Introduction
1. Before this Honourable Court for determination is the Notice of Motion Application dated 3rd May, 2024, by the 2nd Defendant (Kigio Group Company Limited), seeking multiple reliefs, including setting aside the orders issued by Lady Justice Mong’are on 4th September, 2023, which had granted a mandatory injunction in favour of the 1st Plaintiff, Geepak Limited, allowing it to collect rental income from LR No. 4953/IV/45 and 46 and Thika Municipality Block 9/96 and 558 (the Suit Property) pending the hearing of Civil Appeal No. E193 of 2022.
2. In the said Application, the 2nd Defendant also seeks restitution of the rental income collected by Geepak since 4th September, 2023, the date of the orders issued by Mong’are J., and a further order directing the Directorate of Criminal Investigations (DCI) to investigate alleged fraud and conspiracy in the sale of the Suit Property.
Brief Background
3. The genesis of the present dispute revolves around the property known as Land Reference Number 4953/IV/45 and 46 Thika Municipality Block 9/96 and 558 (the "Suit Property"), also referred to as Thika Business Centre, and Land Reference No. 30036/2 (IR No. 190140) which had been given as a security in a financial facility arrangement between the 1st Defendant (HFC) and Kigio Group Ltd, the 2nd Defendant herein.
4. The Kigio Group allegedly defaulted, and the 1st Defendant, in the exercise of its statutory power of sale, instructed Garam Investments to sell the suit property by way of public auction.
5. In a bid to challenge the auction, Kigio Group filed HCCOMM No. E634 of 2021, Kigio Group Company Ltd vs. Housing Finance Company Limited & 4 Others, and contemporaneously filed an application dated 16th June 2021 in which the company sought an interim injunction pending the hearing and determination of the suit.
6. On 25th May 2021, a public auction of the Suit Property was conducted by Garam Investments on the instructions of HFC, where the 1st Plaintiff, Geepak Limited, was declared the highest bidder at Kshs. 563,000,000/=. Geepak paid the 10 percent deposit.
7. Prior to or concurrently with the auction, Civil Application No. E140 of 2021 (later Civil Appeal No. E193 of 2022) was pending before the Court of Appeal, in which Kigio Group Ltd sought orders to stop the sale. An order stopping the sale was indeed issued on 25th May 2021.
8. On 3rd April 2023, the Plaintiffs filed the present suit (HCCOMM E140 of 2023) and contemporaneously with the suit, a Notice of Motion Application seeking, inter alia, a mandatory injunction directing that future rental income from Thika Business Centre be paid to the 1st Plaintiff's bank account, and that past collected rental income be used to offset loan arrears.
9. On 4th September 2023, this Honourable Court (Mong’are J) delivered a ruling granting the mandatory injunctions sought by the Plaintiffs, directing the payment of future rental income to the 1st Plaintiff's account and the utilization of past rental income collected by the 1st Defendant to offset loan arrears.
10. Aggrieved by this ruling, HFC, the 1st Defendant herein, lodged Civil Appeal No. E866 of 2023, which is currently pending hearing and determination before the Court of Appeal.
11. Kigio Group Ltd, which was not initially a party to HCCOMM E140 of 2023, was later enjoined as the 2nd Defendant by an order of this Court dated 11th April 2024, following its application dated 12th September 2023.
12. Subsequently, on 26th September 2023, Kigio Group, by an application of the same date, moved the Court of Appeal in Civil Appeal (Application) No. E193 of 2022, seeking to commit the Respondents for contempt of court, stay of proceedings in this suit, and other prayers, substantially similar prayers as those in the present Application.
13. On 31st July 2024, the Court of Appeal delivered its ruling in Civil Appeal (Application) No. E193 of 2022, dismissing Kigio Group’s application for contempt and finding that the Respondents were not culpable of breaching the order of 25th May 2021 since service of the subject orders was effected at 2.17 pm, long after the auction had happened at 12:00 noon.
14. Furthermore, in HCCOMM No. E634 of 2021, Kigio Group Company Ltd vs. Housing Finance Company Limited & 4 Others, Justice Sifuna, in a ruling delivered on 21st November 2024, dismissed Kigio Group’s application in which the company had sought to suspend or cancel the results of the public auction of the Suit Property.
Response to the Application
15. The instant application (dated 3rd May 2024) by Kigio Group is opposed by the Plaintiffs, Geepak Limited & 2 Others ("the Plaintiffs"), through their Notice of Preliminary Objection dated 3rd October 2024 and a Replying Affidavit sworn by Grace Wamuyu Mathenge on 30th May 2024.
