1. The Plaintiffs/Applicants have filed an application dated 16 th March 2026 seeking for orders that:
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(3) There be a temporary injunction pending, the hearing and determination of this suit, restraining the Defendant, its agents, servants or employees from taking any enforcement action against the plaintiffs, including appointing any receiver or administrator or advertising for sale, selling or in any way dealing with LR No. 29383 pending the hearing and determination of this suit.
2. The application is based on grounds stated on the face of the application and supported by the affidavit of the 2 nd Applicant, a director of the 1 st Applicant, sworn on even date.
3. The grounds in support of the application are that in the year 2023 the Respondent herein ad vanced the 1 st Applicant loans totaling to Ksh.450 million which were secured by debentures and further secured by a legal charge over LR 29831 situate in Lamu county.
4. That on the 12 th March 2026 they were at the bank premises on business when they learnt that the Respondent had through the firm of Keysian Auctioneers issued redemption notices and notification of sale both dated 2 nd Februaryn2026 seeking to sell LR 29831 by public auction upon expiry of the said notices. However, that the applicants were never served with the said notices.
5. The Applicants contend that despite payments being made on account of the loan the Respondent has failed to give credit for monies paid, loaded the applicants` account with unlawful interest, unapproved and uncontractual interest and has violated other statutory provisions such as section 44 of the Banking Act Cap 488; sections 84(1), 90, 96, 96(2) and (3) and 97(2) of the Land Act 2012; Rules 11(b) (x) and 15 of the Auctioneers Rules 1997 and sections 3, 15 and 61 of the Consumer Protection Act.
6. The Applicants contend that the offer letter and legal charge over its property were invalid because they were entered into without the Respondent obtaining ministerial approval of the rate of interest as required by section 44 of the Banking ActCap.488. More so that the rate of interest was too high as to amount to an unconscionable bargain and also illegal which is prescribed by sections 3, 15 and 61 of the Consumer Protection ActCap.501. Moreover, that the same was varied severally without notice to the Applicants, yet the Applicants were by statute and contract entitled to receive notice of not less than 30 days.
7. Consequently, it is contended that the intended exercise of the statutory power of sale is on a false hypothesis of default on the part of the 1 st Applicant and is therefore invalid. The applicants are apprehensive that the Respondent may exercise its powers under the security to sell its properties in which case the applicants will suffer irreparably because they may lose valuable property on the strength of illegal and unconscionable contracts and in violation of the law.
8. The application was opposed by the respondent vide the replying affidavit of its Recovery Manager, Joseph Muli, sworn on 20 th April 2025 wherein he deposed that the intended exercise of statutory power of sale was properly invoked after the Applicant defaulted in paying the loan. That the Applicant was on the 27 th August 2025 served with the statutory notice of 90 days requiring them to settle the loan arrears which they failed to comply with. That after the expiry of the 90 days they were served with 40 days` notice to sell dated 5 th December, 2025 asking it to rectify the default which was again not complied with. That after the expiry of the said period the Respondent instructed Keysian Auctioneers who issued the Applicant with 45-day redemption notice dated 2 nd February 2026 giving the Applicant the prescribed 45-day notice prior to the sale by public auction. That the Respondent conducted a valuation of the suit property and a valuation report dated 9 th October 2025 was prepared by a valuer and the property was valued at Ksh.217,316,000/= after which the sale of the land was scheduled for auction on 24 th April 2026.
9. It was thus deposed that the Respondent issued all the statutory notices pursuant to the provisions of section 90 and 96 and has fully complied with the law. That the notices were served through their registered postal address of P.O. Box 14908-00800, Nairobi which is the address provided in the loan documents. That the Respondent acted lawfully in strict compliance with the law which empowers it to recover the debt through the statutory power of sale in the event of default. Therefore, that the Applicant`s allegations of unlawful attachment are unfounded and devoid of merit.
10. The Respondent in addition filed an application dated 20 th April 2026 seeking that for the orders of injunction issued by this court on 24 th March 2026 be discharged on the ground that the same were obtained on the premise of material non-disclosure, misrepresentation and concealment of material facts. That the Applicants in their application did not disclose that they had defaulted on their loan obligation nor that they had been served with all the requisite statutory notices. That the Applicants` application does not meet the threshold for grant of relief of injunction sought and the same should be discharged.
11. The application dated 20 th April 2026 was opposed by the Applicants on the grounds that interim orders issued by the court were temporary in nature and were meant to protect the substratum of the suit pending hearing of the same on its substantive merits. That the issuance of the orders did not prejudice the interests of the Respondent. They denied that the orders were obtained through material non-disclosure, misrepresentation and concealment of material facts. They argued that the Respondent was asking the court to presume as a fact matters that require to be interrogated and proved through cogent evidence.
12. The two applications were argued together and proceeded by way of written submissions.
Applicants` submissions
13. The Applicants identified three issues for determination which are those required to sustain an order for temporary injunction as established in the case of Giella v Cassman Brown [1973] E A 358 at 360, to wit;
(1) Whether the Applicants have established a prima facie case with a probability of success.
(2) Whether the Applicants will suffer irreparably if the orders are not issued
(3) Whether the balance of convenience is in favour of granting the injunction.
14. On whether the Applicants have established a prima facie case with a probability of success, the Applicants submitted that in an interlocutory application such as this, the court is not required to hold a mini trial or determine conclusively any questions of facts or law but only to see that “in the face of it, the person applying for an injunction has a right which has been or is threatened with violation” as held in the case of Muchiri v Orbit Chemical Industries Limited (2024) KEELC 195 (KLR).
15. The Applicants submitted that section 44 of the Banking Act requires for any change in the rate of interest be with the approval of the Cabinet Secretary in charge of Finance. That the Respondent changed the rate of interest by varying the rates in the letter of offer dated 12 th August 2024 and the letter of offer dated 27 th October 2023. That there is no evidence that the same was approved by the Cabinet Secretary. The Applicants in this respect relied on the case of Margaret Njeri Muiruri v Bank of Baroda (Kenya) Limited (2014) KECA 319 (KLR) where the court held that the burden of proof was on the Defendant to prove that it obtained approval from the cabinet secretary. That contracts entered into in violation of the law are unenforceable as held in Patel v Singh (1987) KECA 21 (KLR ). Therefore, that there is reasonable prospect that the Respondent violated section 44 of Cap.488.
