NCBA Bank ordered to reimburse Sh1.8 million after unauthorised reversal to Nairobi Chapel

 

In October 2019, NCBA Bank Limited reversed Sh1,875, 000 from Harriet Were’s account without her knowledge at the request of her former employer, Nairobi Chapel.

The bank went ahead and caused an over-withdrawal on her current and savings accounts, leading to the creation of an overdraft that continued to accrue interest.

The said funds had been paid to her by the Chapel and its Presiding Bishop, Oscar Muriu, as gratuity after terminating her from her job as the Director of Social Justice.

Were also served as Director of Mwangaza Ulio Tumaini Clinic, situated in Korogocho, Nairobi, where she earned a monthly salary of Sh230,000.

Were said her resignation was a result of coercion from Muriu after declining to unprocedurally release funds to the Chapel from the Tumaini clinic that was making profits as the church struggled financially.

“I was told to draw funds from the clinic for the benefit of the Chapel contrary to established financial procedures, which request I declined and reported to Oscar Muriu,” said Were.

Were said Muriu promised her a substantial farewell package and indeed gave her Sh1 million as a gift after she tendered her resignation on September 1, 2019.

She, however, explained that she lost her pregnancy when she first learnt of the intention to terminate her job.

Were said that on October 3, 2019, the Chapel paid her a sum of Sh3,750,000 as gratuity and a gift after disclosing her financial obligation of a Sh1 million car loan and Sh3 million mortgage.

“I believed the payments were part of the agreed separation package which I utilised to clear my personal and car loans and to make substantial repayments on my mortgage,” said Were.

However, on November 5, 2019, the Chapel telephoned her demanding Sh1,875,000 on the basis that the payment belonged to the church without any written explanation to justify the demand.

“On November 7, 2019, the Chapel instructed NCBA to reverse one of the payments amounting to Sh1,875,000 without notifying me. As a consequence, my current and savings accounts were allegedly overdrawn, and the bank created an overdraft facility on my account, which continued to accrue interest,” said Were.

In her verdict, Justice Monica Mbaru directed the bank to reimburse the full withdrawn amount with interest at commercial rates from October 2019 until paid in full.

She also ordered the Chapel to pay Were Sh564,000 as compensation for his constructive dismissal and service pay.

“The wrongful access to Were’s (the claimant’s) bank account held by NCBA Bank Kenya (2nd respondent) is not justified. The referral of funds without recourse to the claimant is a breach of duty owed to the claimant by the 2nd respondent,” said Justice Mbaru.

While dismissing the bank’s counter-claim, the judge said that upon the wrongful action by the bank, liability cannot accrue to Were in whatever manner.

Justice Mbaru ordered the bank to regularise Were’s account as before the wrongful reversal to the benefit of the Chapel.

“Based on the findings above, the order is to calculate the amount in Sh1,875,000 plus interest at commercial rates. These shall be paid to the claimant less what is claimed in debit balance of Sh1,681,121.95, whichever is higher,” said Justice Mbaru.

According to the bank’s defence, Were refused to refund the said monies despite being informed about the technical error and proceeded to utilise the funds to offset her loans.

NCB Senior Legal Counsel, Christine Wahome, testified that the bank reversed the said monies from Were’s bank account in accordance with the church’s instructions and the bank’s general banking practice and prudential guidelines.

Wahome said that as at September 15, 2022, Were’s account had a debit balance of Sh1,681,121.95, which continues to accrue interest in line with Clause 9(c) of the General Terms and Conditions.

The Church accused Were of retaining the church’s possession and control of the Mwangaza Ulio Tumaini Clinic and its assets, including bank accounts, cheque books, Mpesa accounts, financial records and access to rental property.

However, she said the Chapel blocked access to all the said assets.

The judge said although aggrieved by the constructive dismissal, holding back the employer's property is not justified.

Justice Mbaru said the church failed to quantify the assets and dismissed their counter-claim and directed Were to return the said possessions.

“Whatever remains of the bank accounts, cheque books, M-Pesa accounts, financial records and access to rental property shall be returned within 14 days,” said Justice Mbaru.