1. The Applicant filed a Notice of motion Application dated 02/10/2024 seeking the following orders;
a) Spent
b) That a temporary injunction do issue to restrain and prevent the Respondents by themselves and/or their agents, servants, employees, assigns or otherwise howsoever from any form of execution against the applicant in any way and in particular stay of execution of the proclamation notice served upon the plaintiff/applicant issued on 30th September 2024.
c) That a permanent injunction do issue to restrain and prevent the Respondents by themselves and/or their agents, servants, employees, assigns or otherwise howsoever from any form of execution against the applicant in any way and in particular stay of execution of the proclamation notice served upon the plaintiff/applicant issued on 30th September 2024 pending hearing and determination of the main suit.
d) The cost of the application be borne by the Respondents.
2. The Application is premised on the grounds on the face of it and the contents of the supporting affidavit sworn by Isaiah Sifuna Walubengo. In a nutshell, whereas the Applicant does not deny being indebted to the 1st Respondent, he deposes that he has being repaying the same in good time but the 1st Respondent unilaterally reviewed the interest rate of 13% on a reducing balance thereby always making the Applicant to be in default. That upon realizing this fact, the Applicant wrote to the 1st Respondent on 13th August 2024 but despite his letter being received on 26th August 2024, it did not elicit any response but instead proceeded to instruct the 2nd Respondent to Proclaim his properties which are part of the security for the loan. The Proclamation Notice is dated 30th September 2024.
Replying Affidavit
3. The Respondents opposed the application vide a Replying Affidavit sworn by Edwin B. Ndiwa who stated that he is the Credit manager of the 1st Respondent’s Eldoret Branch. He deposed that the application is an abuse of the court process and further, that the same ought to be struck out with costs. He urged that the applicant approached the respondent for a loan facility of Kshs. 38,000,000/- which was secured by several motor vehicles. That vide the letter dated 15/06/2022 the Respondent granted the applicant the loan and the applicant offered the logbooks for the following motor vehicles as security; KBY 800U Toyota Land cruiser, KCQ 683F Toyota Harrier, KDC 230H Toyota Hiace, KBL 967M Sinotruk Howo, KCB 664P Toyota DBA-ZRT265, KCD 062C Toyota DBA-ACA33W and ZD 1591 Bhachu Tipper. (He annexed as EBN-1 to 9 the relevant documentation)
4. That the Plaintiff then failed terribly in its primary duty to to service the loan and as at 14/12/2023 the same was in arrears of a sum of Kshs. 9,391,262.92 with the total outstanding amount due to the bank being Ks. 23,005,384,92/=. He further stated that the 1st Defendant/Respondent issued a demand notice dated 14/12/ 2023 being a 14-day notice, failure to which the 1st Respondent would exercise its remedy for the recovery of the amount outstanding together with interest (He annexed a copy of the Demand Letter as EBN -10 and a copy of the Certificate of Postage as EBN-11). He urged that despite issuance of the demand notice, the Applicant failed to service the loan. Accordingly, the 1st Respondent instructed the 2nd Respondent to realize security in the Plaintiffs custody
5. The deponent averred that the non-observance by the Appellant to service the loan is in dereliction of the of the facility agreement specifically Clause 2, Section A and that further, that this application is an attempt to avoid paying their just debt and it is therefore in the interest of justice for the Respondent to be granted leave to continue with its intended attachment of security since the same has accrued. He additionally deposed that a failure for the sale to take place will result in a very real risk that the debt may outstrip the value of the suit property, therefore the balance of convenience is in favor of the Respondent. He maintained that the application does not meet the threshold for grant of orders sought and prayed that the application be dismissed with costs.
Hearing of the Application
6. The Application was canvassed by way of written submissions. The applicant filed submissions dated 10/02/2025 through the firm of Messrs. Aloo Romanus & Company Advocates whereas the Respondents filed submissions dated 14/02/2025 through the firm of Messrs. Kalya & Company Advocates.
Applicants’ Submissions
7. Counsel for the applicant submitted that as a general rule, the conditions for grant of temporary injunctions were settled in the case on Giella v Cassman Brown [19731 EA 358, that is to say; An applicant has to show a prima fade case with probability of success; That an interlocutory injunction will not normally be granted unless the applicant might otherwise suffer irreparable injury, which would not be adequately compensated by an award of damages; and that if the court is in doubt, it will decide the application on a balance of convenience.