16. The 1st Defendant, Housing Finance Company Limited ("HFC"), has also filed Grounds of Opposition dated 14th October 2024, opposing specific prayers of the Application.
17. The application was canvassed by way of written submissions. The Applicant (Kigio Group) filed its submissions dated 30th May 2024 and a further submission dated 16th October 2024. The 1st Defendant (HFC) filed their submissions dated 22nd May 2025, whilst the Plaintiffs (Geepak Limited & 2 Others) filed their submissions dated 17th October 2024.
Analysis and Determination
18. Having carefully considered the parties’ respective submissions, the Court identifies the following two issues for determination: -
i. Whether this Court has jurisdiction to entertain the 2nd Defendant's Application dated 3rd May 2024, in light of the Preliminary Objection raised by the Plaintiffs.
ii. Whether the Plaintiffs' suit (HCCOMM E140 of 2023) is incompetent due to alleged fraud, lack of authority in the verifying affidavit, and false averments regarding pending suits.
iii. Whether the orders of 4th September 2023 issued by this Court should be stayed, set aside, or varied.
iv. Whether the 2nd Defendant is entitled to restitution of rental income or an account of the same.
v. Whether the prayers for DCI investigation, vacation of premises, and damages are merited.
Issue 1: Whether the Court has jurisdiction to hear the 2nd Defendant’s application dated 3rd May 2024
19. The Plaintiffs have raised a Preliminary Objection asserting that this Court lacks jurisdiction, as the Application is sub judice Civil Appeal (Application) No. E193 of 2022 and offends Section 6 of the Civil Procedure Act. They also argue that the application is res judicata and an abuse of process.
20. Jurisdiction is indeed a fundamental threshold issue. If a court lacks jurisdiction, it cannot proceed further. The Supreme Court in Owners of Motor Vessel 'Lillian S' v Caltex Oil (Kenya) Ltd [1989] KLR 1 firmly established this principle.
21. Section 6 of the Civil Procedure Act addresses the doctrine of sub judice, which prevents a court from proceeding with the trial of any suit in which the matter in issue is also directly and substantially in issue in a previously instituted suit between the same parties or parties under whom they claim, pending in the same or any other court having jurisdiction to grant the relief claimed.
22. The Plaintiffs correctly point to the Court of Appeal's ruling of 31st July 2024 in Civil Appeal (Application) No. E193 of 2022 – Kigio Group Company Limited versus Robert Kibaara & 8 Others, in which the Court of Appeal dismissed the 2nd Defendant’s contempt of Court application against the Respondents.
23. I have carefully reviewed the said decision by the Court of Appeal and note that some of the issues being raised by the 2nd Respondent in the instant application were indeed addressed by the Court of Appeal. I note that in Civil Appeal (Application) No. E193 of 2022, Kigio Group sought to commit the Respondents (including Geepak and HFC officers) for contempt of court, primarily alleging disobedience of the Court of Appeal's order of 25th May 2021 by proceeding with the auction.
24. It is apparent from the said decision that the Court of Appeal, in dismissing the contempt application found the respondents in that application not in contempt of its orders since whilst the auction took place at 12 noon on 25th May 2021, the Court of Appeal order of 25th May 2021 was served at 2:17 pm on the same day. It therefore follows that the Court of Appeal, a superior court, having pronounced itself on the very issue of alleged disregard of its orders concerning the auction, and has found no culpability, this Court is bound by that decision.
25. Consequently, I find merit in the Plaintiffs’ Preliminary Objection that this Court lacks jurisdiction to re-litigate on the issue of whether the Plaintiffs and 1st Defendant disregarded the Court of Appeal's orders of 25th May 2021, the same having been conclusively determined by the Court of Appeal in Civil Appeal (Application) No. E193 of 2022.
Issue 2: Whether the Plaintiffs' suit (HCCOMM E140 of 2023) is incompetent
26. Kigio Group alleges that the Plaintiff's suit is a fraud and nullity due to lack of consent from the 3rd Plaintiff, lack of proper authority for the Verifying Affidavit, and false averments in the Plaintiff's suit regarding pending suits.
27. The Plaintiffs, in their submissions, address Kigio Group's allegations regarding the 3rd Plaintiff. They note that the 3rd Plaintiff has indeed filed an application to have its name struck out, indicating that the issue of consent is a live dispute within the suit itself. The Plaintiffs also assert that H&K Law Advocates, who filed the Preliminary Objection, still insist on representing the 3rd Plaintiff, implying a conflict or a factual contest.
