1. This Ruling is in respect of the Plaintiffs' Notice of Motion application dated 17th September, 2025, brought under Section 3A of the Civil Procedure Act and Order 40 of the Civil Procedure Rules. Through the said application, the Plaintiffs seek several interlocutory reliefs, primarily:
1. An injunction restraining the Defendants from disposing of, alienating, transferring, or selling the property known as Dagoretti/Uthiru/1438 (the "Suit Property") and the 50 apartments erected thereon.
2. An injunction restraining the Land Registrar from registering any transfer or interest in the Suit Property.
3. An injunction restraining the 4th Defendant (Espader Limited) from collecting rental income from the Suit Property.
4. An order directing that the rental collections from the 50 apartments be deposited into NCBA Account No. 2180630156 to offset the loan.
5. An order compelling the 1st Defendant to render a complete, true, and accurate account of the 2nd Defendant's accounts.
Background Facts
2. The genesis of this dispute traces back to a commercial lending relationship between the 1st Defendant (NCBA Bank Kenya PLC) and the 2nd Defendant (Saxon Investments Limited). The late Gerald Lidali Akali, for whose estate the Plaintiffs act as administrators, was the majority shareholder (70%) and a director of the 2nd Defendant. To secure loan facilities advanced to the 2nd Defendant, the deceased executed a first-ranking legal charge over the Suit Property, alongside a personal guarantee and an all-asset debenture.
3. The Plaintiffs contend that following the demise of Gerald Lidali Akali, they were unlawfully locked out of the 2nd Defendant's affairs by the surviving directors. They aver that the rental income generated from the Suit Property (estimated at over Kshs. 1,000,000/= monthly) was deposited into the designated NCBA account and was sufficient to service the monthly loan instalments.
4. The Plaintiffs aggressively challenge the validity of the statutory notices. They assert that the 90-day statutory notice dated 30th July, 2024, dispatched via registered post to P.O. Box 197-50204, Kimilili, was never served upon them. They adduce evidence from the local postmaster indicating that the said postal box belonged to St. James ACK Academy, was closed for non-payment in 2016, and that the registered mail was marked "Return to Sender."
5. Furthermore, the Plaintiffs allege irregularities in the creation of the security, noting that the Charge appears to have been registered in June 2020, well before the Letter of Offer was accepted in August 2021.
6. The 1st and 4th Defendants vehemently oppose the application. The 1st Defendant avers that the 2nd Defendant's accounts were serially underfunded, constituting a clear default. Consequently, the 1st Defendant instructed the 3rd Defendant (Josrick Merchants Auctioneers) to realize the security. The 1st Defendant maintains it fulfilled its statutory obligation by dispatching the requisite notices to the last known address provided by the chargor.
7. Crucially, the 1st Defendant deposes that the Suit Property was lawfully advertised and subsequently sold at a public auction on 10th June, 2025 to Minka Resources Limited for Kshs. 124,000,000/=. The title documents and transfer forms were released to the purchaser's agent on 15th August, 2025. The 4th Defendant confirms it is the appointed managing agent for Minka Resources Limited and has lawfully taken possession and issued new leases to the tenants.
Issues for Determination
7. Having carefully considered the Notice of Motion, the rival affidavits, the written submissions, and the oral highlights by Counsel for the parties, the Court frames the following issues for determination:
(a.) Whether the Plaintiffs have established a prima facie case with a probability of success to warrant the grant of an interlocutory injunction restraining the transfer of the Suit Property.
(b.) Whether the prayers seeking to restrain the 4th Defendant from collecting rent and compelling the deposit of rent into the 1st Defendant's account are merited.
(c.) Whether it is procedurally appropriate to compel the 1st Defendant to render statements of account at this interlocutory stage.
Analysis
8. The principles guiding the grant of an interlocutory injunction are firmly settled in our jurisprudence as laid down in the locus classicus of Giella v Cassman Brown & Co Ltd [1973] EA 358. An applicant must show a prima facie case with a probability of success; demonstrate irreparable injury that cannot be adequately compensated by damages; and, if the Court is in doubt, prove that the balance of convenience tilts in their favour.
