Ashford W. Meikle, Business Reporter

DESPITE attempts to dissuade its sale, National Commercial Bank last week sold 81B King Street, former home of Topaz Jewellers, at auction to a member of the Tewani family for $37 million.

A representative of auctioneers D.C. Tavares Finson confirmed the sale, but declined to identify the buyer, claiming "it's a sensitive matter."

The property was mortgaged to NCB as collateral on a loan to Topaz, owned principally by Raju Khemlani, which has defaulted on payments. The loan was for $55 million, but the size of the default was unclear.

Topaz is fighting NCB in court to retain control of the real estate, located in the heart of the shopping district in downtown Kingston.

Enjoining to lawsuit

In two separate full-page advertisements last week, Topaz warned it would sue the successful bidder, enjoining them in the lawsuit against NCB.

"Members of the public are hereby put on notice that NCB's alleged powers under the mortgage are disputed - and any person seeking to 'purchase' the property at the auction will be added to the lawsuit as a defendant," the ad read.

Topaz is claiming that the mortgage on the property, which was registered in 1997 by NCB, was improperly obtained and unenforceable.

The bank has filed a defence against the lawsuit.

"What it does show is that where you have litigation going on at the courts, you can't hope to get a remedy at North Street [that] you can get at King Street," said NCB's attorney, Sandra Minott-Phillips, who also confirmed the sale.

Minott-Phillips' remarks were an obvious reference to the advertisement placed in the North Street-based Gleaner by Topaz. The Supreme Court is on King Street.

"They were using the full-page advertisement in the newspaper to intimidate prospective purchasers in any a manner," said the lawyer. "They can't hope to achieve an injunction by way of a full-page advertisement in any newspaper. An injunction is something you get from the court, not from the offices of the newspaper."

Case ongoing

Legally, for Topaz to have obtained the injunction from the Supreme Court barring the sale, it would have had to pay to the court the amount that the bank claims to be due on the loan.

"The purchaser is entitled to purchase and the bank is entitled to sell, unless and until the court says it cannot do so," said Minott-Phillips.

Notwithstanding the sale of the property, which has a gross floor space of 15,000 square feet and is presently the home of Best Mart, Minott-Phillips said that the case was ongoing.

"They have sued the bank saying that the bank's security should be null and void and unenforceable. The bank has defended saying its securities are very much good and effective," said the attorney.

"As far as we are concerned if they want to withdraw the action or discontinue their case, that would be lovely."