28. The allegations of fraud, perjury, and lack of proper authority for a verifying affidavit, while serious, typically require detailed factual inquiry and evidence beyond what can be conclusively determined at a preliminary objection stage without delving into the merits. The Court of Appeal in Mukisa Biscuit Manufacturing Co. Ltd vs West End Distributors Ltd [1969) EA 696 had this to say:
“.... A Preliminary Objection consists of a point of law which has been pleaded, or which arises by clear implication out of pleadings and which if argued as a preliminary point may dispose of the suit. Examples are an objection to the Jurisdiction of the court a plea of limitation, or a submission that the parties are bound by the contract giving rise to the suit to refer the dispute to arbitration.”
29. Again, in the case of Oraro v Mbaja[2005] 1KLR 141, the court held that:-
“Anything that purports to be a Preliminary Objection must not deal with disputed facts and it must not derive its foundation from factual information which stands to be tested by rules of evidence.”
30. In the circumstances, I agree with the Plaintiff’s submissions that the questions as to whether Grace Wamuyu Mathenge had actual authority, or whether the 3rd Plaintiff consented to the actions in question, are factual in nature. These issues require the presentation and testing of evidence through cross-examination and therefore do not constitute pure points of law capable of being determined by way of a Preliminary Objection.
31. Accordingly, I am of the considered view that the issue of the competence of the Plaintiff’s suit, including the allegation by the 2nd Defendant that Paragraph 24 of the Plaint contains a false averment regarding the existence of other pending suits, raises evidentiary questions that are best addressed at the substantive hearing of the main suit (HCCOMM E140 of 2023). These matters fall outside the purview of a Preliminary Objection and should be deferred to await full trial.
Issue 3: Whether the orders of 4th September 2023 issued by this Court should be stayed, set aside, or varied .
32. Kigio Group seeks to stay or set aside the orders of 4th September 2023, arguing they were fraudulently obtained, were final in nature at an interlocutory stage, and were issued in its absence.
33. The Plaintiffs (Geepak), on the other hand, argue that these prayers by the 2nd Respondent (Kigio) are "bare" and not anchored in any substantive application for review, discharge, vacation, and/or variation. They emphasize that an interim application (like the stay sought) must be anchored in a substantive suit or a substantive application for review of the underlying order.
34. I have carefully reviewed and considered the parties' respective submissions on this issue. However, given the existence of HFC's appeal (Civil Appeal No. E866 of 2023) challenging the 4th September 2023 orders, it would be inappropriate for this Court to directly set aside or substantially vary those orders, as that would amount to usurping the appellate court's role.
35. The court, however, retains inherent and residual jurisdiction to ensure justice and prevent abuse of process. The Court of Appeal in the case of Kenya Power & Lighting Company Limited v Benzene Holdings Limited t/a Wyco Paints [2016] eKLR, stated as follows regarding the inherent power of the courts: -
“Section 3A of the Civil Procedure Act appears to have been introduced to augment the provisions of section 3, vesting in the courts inherent power to make any orders as may be necessary for the ends of justice or to prevent abuse of the process of the court. Of course this power has now been broadened by the introduction in 2009 of overriding objective in sections 1A & 1B and in 2010 by Article 159 of the Constitution.
The extent of inherent powers of the court was eloquently explained by the authors of the Halsbury’s Laws of England, 4th Edn. Vol. 37 Para. 14 as follows;
‘The jurisdiction of the court which is comprised within the term “inherent” is that which enables it to fulfil itself, properly and effectively, as a court of law. The overriding feature of the inherent jurisdiction of the court is that it is part of procedural law, both civil and criminal, and not part of substantive law; it is exercisable by summary process, without plenary trial; it may be invoked not only in relation to the parties in pending proceedings, but in relation to anyone, whether a party or not, and in relation to matters not raised in litigation between the parties; it must be distinguished from the exercise of judicial discretion; it may be exercised even in circumstances governed by rules of court. The inherent jurisdiction of the court enables it to exercise control over process by regulating its proceedings, by preventing the abuse of the process and by compelling the observance of the process … In sum, it may be said that the inherent jurisdiction of the court is a virile and viable doctrine and has been defined as being the reserve or fund of powers, a residual source of powers, which the court may draw upon as necessary whenever it is just or equitable to do so, in particular to ensure the observance of the due process of law, to prevent improper vexation or oppression, to do justice between the parties and to secure a fair trial between them.” See also Meshallum Waweru Wanguku (supra)’
This inherent jurisdiction is a residual intrinsic authority which the court may resort to in order to put right that which would otherwise be an injustice.”