9. On the first issue regarding the sale and transfer of the Suit Property, the evidentiary record confirms that the 1st Defendant exercised its statutory power of sale, and the Suit Property was sold to Minka Resources Limited at a public auction on 10th June, 2025. It is a well-established tenet of property law that upon the fall of the hammer at a valid public auction, the chargor's equity of redemption is irrevocably extinguished. See Simon Njoroge Mburu v Consolidated Bank of Kenya Ltd [2014] KEHC 7407 (KLR).
10. The Plaintiffs' primary attack on the sale is the alleged non-service of the 90-day statutory notice, relying on the "Return to Sender" slip. Section 90 of the Land Act mandates the service of a notice upon default. While the Plaintiffs fault the 1st Defendant for utilizing a closed postal box, it is settled law that the burden of updating a lending institution on any change of address rests squarely on the borrower. As observed in Levnel Enterprises Limited & another v Grofin SGB Kenya Limited & another [2020] KEHC 5065 (KLR), a party cannot seek refuge behind their own failure to maintain their postal box as an excuse to claim lack of service. The 1st Defendant fulfilled its statutory duty by dispatching the notice via registered post to the address on record.
11. Even if the Court were to find procedural irregularities in the service of the notices or the chronology of the charge registration, such defects do not operate to unravel a completed sale to an innocent third-party purchaser. The Court of Appeal in City Finance Limited & 2 others v Nyanja Holdings Limited & 10 others [2026] KECA 106 (KLR) recently reaffirmed the sanctity of Section 99 of the Land Act, holding that a completed statutory sale is unimpeachable and cannot be cancelled unless fraud or collusion involving the purchaser is specifically pleaded and strictly proved. The Plaintiffs have not adduced strict proof of fraud against Minka Resources Limited or its agent, the 4th Defendant. A party prejudiced by an irregular exercise of the power of sale is restricted to a remedy in damages. Consequently, the Plaintiffs have failed to establish a prima facie case to injunct the Land Registrar or halt the transfer.
12. Turning to the prayers seeking to restrain the 4th Defendant from collecting rent and directing that rent be deposited into NCBA Account No. 2180630156. Having established that the equity of redemption was extinguished and the property lawfully sold, the purchaser is legally entitled to take possession and enjoy the fruits of the property. The 4th Defendant, acting as the duly appointed agent of the purchaser, is lawfully collecting rent. These prayers are therefore untenable and are hereby declined.
13. Lastly, regarding the prayer compelling the 1st Defendant to render a complete account of the 2nd Defendant's bank accounts. The Plaintiffs concede that they are the legal administrators of the estate of the majority shareholder of the 2nd Defendant. The proper mechanism for majority shareholders to access corporate bank statements is through the internal governance structures provided under the Companies Act, 2015, rather than seeking equitable injunctive relief against a third-party lending institution. Furthermore, a mere demand for accounts does not constitute grounds to paralyze the realization of security.
14. The Plaintiffs have stumbled at the first hurdle of the Giella test by failing to establish a prima facie case with a probability of success. The Court need not delve into the elements of irreparable injury and the balance of convenience, though it is evident that the balance tilts heavily in favour of the Defendants who are protecting lawfully acquired proprietary rights following a statutory sale.
15. As to costs, the same lie at the discretion of this Court and ordinarily follow the event. The Plaintiffs having lost the application, the costs thereof are awarded to the Defendants.
Determination
16. Consequently, having analyzed the pleadings, the rival submissions, and the applicable law, this Court makes the following orders:
1. The Plaintiffs’ application by way of a Notice of Motion dated 17th September, 2025 is HEREBY dismissed in its entirety for lack of merit.
2. The interim orders issued on 25th September, 2025 are HEREBY discharged.
3. The costs of this application are awarded to the Defendants.
17. It is so ordered.
DATED, SIGNED AND DELIVERED AT MILIMANI THIS 09TH DAY OF JULY, 2026
NJOROGE BENJAMIN K.
JUDGE
In the presence of:
Mr. Mokaya for the Plaintiffs/Applicants.
Miss Cheruiyot holding brief for Mr. Kongere for the 1st Defendant/Respondent.
