Last week, on Friday, the Housing Finance Company Of Kenya (HFCK) was directed to pay Ksh1.2 billion to a family whose house it sold in Runda due to non-payment of their mortgage.
The Court had ruled that HFCK had illegally sold the house belonging to Sharok Kher Mohamed Ali Hirji.
In its ruling he Court of Appeal stated that HFCK pays damages of Ksh20.4 million with an annual compound interest of 26 percent for 19 years. The case was filed in court in the year 2000.
However, Housing Finance is asking for a stay of execution of the ruling until its appeal in the Supreme Court is heard and determined.
“By any stretch of imagination, this is harsh, unconscionable and oppressive. It also amounts to unjust enrichment and therefore goes against public policy,” the mortgage lender said yesterday in a notice announcing its intention to block the award at the Supreme Court.
In her dissenting opinion, Justice Martha Koome disagreed with sections of the judgment, faulting the inclusion of the 26 percent compounded interest. However, the decision of the majority, Justices Kantai and Hannah Okwengu, prevailed.
Should the firm take its case to the Supreme Court, it will have to prove that the dispute is of public interest or that it is seeking a constitutional interpretation for the matter to be heard by the Supreme Court, the Business Daily reports.
Justices Kantai and Hannah Okwengu ruled that HFCK had raised interest rates on Ms Hirji’s loan from 13.5 percent to 26 percent without notice and had, therefore, fallen foul of the law. The mortgage firm was also accused of failing to issue a 45-day notice of the sale as required by law before auctioning the property.
Mr Hirji’s wife, Firoz Nurali Hirji, had said that Mr Hirji had charged his property to secure a loan of Sh600,000 in 1997. He repaid part of the loan, but defaulted at some point and the bank then issued a notice of intention to sell the property to recover its money.
Business Daily reports that the loan advanced was to be repaid over 15 years and that as at January 17, 2000 he had paid in excess of the amount advanced and was ready and willing to complete paying any amount found to be due or owing. However, the bank sold the property in January 2000 for Sh6,050,000, a value disputed by the couple, who said the property was valued at Sh20 million. According to the couple, after the notice was issued, they continued making payments and were made to believe the bank had accepted the money.
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