The Commercial Division of the High Court of Malawi has dismissed with costs a case in which lawyer Tamando Lama Chokhotho dragged FDH Bank PLC to court restraining the commercial bank from selling property on Title Number Likabula 3319 (Title Number LK 3319) below the reserve price off K215 million.
Apparently, Chokhotho pledged the same property as security for the loan. However, the he defaulted in the repayment for the loan, prompting the bank to proceeded to issue a notice of sale of the property to recover the loan.
But attempts to sell the property by public auction failed as it could not attract any buyers beyond the reserve price of K215 million.
Chokhotho, therefore, protested that FDH Bank PLC was proceeding with the sale of the property at K 180 million and sought for an order to re-open the transaction under Section 3 of the Loans Recovery Act.
He further proceeded and filed the without notice application for an interlocutory injunction restraining the bank from proceeding with the sale of the property below the reserve price.
The lawyer contended that section 3 of the Loans Recovery Act provides that where the enforcement of a security had been conducted in an unconscionable inequitable or unfair manner, the court has powers to re-open the transaction.
He argued that the reading of the provision shows that in a case where the security had already been disposed of the remedy available to the debtor lies in damages, whereas in cases where the security has not yet fully been disposed of, like the present matter, the court has powers to re-open the transaction.
However, delivering his judgement on August, 8, 2023, Judge Jabber Alide disagreed with Chokhotho, stating that his action had no legal merit, and in any case, had not raised any triable issues.
Alide further observed that the remedies Chokhotho sought were strange and not available under the applicable law.
“All I can see in this matter is the Claimant’s attempt to coin some confusion with a view of creating an impression that there is some controversy worth the court’s intervention. I must say, firmly so, that there is no legitimate controversy in this matter. I am compelled, in the circumstances, to cite the words of Dr. Kachale J. in the Rombani Londwa t/a Kaizwanga Investment and General Dealers v Standard Bank plc case, supra, with approval that: “Litigation should be about genuine controversy and not mere academic or frivolous or contrived disputes with no cloak of legality,” reads part of the judgment.
Chokhotho said it was his view that the present cause of action was hinged on a flimsy and untenable foundation bearing in mind the factual context and the applicable law in respect of issues raised herein.
“It is my view that the Claimant’s action does not raise any arguable case. For the above reasons, the Claimant’s action herein fails in its entirety, and is dismissed with costs,” ruled Alide.