36. From the pending appeals, it is evident that there is a legitimate question as to whether Geepak, without full legal title and full payment of the purchase price, should unilaterally collect the rents, especially if those rents were previously assigned to HFC to service Kigio Group's loan. The fact that HFC supports that the funds be deposited in Kigio Group’s account with them, and has appealed against the said orders of 4th September 2023, is equally critical.
37. The fact that the mandatory injunctions granted were arguably final in nature at an interlocutory stage, and were granted without the 2nd Defendant (now an enjoined party with a significant interest) having been heard, raises serious concerns about their continued operation.
38. In the circumstances of this case, I am therefore of the view that to maintain the status quo and to ensure that the subject funds are properly accounted for pending the determination of the substantive appeal, a stay of the orders of 4th September 2023 is warranted, not for the purpose of reversing them (as doing so would be a usurpation of the Court of Appeal powers), but only to manage the subject matter of the appeal.
39. In view of my findings above, I find it unnecessary to undertake any analysis on whether the 2nd Defendant is entitled to restitution of rental income or an account thereof. Similarly, the prayers for an investigation by the Directorate of Criminal Investigations (DCI) and for the vacation of the premises are, as earlier indicated, not awardable in light of the findings of the Court of Appeal in Civil Appeal (Application) No. E193 of 2022.
Disposition
40. Based on the foregoing analysis and based on the court’s inherent jurisdiction, I order and direct as follows:
i. The Plaintiffs/Respondents' Preliminary Objection is hereby UPHELD IN PART. Prayer Number 6 of the 2nd Defendant/Applicant's Notice of Motion Application dated 3rd May 2024, which seeks an order directing the Director of Criminal Investigations to conduct an investigation to establish fraud, criminal nexus, and conspiracy related to the Plaintiffs' and 1st Defendant's alleged disregard of the Court of Appeal orders of 25th May 2021 and 23rd July 2021 regarding the auction, is hereby STRUCK OUT as being res judicata and an abuse of court process, in light of the Court of Appeal's ruling in Civil Appeal (Application) No. E193 of 2022.
ii. Pending the hearing and final determination of Civil Appeal No. E866 of 2023, and to preserve the subject matter of the dispute and prevent further prejudice, an order of STAY is hereby issued on the orders granted on 4th September 2023, specifically Order Number (c) which directs future rental income collection to the 1st Applicant's (1st Plaintiff’s) bank account, and Order Number (e) and (f) related to the utilization of rental income.
iii. The Plaintiffs/Respondents and the 1st Defendant/Respondent are hereby directed to provide a full and detailed account to this Court of all rental income collected from the Suit Property known as Land Reference Number 4953/IV/45 and 46 Thika Municipality Block 9/96 and 558 (Thika Business Centre) for the period between 4th September 2023 to date. Such account shall be filed in Court and served upon the 2nd Defendant/Applicant within [21] days from the date of this order.
iv. Regarding the collected rental income from 4th September 2023 to date, the Plaintiffs/Respondents and the 1st Defendant/Respondent shall, within [21] days from the date of this order, deposit the entire amount into an interest-earning joint escrow account to be opened with the 1st Defendant, in the names of the Advocates for the 2nd Defendant/Applicant and the Advocates for the Plaintiffs/Respondents, pending the hearing and determination of Civil Appeal No. E866 of 2023 and/or further orders of this Court.
v. The prayers seeking immediate restitution of all rental income with interest (Prayer 4), vacating of premises (Prayer 7 and 11), supervision by OCS Thika (Prayer 8), valuation of damages (Prayer 9), and damages for loss of rental income (Prayer 12), are hereby DENIED at this interlocutory stage, as they are final reliefs or premature.
vi. The prayer for striking out the entire Plaintiff's suit (Prayer 10) or staying proceedings (Prayer 11, alternative to 10) is RESERVED for determination at the full hearing of the Preliminary Objection, which will include consideration of the alleged non-disclosure of pending suits and issues of the Verifying Affidavit.
vii. The costs of the Application shall be in the cause.
