Directors of a Nairobi's popular eatery, Nyama Mama Restaurant, have sued Victoria Commercial Bank over alleged unlawful prosecution involving a Sh520 million loan.
Ms Nina Shanghavi and her husband, Mr Jayesh Shanghavi, are jointly seeking compensation of Sh2 billion from the bank.
They also want an order stopping the lender and its officials from interfering with their business, personal affairs and legal entitlements.
The couple further want court orders restraining the bank from initiating criminal proceedings concerning any of their financial arrangements.
In the petition filed at the High Court in Milimani on Wednesday, they have sued the bank alongside its chief executive officer, Yogesh Pattni, and members of the board of directors.
The petition follows the criminal trial of Ms Nina and Mr Jayesh two years ago over allegations of obtaining a Sh520 million loan from the bank without registering a security.
They were charged with obtaining the execution of a security by pretenses.
The charges were, however, withdrawn in July 2021 by a magistrate court after the case prosecutor dropped the trial on grounds that review of the evidence indicated the dispute would be best handled through civil court.
Prosecutors explained that the dispute stemmed from commercial transactions between the couple and the bank, and the civil court was the appropriate forum.
The criminal charges stated that the restaurateur and its company, Good Earth (Group) Limited, induced the bank to execute a charge over an apartment in Nairobi to secure the loan. The company operates several dining establishments in Nairobi offering services within the hospitality industry.
It was alleged that they committed the offences between December 10, 2018, and November 23, 2020.
According to the petition, the couple says it was unjustified for the bank to institute a criminal complaint against them “knowing too well that theirs was a civil dispute” and that there was no evidence to support the criminal case.
“The criminal investigations were based on the bank's allegations that the directors had engaged in fraudulent activities about the loan and its security ,” says their lawyer Dantsan Omari, in the court papers.
He says that though the company faced financial challenges resulting from the COVID-19 pandemic, economic hardship and other constraints which severely disrupted business operations, the directors remained committed to fulfilling its financial obligations with the bank.
“The investigations were not only biased but also lacked impartiality, objectivity and fairness. There was a deliberate effort to intimidate and harass the directors under the guise of criminal prosecution,” says Mr Omari.
Alleging violation of his clients’ right to family, the lawyer says they suffered unlawful and targeted harassment which strained their family, dignity and security. He says this also threatened the social and economic wellbeing of their household.
In her affidavit, Ms Nina says the company did not default in loan repayments as it entered into negotiations with the bank for restructuring of the loan following disruption of the business by the Covid-19.
“The bank and the board of directors rejected all genuine proposals and instead embarked on a campaign of harassment, coercion and malicious prosecution against me and my husband. I was wrongly arrested, detained and charged in court alongside my husband in a purely civil and commercial matter, in complete violation of my constitutional rights and contravention of settled legal principles,” she says.
She adds that though they had no prior criminal record, they were subjected to a hefty bond term of Sh5 million cash bail, “which was wholly disproportionate and ignored our personal circumstances and clean records”.
She says that at the time she was sick and was scheduled to travel abroad for medical treatment.
“Despite my advanced age and fragile health, I was placed under house arrest and subjected to repeated court attendances, including on several occasions where I had to appear in court in a wheelchair, having been forcibly removed from bed rest and denied the benefit of adequate medical accommodation,” she narrates.