8. Counsel urged that a prima facie case was defined in the case of Mrao Ltd Vs First American Bank of Kenya and 2 others (2003) KLR 12 and further, that in order to demonstrate a prima facie case the applicant indicated in his supporting affidavit that he is the registered owner of the suit properties. He stated that the applicant has been financing the loan advanced to him by the Defendant despite the exaggerated interest rates that were never brought to his attention at the time they were being increased.
9. Counsel urged that in his supporting affidavit, the applicant confirmed that he was never served with any 45 days Redemption Notice and a Notification of sale to enable him redeem his account but only a letter threatening to list him to the Credit Reference Bureau. He cited the case of Kenleb Cons Ltd v New Gatitu Service Station Ltd & another (1990} K.L.R 557 in support of this submission. He submitted that having satisfied the first grounds, the Application should be allowed.
10. Counsel submitted that if the orders sought are not granted, the Applicant will suffer irreparable harm since his properties will be auctioned illegally and since the same are used to run a business, the act of disposing of these properties will disrupt the operations of the business. Further, that there is the existence of real injury that cannot be adequately compensated by damages.
11. On balance of convenience, counsel urged the Court to put into focus both the Applicant's rights and the Respondent rights and thereafter resort to the lower risk rather than higher risk of injustice. Further, that the balance of convenience tilts in favor of the Applicant for the reason that the sale of the suit properties will be detrimental to both himself and his business as its operations will be paralyzed unfairly. He submitted that in the event that the Defendant are to suffer any loss, the said loss can adequately be compensated by an award of the court whereas the Plaintiff will suffer irreparable harm if the orders sought are not granted. He urged that the Applicant has met the legal threshold required to grant the orders.
Respondents’ Submissions
12. Learned Counsel for the Respondent denied the allegations on charging exaggerated interest rates on the loan account, or increasing of rates without informing the applicant. Counsel urged that the interest charged was regular and in line with the terms of the letter of offer dated 25th June, 2022. Further, that the applicant has failed to demonstrate how and when the interest was increased and to what extent it was increased. He cited section 107 of the Evidence Act on the burden of proof and submitted that it is trite law that the burden of proof lies with the one who alleges,
13. Counsel submitted that the commissions, charges and penalties charged by the 1st Defendant were contractual and within the parameters stipulated under Section 44A of the Banking Act. Further, that the 1st Defendant attached the account statements as ‘EBN- 13 which shows that the amount outstanding, interests and charges in line with the letter of offer. Counsel cited the cases of Samesh Textile Industries Ltd & Another vs Delphis Bank Ltd. C. Case No. 2186/2000 (2000) LLR 2976; Sports Car Ltd v Trust Bank Ltd Nairobi – Milimani HCCC No. 754 of 1999 and Peter Njuguna Njenga & 2 Others vs Equity Bank Ltd (2014) eKLR, in support of his submissions urging the court to be persuaded and dismiss the application with costs to the Respondent.
14. As to whether the Applicant is entitled to the orders sought, counsel cited the principles for the prayers to be granted as set out in the case of Giella vs Cassman Brown Limited (1973) EA 358. He urged that as observed by the court of appeal in the case of Nguruman Limited v Jan Bonde Nielsen & 2 Others (2014) eKLR, these conditions and stages are to be applied as separate, distinct and logical hurdles which the applicant has to surmount sequentially.
15. Counsel submitted that what amounts to a prima facie case was set out in Mrao Ltd v First American Bank of Kenya Ltd (2003) eKLR. He stated that from the onset, the application has failed to demonstrate prima facie evidence of a genuine and arguable case. That in fact if there is anyone with a genuine and arguable case, it is the 1st Respondent who is owed money and has not breached the terms of the agreement. He pointed out that it is not in dispute that the plaintiff provided logbooks for his motor vehicles as security or; that the Plaintiff defaulted in the repayment of the loan advanced, breaching the terms of the contract between them and the 1st Defendant.
16. Counsel urged that according to the bank statements annexed and marked as annexure EBN-13 to the Replying affidavit, it is undisputed that the Plaintiff had failed to service the loan causing the loan account to fall into arrears and as at 14/12/2023 it was in arrears of a csum of Kshs. 9,391,262.92 for Loan Account Number 1090582862392 and 1090D40710154. He reiterated that the total outstanding amount due to the bank was Kshs. 23,005,384.92 and the 1st Respondent issued the Plaintiff with the demand notice dated 14th December, 2023 which issued a fourteen-day notice, failure to which the 1st Respondent would exercise its remedy for the recovery of the amount outstanding and remaining unpaid together with interest. The Applicant’s failure to regularize its account after issuance of the demand notice prompted the 1st Defendant to instruct the 2nd Defendant to enable it exercise its rights as per the contract.
