1. Before this Honourable Court for determination is a Notice of Motion Application filed under a Certificate of Urgency, dated 17th July 2024. The Application is brought pursuant to the provisions of Order 51 Rules 1 and 13, Order 40 of the Civil Procedure Rules, Sections 1A, 1B, 3A, and 63(e) of the Civil Procedure Act, Articles 65, 50(1), 159(2)(d), and 165(3)(a) of the Constitution of Kenya, as well as all other enabling provisions of the law.
2. The Applicant seeks the following orders: -
a. Spent
b. Spent
c. That an order of injunction do issue restraining the Defendants/Respondents, their officers, its agents, employees, functionaries or officials by whatever name called from advertising for sale, offering for sale, selling, transferring and or dealing in any way whatsoever with the property L.R Ruiru KIU BLOCK 3/2188 pending the hearing and determination of this suit.
d. That the costs of this Application be provided for.
3. The Applicant seeks injunctive relief against the intended sale of the matrimonial property known as L.R. Ruiru Kiu Block 3/2188, which was charged to secure a loan of Kshs 18,400,000 advanced by the 1st Defendant in September 2021. The facility carried a repayment period of 120 months at a monthly instalment of Kshs 274,732 at an agreed interest rate of 14.25 per cent per annum.
4. The applicant alleges that, the 1st Defendant unilaterally increased the interest rate to over 29 per cent, without notice, altering the loan terms to its detriment. Further that despite repaying all arrears, including Kshs 685,737.90 settled between January and April 2024 the 1st Defendant failed to issue a clear statement of account and instead suppressed vital financial information.
5. The Applicant contends that the current property valuation exceeds Kshs 38 million, yet it is being sold for Kshs 18 million, pointing to fraudulent intent. The Applicant further alleges continuous unlawful increases in interest rates and lack of transparency regarding loan repayments, has only reduced the loan by Kshs 332,000, with no explanation for the remainder.
6. The applicant further contends that no statutory notices of 90 and 45 days as required under Sections 90 and 96 of the Land Act were properly served, making the intended sale through public auction unlawful. The Applicant asserts that the sale process is actuated by malice and unjust enrichment, especially since he is meeting his repayment obligations.
7. The applicant avers that it has established a prima facie case with high chances of success, and granting the injunction will not prejudice the Respondents given the substantial value of the secured property but if an injunction is not issued the application will be rendered nugatory and will cause irreparable loss to the applicant.
8. In response, the Respondents filed a Replying Affidavit sworn by Samuel Njuguna, the Legal Officer of the 1st Respondent, on 30th October 2024. He stated that the Plaintiff/Applicant was granted financial facilities and accommodations totaling Kshs 18,400,000. To secure these facilities, a charge instrument dated 15th September 2021 was executed over the property known as L.R No. Ruiru Kiu Block 3/2188. The Respondents further averred that it was a clear and express term of the charge instrument that, in the event of default, the Bank reserved the right under the provisions of the Land Act to exercise its statutory power of sale to recover the amounts due.
9. The 1st Respondent asserted that all necessary statutory notices were duly issued. It was only after the property had been advertised in the newspaper with the auction scheduled for 11th September 2024 that the Applicant proceeded to file the present Application seeking injunctive reliefs to restrain the impending sale of the suit property.
10. Pursuant to the directions of the Court issued on 26th November 2024, the Applicant filed his written submissions dated 29th November 2024, while the Respondents’ submissions are dated 25th November 2024.
11. The Applicant submitted on a single issue: whether the applicant is entitled to the orders sought. He relied on the principles established in the cases of Giella v Cassman Brown, Satrose Ayuma & 11 Others v Registered Trustees of the Kenya Railways Staff Benefits Scheme & 2 Others, and Suleiman v Amboseli Resort Limited, Civil Case No. 1078 of 2003, which outline the requirements for the grant of temporary injunctions.
