Court orders bank to refund N112.5m for undervalued sale of property

A Lagos High Court sitting at Tafawa Balewa Square, TBS, yesterday, ordered an old generation bank to refund to the beneficiaries of the estate of Otunba Adedoyin Ogunde N112.5million over the undervaluation and sale of their property located at Moore Road, Ikoyi.

Justice Ibironke Harrison gave the order while delivering judgment, in a suit filed by beneficiaries of the deceased Otunba Adedoyin’s estate over the bank’s gross undervaluation of his property and sale of the same on the account of his indebtedness to it.

In her judgment, Justice Harrison held that the sale of the deceased’s property at No. 6, Moore Road, Ikoyi, Lagos by the bank was in bad faith and that the property was grossly undervalued.

The court held that the fact that a customer owes a bank was no reason to fling the customer’s property at a ridiculous rate simply to realize the debt owed, adding that “sale at a price that is so low is evidence of fraud.”

In determining the duties of a mortgagee in the exercise of its power of sale, Justice Harrison held that “a mortgagee by law is entitled to exercise its right of sale over a mortgaged property when the Mortgagor has defaulted or failed to liquidate its outstanding indebtedness.

“The legal obligation incumbent on the mortgagee when exercising its power of sale of the mortgaged property is to act in good faith. Once it is established that the mortgagee acted in good faith, the exercise of the power of sale cannot be impugned or impeached,” the court held.

VANGUARD