‘Clear Your Loan Or Face Jail’- High Court Trashes Rajni Tailor’s Case Against Prime Finance Company

The Commercial Division of the High Court has dismissed an application filed by Rajni Tailor against Prime Finance Company Limited.

According to Mr. Tailor, on 6th August 2016, he entered into a loan agreement with Prime Finance for a personal loan facility in the sum of USD 20,000 repayable in three weeks by 27th August 2016 as in the loan agreement.

Tailor averred that he paid the sum of USD 20,000 in three equal installments before the lapse of the loan period and that as such is not indebted to the respondent. He demanded for acknowledgment of receipt of the total amount but the company refused and, or failed to issue the said receipt despite several occasions to engage with the Managing Director who was nowhere to be seen. Heathen closed the loan account with the company.

The Company retained the cheque which had been given to it as security and banked the same without Tailor’s knowledge and the he was never with any notice of dishonor of the cheque.

Since 2016 to date, Prime Finance has never issued any demand notice or notice of default to Tailor until now when it has showed up to demand for the money and interest which he denies.

However in the respondents (Prime Finance) evidence stated in an affidavit in reply, affirmed by Bashir Seiko the manager of the company, says Tailor has said lies and falsehoods that he is not indebted to the respondent. It deny that it ever received any amount of money as payment for the loan facility before filing of the civil suit.

That tailor was notified of the dishonor of the cheque by way of telephone call and indeed appeared and made verbal promises to clear the loan facility. He was served with a demand notice from Adsum Advocates dates 18th July 2019 which he admits in his letter dated 29th August 2019.

They say Tailor acknowledged his indebtedness to the respondent by email to Rajiv Ruparelia, the Managing Director pleading to pay a sum of 10,000 USD by end of December 2019 claiming that he had been sick.

Upon filing of the suit on 21st August 2019, Tailor contacted Rajiv and Bashir with proposals of settling the matter out of court as seen by his own letter dated 29th August 2019. Following discussions, first payment made on 25 September 2019 where he paid USD 2,000 and on 7th November a sum of USD 500 and 13,500 as at 6th January 2021 as per account statement of Tailor.

As at 6th January 2021, the applicant is indebted to the respondent to the tune of USD 68,823 as indicated in the account statement.

They therefore asked court that in the interest of justice that the application for leave to appear and defended be dismissed with costs to the respondent since it has no merit and is based on falsehoods. And the applicant should be completed to deposit half of the outstanding amount before leave to appear and defend is granted.

In court’s decision delivered in email by Judge Susan Abinyo, it says following the discourse between the parties and the proposed settlements by the applicant, it finds the applicant’s assertion that he paid the loan facility of USD 20,000 in three equal installments before the lapse of the loan period that is 27th August 2016 unacceptable in the circumstance and the question that arises is why did the applicant made partial payments on 25/09/2019 and 7/11/2020.

As a result, that applicant failed to raise triable issues and a plausible defence to warrant the grant of leave to appear and defend the suit.

“Under order 36 rule 5 of the Civil Procedure rules, once court has declined to grant an application by a defendant for leave to appear and defend the suit, the plaintiff is entitled to a decree for an amount not exceeding the sum claimed in the plaint and costs against the defendant”. reads court’s ruling

It further  reads “The plaintiff is entitled to a decree in the sum thereof less USD 13,500 which the applicant has so far paid”.

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