12. On whether a prima facie case had been established, the Applicant argued that the Court should examine the adequacy of the statutory notices and his loan servicing status. He contended that the 1st Respondent failed to properly serve the required 90-day and 40-day statutory notices. While the 1st Respondent exhibited the notices in its Replying Affidavit, the Applicant pointed out that it did not provide proof of actual postage, such as a certificate of posting. In support, the Applicant cited Cordeiro & Another v Shamji (Civil Suit 329 of 2014) [2015] KEHC 6977 (KLR), asserting that the Respondent’s failure rendered the intended sale legally defective.
13. On whether the Applicant has been servicing the loan, it was submitted that he provided sufficient evidence of consistent payments. Specifically, he had repaid Kshs 9,381,223 by August 2024, excluding an additional Kshs 1 million deposited on 6th November 2024. This, according to the Applicant, reflected good faith and effort, thereby justifying the grant of injunctive relief as an equitable remedy.
14. Regarding irreparable harm, the Applicant contended that if an injunction was not granted, he faced imminent loss of his matrimonial home, despite actively servicing the loan. Such loss, he argued, would constitute irreparable loss and prejudice.
15. As to the balance of convenience, the Applicant submitted that it clearly tilted in his favour. He had demonstrated ongoing repayment efforts and a legitimate right to property protection. Moreover, the 1st Respondent’s failure to comply with statutory notice requirements warranted judicial intervention. Reliance was placed on Suleiman v Amboseli Resort Limited, Civil Case No. 1078 of 2003 (2004) 2 KLR 589.
16. The Respondents submitted on the main issue: whether the Applicant is entitled to injunctive relief to restrain the respondent from selling the suit property, despite defaulting on loan repayment obligations under the charge instrument.
17. On the first principle for granting an injunction, the Respondents argued that the Applicant had failed to establish a prima facie case. They relied on the case of Mrao Limited v First American Bank & 2 Others (2003) eKLR, submitting that the Applicant had not demonstrated any infringement of his rights. The Respondents also argued that the Applicant had failed to prove he would suffer irreparable harm if the injunction was not granted, asserting that any potential harm alleged could be adequately compensated through monetary means if proven at trial. In support, they cited Obama Enterprises Limited & 2 Others v Kenya Women Microfinance Bank Limited (Civil Case E315 of 2021) [2021] KEHC 351 (KLR) (Commercial and Tax) (16 December 2021) (Ruling).
18. The Respondents further submitted that if the court finds any doubt in satisfying the conditions for granting interlocutory injunctions, the matter should be determined on a balance of convenience. They contended that the balance tilts in their favour, given that the Applicant is in substantial default, has breached the charge agreement, and has failed to act in good faith.
19. On the issue of discharging injunctions, the Respondents relied on Order 40 Rule 7 of the Civil Procedure Rules and the case of Owino, Ndoga & Another v Board of Trustees National Social Security Funds & Another [2024] KEELC 967 (KLR), which outlines factors guiding the court’s discretion.
20. The Respondents argued that the Applicant failed to disclose material facts to the court. Specifically, he did not inform the court that he failed to deposit the required funds within the stipulated 45-day period, that his payments were irregular, and that he defaulted in 2023 despite receiving multiple statutory notices. The Respondents asserted that such concealment is a deliberate omission that disqualifies the Applicant from receiving equitable relief.
21. Additionally, the Respondents argued that the Applicant had not shown sufficient grounds for continued protection, considering his breach of the terms of the charge instrument. They cited Benl Development Limited v First Community Bank Limited [2021] eKLR, emphasizing that injunctive reliefs are not punitive but intended to preserve the status quo pending court determination. They submitted that the status quo requires the borrower to continue repaying the loan facilities, regardless of ongoing litigation.
22. In conclusion, the Respondents submitted that the Applicant’s case lacks merit and does not meet the threshold for an injunction. They urged the court to discharge the interim orders previously granted.
23. I have considered the averments made by all parties and the written submissions filed. I find that only one issue arises for determination: whether the Applicant has demonstrated that he is deserving of the injunctive reliefs sought.