41. It is so ordered.
SIGNED, DATED, and DELIVERED IN VIRTUAL COURT THIS
24TH DAY OF JULY 2025
ADO MOSES
JUDGE
In the Presence of
Moses C/A
Kipkorir…. ………………for the Plaintiff/Respondents
Kiche…. ………………...for 1st Defendant/Respondent
Mwaura…………………for the 2nd Defendant
1. Before this Honourable Court for determination is the Notice of Motion Application dated 3rd May, 2024, by the 2nd Defendant (Kigio Group Company Limited), seeking multiple reliefs, including setting aside the orders issued by Lady Justice Mong’are on 4th September, 2023, which had granted a mandatory injunction in favour of the 1st Plaintiff, Geepak Limited, allowing it to collect rental income from LR No. 4953/IV/45 and 46 and Thika Municipality Block 9/96 and 558 (the Suit Property) pending the hearing of Civil Appeal No. E193 of 2022.
2. In the said Application, the 2nd Defendant also seeks restitution of the rental income collected by Geepak since 4th September, 2023, the date of the orders issued by Mong’are J., and a further order directing the Directorate of Criminal Investigations (DCI) to investigate alleged fraud and conspiracy in the sale of the Suit Property.
Brief Background
3. The genesis of the present dispute revolves around the property known as Land Reference Number 4953/IV/45 and 46 Thika Municipality Block 9/96 and 558 (the "Suit Property"), also referred to as Thika Business Centre, and Land Reference No. 30036/2 (IR No. 190140) which had been given as a security in a financial facility arrangement between the 1st Defendant (HFC) and Kigio Group Ltd, the 2nd Defendant herein.
4. The Kigio Group allegedly defaulted, and the 1st Defendant, in the exercise of its statutory power of sale, instructed Garam Investments to sell the suit property by way of public auction.
5. In a bid to challenge the auction, Kigio Group filed HCCOMM No. E634 of 2021, Kigio Group Company Ltd vs. Housing Finance Company Limited & 4 Others, and contemporaneously filed an application dated 16th June 2021 in which the company sought an interim injunction pending the hearing and determination of the suit.
6. On 25th May 2021, a public auction of the Suit Property was conducted by Garam Investments on the instructions of HFC, where the 1st Plaintiff, Geepak Limited, was declared the highest bidder at Kshs. 563,000,000/=. Geepak paid the 10 percent deposit.
7. Prior to or concurrently with the auction, Civil Application No. E140 of 2021 (later Civil Appeal No. E193 of 2022) was pending before the Court of Appeal, in which Kigio Group Ltd sought orders to stop the sale. An order stopping the sale was indeed issued on 25th May 2021.
8. On 3rd April 2023, the Plaintiffs filed the present suit (HCCOMM E140 of 2023) and contemporaneously with the suit, a Notice of Motion Application seeking, inter alia, a mandatory injunction directing that future rental income from Thika Business Centre be paid to the 1st Plaintiff's bank account, and that past collected rental income be used to offset loan arrears.
9. On 4th September 2023, this Honourable Court (Mong’are J) delivered a ruling granting the mandatory injunctions sought by the Plaintiffs, directing the payment of future rental income to the 1st Plaintiff's account and the utilization of past rental income collected by the 1st Defendant to offset loan arrears.
10. Aggrieved by this ruling, HFC, the 1st Defendant herein, lodged Civil Appeal No. E866 of 2023, which is currently pending hearing and determination before the Court of Appeal.
11. Kigio Group Ltd, which was not initially a party to HCCOMM E140 of 2023, was later enjoined as the 2nd Defendant by an order of this Court dated 11th April 2024, following its application dated 12th September 2023.
12. Subsequently, on 26th September 2023, Kigio Group, by an application of the same date, moved the Court of Appeal in Civil Appeal (Application) No. E193 of 2022, seeking to commit the Respondents for contempt of court, stay of proceedings in this suit, and other prayers, substantially similar prayers as those in the present Application.
13. On 31st July 2024, the Court of Appeal delivered its ruling in Civil Appeal (Application) No. E193 of 2022, dismissing Kigio Group’s application for contempt and finding that the Respondents were not culpable of breaching the order of 25th May 2021 since service of the subject orders was effected at 2.17 pm, long after the auction had happened at 12:00 noon.
14. Furthermore, in HCCOMM No. E634 of 2021, Kigio Group Company Ltd vs. Housing Finance Company Limited & 4 Others, Justice Sifuna, in a ruling delivered on 21st November 2024, dismissed Kigio Group’s application in which the company had sought to suspend or cancel the results of the public auction of the Suit Property.
Response to the Application
15. The instant application (dated 3rd May 2024) by Kigio Group is opposed by the Plaintiffs, Geepak Limited & 2 Others ("the Plaintiffs"), through their Notice of Preliminary Objection dated 3rd October 2024 and a Replying Affidavit sworn by Grace Wamuyu Mathenge on 30th May 2024.