16. It was submitted that the letters of offers stated above charged the base lending interest at 13.6%, variable margin of 2.8%, default interest of 10% and additional interest of 10%, totaling to 36.6% per annum. It was submitted that such interest is unconscionable. Reliance was placed in the case of Margaret Njeri Muiruri (supra) where interest of 29.5% was held to be unconscionable.
17. The applicants submitted that section 61 of the Consumer Protection Act, Cap.501 provides that “a lender is not entitled to impose on a borrower under a credit agreement default charges other than reasonable charges actually incurred in collecting or attempting to collect payment, or reasonable charges in realizing or protecting a security after default, a cheque dishonor charges”. Therefore, that the default interest and additional interest loaded into the Applicants` account are outlawed by statute and thus illegal, null and void.
18. On the service of statutory notices, it was submitted that no receipt of payment of postal charges was exhibited showing that the letters were indeed posted to the applicants. Neither was there an affidavit of service by the person who allegedly posted the letters. The Respondent therefore failed to prove service of the documents on the Applicants.
19. It was submitted that the it is not clear the value the Respondent was to sell the property as the statutory notices dated 2 nd February 2026 state that the forced value of the property is Ksh.217,000/= but that the valuation report by Transcountry Valuers Limited dated 9 th October 2025 show that the property was to be sold at a forced sale value of Ksh.163,000/= which is an undervaluation.
20. It was further submitted that the statutory notice dated 27/8/2025 shows that new banking facilities and others were added and a demand made of Ksh.515,507,037/=. That some added amounts were not secured by the legal charge. That by including amounts not secured by legal charge and which amount add up to more than the aggregate amount secured, then the charger`s right of redemption was hindered and effectively extinguished. Reliance in this respect was placed in the case of Professional Consultants Limited v SBM Bank (Kenya) Limited (2020) eKLR where it was held that:
12. I agree with the plaintiff the statutory notice dated 4 th March 2020 is defective as it includes an amount not secured by the charge. In other words, it impedes the Plaintiff’s right to redeem the suit property by including an amount that is outside the confines of the charge. The charge only secured the overdraft and term loan granted by Fidelity Bank.
21. It was submitted that the statutory notices cannot stand.
22. On whether the Applicants will suffer irreparable loss if the orders sought are not granted, it was submitted that the Respondent acted in violation of the law. That a party cannot break the law and get away with it just because they are wealthy enough to pay for it. The applicants in this respect cited the case of Francis Kiarie Kinyanjui v HFC Limited (2020) KEHC 8176 (KLR) where PJO Otieno stated that:
35. I am fully cognisant of the fact that the law is not that in all cases where the damage is capable of being quantified injunction will not be granted. Ringera, J (as he then was) in Martha Khayanga Simiyu vs. Housing Finance Co. of Kenya & 2 Others Nairobi HCCC No. 937 of 2001 [2001] 2 EA 540:
“the law is not that an interlocutory injunction can never issue where damages would be an adequate remedy and the Respondent is in a position to pay them. That is the normal course but not the invariable course. The court has to take into account the conduct of the Respondent and the gravity of the breaches of law or contract alleged otherwise it would confer a carte blanche on those who are rich enough to pay all quantums of damages to ride roughshod over the rights of other persons. The rich do not fear to pay damages and they must be compelled to submit to the authority of the law by being put to other perils”.
23. On the Respondent`s application dated 20 th April 2026, the Applicants submitted that the statutory notices were not served and in any event that they were defective and of no legal effect. That the respondents are calling upon the court to vary the interim orders by presuming in evidence facts that require proof which has not been adduced. The Applicants urged the court to dismiss the Respondent`s application and to allow their application.
Respondent`s submissions
24. The Respondent identified two issues for determination:
(1) Whether the court should grant the injunction reliefs sought.
(2) Whether the court should set aside the ex parte order of injunction issued on 24 th March 2026.
25. On the first issue, the Respondent submitted that for an order of temporary injunction to issue, the applicant has to make out a prima facie case with a probability of success at the trial; show that he is likely to suffer irreparable injury which cannot be adequately compensated in damages and thirdly that if the court is in doubt should decide the issue on a balance of probabilities, see Steve Ouma`s “A Commentary on the Civil Procedure Act,” Second Edition at page 440.
26. It was the Respondent`s submission that the Applicant`s suit and the application do not disclose a prima facie case for the reasons that the Applicants do not dispute the indebtedness.
27. It was submitted that a dispute relating to the amount of debt cannot be the basis of issuance of an injunctive relief. In this regard the Respondent cited the case of Palker Enterprises Limited & another v Co-Operative Bank of Kenya Nairobi Commercial Case E90 of 2025 (2025) KEHC 17220 (KLR) (Commercial and Tax) (20 November 2025) (Ruling) where the court held that:
It is trite law that even where there is a dispute on the amount owed, that alone is not a ground for injunction unless the chargor shows that the chargee acted fraudulently, illegally, or in bad faith – see Joseph Okoth Waudi v National Bank of Kenya (2006) eKLR .
28. It was submitted that it is trite law that parties are bound by terms of contract and a court of law cannot re-write terms of contract unless it is demonstrated that it was obtained by fraud, coercion or undue influence which the Applicant has not done in this case. The case of National Bank of Kenya Ltd v Pipeplastic Samkolit (K) Ltd & another [2001] KECA 362 (KLR) was relied on in this proposition.
29. It was submitted that before exercising the statutory power of sale the Respondent fully complied with the provisions of section 90 and 96 of the Land Act by issuing all the statutory notices as evidenced by the certificate of postage which have the engrossed stamp of postal corporation of Kenya. That certificate of postage is conclusive proof of posting as held in the cases of Hellen Jane Achieng Odegi v Kenya Commercial Bank Ltd Nairobi ELC No. 867 of 2015 and Wanjiru v HFC Limited &2 others (Commercial Case E050 of 2025) (2025) KEHC 17783 (KLR) (Commercial and Tax) (1 December 2025) (Ruling).