17. Counsel submitted that the Plaintiffs breached the terms of the agreement i.e. clause 5, 2 of the Letter of Offer by failing to repay the loan as agreed hence causing the account to run into arrears. Further, that the Applicant seems to seek this court to rewrite the contract between the Parties which is forbidden. Citing the case of Kenya Breweries Ltd vs Okeyo (2002) EA and the case of National Bank of Kenya Ltd vs Pipelastic Samokut Ltd & Another (2001) KLR counsel urged that this court is forbidden from rewriting the contract between the parties.
18. Further, that the default clause cannot be varied through this Court because the Court’s role is to interpret the agreement as signed by the parties. Additionally, that the Plaintiff admits the terms of the agreement which is otherwise binding on the parties herein and having established as such, and considering the fact that the Plaintiff breached the terms of the agreement and caused the account to run into arrears, the 1st Defendant/Respondent had a right to realize the security as guaranteed by the agreement between the parties.
19. Counsel urged that no good or valid reasons have been advanced by the Plaintiff for non- payment and/or compliance with the agreement entered into. He reiterated the case of Mrao Ltd Vs First American Bank of Kenya Ltd & 2 others and urged that the Plaintiff/applicant having defaulted and are in breach of the agreement between themselves and the 1st Defendant, and therefore it cannot be granted an injunction. Counsel additionally cited the case of Woodcraft Industries Ltd & Others vs The East African Building Society; Nairobi HCCC No. 602 of 2000 (2000) LLR 2940.
20. On the issue of whether the applicants are likely to suffer irreparable loss which cannot be compensated by damages, counsel submitted that the Applicant has not demonstrated that it stands to suffer irreparable loss which cannot warrant adequate compensation by damages. He urged that the Plaintiff, in the supporting affidavit, has casually sworn that it will suffer irreparable damage and holds that this has not been established. He cited the case of Paul Gitonga Wanyau v Gathuthi tea Factory Company Limited & 2 Others (2016) eKLR on proof of irreparable harm.
21. He reiterated that from the onset, as at the time of agreement the Plaintiff understood the consequences of non-payment of the loan and/ or non-compliance with the terms of the agreement. Further, that it is the 1st Defendant/Respondent who stands to suffer loss if the orders sought are granted since the amount continues to accrue interest, charges and commissions to the 1st defendant’s detriment. Counsel additionally cited the case of Mary Wanjiku Mwaniki & Another v Dream Credit Limited [2017] eKLR.
22. On the issue of balance of convenience, counsel cited the case of Bryan Chebii Kipkoech v Barnabas Tuitoek Bargoria & Another (2019) eKLR and urged the court to take judicial notice of the fact that the 1st Defendant/Respondent is a reasonably sound financial institution and it stands better chances to compensate the Plaintiff should the Plaintiff succeed in trial. Should the injunction be granted to restrain the 1st Defendant from exercising its statutory powers, the amount of debt may continue to rise exponentially and the security may prove to be insufficient to cover the ultimate balance. He further cited the case of Andrew Muriuki Wanjohi vs Equity Building Society Limited & 2 Others (2006) eKLR and urged that the balance of convenience lies in dismissing the application.
23. Counsel urged that an order of injunction is an equitable remedy and the party seeking it must come to court with clean hands. He cited the cases of Patrick Waweru Mwangi and Anor vs Housing Finance Co. of Kenya Ltd (2013) Eklr and Michael Gitere & Another v Commercial Bank Limited (2018) eKLR and submitted that the Applicant is seeking equitable orders from this court which cannot issue since it is a maxim of equity that he who seeks equity must do equity.
24. Counsel further urged that the Plaintiff failed to adhere to their part of the contract then brought this application seeking for orders against the 1st Defendant who has not breached the agreement in any way. This is clearly not equitable. Additionally, that he who comes to equity must come with clean hands. Counsel urged that the applicant does not deserve the equitable relief and prayed the court dismiss the application with costs.
Analysis & Determination
25. Having addressed my mind to the pleadings as well as the submissions, it is my considered opinion that much as both Counsel have submitted on the law governing the issuance of a temporary injunction, it should be noted that a temporary injunction was issued in favor of the applicant at the interim stage restraining the Respondents from executing the proclamation Notice issued on 30th September 2024 as was sought in prayer No. 2 of the Application. The issue for determination the subject matter of this Ruling therefore is whether a permanent injunction should issue pending the hearing and determination of the main suit as per prayer 3.