Miss Ithondeka for the 5th Defendant/Respondent.
Mr. John Paul - Court Assistant
1. An injunction restraining the Defendants from disposing of, alienating, transferring, or selling the property known as Dagoretti/Uthiru/1438 (the "Suit Property") and the 50 apartments erected thereon.
2. An injunction restraining the Land Registrar from registering any transfer or interest in the Suit Property.
3. An injunction restraining the 4th Defendant (Espader Limited) from collecting rental income from the Suit Property.
4. An order directing that the rental collections from the 50 apartments be deposited into NCBA Account No. 2180630156 to offset the loan.
5. An order compelling the 1st Defendant to render a complete, true, and accurate account of the 2nd Defendant's accounts.
Background Facts
2. The genesis of this dispute traces back to a commercial lending relationship between the 1st Defendant (NCBA Bank Kenya PLC) and the 2nd Defendant (Saxon Investments Limited). The late Gerald Lidali Akali, for whose estate the Plaintiffs act as administrators, was the majority shareholder (70%) and a director of the 2nd Defendant. To secure loan facilities advanced to the 2nd Defendant, the deceased executed a first-ranking legal charge over the Suit Property, alongside a personal guarantee and an all-asset debenture.
3. The Plaintiffs contend that following the demise of Gerald Lidali Akali, they were unlawfully locked out of the 2nd Defendant's affairs by the surviving directors. They aver that the rental income generated from the Suit Property (estimated at over Kshs. 1,000,000/= monthly) was deposited into the designated NCBA account and was sufficient to service the monthly loan instalments.
4. The Plaintiffs aggressively challenge the validity of the statutory notices. They assert that the 90-day statutory notice dated 30th July, 2024, dispatched via registered post to P.O. Box 197-50204, Kimilili, was never served upon them. They adduce evidence from the local postmaster indicating that the said postal box belonged to St. James ACK Academy, was closed for non-payment in 2016, and that the registered mail was marked "Return to Sender."
5. Furthermore, the Plaintiffs allege irregularities in the creation of the security, noting that the Charge appears to have been registered in June 2020, well before the Letter of Offer was accepted in August 2021.
6. The 1st and 4th Defendants vehemently oppose the application. The 1st Defendant avers that the 2nd Defendant's accounts were serially underfunded, constituting a clear default. Consequently, the 1st Defendant instructed the 3rd Defendant (Josrick Merchants Auctioneers) to realize the security. The 1st Defendant maintains it fulfilled its statutory obligation by dispatching the requisite notices to the last known address provided by the chargor.
7. Crucially, the 1st Defendant deposes that the Suit Property was lawfully advertised and subsequently sold at a public auction on 10th June, 2025 to Minka Resources Limited for Kshs. 124,000,000/=. The title documents and transfer forms were released to the purchaser's agent on 15th August, 2025. The 4th Defendant confirms it is the appointed managing agent for Minka Resources Limited and has lawfully taken possession and issued new leases to the tenants.
Issues for Determination
7. Having carefully considered the Notice of Motion, the rival affidavits, the written submissions, and the oral highlights by Counsel for the parties, the Court frames the following issues for determination:
(a.) Whether the Plaintiffs have established a prima facie case with a probability of success to warrant the grant of an interlocutory injunction restraining the transfer of the Suit Property.
(b.) Whether the prayers seeking to restrain the 4th Defendant from collecting rent and compelling the deposit of rent into the 1st Defendant's account are merited.
(c.) Whether it is procedurally appropriate to compel the 1st Defendant to render statements of account at this interlocutory stage.
Analysis
8. The principles guiding the grant of an interlocutory injunction are firmly settled in our jurisprudence as laid down in the locus classicus of Giella v Cassman Brown & Co Ltd [1973] EA 358. An applicant must show a prima facie case with a probability of success; demonstrate irreparable injury that cannot be adequately compensated by damages; and, if the Court is in doubt, prove that the balance of convenience tilts in their favour.