30. The Respondent submitted that before conducting the intended sale the Respondent conducted a valuation report of the suit property and the property was valued at Ksh.217,316,000/=. That the complaint by the Applicant without an alternative report is without merit. More so that any complaint about valuation is compensable by way of damages and cannot be basis of injunction. The Respondent relied on the case of Kenya Walking Survivors Safaris Limited & another v NCBA Bank Limited & another (Civil suit E014 of 2023) (2024) KEHC 1741 (KLR) (Commercial and Tax) (26 February 2024) (Ruling) where the court held that:
The totality of my observations is that the reasons advanced by the Plaintiff in this matter do not establish a prima facie case with a likelihood of success. In the absence of any other evidence of irregularity on the part of the Chargee in its exercise of its statutory power of sale, I believe whatever loss that the Plaintiff has suffered (if any) can always be compensated by an award of damages, if it is established that the property was sold at an under valuation. Based on the foregoing, I am not satisfied that the Plaintiff has established that they have a prima facie case with a likelihood of success to warrant this court to grant the orders sought.
31. On interest, the Respondent submitted that they maintained a constant interest of 16.5%. That in any case computation of interest are questions to be determined by the court at the hearing of the suit and therefore any disagreement over computation of interest cannot be the basis of grant of an order of injunction. The Respondent in this regard cited the case of Muiruri & another v KCB Kenya Limited (Commercial suit E393 of 2024) (2025) KEHC 15320 (KLR) (Commercial and Tax) (23 October 2025) (Ruling) where the court cited the Court of Appeal decision in Mrao Ltd v First Assurance Bank of Kenya) Ltd &2 others (2023) KLR 125 where it was held that:
As the Court of Appeal stated in Mrao Ltd V First American Bank of Kenya Ltd & 2 Others, [2003] KLR 125, issues that go to the validity of the underlying contract or its performance are best reserved for the trial where parties will have the opportunity to tender oral and documentary evidence. Accordingly, the issue of whether the interest charged was unconscionable or unlawfully varied is reserved for determination at the hearing of the main suit. In any case, the Courts have held that a disagreement on interest cannot be a ground to allow an injunction.
32. It was the submission of the Respondent that it was a term of the assorted security instrument that failure to pay the amount due and owing under the security instrument constituted default. Further that the right of the Respondent to dispose of the assets of the 1 st Applicant, take possession of assets and appoint a receiver or administrator was automatic on default. Reliance was placed on Proctor and Allan (EA) Limited v KCB Bank of Kenya Limited and 2 others Nairobi Commercial Tax Division HCCOMM No. E133 Of 2025 where it was reiterated that a court of law cannot re-write a contract between parties, as they are bound by the terms of their contract unless coercion, fraud or undue influence are pleaded and proved, citing National Bank of Kenya Ltd v Pipeplastic Samkolit (supra.
33. Having regard to the foregoing, the Respondent submitted that there is no arguable case presented by the Applicants.
34. On whether the Applicants will suffer irreparable harm that cannot be compensated by damages if the property is sold, it was submitted that once property is offered as security it becomes a commodity for sale in the event of default by the charger and its loss is compensable by way of damages. The Respondent in this regard cited the case of Gitau v HFC &5 others (Eldoret HC Civil suit 71 of 2018) 12024 KEHC 7179 (KLR) (13 June 2024) (Judgment) where it was observed as follows:
Generally speaking, on matters of mortgagee and mortgagor contracts any property offered as security for a loan from the bank may it be matrimonial home or spiritual house of worship is not precluded from the risk of being sold by the bank if the borrower like the plaintiff in this case defaults in making the necessary payments to secure the debt received and acknowledged as a loan or overdraft. There is no sentimental or spiritual value of any immovable property offered as security to legitimise the money borrowed for use by the borrower in the form of a loan.
35. Accordingly, it was submitted that the Applicants will not suffer irreparable harm incapable of being compensated by way of damages in the event the suit parcel of land is sold to meet the defaulted monies.
36. On the issue of balance of convenience, it was submitted that the same lies with allowing the Respondent`s to realize the facilities it granted to the 1 st Applicant. That the balance of convenience tilts in favour of allowing the Respondent to exercise its statutory power of sale as postponing it will only serve to compound the interest in default to the detriment of the Respondent. Reliance was placed in Palker Enterprises Limited & another v Co-Operative Bank of Kenya (supra) where it was held that:
On the balance of convenience, the 2 nd Plaintiff is in admitted default. The Respondent, as a financial institution, continues to suffer prejudice due to non-performance of the facilities. The balance of convenience therefore tilts in favour of allowing the Respondent to exercise its statutory power of sale, provided the statutory procedures have been complied with.
37. On the second issue on whether the court should set aside the ex parte order of injunction issued on 24 th March 2026, the Respondent submitted that order 40 Rule 7 of the Civil Procedure Rules allows the court to discharge, vary or set aside any order for injunction on application by any party dissatisfied with such order. That it is trite law that a party seeking an ex parte order of injunction has an obligation to the court to make the fullest possible disclosure of all material facts within its knowledge and if this is not done then he cannot obtain any advantage from the proceedings and he may be deprived of any advantage he may have already obtained. The Respondent cited the case of Kenya Hospital Association Limited v Rono & 9 others; Kambuni (Interested Party) (Civil suit E 233 & E015 of 2024 (consolidated) (2024) KEHC 15844 (Commercial and Tax) (13 December 2024) (Ruling) where Mugambi J stated that:
It is well established that any party approaching a court to seek ex-parte interim orders bears a duty of full and frank disclosure of all material facts. This duty is crucial for ensuring that the court makes an informed and balanced decision in the absence of the opposing party. As observed by Onguto, J. in Republic V Kenya Medical Training College & Another Ex-Parte Kenya Universities and Colleges Central Placement Service [2015] eKLR:
“… I must state and emphasize the high duty of candour fixed upon any applicant to court, appearing ex parte. A party appearing before the court without notice to the other (ex parte) must exhibit a high quality and degree of sincerity and honesty. He must be guileless. He must be frank. He must be open. He must keep nothing that touches on the matter away from the court. He must act in utmost good faith. If he does not so act, he does so at his own risk.”