26. The law governing the granting of injunctions is set out under order 40(1) (a) and (b) of the Civil Procedure Rules 2010 which provides that: -
"Where in any suit it is proved by affidavit or otherwise—
(a) That any property in dispute in a suit is in danger of being wasted, damaged, or alienated by any party to the suit, or wrongfully sold in execution of a decree; or [Rev. 2012] Civil Procedure CAP. 21 [Subsidiary] C17 – 165;
(b) That the defendant threatens or intends to remove or dispose of his property in circumstances affording reasonable probability that the plaintiff will or may be obstructed or delayed in the execution of any decree that may be passed against the defendant in the suit, the court may by order grant a temporary injunction to restrain such act, or make such other order for the purpose of staying and preventing the wasting, damaging, alienation, sale, removal, or disposition of the property as the court thinks fit until the disposal of the suit or until further."
27. The conditions for consideration in granting an injunction were settled in the celebrated case of Giella v Cassman Brown & Company Limited (1973) EA 358, where the court expressed itself on the condition’s that a party must satisfy for the court to grant an interlocutory injunction as follows: -
"Firstly, 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 might otherwise 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."
28. The test for granting of an interlocutory injunction was considered in the American Cyanamid Co. v Ethicon Limited (1975) A AER 504 where three elements were noted to be of great importance namely: -
i. There must be a serious/fair issue to be tried,
ii. Damages are not an adequate remedy,
iii. The balance of convenience lies in favour of granting or refusing the application.
29. As already submitted by Counsel, a prima facie case was defined in the case of Mrao Ltd v First American Bank of Kenya Ltd & 2 Others [2003] KLR 123 as follows;
A prima facie case in a civil application included but was not confined to a genuine and arguable case. It was a case which, on the material presented to the court, a tribunal properly directing itself would conclude that there existed a right which had apparently been infringed by the opposite party as to call for an explanation or rebuttal from the latter.
30. Further, in the case of Nguruman Ltd v Jan Bonde Nielsen Court of Appeal 77 of 2012, the court had the following to say on the three conditions that a party seeking an injunction must demonstrates as set out in the herein cited case of Giella v Cassman Brown;
These are the three pillars on which rests the foundation of any order of injunction, interlocutory or permanent. It is established that all the above three conditions and stages are to be applied as separate, distinct and logical hurdles which the applicant is expected to surmount sequentially. See Kenya Commercial Finance Co. Ltd V. Afraha Education Society [2001] Vol. 1 EA 86. If the applicant establishes a prima facie case that alone is not sufficient basis to grant an interlocutory injunction, the court must further be satisfied that the injury the respondent will suffer, in the event the injunction is not granted, will be irreparable. In other words, if damages recoverable in law is an adequate remedy and the respondent is capable of paying, no interlocutory order of injunction should normally be granted, however strong the applicant’s claim may appear at that stage. If prima facie case is not established, then irreparable injury and balance of convenience need no consideration. The existence of a prima facie case does not permit “leap-frogging” by the applicant to injunction directly without crossing the other hurdles in between.
31. On whether the injunction sought is merited, it is important to note that the law governing the grant of injunctions, whether temporary or permanent as pointed out by the Learned Judges in the Nguruman Case above is the same. The onus is on the Applicant who is seeking for the injunction to demonstrate as set out in order 40 and as elaborated in the authorities herein cited that he merits the same. Proceeding to the issue at hand then, I have considered the pleadings by both parties as well as the submissions filed on their behalf. It is common ground that the loan facility the subject matter of application was advanced to the Applicant by the 1st Respondent and because both parties have annexed the same loan agreement to their Applications, the presumption is that there is no dispute on the terms and conditions thereof.
32. The Applicant does not deny being indebted to the 1st Respondent, he deposed that he has being repaying the loan advanced diligently and in good time. However, he blames the Respondent for the accumulated arrears by deposing that it is the 1st Respondent who unilaterally reviewed the interest rate upwards and contrary to what is in the contract thereby always making the Applicant to be in default.
33. The court notes however, that apart from the letter dated 26th August 2024 which the Applicant says he wrote to the 1st Respondent to express his concern with the bank and seeking clarification on the matter of the revised interest rate, there is no evidence that any other complaint over the alleged increase in interest was raised. Further the Applicant did not demonstrate to court as he has deposed, how diligent he had been in the repayment of the loan.
34. The court also notes that annexed to his Application is a Bank Statement from Equity Bank (K) Limited. However, the said statement does not indicate which account it is affiliated to and in whose name the said account is. That aside, the court also takes into account the fact that no attempt was made at all by the Applicant to establish for the benefit of the court the nexus between the statement, the Applicant and the loan facility account. Moreover, the entries in the said statement, their purport and connection to the Applicant’s case were also not explained to court. All these issues it seems were left to the court to figure out by itself.