24. The burden of proof lies on the Applicant to demonstrate that he has satisfied the legal threshold for the grant of an injunction. It is worth emphasizing that injunctions are a discretionary equitable remedy, dependent on the specific facts of each case. The applicable law on injunctions is found under Order 40 Rule 1(a) of the Civil Procedure Rules. The principles guiding the grant of injunctions were articulated in Giella v Cassman Brown & Co. Ltd (1973) E.A. 385 where the conditions are summed up as follows: first, an applicant must show a prima facie case with a probability of success. secondly, an interlocutory injunction will not normally be granted unless the applicant shows he will suffer irreparable injury which would not adequately be compensated by an award of damages. Thirdly, if the court is in doubt, it will decide an application on the balance of convenience.”
25. In Mrao Ltd v First American Bank of Kenya Ltd & 2 Others (2003) KLR 125, the Court of Appeal clarified the meaning of a prima facie case. Thus at this interlocutory stage, the Court is not expected to delve into the merits of the substantive case. As stated in Nguruman Ltd v Jan Bonde Nielsen, CA No. 77 of 2020, the court must resist holding a mini-trial and instead focus on whether the Applicant has demonstrated a threatened or actual violation of rights sufficient to warrant interim protection.
26. The Applicant instituted proceedings on grounds that the 1st Respondent failed to serve him with statutory notices in compliance with Section 56(2) of the Land Registration Act, and failed to serve the three-month statutory notices as required under Sections 90 and 96(1) of the Land Act. He further contends that the 2nd Respondent did not serve the 45-day notice in accordance with Rule 15(d) of the Auctioneers Rules. Further the he has raised serious questions as to the propriety of interest rate adjustments and the computation of the outstanding loan balance.
27. It is not disputed that the 1st Respondent registered a charge over L.R No. Ruiru/Kiu Block 3/2188 in September 2021. It is also uncontested that the Applicant is both the borrower and the registered owner, and that the loan remains outstanding. The Applicant’s contention, however, is that due to the Respondents' failure to properly serve the required statutory notices, the enforcement of the power of sale is premature and procedurally flawed.
28. Upon examining the court record and the affidavit evidence from the 1st Respondent, the Court notes that copies of both the 90-day notice (dated 25th May 2023) and the 40-day notice (dated 18th April 2024) were availed. However, the certificate of postage was not exhibited raising questions as to whether these notices were properly dispatched in accordance with the law.
29. The Court has also reviewed the 45-day Redemption Notice issued by the 2nd Respondent dated 20th June 2024, along with the certificate of service sworn by Joseph Gathirwa Muturi on 24th June 2024, confirming service on the Applicant. While this evidence supports proper service of the 45-day notice, it is important to note that prior requisite notices must be served before issuance of the redemption notice.
30. This Court finds that the 1st Respondent merely provided copies of the statutory notices, without producing certificates of postage as required for proper service. The absence of this critical evidence supports the Applicant’s claim of non-receipt. The Court is guided by the decision in Nyangilo Ochieng & Another v Kenya Commercial Bank, Civil Appeal No. 148 of 1995 (1996) eKLR, this Court reiterates that the burden of proving service or postage of statutory notices lies with the 1st Respondent. The absence of such proof specifically, certificates of postage raise a prima facie ground for granting injunctive relief, as any sale of the charged property at this stage may expose the Applicant to irreparable loss.
31. This Court is not making a final determination on the 1st Respondent’s conduct but is satisfied that, based on the material presented, the Applicant has raised a good and arguable case, appropriate for resolution at the trial.
32. On the principle of balance of convenience, upon weighing the risk of potential harm to both parties, this Court finds that the potential injustice to the Applicant stemming from questionable service of statutory notices far outweighs any inconvenience the 1st Respondent may suffer. Accordingly, the intended sale of the suit property shall not proceed, and the balance of convenience favors the Applicant.
33. Consequently, the Applicant is found to have met the conditions for the grant of an injunctive order. As a condition precedent to the issuance of the of the injunctive orders this courts makes the following orders;
a. That an order of injunction is hereby issued restraining the Defendants/Respondents, their officers, its agents, employees, functionaries or officials by whatever name called from advertising for sale, offering for sale, selling, transferring and or dealing in any way whatsoever with the property L.R Ruiru KIU BLOCK 3/2188 pending the hearing and determination of this suit.
b. The Applicant shall continue to make monthly instalments of kshs. 274,732/- starting August 2025, directly to the 1st Respondent and throughout the pendency of this suit.
c. In the event of default on any instalment, the 1st and 2nd Respondents shall be at liberty to proceed with the sale of the subject property. In such an event, the injunctive orders herein shall stand automatically discharged.
d. The costs of the application shall be in the cause.