38. It was submitted that the Applicants herein obtained the injunctive relief on the premises of material non-disclosure, misrepresentation and concealment of material facts in that they did not disclose that they were indebted to the tune of Ksh.610,123,601.35. That they did not disclose they were served with statutory notices pursuant to the provisions of section 90 and 96 of the Land Act and Rule 15(d) of the of the Auctioneers Rules which they did not comply with. That in view of that the ex parte orders ought to be discharged. The Respondent in this respect relied on the case of Gabriel Kariuki Gitonga & others v Redken Wells Ltd and others Nairobi Commercial and Admiralty Division Civil case No. E129 of 2021 where the court observed that:
Material non-disclosure is a serious issue which, once the court is made aware of it, would lead to the setting aside and discharge of an ex-parte order forthwith. Good faith is so central in an ex-parte circumstances that a party who approaches the court in such circumstances must be absolutely truthful.
39. For the above reasons the court was urged to discharge the injunctive orders.
Analysis and determination
40. I have considered the affidavits filed, the annexures thereto, the submissions filed by counsels for both parties and the applicable law. The issues for determination are whether the Application has met the threshold for grant of temporary orders of injunction as set out in the case of Giella v Cassman Brown (supra), to wit;
(1) Whether the applicants have established a prima facie case with a probability of success;
(2) Whether the applicants have demonstrated that they will suffer irreparable injury unless the orders sought are granted and
(3) Whether the balance of convenience is in favour of granting the injunction.
Whether the applicants have established a prima facie case
41. A prima facie case was defined in the case of Mrao Ltd v First American Bank of Kenya Ltd & 2 others [2003] KLR 123 thus:
“…In civil cases a prima facie case is a case in which on the material presented to the Court a tribunal properly directing itself will conclude that there exists a right which has apparently been infringed by the opposite party to call for an explanation or rebuttal from the latter. A prima facie case is more than an arguable case. It is not sufficient to raise issues but the evidence must show an infringement of a right, and the probability of success of the applicant’s case upon trial. That is clearly a standard, which is higher than an arguable case.”
42. The Court of Appeal in Nguruman Limited vs. Jan Bonde Nielsen & 2 Others [2014] eKLR stated the following on the subject:
“The party on whom the burden of proving a prima facie case lies must show a clear and unmistakable right to be protected which is directly threatened by an act sought to be restrained, the invasion of the right has to be material and substantive and there must be an urgent necessity to prevent the irreparable damage that may result from the invasion. We reiterate that in considering whether or not a prima facie case has been established, the court does not hold a mini trial and must not examine the merits of the case closely. All that the court is to see is that on the face of it the person applying for an injunction has a right which has been or is threatened with violation. Positions of the parties are not to be proved in such a manner as to give a final decision in discharging a prima facie case. The applicant need not establish title it is enough if he can show that he has a fair and bona fide question to raise as to the existence of the right which he alleges. The standard of proof of that prima facie case is on a balance or, as otherwise put, on a preponderance of probabilities. This means no more than that the Court takes the view that on the face of it the applicant’s case is more likely than not to ultimately succeed.”
43. The applicants contend that the Respondent in its Letters of Offer dated 12 th August 2024 and 27 th October 2024 changed the baking rate accorded to the applicants but there is no evidence of compliance with section 44 of the Banking Act which requires banks to notify the Minister for Finance before any change in the rate of banking is effected. They submitted that the contract was entered into in violation of the law and the same are unenforceable. The respondent on the other hand contended that the contract was valid and thus parties were bound by the terms of the contract. In view of the opposing positions taken by both sides, I find that the issue requires further interrogation by this court in a full hearing. At the face value I am of the view that the issue raises a prima facie case.
44. The Applicants contend that the Respondent was charging them an interest of over 36.6% which they argued is unconscionable. That they also charged them “default interest” and “additional interest” which were illegal. They submitted that though parties have freedom to enter into contracts, this has not prevented the courts from interfering with unconscionable contracts.
45. The respondent on the other hand submitted that they maintained constant interest of 16.5%. That a dispute over interest or amount owing is not a ground for grant of temporary orders of injunction.
46. It is trite that courts have power to interfere with oppressive contracts. The Court of Appeal in the case of Kenya Commercial Finance Company Ltd vs. Ngeny & Another [2002] 1KLR had the following to say:
“The court will not interfere where parties have contracted on arms-length basis. However by its equitable jurisdiction, this court will set aside any bargain which is harsh, unconscionable and oppressive or where having agreed to certain terms and conditions, thereafter imposes additional terms upon the other party. Equity can intervene to relieve that party of such conditions.”
47. In view of the contention by the applicants that the respondent was charging them illegal interest, I find this contention to raise a prima facie case. A temporary injunction would, in my view, be in order until the issue is resolved. A prima facie case has thereby been established.
48. The applicants contend that they were not issued with statutory notices before the Respondent exercised its statutory power of sale under the provisions of section 90 and 96 of the Land Act. I have perused the documents filed by the respondent and noted that the said notices were served and were accompanied by a certificate of postage stamp of Postal Corporation of Kenya. I have also noted that the respondent conducted a valuation of the suit property before the intended sale.
Irreparable harm
49. On the issue of irreparable loss, the applicants were required to show that they will suffer a loss that cannot be compensated by way of damages. In Mureithi vs. City Council of Nairobi [1976-1985] EA 331 Madan JJA referred to L. Diplock in American Cynamid Co. vs. Ethicon Ltd [1975] 1All ER 504 as follows;
“The object of Interlocutory injunction is to protect the plaintiff against injury by violation of his right of which he could not be adequately compensated in damages recoverable in the action if the uncertainty were resolved in his favor at the trial…if damages in the measure recoverable at common law would be adequate remedy and the defendant would be in a financial po
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(3) There be a temporary injunction pending, the hearing and determination of this suit, restraining the Defendant, its agents, servants or employees from taking any enforcement action against the plaintiffs, including appointing any receiver or administrator or advertising for sale, selling or in any way dealing with LR No. 29383 pending the hearing and determination of this suit.