16. The 1st Defendant, Housing Finance Company Limited ("HFC"), has also filed Grounds of Opposition dated 14th October 2024, opposing specific prayers of the Application.
17. The application was canvassed by way of written submissions. The Applicant (Kigio Group) filed its submissions dated 30th May 2024 and a further submission dated 16th October 2024. The 1st Defendant (HFC) filed their submissions dated 22nd May 2025, whilst the Plaintiffs (Geepak Limited & 2 Others) filed their submissions dated 17th October 2024.
Analysis and Determination
18. Having carefully considered the parties’ respective submissions, the Court identifies the following two issues for determination: -
i. Whether this Court has jurisdiction to entertain the 2nd Defendant's Application dated 3rd May 2024, in light of the Preliminary Objection raised by the Plaintiffs.
ii. Whether the Plaintiffs' suit (HCCOMM E140 of 2023) is incompetent due to alleged fraud, lack of authority in the verifying affidavit, and false averments regarding pending suits.
iii. Whether the orders of 4th September 2023 issued by this Court should be stayed, set aside, or varied.
iv. Whether the 2nd Defendant is entitled to restitution of rental income or an account of the same.
v. Whether the prayers for DCI investigation, vacation of premises, and damages are merited.
Issue 1: Whether the Court has jurisdiction to hear the 2nd Defendant’s application dated 3rd May 2024
19. The Plaintiffs have raised a Preliminary Objection asserting that this Court lacks jurisdiction, as the Application is sub judice Civil Appeal (Application) No. E193 of 2022 and offends Section 6 of the Civil Procedure Act. They also argue that the application is res judicata and an abuse of process.
20. Jurisdiction is indeed a fundamental threshold issue. If a court lacks jurisdiction, it cannot proceed further. The Supreme Court in Owners of Motor Vessel 'Lillian S' v Caltex Oil (Kenya) Ltd [1989] KLR 1 firmly established this principle.
21. Section 6 of the Civil Procedure Act addresses the doctrine of sub judice, which prevents a court from proceeding with the trial of any suit in which the matter in issue is also directly and substantially in issue in a previously instituted suit between the same parties or parties under whom they claim, pending in the same or any other court having jurisdiction to grant the relief claimed.
22. The Plaintiffs correctly point to the Court of Appeal's ruling of 31st July 2024 in Civil Appeal (Application) No. E193 of 2022 – Kigio Group Company Limited versus Robert Kibaara & 8 Others, in which the Court of Appeal dismissed the 2nd Defendant’s contempt of Court application against the Respondents.
23. I have carefully reviewed the said decision by the Court of Appeal and note that some of the issues being raised by the 2nd Respondent in the instant application were indeed addressed by the Court of Appeal. I note that in Civil Appeal (Application) No. E193 of 2022, Kigio Group sought to commit the Respondents (including Geepak and HFC officers) for contempt of court, primarily alleging disobedience of the Court of Appeal's order of 25th May 2021 by proceeding with the auction.
24. It is apparent from the said decision that the Court of Appeal, in dismissing the contempt application found the respondents in that application not in contempt of its orders since whilst the auction took place at 12 noon on 25th May 2021, the Court of Appeal order of 25th May 2021 was served at 2:17 pm on the same day. It therefore follows that the Court of Appeal, a superior court, having pronounced itself on the very issue of alleged disregard of its orders concerning the auction, and has found no culpability, this Court is bound by that decision.
25. Consequently, I find merit in the Plaintiffs’ Preliminary Objection that this Court lacks jurisdiction to re-litigate on the issue of whether the Plaintiffs and 1st Defendant disregarded the Court of Appeal's orders of 25th May 2021, the same having been conclusively determined by the Court of Appeal in Civil Appeal (Application) No. E193 of 2022.
Issue 2: Whether the Plaintiffs' suit (HCCOMM E140 of 2023) is incompetent
26. Kigio Group alleges that the Plaintiff's suit is a fraud and nullity due to lack of consent from the 3rd Plaintiff, lack of proper authority for the Verifying Affidavit, and false averments in the Plaintiff's suit regarding pending suits.
27. The Plaintiffs, in their submissions, address Kigio Group's allegations regarding the 3rd Plaintiff. They note that the 3rd Plaintiff has indeed filed an application to have its name struck out, indicating that the issue of consent is a live dispute within the suit itself. The Plaintiffs also assert that H&K Law Advocates, who filed the Preliminary Objection, still insist on representing the 3rd Plaintiff, implying a conflict or a factual contest.