9. On the first issue regarding the sale and transfer of the Suit Property, the evidentiary record confirms that the 1st Defendant exercised its statutory power of sale, and the Suit Property was sold to Minka Resources Limited at a public auction on 10th June, 2025. It is a well-established tenet of property law that upon the fall of the hammer at a valid public auction, the chargor's equity of redemption is irrevocably extinguished. See Simon Njoroge Mburu v Consolidated Bank of Kenya Ltd [2014] KEHC 7407 (KLR).
10. The Plaintiffs' primary attack on the sale is the alleged non-service of the 90-day statutory notice, relying on the "Return to Sender" slip. Section 90 of the Land Act mandates the service of a notice upon default. While the Plaintiffs fault the 1st Defendant for utilizing a closed postal box, it is settled law that the burden of updating a lending institution on any change of address rests squarely on the borrower. As observed in Levnel Enterprises Limited & another v Grofin SGB Kenya Limited & another [2020] KEHC 5065 (KLR), a party cannot seek refuge behind their own failure to maintain their postal box as an excuse to claim lack of service. The 1st Defendant fulfilled its statutory duty by dispatching the notice via registered post to the address on record.
11. Even if the Court were to find procedural irregularities in the service of the notices or the chronology of the charge registration, such defects do not operate to unravel a completed sale to an innocent third-party purchaser. The Court of Appeal in City Finance Limited & 2 others v Nyanja Holdings Limited & 10 others [2026] KECA 106 (KLR) recently reaffirmed the sanctity of Section 99 of the Land Act, holding that a completed statutory sale is unimpeachable and cannot be cancelled unless fraud or collusion involving the purchaser is specifically pleaded and strictly proved. The Plaintiffs have not adduced strict proof of fraud against Minka Resources Limited or its agent, the 4th Defendant. A party prejudiced by an irregular exercise of the power of sale is restricted to a remedy in damages. Consequently, the Plaintiffs have failed to establish a prima facie case to injunct the Land Registrar or halt the transfer.
12. Turning to the prayers seeking to restrain the 4th Defendant from collecting rent and directing that rent be deposited into NCBA Account No. 2180630156. Having established that the equity of redemption was extinguished and the property lawfully sold, the purchaser is legally entitled to take possession and enjoy the fruits of the property. The 4th Defendant, acting as the duly appointed agent of the purchaser, is lawfully collecting rent. These prayers are therefore untenable and are hereby declined.
13. Lastly, regarding the prayer compelling the 1st Defendant to render a complete account of the 2nd Defendant's bank accounts. The Plaintiffs concede that they are the legal administrators of the estate of the majority shareholder of the 2nd Defendant. The proper mechanism for majority shareholders to access corporate bank statements is through the internal governance structures provided under the Companies Act, 2015, rather than seeking equitable injunctive relief against a third-party lending institution. Furthermore, a mere demand for accounts does not constitute grounds to paralyze the realization of security.
14. The Plaintiffs have stumbled at the first hurdle of the Giella test by failing to establish a prima facie case with a probability of success. The Court need not delve into the elements of irreparable injury and the balance of convenience, though it is evident that the balance tilts heavily in favour of the Defendants who are protecting lawfully acquired proprietary rights following a statutory sale.
15. As to costs, the same lie at the discretion of this Court and ordinarily follow the event. The Plaintiffs having lost the application, the costs thereof are awarded to the Defendants.
Determination
16. Consequently, having analyzed the pleadings, the rival submissions, and the applicable law, this Court makes the following orders:
1. The Plaintiffs’ application by way of a Notice of Motion dated 17th September, 2025 is HEREBY dismissed in its entirety for lack of merit.
2. The interim orders issued on 25th September, 2025 are HEREBY discharged.
3. The costs of this application are awarded to the Defendants.
17. It is so ordered.
DATED, SIGNED AND DELIVERED AT MILIMANI THIS 09TH DAY OF JULY, 2026
NJOROGE BENJAMIN K.
JUDGE
In the presence of:
Mr. Mokaya for the Plaintiffs/Applicants.
Miss Cheruiyot holding brief for Mr. Kongere for the 1st Defendant/Respondent.
Miss Ithondeka for the 5th Defendant/Respondent.
Mr. John Paul - Court Assistant