2. The application is based on grounds stated on the face of the application and supported by the affidavit of the 2 nd Applicant, a director of the 1 st Applicant, sworn on even date.
3. The grounds in support of the application are that in the year 2023 the Respondent herein ad vanced the 1 st Applicant loans totaling to Ksh.450 million which were secured by debentures and further secured by a legal charge over LR 29831 situate in Lamu county.
4. That on the 12 th March 2026 they were at the bank premises on business when they learnt that the Respondent had through the firm of Keysian Auctioneers issued redemption notices and notification of sale both dated 2 nd Februaryn2026 seeking to sell LR 29831 by public auction upon expiry of the said notices. However, that the applicants were never served with the said notices.
5. The Applicants contend that despite payments being made on account of the loan the Respondent has failed to give credit for monies paid, loaded the applicants` account with unlawful interest, unapproved and uncontractual interest and has violated other statutory provisions such as section 44 of the Banking Act Cap 488; sections 84(1), 90, 96, 96(2) and (3) and 97(2) of the Land Act 2012; Rules 11(b) (x) and 15 of the Auctioneers Rules 1997 and sections 3, 15 and 61 of the Consumer Protection Act.
6. The Applicants contend that the offer letter and legal charge over its property were invalid because they were entered into without the Respondent obtaining ministerial approval of the rate of interest as required by section 44 of the Banking ActCap.488. More so that the rate of interest was too high as to amount to an unconscionable bargain and also illegal which is prescribed by sections 3, 15 and 61 of the Consumer Protection ActCap.501. Moreover, that the same was varied severally without notice to the Applicants, yet the Applicants were by statute and contract entitled to receive notice of not less than 30 days.
7. Consequently, it is contended that the intended exercise of the statutory power of sale is on a false hypothesis of default on the part of the 1 st Applicant and is therefore invalid. The applicants are apprehensive that the Respondent may exercise its powers under the security to sell its properties in which case the applicants will suffer irreparably because they may lose valuable property on the strength of illegal and unconscionable contracts and in violation of the law.
8. The application was opposed by the respondent vide the replying affidavit of its Recovery Manager, Joseph Muli, sworn on 20 th April 2025 wherein he deposed that the intended exercise of statutory power of sale was properly invoked after the Applicant defaulted in paying the loan. That the Applicant was on the 27 th August 2025 served with the statutory notice of 90 days requiring them to settle the loan arrears which they failed to comply with. That after the expiry of the 90 days they were served with 40 days` notice to sell dated 5 th December, 2025 asking it to rectify the default which was again not complied with. That after the expiry of the said period the Respondent instructed Keysian Auctioneers who issued the Applicant with 45-day redemption notice dated 2 nd February 2026 giving the Applicant the prescribed 45-day notice prior to the sale by public auction. That the Respondent conducted a valuation of the suit property and a valuation report dated 9 th October 2025 was prepared by a valuer and the property was valued at Ksh.217,316,000/= after which the sale of the land was scheduled for auction on 24 th April 2026.
9. It was thus deposed that the Respondent issued all the statutory notices pursuant to the provisions of section 90 and 96 and has fully complied with the law. That the notices were served through their registered postal address of P.O. Box 14908-00800, Nairobi which is the address provided in the loan documents. That the Respondent acted lawfully in strict compliance with the law which empowers it to recover the debt through the statutory power of sale in the event of default. Therefore, that the Applicant`s allegations of unlawful attachment are unfounded and devoid of merit.
10. The Respondent in addition filed an application dated 20 th April 2026 seeking that for the orders of injunction issued by this court on 24 th March 2026 be discharged on the ground that the same were obtained on the premise of material non-disclosure, misrepresentation and concealment of material facts. That the Applicants in their application did not disclose that they had defaulted on their loan obligation nor that they had been served with all the requisite statutory notices. That the Applicants` application does not meet the threshold for grant of relief of injunction sought and the same should be discharged.
11. The application dated 20 th April 2026 was opposed by the Applicants on the grounds that interim orders issued by the court were temporary in nature and were meant to protect the substratum of the suit pending hearing of the same on its substantive merits. That the issuance of the orders did not prejudice the interests of the Respondent. They denied that the orders were obtained through material non-disclosure, misrepresentation and concealment of material facts. They argued that the Respondent was asking the court to presume as a fact matters that require to be interrogated and proved through cogent evidence.
12. The two applications were argued together and proceeded by way of written submissions.
Applicants` submissions
13. The Applicants identified three issues for determination which are those required to sustain an order for temporary injunction as established in the case of Giella v Cassman Brown [1973] E A 358 at 360, to wit;
(1) Whether the Applicants have established a prima facie case with a probability of success.
(2) Whether the Applicants will suffer irreparably if the orders are not issued
(3) Whether the balance of convenience is in favour of granting the injunction.
14. On whether the Applicants have established a prima facie case with a probability of success, the Applicants submitted that in an interlocutory application such as this, the court is not required to hold a mini trial or determine conclusively any questions of facts or law but only to see that “in the face of it, the person applying for an injunction has a right which has been or is threatened with violation” as held in the case of Muchiri v Orbit Chemical Industries Limited (2024) KEELC 195 (KLR).
15. The Applicants submitted that section 44 of the Banking Act requires for any change in the rate of interest be with the approval of the Cabinet Secretary in charge of Finance. That the Respondent changed the rate of interest by varying the rates in the letter of offer dated 12 th August 2024 and the letter of offer dated 27 th October 2023. That there is no evidence that the same was approved by the Cabinet Secretary. The Applicants in this respect relied on the case of Margaret Njeri Muiruri v Bank of Baroda (Kenya) Limited (2014) KECA 319 (KLR) where the court held that the burden of proof was on the Defendant to prove that it obtained approval from the cabinet secretary. That contracts entered into in violation of the law are unenforceable as held in Patel v Singh (1987) KECA 21 (KLR ). Therefore, that there is reasonable prospect that the Respondent violated section 44 of Cap.488.