35. Further to the above, the Applicant did not explain to court at what point the interest on the loan facility was reviewed, what the rate was before the review and to what rate it was reviewed, what the monthly repayment before the review was, what the monthly repayment after the review was and how this review then caused the Applicant to always be in default as he has averred.
36. It should be noted that these omissions by the Applicant are very basic but they are the areas that are critical, substantial and necessary in demonstrating to court that the Applicant has a prima facie case to warrant the orders of injunction sought. My pointing out on these omissions only goes to show that the Applicant has failed to establish a prima facie case to warrant the orders of injunction that he seeks. In this regard as stated by the Learned Judges in held in the Nguruman Case, if a prima facie case is not established, then irreparable injury and balance of convenience need no consideration and I will therefore not delve into both.
37. Further to the above, as already noted the court observed that the Applicant is seeking for a permanent injunction. On whether or not this can issue at this stage the following cases to which I associate myself with fully are relevant. In the case of Kenya Power & Lighting Co. Limited v Sheriff Molana Habib [2018] eKLR, the court held as follows
“It is apparent from the pleadings that the Respondent was seeking a permanent injunction against disconnection of his electricity by the Appellant. A permanent injunction which is also known as perpetual injunction is granted upon the hearing of the suit. It fully determines the rights of the parties before the court and is thus a decree of the court. The injunction is granted upon the merits of the case after evidence in support of and against the claim has been tendered. A permanent injunction perpetually restrains the commission of an act by the defendant in order for the rights of the plaintiff to be protected.
A permanent injunction is different from a temporary/interim injunction since a temporary injunction is only meant to be in force for a specified time or until the issuance of further orders from the court. Interim injunctions are normally meant to protect the subject matter as the court hears the parties”
38. In the case of Kenya Consortium to Fight Aids, Tb & Malaria & Another V Brigitte Mukui Kitenge & 4 Others [2013] eKLR, the court held thus:
“In fact, the way the said prayers are crafted, they seem to be seeking perpetual injunctions. In The Headmaster Kiembeni Baptist Primary School & Another vs. The Pastor of Kiembeni Baptists Church Mombasa HCCA No. 103 of 2004, Maraga, J (as he then was) held that when dealing with applications for interlocutory injunctions it is wrong to grant a permanent injunction whose effect is to conclusively decide the suit as issues of fact should be decided after hearing evidence and that Courts should be wary of parties who make applications for interlocutory injunctive orders which if granted as prayed would have the effect of granting permanent or mandatory injunctions and sometimes even eviction orders as order 39 does not provide for grant of permanent injunctions at interlocutory stage.”
39. In the case of Kenya Breweries Limited v Washington Okeyo [2002] eKLR the Court of Appeal reasoned that:
“A Mandatory Injunction can be granted on an interlocutory application as well as at the hearing but, in the absence of special circumstances it will not normally be granted. However, if the case is clear, and one which the court thinks it ought to be decided at once, or if the act done is a simple and summary one which can be easily remedied or if the defendant attempted to steal a match on the plaintiff. A mandatory injunction will be granted on an interlocutory application.”
40. In light of my conclusions and findings as above therefore, I am of the finding that the Applicant’s Application is misconceived and lacks merit. The same is accordingly dismissed in its entirety with costs to the Respondents. The interim orders herein issued are now hereby vacated.
Read Dated and Signed at ELDORET on 4th June 2026
a) Spent
b) That a temporary injunction do issue to restrain and prevent the Respondents by themselves and/or their agents, servants, employees, assigns or otherwise howsoever from any form of execution against the applicant in any way and in particular stay of execution of the proclamation notice served upon the plaintiff/applicant issued on 30th September 2024.
c) That a permanent injunction do issue to restrain and prevent the Respondents by themselves and/or their agents, servants, employees, assigns or otherwise howsoever from any form of execution against the applicant in any way and in particular stay of execution of the proclamation notice served upon the plaintiff/applicant issued on 30th September 2024 pending hearing and determination of the main suit.
d) The cost of the application be borne by the Respondents.
