He averred that the defendant advanced to the plaintiff Ksh 10,000,000 on February 21, 2022 under a loan agreement requiring repayment within 9 months at a 10% monthly interest rate and that the plaintiff provided security for the loan, including guarantees and property charges.
It was contended that the plaintiff failed to repay the loan as agreed which led the defendant to issue a demand letter in August 2022, and the plaintiff admitted the default in a letter dated September 2, 2022, promising repayment but failing to honor it.
In his affidavit stated that the plaintiff admitted breaching the loan terms and failing to make repayments and that the application lacks merit and was filed in bad faith, primarily to delay repayment without valid grounds.
The judge dismissed the suit with costs