2. The Applicant seeks the following orders: -
a. Spent
b. Spent
c. That an order of injunction do issue restraining the Defendants/Respondents, their officers, its agents, employees, functionaries or officials by whatever name called from advertising for sale, offering for sale, selling, transferring and or dealing in any way whatsoever with the property L.R Ruiru KIU BLOCK 3/2188 pending the hearing and determination of this suit.
d. That the costs of this Application be provided for.
3. The Applicant seeks injunctive relief against the intended sale of the matrimonial property known as L.R. Ruiru Kiu Block 3/2188, which was charged to secure a loan of Kshs 18,400,000 advanced by the 1st Defendant in September 2021. The facility carried a repayment period of 120 months at a monthly instalment of Kshs 274,732 at an agreed interest rate of 14.25 per cent per annum.
4. The applicant alleges that, the 1st Defendant unilaterally increased the interest rate to over 29 per cent, without notice, altering the loan terms to its detriment. Further that despite repaying all arrears, including Kshs 685,737.90 settled between January and April 2024 the 1st Defendant failed to issue a clear statement of account and instead suppressed vital financial information.
5. The Applicant contends that the current property valuation exceeds Kshs 38 million, yet it is being sold for Kshs 18 million, pointing to fraudulent intent. The Applicant further alleges continuous unlawful increases in interest rates and lack of transparency regarding loan repayments, has only reduced the loan by Kshs 332,000, with no explanation for the remainder.
6. The applicant further contends that no statutory notices of 90 and 45 days as required under Sections 90 and 96 of the Land Act were properly served, making the intended sale through public auction unlawful. The Applicant asserts that the sale process is actuated by malice and unjust enrichment, especially since he is meeting his repayment obligations.
7. The applicant avers that it has established a prima facie case with high chances of success, and granting the injunction will not prejudice the Respondents given the substantial value of the secured property but if an injunction is not issued the application will be rendered nugatory and will cause irreparable loss to the applicant.
8. In response, the Respondents filed a Replying Affidavit sworn by Samuel Njuguna, the Legal Officer of the 1st Respondent, on 30th October 2024. He stated that the Plaintiff/Applicant was granted financial facilities and accommodations totaling Kshs 18,400,000. To secure these facilities, a charge instrument dated 15th September 2021 was executed over the property known as L.R No. Ruiru Kiu Block 3/2188. The Respondents further averred that it was a clear and express term of the charge instrument that, in the event of default, the Bank reserved the right under the provisions of the Land Act to exercise its statutory power of sale to recover the amounts due.
9. The 1st Respondent asserted that all necessary statutory notices were duly issued. It was only after the property had been advertised in the newspaper with the auction scheduled for 11th September 2024 that the Applicant proceeded to file the present Application seeking injunctive reliefs to restrain the impending sale of the suit property.
10. Pursuant to the directions of the Court issued on 26th November 2024, the Applicant filed his written submissions dated 29th November 2024, while the Respondents’ submissions are dated 25th November 2024.
11. The Applicant submitted on a single issue: whether the applicant is entitled to the orders sought. He relied on the principles established in the cases of Giella v Cassman Brown, Satrose Ayuma & 11 Others v Registered Trustees of the Kenya Railways Staff Benefits Scheme & 2 Others, and Suleiman v Amboseli Resort Limited, Civil Case No. 1078 of 2003, which outline the requirements for the grant of temporary injunctions.
12. On whether a prima facie case had been established, the Applicant argued that the Court should examine the adequacy of the statutory notices and his loan servicing status. He contended that the 1st Respondent failed to properly serve the required 90-day and 40-day statutory notices. While the 1st Respondent exhibited the notices in its Replying Affidavit, the Applicant pointed out that it did not provide proof of actual postage, such as a certificate of posting. In support, the Applicant cited Cordeiro & Another v Shamji (Civil Suit 329 of 2014) [2015] KEHC 6977 (KLR), asserting that the Respondent’s failure rendered the intended sale legally defective.