16. It was submitted that the letters of offers stated above charged the base lending interest at 13.6%, variable margin of 2.8%, default interest of 10% and additional interest of 10%, totaling to 36.6% per annum. It was submitted that such interest is unconscionable. Reliance was placed in the case of Margaret Njeri Muiruri (supra) where interest of 29.5% was held to be unconscionable.
17. The applicants submitted that section 61 of the Consumer Protection Act, Cap.501 provides that “a lender is not entitled to impose on a borrower under a credit agreement default charges other than reasonable charges actually incurred in collecting or attempting to collect payment, or reasonable charges in realizing or protecting a security after default, a cheque dishonor charges”. Therefore, that the default interest and additional interest loaded into the Applicants` account are outlawed by statute and thus illegal, null and void.
18. On the service of statutory notices, it was submitted that no receipt of payment of postal charges was exhibited showing that the letters were indeed posted to the applicants. Neither was there an affidavit of service by the person who allegedly posted the letters. The Respondent therefore failed to prove service of the documents on the Applicants.
19. It was submitted that the it is not clear the value the Respondent was to sell the property as the statutory notices dated 2 nd February 2026 state that the forced value of the property is Ksh.217,000/= but that the valuation report by Transcountry Valuers Limited dated 9 th October 2025 show that the property was to be sold at a forced sale value of Ksh.163,000/= which is an undervaluation.
20. It was further submitted that the statutory notice dated 27/8/2025 shows that new banking facilities and others were added and a demand made of Ksh.515,507,037/=. That some added amounts were not secured by the legal charge. That by including amounts not secured by legal charge and which amount add up to more than the aggregate amount secured, then the charger`s right of redemption was hindered and effectively extinguished. Reliance in this respect was placed in the case of Professional Consultants Limited v SBM Bank (Kenya) Limited (2020) eKLR where it was held that:
12. I agree with the plaintiff the statutory notice dated 4 th March 2020 is defective as it includes an amount not secured by the charge. In other words, it impedes the Plaintiff’s right to redeem the suit property by including an amount that is outside the confines of the charge. The charge only secured the overdraft and term loan granted by Fidelity Bank.
21. It was submitted that the statutory notices cannot stand.
22. On whether the Applicants will suffer irreparable loss if the orders sought are not granted, it was submitted that the Respondent acted in violation of the law. That a party cannot break the law and get away with it just because they are wealthy enough to pay for it. The applicants in this respect cited the case of Francis Kiarie Kinyanjui v HFC Limited (2020) KEHC 8176 (KLR) where PJO Otieno stated that:
35. I am fully cognisant of the fact that the law is not that in all cases where the damage is capable of being quantified injunction will not be granted. Ringera, J (as he then was) in Martha Khayanga Simiyu vs. Housing Finance Co. of Kenya & 2 Others Nairobi HCCC No. 937 of 2001 [2001] 2 EA 540:
“the law is not that an interlocutory injunction can never issue where damages would be an adequate remedy and the Respondent is in a position to pay them. That is the normal course but not the invariable course. The court has to take into account the conduct of the Respondent and the gravity of the breaches of law or contract alleged otherwise it would confer a carte blanche on those who are rich enough to pay all quantums of damages to ride roughshod over the rights of other persons. The rich do not fear to pay damages and they must be compelled to submit to the authority of the law by being put to other perils”.
23. On the Respondent`s application dated 20 th April 2026, the Applicants submitted that the statutory notices were not served and in any event that they were defective and of no legal effect. That the respondents are calling upon the court to vary the interim orders by presuming in evidence facts that require proof which has not been adduced. The Applicants urged the court to dismiss the Respondent`s application and to allow their application.
Respondent`s submissions
24. The Respondent identified two issues for determination:
(1) Whether the court should grant the injunction reliefs sought.
(2) Whether the court should set aside the ex parte order of injunction issued on 24 th March 2026.
25. On the first issue, the Respondent submitted that for an order of temporary injunction to issue, the applicant has to make out a prima facie case with a probability of success at the trial; show that he is likely to suffer irreparable injury which cannot be adequately compensated in damages and thirdly that if the court is in doubt should decide the issue on a balance of probabilities, see Steve Ouma`s “A Commentary on the Civil Procedure Act,” Second Edition at page 440.
26. It was the Respondent`s submission that the Applicant`s suit and the application do not disclose a prima facie case for the reasons that the Applicants do not dispute the indebtedness.
27. It was submitted that a dispute relating to the amount of debt cannot be the basis of issuance of an injunctive relief. In this regard the Respondent cited the case of Palker Enterprises Limited & another v Co-Operative Bank of Kenya Nairobi Commercial Case E90 of 2025 (2025) KEHC 17220 (KLR) (Commercial and Tax) (20 November 2025) (Ruling) where the court held that:
It is trite law that even where there is a dispute on the amount owed, that alone is not a ground for injunction unless the chargor shows that the chargee acted fraudulently, illegally, or in bad faith – see Joseph Okoth Waudi v National Bank of Kenya (2006) eKLR .
28. It was submitted that it is trite law that parties are bound by terms of contract and a court of law cannot re-write terms of contract unless it is demonstrated that it was obtained by fraud, coercion or undue influence which the Applicant has not done in this case. The case of National Bank of Kenya Ltd v Pipeplastic Samkolit (K) Ltd & another [2001] KECA 362 (KLR) was relied on in this proposition.
29. It was submitted that before exercising the statutory power of sale the Respondent fully complied with the provisions of section 90 and 96 of the Land Act by issuing all the statutory notices as evidenced by the certificate of postage which have the engrossed stamp of postal corporation of Kenya. That certificate of postage is conclusive proof of posting as held in the cases of Hellen Jane Achieng Odegi v Kenya Commercial Bank Ltd Nairobi ELC No. 867 of 2015 and Wanjiru v HFC Limited &2 others (Commercial Case E050 of 2025) (2025) KEHC 17783 (KLR) (Commercial and Tax) (1 December 2025) (Ruling).