28. The allegations of fraud, perjury, and lack of proper authority for a verifying affidavit, while serious, typically require detailed factual inquiry and evidence beyond what can be conclusively determined at a preliminary objection stage without delving into the merits. The Court of Appeal in Mukisa Biscuit Manufacturing Co. Ltd vs West End Distributors Ltd [1969) EA 696 had this to say:
“.... A Preliminary Objection consists of a point of law which has been pleaded, or which arises by clear implication out of pleadings and which if argued as a preliminary point may dispose of the suit. Examples are an objection to the Jurisdiction of the court a plea of limitation, or a submission that the parties are bound by the contract giving rise to the suit to refer the dispute to arbitration.”
29. Again, in the case of Oraro v Mbaja[2005] 1KLR 141, the court held that:-
“Anything that purports to be a Preliminary Objection must not deal with disputed facts and it must not derive its foundation from factual information which stands to be tested by rules of evidence.”
30. In the circumstances, I agree with the Plaintiff’s submissions that the questions as to whether Grace Wamuyu Mathenge had actual authority, or whether the 3rd Plaintiff consented to the actions in question, are factual in nature. These issues require the presentation and testing of evidence through cross-examination and therefore do not constitute pure points of law capable of being determined by way of a Preliminary Objection.
31. Accordingly, I am of the considered view that the issue of the competence of the Plaintiff’s suit, including the allegation by the 2nd Defendant that Paragraph 24 of the Plaint contains a false averment regarding the existence of other pending suits, raises evidentiary questions that are best addressed at the substantive hearing of the main suit (HCCOMM E140 of 2023). These matters fall outside the purview of a Preliminary Objection and should be deferred to await full trial.
Issue 3: Whether the orders of 4th September 2023 issued by this Court should be stayed, set aside, or varied .
32. Kigio Group seeks to stay or set aside the orders of 4th September 2023, arguing they were fraudulently obtained, were final in nature at an interlocutory stage, and were issued in its absence.
33. The Plaintiffs (Geepak), on the other hand, argue that these prayers by the 2nd Respondent (Kigio) are "bare" and not anchored in any substantive application for review, discharge, vacation, and/or variation. They emphasize that an interim application (like the stay sought) must be anchored in a substantive suit or a substantive application for review of the underlying order.
34. I have carefully reviewed and considered the parties' respective submissions on this issue. However, given the existence of HFC's appeal (Civil Appeal No. E866 of 2023) challenging the 4th September 2023 orders, it would be inappropriate for this Court to directly set aside or substantially vary those orders, as that would amount to usurping the appellate court's role.
35. The court, however, retains inherent and residual jurisdiction to ensure justice and prevent abuse of process. The Court of Appeal in the case of Kenya Power & Lighting Company Limited v Benzene Holdings Limited t/a Wyco Paints [2016] eKLR, stated as follows regarding the inherent power of the courts: -
“Section 3A of the Civil Procedure Act appears to have been introduced to augment the provisions of section 3, vesting in the courts inherent power to make any orders as may be necessary for the ends of justice or to prevent abuse of the process of the court. Of course this power has now been broadened by the introduction in 2009 of overriding objective in sections 1A & 1B and in 2010 by Article 159 of the Constitution.
The extent of inherent powers of the court was eloquently explained by the authors of the Halsbury’s Laws of England, 4th Edn. Vol. 37 Para. 14 as follows;
‘The jurisdiction of the court which is comprised within the term “inherent” is that which enables it to fulfil itself, properly and effectively, as a court of law. The overriding feature of the inherent jurisdiction of the court is that it is part of procedural law, both civil and criminal, and not part of substantive law; it is exercisable by summary process, without plenary trial; it may be invoked not only in relation to the parties in pending proceedings, but in relation to anyone, whether a party or not, and in relation to matters not raised in litigation between the parties; it must be distinguished from the exercise of judicial discretion; it may be exercised even in circumstances governed by rules of court. The inherent jurisdiction of the court enables it to exercise control over process by regulating its proceedings, by preventing the abuse of the process and by compelling the observance of the process … In sum, it may be said that the inherent jurisdiction of the court is a virile and viable doctrine and has been defined as being the reserve or fund of powers, a residual source of powers, which the court may draw upon as necessary whenever it is just or equitable to do so, in particular to ensure the observance of the due process of law, to prevent improper vexation or oppression, to do justice between the parties and to secure a fair trial between them.” See also Meshallum Waweru Wanguku (supra)’
This inherent jurisdiction is a residual intrinsic authority which the court may resort to in order to put right that which would otherwise be an injustice.”
