One of Kenya's biggest landlords, Basil Criticos was on Wednesday, March 4, awarded Ksh2.2 billion in damages by the Court of Appeal after a protracted battle with a local bank over the sale of his land.
Justices Patrick Kiage, Roselyne Nambuye. Wanjiru Karanja noted that the bank undervalued his land, which it sold for Ksh55 million to a private company in 2007 to recover a loan it offset Critico's company following a review of evidence tabled by the latter.
According to court documents, the assessment and valuation of the land did not factor in costs of the crop plantation on the land and several infrastructural developments on the property.
"...a declaration that the sale of LR No. 5865/2 for the sum of Ksh55.000,000 to the second defendant was a gross under value," the ruling read in part.
"Damages of Ksh2,284,101,000 for the unauthorized, improper and irregular sale assessed at the market value of property LRNo 5865/2 together with interest at court rates thereon from the date of this judgement until payment in full," directed the three-judge bench.
In addition, the appellate court added that the bank did not have any legal jurisdiction to sell the land given that the Former Taveta Member of Parliament had already gone to court, which granted him a temporary injunction to stop the auction.
"The defendant did not have any legal right to exercise the statutory power of the sale in respect of the land and that the agreement for sale and transfer dated September 5, 2007, was executed in contempt of injunctive orders issued in Milimani HCCC N. 270 of 2007," the ruling read in part.
In addition, the local bank, was compelled to pay Criticos an additional sum of Ksh35 million, which the court explained was a surplus of the sale of the land. The court further discharged from all liabilities of the said loan.
"A declaration that the plaintiff is discharged and released from all liability under the Lega Charge dated January 29, 1991, and guarantee dated January 22, 1991," read the court document.
It explained that the interest rates on the loan, 35 per cent per month, were excessive further questioning the decision by the institution to turn down offers to off set the debt.
"We find it unconscionable and morally wrong that the bank would raise the interest rate from 19 per cent per annum to the impossibly high rate of 35 percent per month, amounting to 420 percent per annum,” the judges noted.