30. The Respondent submitted that before conducting the intended sale the Respondent conducted a valuation report of the suit property and the property was valued at Ksh.217,316,000/=. That the complaint by the Applicant without an alternative report is without merit. More so that any complaint about valuation is compensable by way of damages and cannot be basis of injunction. The Respondent relied on the case of Kenya Walking Survivors Safaris Limited & another v NCBA Bank Limited & another (Civil suit E014 of 2023) (2024) KEHC 1741 (KLR) (Commercial and Tax) (26 February 2024) (Ruling) where the court held that:
The totality of my observations is that the reasons advanced by the Plaintiff in this matter do not establish a prima facie case with a likelihood of success. In the absence of any other evidence of irregularity on the part of the Chargee in its exercise of its statutory power of sale, I believe whatever loss that the Plaintiff has suffered (if any) can always be compensated by an award of damages, if it is established that the property was sold at an under valuation. Based on the foregoing, I am not satisfied that the Plaintiff has established that they have a prima facie case with a likelihood of success to warrant this court to grant the orders sought.
31. On interest, the Respondent submitted that they maintained a constant interest of 16.5%. That in any case computation of interest are questions to be determined by the court at the hearing of the suit and therefore any disagreement over computation of interest cannot be the basis of grant of an order of injunction. The Respondent in this regard cited the case of Muiruri & another v KCB Kenya Limited (Commercial suit E393 of 2024) (2025) KEHC 15320 (KLR) (Commercial and Tax) (23 October 2025) (Ruling) where the court cited the Court of Appeal decision in Mrao Ltd v First Assurance Bank of Kenya) Ltd &2 others (2023) KLR 125 where it was held that:
As the Court of Appeal stated in Mrao Ltd V First American Bank of Kenya Ltd & 2 Others, [2003] KLR 125, issues that go to the validity of the underlying contract or its performance are best reserved for the trial where parties will have the opportunity to tender oral and documentary evidence. Accordingly, the issue of whether the interest charged was unconscionable or unlawfully varied is reserved for determination at the hearing of the main suit. In any case, the Courts have held that a disagreement on interest cannot be a ground to allow an injunction.
32. It was the submission of the Respondent that it was a term of the assorted security instrument that failure to pay the amount due and owing under the security instrument constituted default. Further that the right of the Respondent to dispose of the assets of the 1 st Applicant, take possession of assets and appoint a receiver or administrator was automatic on default. Reliance was placed on Proctor and Allan (EA) Limited v KCB Bank of Kenya Limited and 2 others Nairobi Commercial Tax Division HCCOMM No. E133 Of 2025 where it was reiterated that a court of law cannot re-write a contract between parties, as they are bound by the terms of their contract unless coercion, fraud or undue influence are pleaded and proved, citing National Bank of Kenya Ltd v Pipeplastic Samkolit (supra.
33. Having regard to the foregoing, the Respondent submitted that there is no arguable case presented by the Applicants.
34. On whether the Applicants will suffer irreparable harm that cannot be compensated by damages if the property is sold, it was submitted that once property is offered as security it becomes a commodity for sale in the event of default by the charger and its loss is compensable by way of damages. The Respondent in this regard cited the case of Gitau v HFC &5 others (Eldoret HC Civil suit 71 of 2018) 12024 KEHC 7179 (KLR) (13 June 2024) (Judgment) where it was observed as follows:
Generally speaking, on matters of mortgagee and mortgagor contracts any property offered as security for a loan from the bank may it be matrimonial home or spiritual house of worship is not precluded from the risk of being sold by the bank if the borrower like the plaintiff in this case defaults in making the necessary payments to secure the debt received and acknowledged as a loan or overdraft. There is no sentimental or spiritual value of any immovable property offered as security to legitimise the money borrowed for use by the borrower in the form of a loan.
35. Accordingly, it was submitted that the Applicants will not suffer irreparable harm incapable of being compensated by way of damages in the event the suit parcel of land is sold to meet the defaulted monies.
36. On the issue of balance of convenience, it was submitted that the same lies with allowing the Respondent`s to realize the facilities it granted to the 1 st Applicant. That the balance of convenience tilts in favour of allowing the Respondent to exercise its statutory power of sale as postponing it will only serve to compound the interest in default to the detriment of the Respondent. Reliance was placed in Palker Enterprises Limited & another v Co-Operative Bank of Kenya (supra) where it was held that:
On the balance of convenience, the 2 nd Plaintiff is in admitted default. The Respondent, as a financial institution, continues to suffer prejudice due to non-performance of the facilities. The balance of convenience therefore tilts in favour of allowing the Respondent to exercise its statutory power of sale, provided the statutory procedures have been complied with.
37. On the second issue on whether the court should set aside the ex parte order of injunction issued on 24 th March 2026, the Respondent submitted that order 40 Rule 7 of the Civil Procedure Rules allows the court to discharge, vary or set aside any order for injunction on application by any party dissatisfied with such order. That it is trite law that a party seeking an ex parte order of injunction has an obligation to the court to make the fullest possible disclosure of all material facts within its knowledge and if this is not done then he cannot obtain any advantage from the proceedings and he may be deprived of any advantage he may have already obtained. The Respondent cited the case of Kenya Hospital Association Limited v Rono & 9 others; Kambuni (Interested Party) (Civil suit E 233 & E015 of 2024 (consolidated) (2024) KEHC 15844 (Commercial and Tax) (13 December 2024) (Ruling) where Mugambi J stated that:
It is well established that any party approaching a court to seek ex-parte interim orders bears a duty of full and frank disclosure of all material facts. This duty is crucial for ensuring that the court makes an informed and balanced decision in the absence of the opposing party. As observed by Onguto, J. in Republic V Kenya Medical Training College & Another Ex-Parte Kenya Universities and Colleges Central Placement Service [2015] eKLR:
“… I must state and emphasize the high duty of candour fixed upon any applicant to court, appearing ex parte. A party appearing before the court without notice to the other (ex parte) must exhibit a high quality and degree of sincerity and honesty. He must be guileless. He must be frank. He must be open. He must keep nothing that touches on the matter away from the court. He must act in utmost good faith. If he does not so act, he does so at his own risk.”