2. The Application is premised on the grounds on the face of it and the contents of the supporting affidavit sworn by Isaiah Sifuna Walubengo. In a nutshell, whereas the Applicant does not deny being indebted to the 1st Respondent, he deposes that he has being repaying the same in good time but the 1st Respondent unilaterally reviewed the interest rate of 13% on a reducing balance thereby always making the Applicant to be in default. That upon realizing this fact, the Applicant wrote to the 1st Respondent on 13th August 2024 but despite his letter being received on 26th August 2024, it did not elicit any response but instead proceeded to instruct the 2nd Respondent to Proclaim his properties which are part of the security for the loan. The Proclamation Notice is dated 30th September 2024.
Replying Affidavit
3. The Respondents opposed the application vide a Replying Affidavit sworn by Edwin B. Ndiwa who stated that he is the Credit manager of the 1st Respondent’s Eldoret Branch. He deposed that the application is an abuse of the court process and further, that the same ought to be struck out with costs. He urged that the applicant approached the respondent for a loan facility of Kshs. 38,000,000/- which was secured by several motor vehicles. That vide the letter dated 15/06/2022 the Respondent granted the applicant the loan and the applicant offered the logbooks for the following motor vehicles as security; KBY 800U Toyota Land cruiser, KCQ 683F Toyota Harrier, KDC 230H Toyota Hiace, KBL 967M Sinotruk Howo, KCB 664P Toyota DBA-ZRT265, KCD 062C Toyota DBA-ACA33W and ZD 1591 Bhachu Tipper. (He annexed as EBN-1 to 9 the relevant documentation)
4. That the Plaintiff then failed terribly in its primary duty to to service the loan and as at 14/12/2023 the same was in arrears of a sum of Kshs. 9,391,262.92 with the total outstanding amount due to the bank being Ks. 23,005,384,92/=. He further stated that the 1st Defendant/Respondent issued a demand notice dated 14/12/ 2023 being a 14-day notice, failure to which the 1st Respondent would exercise its remedy for the recovery of the amount outstanding together with interest (He annexed a copy of the Demand Letter as EBN -10 and a copy of the Certificate of Postage as EBN-11). He urged that despite issuance of the demand notice, the Applicant failed to service the loan. Accordingly, the 1st Respondent instructed the 2nd Respondent to realize security in the Plaintiffs custody
5. The deponent averred that the non-observance by the Appellant to service the loan is in dereliction of the of the facility agreement specifically Clause 2, Section A and that further, that this application is an attempt to avoid paying their just debt and it is therefore in the interest of justice for the Respondent to be granted leave to continue with its intended attachment of security since the same has accrued. He additionally deposed that a failure for the sale to take place will result in a very real risk that the debt may outstrip the value of the suit property, therefore the balance of convenience is in favor of the Respondent. He maintained that the application does not meet the threshold for grant of orders sought and prayed that the application be dismissed with costs.
Hearing of the Application
6. The Application was canvassed by way of written submissions. The applicant filed submissions dated 10/02/2025 through the firm of Messrs. Aloo Romanus & Company Advocates whereas the Respondents filed submissions dated 14/02/2025 through the firm of Messrs. Kalya & Company Advocates.
Applicants’ Submissions
7. Counsel for the applicant submitted that as a general rule, the conditions for grant of temporary injunctions were settled in the case on Giella v Cassman Brown [19731 EA 358, that is to say; An applicant has to show a prima fade case with probability of success; That an interlocutory injunction will not normally be granted unless the applicant might otherwise suffer irreparable injury, which would not be adequately compensated by an award of damages; and that if the court is in doubt, it will decide the application on a balance of convenience.
8. Counsel urged that a prima facie case was defined in the case of Mrao Ltd Vs First American Bank of Kenya and 2 others (2003) KLR 12 and further, that in order to demonstrate a prima facie case the applicant indicated in his supporting affidavit that he is the registered owner of the suit properties. He stated that the applicant has been financing the loan advanced to him by the Defendant despite the exaggerated interest rates that were never brought to his attention at the time they were being increased.
9. Counsel urged that in his supporting affidavit, the applicant confirmed that he was never served with any 45 days Redemption Notice and a Notification of sale to enable him redeem his account but only a letter threatening to list him to the Credit Reference Bureau. He cited the case of Kenleb Cons Ltd v New Gatitu Service Station Ltd & another (1990} K.L.R 557 in support of this submission. He submitted that having satisfied the first grounds, the Application should be allowed.
10. Counsel submitted that if the orders sought are not granted, the Applicant will suffer irreparable harm since his properties will be auctioned illegally and since the same are used to run a business, the act of disposing of these properties will disrupt the operations of the business. Further, that there is the existence of real injury that cannot be adequately compensated by damages.
