A businessman, Mr.

David Muigai Ng’ang’a, the director of Sheng Shuang Quarry Limited, is in a legal battle with NCBA Bank over the forcible entry and seizure of his equipment six years ago.

He wants the High Court to compel the lender to compensate him for losses from the confiscation.

Mr.

Ng’ang’a claims that the takeover of his quarry in June 2018 was illegal, premature, and intended to cripple his business.

In the case to be heard on July 30, Mr.

Ng’ang’a stated that NCBA forcibly took possession of his business and seized various vehicles and machinery, purporting to exercise its power of sale after his firm allegedly defaulted on loan repayment.

He argued that the move was done without following the procedure laid down in the Land Act, which amounted to clogging his right to repay the amount.

Mr.

Ng’ang’a is seeking a permanent injunction to restrain NCBA and its agents from exercising their power of sale over his property known as L.

R No.

28617 L.

R 129519 Mavoko Municipality, Machakos County, or any other property belonging to him.

Sheng Shuang Quarry has filed two cases in Machakos and Milimani, seeking several orders, including a declaration that the seizure of machinery and finished products was unlawful.

The lender has opposed the cases and defended the seizure, stating that the parties had agreed that the bank could enter and seize the properties by its rights under the hire purchase facility agreement.

NCBA also stated that the movable assets were disposed of by the Movable Property Rights Act and that it has never managed or controlled the quarry, only entering the property to collect its collateral.

Mr.

Ng’ang’a, in an affidavit filed in court, claimed that he was the registered owner of the land measuring about 50 acres in Mavoko, Machakos County.

The land was initially meant for agricultural use but was later converted to quarrying and was valued at Sh800 million before the conversion.

He entered into several agreements with the lender between 2014 and 2018, such as asset finance, hire purchase, commercial loans, and overdrafts, and charged the land as security.

He also entered into a debenture agreement as additional security for the entire funding, capped at a maximum of Sh247.

4 million.

During this period, Sheng Shuang repaid Sh326.

5 million, including the principal amount, interest, and penalties.

Mr.

Ng’ang’a disputed some of the loans, alleging that documents used were forgeries and listed a forensic examiner and a lawyer who allegedly signed the agreements to prove forgeries and the contentious loans.

He accused the lender of unlawfully repossessing vehicles, machinery, and equipment bought on hire purchase and disposing of them at throwaway prices without carrying out any valuation, to the detriment of his company.

Mr.

Ng’ang’a said the lender entered the property in June 2018 and, instead of running the quarry business, dismantled the equipment and sold the kits and spare parts.

The bank also repossessed motor vehicles and machinery between 2017-2018 and sold them but has never given any account to date.

At the time of repossession and disposal of the property, the firm had paid either full or substantial amounts.

The quarry owner said threats by the lender to sell the land are also illegal.

Mr.

Ng’ang’a now wants the bank ordered to account to the company for all the assets it repossessed, as well as ballast amounting to Sh100 million and machinery, spare parts, and other equipment worth Sh400 million, which were seized.

He said he has engaged the bank to get documents relating to the charges, debentures, and hire purchase contracts created over the properties to know the true indebtedness of the company.

However, the lender has allegedly been uncooperative.

He said failure to supply his company with copies of the loan and hire purchase agreements amounted to a breach of its contractual obligation.

Mr.

Ng’ang’a averred that if the defendant accounts for the assets it has disposed of and income generated from the management of the plaintiff's business for an entire year, it is the defendant that owes the plaintiff, and hence its property is redeemed.

The lender revealed that the facilities were secured using a fixed and floating debenture of Sh247.

4 million, which was secured over the assets of the company, a supplemental first legal charge of Sh247.

4 million over the property in Mavoko, director’s guarantee of Sh224 million each, and hire purchase agreement over the financed vehicles.

In a ruling in September 2019, Machakos judge David Kemei noted that the lender had denied entering the property and that the court would need cogent evidence to determine the same.

If the court finds that the respondent acted in bad faith, then it will be in a position to make requisite orders for compensation.