13. On whether the Applicant has been servicing the loan, it was submitted that he provided sufficient evidence of consistent payments. Specifically, he had repaid Kshs 9,381,223 by August 2024, excluding an additional Kshs 1 million deposited on 6th November 2024. This, according to the Applicant, reflected good faith and effort, thereby justifying the grant of injunctive relief as an equitable remedy.
14. Regarding irreparable harm, the Applicant contended that if an injunction was not granted, he faced imminent loss of his matrimonial home, despite actively servicing the loan. Such loss, he argued, would constitute irreparable loss and prejudice.
15. As to the balance of convenience, the Applicant submitted that it clearly tilted in his favour. He had demonstrated ongoing repayment efforts and a legitimate right to property protection. Moreover, the 1st Respondent’s failure to comply with statutory notice requirements warranted judicial intervention. Reliance was placed on Suleiman v Amboseli Resort Limited, Civil Case No. 1078 of 2003 (2004) 2 KLR 589.
16. The Respondents submitted on the main issue: whether the Applicant is entitled to injunctive relief to restrain the respondent from selling the suit property, despite defaulting on loan repayment obligations under the charge instrument.
17. On the first principle for granting an injunction, the Respondents argued that the Applicant had failed to establish a prima facie case. They relied on the case of Mrao Limited v First American Bank & 2 Others (2003) eKLR, submitting that the Applicant had not demonstrated any infringement of his rights. The Respondents also argued that the Applicant had failed to prove he would suffer irreparable harm if the injunction was not granted, asserting that any potential harm alleged could be adequately compensated through monetary means if proven at trial. In support, they cited Obama Enterprises Limited & 2 Others v Kenya Women Microfinance Bank Limited (Civil Case E315 of 2021) [2021] KEHC 351 (KLR) (Commercial and Tax) (16 December 2021) (Ruling).
18. The Respondents further submitted that if the court finds any doubt in satisfying the conditions for granting interlocutory injunctions, the matter should be determined on a balance of convenience. They contended that the balance tilts in their favour, given that the Applicant is in substantial default, has breached the charge agreement, and has failed to act in good faith.
19. On the issue of discharging injunctions, the Respondents relied on Order 40 Rule 7 of the Civil Procedure Rules and the case of Owino, Ndoga & Another v Board of Trustees National Social Security Funds & Another [2024] KEELC 967 (KLR), which outlines factors guiding the court’s discretion.
20. The Respondents argued that the Applicant failed to disclose material facts to the court. Specifically, he did not inform the court that he failed to deposit the required funds within the stipulated 45-day period, that his payments were irregular, and that he defaulted in 2023 despite receiving multiple statutory notices. The Respondents asserted that such concealment is a deliberate omission that disqualifies the Applicant from receiving equitable relief.
21. Additionally, the Respondents argued that the Applicant had not shown sufficient grounds for continued protection, considering his breach of the terms of the charge instrument. They cited Benl Development Limited v First Community Bank Limited [2021] eKLR, emphasizing that injunctive reliefs are not punitive but intended to preserve the status quo pending court determination. They submitted that the status quo requires the borrower to continue repaying the loan facilities, regardless of ongoing litigation.
22. In conclusion, the Respondents submitted that the Applicant’s case lacks merit and does not meet the threshold for an injunction. They urged the court to discharge the interim orders previously granted.
23. I have considered the averments made by all parties and the written submissions filed. I find that only one issue arises for determination: whether the Applicant has demonstrated that he is deserving of the injunctive reliefs sought.
24. The burden of proof lies on the Applicant to demonstrate that he has satisfied the legal threshold for the grant of an injunction. It is worth emphasizing that injunctions are a discretionary equitable remedy, dependent on the specific facts of each case. The applicable law on injunctions is found under Order 40 Rule 1(a) of the Civil Procedure Rules. The principles guiding the grant of injunctions were articulated in Giella v Cassman Brown & Co. Ltd (1973) E.A. 385 where the conditions are summed up as follows: first, an applicant must show a prima facie case with a probability of success. secondly, an interlocutory injunction will not normally be granted unless the applicant shows he will suffer irreparable injury which would not adequately be compensated by an award of damages. Thirdly, if the court is in doubt, it will decide an application on the balance of convenience.”