38. It was submitted that the Applicants herein obtained the injunctive relief on the premises of material non-disclosure, misrepresentation and concealment of material facts in that they did not disclose that they were indebted to the tune of Ksh.610,123,601.35. That they did not disclose they were served with statutory notices pursuant to the provisions of section 90 and 96 of the Land Act and Rule 15(d) of the of the Auctioneers Rules which they did not comply with. That in view of that the ex parte orders ought to be discharged. The Respondent in this respect relied on the case of Gabriel Kariuki Gitonga & others v Redken Wells Ltd and others Nairobi Commercial and Admiralty Division Civil case No. E129 of 2021 where the court observed that:
Material non-disclosure is a serious issue which, once the court is made aware of it, would lead to the setting aside and discharge of an ex-parte order forthwith. Good faith is so central in an ex-parte circumstances that a party who approaches the court in such circumstances must be absolutely truthful.
39. For the above reasons the court was urged to discharge the injunctive orders.
Analysis and determination
40. I have considered the affidavits filed, the annexures thereto, the submissions filed by counsels for both parties and the applicable law. The issues for determination are whether the Application has met the threshold for grant of temporary orders of injunction as set out in the case of Giella v Cassman Brown (supra), to wit;
(1) Whether the applicants have established a prima facie case with a probability of success;
(2) Whether the applicants have demonstrated that they will suffer irreparable injury unless the orders sought are granted and
(3) Whether the balance of convenience is in favour of granting the injunction.
Whether the applicants have established a prima facie case
41. A prima facie case was defined in the case of Mrao Ltd v First American Bank of Kenya Ltd & 2 others [2003] KLR 123 thus:
“…In civil cases a prima facie case is a case in which on the material presented to the Court a tribunal properly directing itself will conclude that there exists a right which has apparently been infringed by the opposite party to call for an explanation or rebuttal from the latter. A prima facie case is more than an arguable case. It is not sufficient to raise issues but the evidence must show an infringement of a right, and the probability of success of the applicant’s case upon trial. That is clearly a standard, which is higher than an arguable case.”
42. The Court of Appeal in Nguruman Limited vs. Jan Bonde Nielsen & 2 Others [2014] eKLR stated the following on the subject:
“The party on whom the burden of proving a prima facie case lies must show a clear and unmistakable right to be protected which is directly threatened by an act sought to be restrained, the invasion of the right has to be material and substantive and there must be an urgent necessity to prevent the irreparable damage that may result from the invasion. We reiterate that in considering whether or not a prima facie case has been established, the court does not hold a mini trial and must not examine the merits of the case closely. All that the court is to see is that on the face of it the person applying for an injunction has a right which has been or is threatened with violation. Positions of the parties are not to be proved in such a manner as to give a final decision in discharging a prima facie case. The applicant need not establish title it is enough if he can show that he has a fair and bona fide question to raise as to the existence of the right which he alleges. The standard of proof of that prima facie case is on a balance or, as otherwise put, on a preponderance of probabilities. This means no more than that the Court takes the view that on the face of it the applicant’s case is more likely than not to ultimately succeed.”
43. The applicants contend that the Respondent in its Letters of Offer dated 12 th August 2024 and 27 th October 2024 changed the baking rate accorded to the applicants but there is no evidence of compliance with section 44 of the Banking Act which requires banks to notify the Minister for Finance before any change in the rate of banking is effected. They submitted that the contract was entered into in violation of the law and the same are unenforceable. The respondent on the other hand contended that the contract was valid and thus parties were bound by the terms of the contract. In view of the opposing positions taken by both sides, I find that the issue requires further interrogation by this court in a full hearing. At the face value I am of the view that the issue raises a prima facie case.
44. The Applicants contend that the Respondent was charging them an interest of over 36.6% which they argued is unconscionable. That they also charged them “default interest” and “additional interest” which were illegal. They submitted that though parties have freedom to enter into contracts, this has not prevented the courts from interfering with unconscionable contracts.
45. The respondent on the other hand submitted that they maintained constant interest of 16.5%. That a dispute over interest or amount owing is not a ground for grant of temporary orders of injunction.
46. It is trite that courts have power to interfere with oppressive contracts. The Court of Appeal in the case of Kenya Commercial Finance Company Ltd vs. Ngeny & Another [2002] 1KLR had the following to say:
“The court will not interfere where parties have contracted on arms-length basis. However by its equitable jurisdiction, this court will set aside any bargain which is harsh, unconscionable and oppressive or where having agreed to certain terms and conditions, thereafter imposes additional terms upon the other party. Equity can intervene to relieve that party of such conditions.”
47. In view of the contention by the applicants that the respondent was charging them illegal interest, I find this contention to raise a prima facie case. A temporary injunction would, in my view, be in order until the issue is resolved. A prima facie case has thereby been established.
48. The applicants contend that they were not issued with statutory notices before the Respondent exercised its statutory power of sale under the provisions of section 90 and 96 of the Land Act. I have perused the documents filed by the respondent and noted that the said notices were served and were accompanied by a certificate of postage stamp of Postal Corporation of Kenya. I have also noted that the respondent conducted a valuation of the suit property before the intended sale.
Irreparable harm
49. On the issue of irreparable loss, the applicants were required to show that they will suffer a loss that cannot be compensated by way of damages. In Mureithi vs. City Council of Nairobi [1976-1985] EA 331 Madan JJA referred to L. Diplock in American Cynamid Co. vs. Ethicon Ltd [1975] 1All ER 504 as follows;
“The object of Interlocutory injunction is to protect the plaintiff against injury by violation of his right of which he could not be adequately compensated in damages recoverable in the action if the uncertainty were resolved in his favor at the trial…if damages in the measure recoverable at common law would be adequate remedy and the defendant would be in a financial po
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