11. On balance of convenience, counsel urged the Court to put into focus both the Applicant's rights and the Respondent rights and thereafter resort to the lower risk rather than higher risk of injustice. Further, that the balance of convenience tilts in favor of the Applicant for the reason that the sale of the suit properties will be detrimental to both himself and his business as its operations will be paralyzed unfairly. He submitted that in the event that the Defendant are to suffer any loss, the said loss can adequately be compensated by an award of the court whereas the Plaintiff will suffer irreparable harm if the orders sought are not granted. He urged that the Applicant has met the legal threshold required to grant the orders.
Respondents’ Submissions
12. Learned Counsel for the Respondent denied the allegations on charging exaggerated interest rates on the loan account, or increasing of rates without informing the applicant. Counsel urged that the interest charged was regular and in line with the terms of the letter of offer dated 25th June, 2022. Further, that the applicant has failed to demonstrate how and when the interest was increased and to what extent it was increased. He cited section 107 of the Evidence Act on the burden of proof and submitted that it is trite law that the burden of proof lies with the one who alleges,
13. Counsel submitted that the commissions, charges and penalties charged by the 1st Defendant were contractual and within the parameters stipulated under Section 44A of the Banking Act. Further, that the 1st Defendant attached the account statements as ‘EBN- 13 which shows that the amount outstanding, interests and charges in line with the letter of offer. Counsel cited the cases of Samesh Textile Industries Ltd & Another vs Delphis Bank Ltd. C. Case No. 2186/2000 (2000) LLR 2976; Sports Car Ltd v Trust Bank Ltd Nairobi – Milimani HCCC No. 754 of 1999 and Peter Njuguna Njenga & 2 Others vs Equity Bank Ltd (2014) eKLR, in support of his submissions urging the court to be persuaded and dismiss the application with costs to the Respondent.
14. As to whether the Applicant is entitled to the orders sought, counsel cited the principles for the prayers to be granted as set out in the case of Giella vs Cassman Brown Limited (1973) EA 358. He urged that as observed by the court of appeal in the case of Nguruman Limited v Jan Bonde Nielsen & 2 Others (2014) eKLR, these conditions and stages are to be applied as separate, distinct and logical hurdles which the applicant has to surmount sequentially.
15. Counsel submitted that what amounts to a prima facie case was set out in Mrao Ltd v First American Bank of Kenya Ltd (2003) eKLR. He stated that from the onset, the application has failed to demonstrate prima facie evidence of a genuine and arguable case. That in fact if there is anyone with a genuine and arguable case, it is the 1st Respondent who is owed money and has not breached the terms of the agreement. He pointed out that it is not in dispute that the plaintiff provided logbooks for his motor vehicles as security or; that the Plaintiff defaulted in the repayment of the loan advanced, breaching the terms of the contract between them and the 1st Defendant.
16. Counsel urged that according to the bank statements annexed and marked as annexure EBN-13 to the Replying affidavit, it is undisputed that the Plaintiff had failed to service the loan causing the loan account to fall into arrears and as at 14/12/2023 it was in arrears of a csum of Kshs. 9,391,262.92 for Loan Account Number 1090582862392 and 1090D40710154. He reiterated that the total outstanding amount due to the bank was Kshs. 23,005,384.92 and the 1st Respondent issued the Plaintiff with the demand notice dated 14th December, 2023 which issued a fourteen-day notice, failure to which the 1st Respondent would exercise its remedy for the recovery of the amount outstanding and remaining unpaid together with interest. The Applicant’s failure to regularize its account after issuance of the demand notice prompted the 1st Defendant to instruct the 2nd Defendant to enable it exercise its rights as per the contract.
17. Counsel submitted that the Plaintiffs breached the terms of the agreement i.e. clause 5, 2 of the Letter of Offer by failing to repay the loan as agreed hence causing the account to run into arrears. Further, that the Applicant seems to seek this court to rewrite the contract between the Parties which is forbidden. Citing the case of Kenya Breweries Ltd vs Okeyo (2002) EA and the case of National Bank of Kenya Ltd vs Pipelastic Samokut Ltd & Another (2001) KLR counsel urged that this court is forbidden from rewriting the contract between the parties.
18. Further, that the default clause cannot be varied through this Court because the Court’s role is to interpret the agreement as signed by the parties. Additionally, that the Plaintiff admits the terms of the agreement which is otherwise binding on the parties herein and having established as such, and considering the fact that the Plaintiff breached the terms of the agreement and caused the account to run into arrears, the 1st Defendant/Respondent had a right to realize the security as guaranteed by the agreement between the parties.