25. In Mrao Ltd v First American Bank of Kenya Ltd & 2 Others (2003) KLR 125, the Court of Appeal clarified the meaning of a prima facie case. Thus at this interlocutory stage, the Court is not expected to delve into the merits of the substantive case. As stated in Nguruman Ltd v Jan Bonde Nielsen, CA No. 77 of 2020, the court must resist holding a mini-trial and instead focus on whether the Applicant has demonstrated a threatened or actual violation of rights sufficient to warrant interim protection.
26. The Applicant instituted proceedings on grounds that the 1st Respondent failed to serve him with statutory notices in compliance with Section 56(2) of the Land Registration Act, and failed to serve the three-month statutory notices as required under Sections 90 and 96(1) of the Land Act. He further contends that the 2nd Respondent did not serve the 45-day notice in accordance with Rule 15(d) of the Auctioneers Rules. Further the he has raised serious questions as to the propriety of interest rate adjustments and the computation of the outstanding loan balance.
27. It is not disputed that the 1st Respondent registered a charge over L.R No. Ruiru/Kiu Block 3/2188 in September 2021. It is also uncontested that the Applicant is both the borrower and the registered owner, and that the loan remains outstanding. The Applicant’s contention, however, is that due to the Respondents' failure to properly serve the required statutory notices, the enforcement of the power of sale is premature and procedurally flawed.
28. Upon examining the court record and the affidavit evidence from the 1st Respondent, the Court notes that copies of both the 90-day notice (dated 25th May 2023) and the 40-day notice (dated 18th April 2024) were availed. However, the certificate of postage was not exhibited raising questions as to whether these notices were properly dispatched in accordance with the law.
29. The Court has also reviewed the 45-day Redemption Notice issued by the 2nd Respondent dated 20th June 2024, along with the certificate of service sworn by Joseph Gathirwa Muturi on 24th June 2024, confirming service on the Applicant. While this evidence supports proper service of the 45-day notice, it is important to note that prior requisite notices must be served before issuance of the redemption notice.
30. This Court finds that the 1st Respondent merely provided copies of the statutory notices, without producing certificates of postage as required for proper service. The absence of this critical evidence supports the Applicant’s claim of non-receipt. The Court is guided by the decision in Nyangilo Ochieng & Another v Kenya Commercial Bank, Civil Appeal No. 148 of 1995 (1996) eKLR, this Court reiterates that the burden of proving service or postage of statutory notices lies with the 1st Respondent. The absence of such proof specifically, certificates of postage raise a prima facie ground for granting injunctive relief, as any sale of the charged property at this stage may expose the Applicant to irreparable loss.
31. This Court is not making a final determination on the 1st Respondent’s conduct but is satisfied that, based on the material presented, the Applicant has raised a good and arguable case, appropriate for resolution at the trial.
32. On the principle of balance of convenience, upon weighing the risk of potential harm to both parties, this Court finds that the potential injustice to the Applicant stemming from questionable service of statutory notices far outweighs any inconvenience the 1st Respondent may suffer. Accordingly, the intended sale of the suit property shall not proceed, and the balance of convenience favors the Applicant.
33. Consequently, the Applicant is found to have met the conditions for the grant of an injunctive order. As a condition precedent to the issuance of the of the injunctive orders this courts makes the following orders;
a. That an order of injunction is hereby issued restraining the Defendants/Respondents, their officers, its agents, employees, functionaries or officials by whatever name called from advertising for sale, offering for sale, selling, transferring and or dealing in any way whatsoever with the property L.R Ruiru KIU BLOCK 3/2188 pending the hearing and determination of this suit.
b. The Applicant shall continue to make monthly instalments of kshs. 274,732/- starting August 2025, directly to the 1st Respondent and throughout the pendency of this suit.
c. In the event of default on any instalment, the 1st and 2nd Respondents shall be at liberty to proceed with the sale of the subject property. In such an event, the injunctive orders herein shall stand automatically discharged.
d. The costs of the application shall be in the cause.