A bank has filed a request for judgment against Mining Cabinet Secretary Hassan Ali Joho, seeking to recover loan arrears of Sh54.5 million as of August 1, last year.
SBM Bank (Kenya) Ltd told the court that Mr Joho had failed to file and serve his memorandum of appearance and defence within the stipulated time.
The court was informed that this was despite the CS having been served with summons to enter appearance and case documents.
A request for judgment is usually made after a sued party fails to enter an appearance or file a defence, and if allowed, judgment is entered against the defendant.
In the case filed at the High Court in Mombasa, SBM Bank (Kenya) Ltd states that Mr Joho operated a loan account with the bank and was a beneficiary of a loan facility advanced by Chase Bank (Kenya) Ltd through a letter of offer dated 16 December 2013.
SBM Bank (Kenya) Ltd acquired 75 per cent of Chase Bank (Kenya) Ltd almost six years ago by virtue of Gazette Notice No 6833.
The bank says that on or about January 3, 2014, it disbursed a Sh40 million loan to Mr Joho under Islamic banking principles.
“The loan facility disbursed to the defendant was to be secured by a first legal charge over Apartment 42, Tamarind Village, Nyali, Mombasa,” state the case documents filed in court.
SBM Bank claims that Mr Joho failed to provide the original title deed for the purpose of registering the charge, despite several requests, and that he also failed to sign the charge document.
It argues that the loan advanced to Mr Joho was intended to finance the purchase of the apartment at Tamarind Village, to be secured by the same property.
According to the bank, Mr Joho maintained an account with it through which the loan was to be repaid.
“In flagrant breach of the terms of the contract, the defendant failed, neglected, and refused to make the monthly payments, hence the account remained in arrears to the detriment of the bank’s interests,” state the court documents.
The bank further says that despite numerous reminders between 2014 and 2021, only a partial payment of Sh20,250,000 was deducted from its advocate-client account held by a law firm upon approval, leaving an outstanding balance of Sh54.5 million as of August 1.
SBM Bank states that the loan matured and stopped accruing profit on January 3, 2024, in accordance with Islamic banking principles.
“Due to the defendant’s default, the plaintiff could not issue the relevant statutory notices to exercise its statutory power of sale under the charge instrument, as the transfer and charge were not registered due to the defendant’s failure to provide the title deed,” the bank argues.
According to SBM Bank, the exercise of its statutory power of sale was frustrated, and the only available option was to seek the court’s intervention to recover the outstanding amounts.
“Despite issuing several demand notices to the defendant requesting him to rectify the default, he has neglected, failed, or refused to make any payment whatsoever, necessitating the plaintiff to file this suit,” the bank states in its court documents.
SBM Bank Manager Peter Chege, in his witness statement, says that the loan account remains in arrears of Sh54.5 million and that the outstanding principal and profit continue to accrue default charges at a rate of 20 per cent until full payment is made.
“I therefore humbly request this court to enter judgment against the defendant, plus costs and interest on the suit,” says Mr Chege.
On Wednesday, Justice Florence Macharia directed that the court file be placed before the Deputy Registrar for endorsement of the request for judgment.
