Samuel Kinyua Mutungi v Barclays Bank of Kenya [2004] KEHC 1290 (KLR)

REPUBLIC OF KENYA IN THE HIGH COURT OF KENYA AT NAIROBI MILIMANI COMMERCIAL COURTS CIVIL CAUSE NO 1827 OF 2000

SAMUEL KINYUA MUTUNGI …….…...………..PLAINTIFF

VERSUS

BARCLAYS BANK OF KENYA ……….………DEFENDANT

J U D G M E N T

The plaintiff was at all material times a customer of the Defendant where he operated two accounts.

The plaintiff account No. 1581050 personal account and account No. 1896493 business both at the defendant’s Union Tower Branch. The business account was entitled Standard Commercial Investigations.

The plaintiff made arrangements for funds to be transmitted directly into the aforesaid accounts by the National Industrial Credit Limited.

The Plaintiff in his affidavit in support of the originating summons said that his personal account and business accounts were closed at the aforesaid defendant’s branch on 30thJune 1997 and 5th September 1997 respectively and at that closure there were no monies owed to the defendant.

I must begin by saying that having heard the defendant’s submissions and having considered the replying affidavit I find that the plaintiff’s aforesaid contention that the accounts were closed without being indebterd to the defendant was not disproved by the defendant. The plaintiff exhibited an account statement for both accounts, which indicated the said closure. The plaintiff did not exhibit statements to disprove that contention. Although the defendant in its replying affidavit stated that the plaintiff’s account was transferred to its Avon center as account No. 1225070, there was nothing to prove that, that account was a continuation of the Union Towers Branch.

The Plaintiff also had another account No. 510618 at the defendant’s Enterprise Road. That account was closed and the plaintiff did exhibit a bank statement to prove its closure and at that time the account was not overdrawn.

The plaintiff’s evidence is that he executed a charge over his properties, MANGU/NGENDA/625 and KABARE/KIRITINE 913 and 914 to secure his indebtedness with the defendant.

The plaintiff contended that on 19th February 1998 a company known as Standard Commercial Investigations Limited was incorporated and the defendant was accordingly informed.

The defendant in its replying affidavit stated that the plaintiff’s business account at Union Towers was transferred to Avon Centre and assigned a new number, namely No. 1225070.

The Plaintiff, according to the defendant was granted some facilities namely in September 1997, October 1997 and November 1997. There seem to be dispute on these facilities.

On 14th January 1999, the defendant offered a facility of kshs 500, 000 to plaintiff using the new incorporated company. The defendant stated that the new facility to the now incorporated company was secured by the Plaintiff’s existing charge. The defendant annexed to its replying affidavit bank statement of account No. 1225070. I have looked at those statements and I note that the account holder thereof is Standard Commercial Investigation Ltd, not the plaintiff. I confirm that I have also looked at the charge executed by the plaintiff it secured only the plaintiff’s indebtedness.

The defendant failed to produce in evidence any security executed by the Plaintiff to secure the indebtedness of Standard Commercial Investigation Ltd.

It is not material that the plaintiff was the one operating the said account or that he benefited from the facility granted to Standard Commercial Investigations Ltd. The said Standard Commercial Investigation Ltd is a separate entity to the plaintiff and the absence of proof that the plaintiff secured its debts the plaintiff is not liable.

The plaintiff had posed certain question for the court’s consideration and I respond to them as follows: -

1. The Plaintiff in view of my findings herein before is not liable under the charge registered in 1989 over L.R. No. KABARE/KIRITIWE 913 and 914 and No. MANGU/NGENDA/625 as security over his personal account or the business account of Standard Commercial Investigations, since those account no longer exist.

2. The Plaintiff on a balance of probability has proved to this court that he fully redeemed his personal account and the business account of Standard Commercial Investigation.

3. The plaintiff is not personally liable to the defendant on account of facilities granted to Standard Commercial Investigations Limited, in the absence of executed security documents in that regard.

4. The defendant has no legal basis proved before this court, which justifies the sale of Plaintiff’s properties L.R. No. KABARE/KIRITINE 913 and 914 and L.R. No. MANGU/NGENDA/625 and I do therefore order that these properties be discharged by the defendant forthwith.

5. The defendant is hereby ordered to pay the costs of this suit to the Plaintiff.

Dated and delivered this 17th day of November 2004.

MARY KASANGO

AG JUDGE