GTB had through its lawyer, Mr. Kunle Ogunba (SAN), filed an originating summons with The R.E.D. Company as the second claimant and joined Diamond Bank Plc and Diamond Capital Ltd (both tenants in the mortgaged property) as co-defendants to the suit.
In suit No M/904/2010 before Justice K.A. Jose, GTB is asking the court to approve the sale of the 13-storey office complex to a firm, The R.E.D. Company Ltd, for N6.5bn and allow the firm to take possession of the property by virtue of a Deed of Assignment between them.
They are also seeking an order of perpetual injunction restraining Babalakin, Diamond Bank, Diamond Capital and their agents from paying any rents, receivables and accruals on the property to Stabilini and Bunbury.
The claimants are also asking the court to grant a perpetual order compelling Babalakin, Diamond Bank and Diamond Capital to pay all outstanding and subsequent rents to the second claimant.
The bank had alleged that there was a Tripartite Deed of Legal Mortgage on the property between it and a firm, Roygate Properties Ltd. It declared that the choice property was used as part of security for credit facilities of N11.5bn to Roygate Properties to enable it to acquire a construction firm, Homan Engineering Co. Ltd.
GTB, which further claimed that Babalakin was the prime mover and alter ego of Stabilini Visinoni and Bunbury Ltd, alleged that the root of title to the choice property resided in Stabilini. The claimant added that Stabilini later executed the tripartite deed of legal mortgage with Roygate Properties and the bank, noting that Stabilini later attempted to assign its unexpired residue in the mortgaged property to Bunbury Ltd.
According to the GTB, one of the terms of the facilities is that the principal sum shall be liquidated in 20 equal quarterly installments of N515m. It claimed, however, that Roygates, Stabilini, Bunbury and Babalakin had breached the terms of repayment of the principal and interest sums on the alleged facilities
The bank alleged that the continued refusal of the defendants to settle the alleged facilities was in breach of the terms and tripartite deed, which it put at N12.3bn. It said this gave it the right of sale of the mortgaged property.
But Stabilini and Bunbury (the first and second defendants) had in a counter-affidavit filed by their lawyer, Mr. Wale Akoni (SAN), faulted the suit on the grounds that the originating summons was academic. According to the defendants, the suit did not disclose any reasonable cause of action against them.
They described it as an abuse of court process and claimed that several actions in different courts had been filed in respect of the same subject.
They further claimed that the court lacked the jurisdiction to grant the reliefs sought in the originating summons, insisting that the claimants lacked the locus stand to file the action. The defendants also faulted the bank’s claim on the liquidation of the principal sums of N515m on quarterly installments, claiming that the bank’s offer letter to Roygate dated December 15, 2008 stipulated that the facility would not become due for repayment until 2013.
The defendants also alleged that the second claimant lacked the locus standi to file the action as it was not a party to the loan agreement between Roygate and GTB. They added that it was not a party to the agreement to mortgage the property.
They also claimed that they were not answerable to the second claimant, as it was a third party, adding that The R.E.D Company had not complied with section 26 of the Land Use Act, 1978. The defendants further claimed that the means by which GTB transferred the title of the property was fraudulent and in bad faith, alleging that the signatures of certain key signatories were forged.
They also faulted the claim of the bank that the property was sold for N6.5bn, stating that the Land Form 1C (Exhibit FSA 1 in the court process) declared the mortgage sum as N1m.
The case has been adjourned till November 22.
Source:http://www.punchng.com/Articl.aspx?theartic=Art201011172415359
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