The Diamond Trust Bank is repossessing 20 Ashok trucks from a contractor who defaulted a Sh. 58 million loan that has ballooned to Sh. 101 million. This is after the High Court made a ruling in favour of the bank on February 3, 2025.
DTB had told the court that it entered into a financing agreement with Gab International in February 2018. With the agreement, DTB gave the construction firm Sh. 58 million for the acquisition of 20 Ashok Leyland tipper trucks.
However, Gab International failed to honour its loan repayment obligations. As a result, the loan went into default, and started to accumulate interests and penalties. DTB informed the court that as of July 18, 2023, the loan facility had accrued interest and increased to Sh. 101, 346,064.
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“On the balance of convenience, the subject matter in dispute involves trucks whose value depreciates with time. The amount remains unpaid and the interest continues to escalate. As such, the outstanding amount continues to increase and might outstrip the value of the trucks, and with time, the plaintiff will not be in a position to recover the amount due from the defendants,” the High Court declared.
Ironically, when the bank went to the contractor’s site to repossess the financed Ashok trucks, the trucks were nowhere to be seen. Apparently, the contractor had deactivated or removed the tracking system. This prompted the bank to go to court to ask that the contractor be compelled to produce the trucks for repossession.
“The balance of convenience clearly lies in favour of the plaintiff and allows the repossession of the trucks to realize the security.” The court further declared that as per the agreement between the bank and the contractor, DTB Bank had the right to terminate the agreement and repossess and sell the Ashok Leyland tipper trucks.
“The agreement clearly spelt out the consequences of default by the defendant, the Plaintiff was at liberty to terminate the agreement and immediately repossess and dispose of the financed motor vehicles,” High Court judge Justice Francis Gikonyo ruled. “The defendant cannot fail to meet its financial obligation and still expect to retain the motor vehicles. The defendant is expected to pay the money failure to which its right of redemption would fail and the plaintiff rights to sell the property will crystalize.”