36. From the pending appeals, it is evident that there is a legitimate question as to whether Geepak, without full legal title and full payment of the purchase price, should unilaterally collect the rents, especially if those rents were previously assigned to HFC to service Kigio Group's loan. The fact that HFC supports that the funds be deposited in Kigio Group’s account with them, and has appealed against the said orders of 4th September 2023, is equally critical.
37. The fact that the mandatory injunctions granted were arguably final in nature at an interlocutory stage, and were granted without the 2nd Defendant (now an enjoined party with a significant interest) having been heard, raises serious concerns about their continued operation.
38. In the circumstances of this case, I am therefore of the view that to maintain the status quo and to ensure that the subject funds are properly accounted for pending the determination of the substantive appeal, a stay of the orders of 4th September 2023 is warranted, not for the purpose of reversing them (as doing so would be a usurpation of the Court of Appeal powers), but only to manage the subject matter of the appeal.
39. In view of my findings above, I find it unnecessary to undertake any analysis on whether the 2nd Defendant is entitled to restitution of rental income or an account thereof. Similarly, the prayers for an investigation by the Directorate of Criminal Investigations (DCI) and for the vacation of the premises are, as earlier indicated, not awardable in light of the findings of the Court of Appeal in Civil Appeal (Application) No. E193 of 2022.
Disposition
40. Based on the foregoing analysis and based on the court’s inherent jurisdiction, I order and direct as follows:
i. The Plaintiffs/Respondents' Preliminary Objection is hereby UPHELD IN PART. Prayer Number 6 of the 2nd Defendant/Applicant's Notice of Motion Application dated 3rd May 2024, which seeks an order directing the Director of Criminal Investigations to conduct an investigation to establish fraud, criminal nexus, and conspiracy related to the Plaintiffs' and 1st Defendant's alleged disregard of the Court of Appeal orders of 25th May 2021 and 23rd July 2021 regarding the auction, is hereby STRUCK OUT as being res judicata and an abuse of court process, in light of the Court of Appeal's ruling in Civil Appeal (Application) No. E193 of 2022.
ii. Pending the hearing and final determination of Civil Appeal No. E866 of 2023, and to preserve the subject matter of the dispute and prevent further prejudice, an order of STAY is hereby issued on the orders granted on 4th September 2023, specifically Order Number (c) which directs future rental income collection to the 1st Applicant's (1st Plaintiff’s) bank account, and Order Number (e) and (f) related to the utilization of rental income.
iii. The Plaintiffs/Respondents and the 1st Defendant/Respondent are hereby directed to provide a full and detailed account to this Court of all rental income collected from the Suit Property known as Land Reference Number 4953/IV/45 and 46 Thika Municipality Block 9/96 and 558 (Thika Business Centre) for the period between 4th September 2023 to date. Such account shall be filed in Court and served upon the 2nd Defendant/Applicant within [21] days from the date of this order.
iv. Regarding the collected rental income from 4th September 2023 to date, the Plaintiffs/Respondents and the 1st Defendant/Respondent shall, within [21] days from the date of this order, deposit the entire amount into an interest-earning joint escrow account to be opened with the 1st Defendant, in the names of the Advocates for the 2nd Defendant/Applicant and the Advocates for the Plaintiffs/Respondents, pending the hearing and determination of Civil Appeal No. E866 of 2023 and/or further orders of this Court.
v. The prayers seeking immediate restitution of all rental income with interest (Prayer 4), vacating of premises (Prayer 7 and 11), supervision by OCS Thika (Prayer 8), valuation of damages (Prayer 9), and damages for loss of rental income (Prayer 12), are hereby DENIED at this interlocutory stage, as they are final reliefs or premature.
vi. The prayer for striking out the entire Plaintiff's suit (Prayer 10) or staying proceedings (Prayer 11, alternative to 10) is RESERVED for determination at the full hearing of the Preliminary Objection, which will include consideration of the alleged non-disclosure of pending suits and issues of the Verifying Affidavit.
vii. The costs of the Application shall be in the cause.
41. It is so ordered.
SIGNED, DATED, and DELIVERED IN VIRTUAL COURT THIS
24TH DAY OF JULY 2025
ADO MOSES
JUDGE
In the Presence of
Moses C/A
Kipkorir…. ………………for the Plaintiff/Respondents
Kiche…. ………………...for 1st Defendant/Respondent
Mwaura…………………for the 2nd Defendant