19. Counsel urged that no good or valid reasons have been advanced by the Plaintiff for non- payment and/or compliance with the agreement entered into. He reiterated the case of Mrao Ltd Vs First American Bank of Kenya Ltd & 2 others and urged that the Plaintiff/applicant having defaulted and are in breach of the agreement between themselves and the 1st Defendant, and therefore it cannot be granted an injunction. Counsel additionally cited the case of Woodcraft Industries Ltd & Others vs The East African Building Society; Nairobi HCCC No. 602 of 2000 (2000) LLR 2940.
20. On the issue of whether the applicants are likely to suffer irreparable loss which cannot be compensated by damages, counsel submitted that the Applicant has not demonstrated that it stands to suffer irreparable loss which cannot warrant adequate compensation by damages. He urged that the Plaintiff, in the supporting affidavit, has casually sworn that it will suffer irreparable damage and holds that this has not been established. He cited the case of Paul Gitonga Wanyau v Gathuthi tea Factory Company Limited & 2 Others (2016) eKLR on proof of irreparable harm.
21. He reiterated that from the onset, as at the time of agreement the Plaintiff understood the consequences of non-payment of the loan and/ or non-compliance with the terms of the agreement. Further, that it is the 1st Defendant/Respondent who stands to suffer loss if the orders sought are granted since the amount continues to accrue interest, charges and commissions to the 1st defendant’s detriment. Counsel additionally cited the case of Mary Wanjiku Mwaniki & Another v Dream Credit Limited [2017] eKLR.
22. On the issue of balance of convenience, counsel cited the case of Bryan Chebii Kipkoech v Barnabas Tuitoek Bargoria & Another (2019) eKLR and urged the court to take judicial notice of the fact that the 1st Defendant/Respondent is a reasonably sound financial institution and it stands better chances to compensate the Plaintiff should the Plaintiff succeed in trial. Should the injunction be granted to restrain the 1st Defendant from exercising its statutory powers, the amount of debt may continue to rise exponentially and the security may prove to be insufficient to cover the ultimate balance. He further cited the case of Andrew Muriuki Wanjohi vs Equity Building Society Limited & 2 Others (2006) eKLR and urged that the balance of convenience lies in dismissing the application.
23. Counsel urged that an order of injunction is an equitable remedy and the party seeking it must come to court with clean hands. He cited the cases of Patrick Waweru Mwangi and Anor vs Housing Finance Co. of Kenya Ltd (2013) Eklr and Michael Gitere & Another v Commercial Bank Limited (2018) eKLR and submitted that the Applicant is seeking equitable orders from this court which cannot issue since it is a maxim of equity that he who seeks equity must do equity.
24. Counsel further urged that the Plaintiff failed to adhere to their part of the contract then brought this application seeking for orders against the 1st Defendant who has not breached the agreement in any way. This is clearly not equitable. Additionally, that he who comes to equity must come with clean hands. Counsel urged that the applicant does not deserve the equitable relief and prayed the court dismiss the application with costs.
Analysis & Determination
25. Having addressed my mind to the pleadings as well as the submissions, it is my considered opinion that much as both Counsel have submitted on the law governing the issuance of a temporary injunction, it should be noted that a temporary injunction was issued in favor of the applicant at the interim stage restraining the Respondents from executing the proclamation Notice issued on 30th September 2024 as was sought in prayer No. 2 of the Application. The issue for determination the subject matter of this Ruling therefore is whether a permanent injunction should issue pending the hearing and determination of the main suit as per prayer 3.
26. The law governing the granting of injunctions is set out under order 40(1) (a) and (b) of the Civil Procedure Rules 2010 which provides that: -
"Where in any suit it is proved by affidavit or otherwise—
(a) That any property in dispute in a suit is in danger of being wasted, damaged, or alienated by any party to the suit, or wrongfully sold in execution of a decree; or [Rev. 2012] Civil Procedure CAP. 21 [Subsidiary] C17 – 165;
(b) That the defendant threatens or intends to remove or dispose of his property in circumstances affording reasonable probability that the plaintiff will or may be obstructed or delayed in the execution of any decree that may be passed against the defendant in the suit, the court may by order grant a temporary injunction to restrain such act, or make such other order for the purpose of staying and preventing the wasting, damaging, alienation, sale, removal, or disposition of the property as the court thinks fit until the disposal of the suit or until further."
27. The conditions for consideration in granting an injunction were settled in the celebrated case of Giella v Cassman Brown & Company Limited (1973) EA 358, where the court expressed itself on the condition’s that a party must satisfy for the court to grant an interlocutory injunction as follows: -
"Firstly, 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 might otherwise 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."
28. The test for granting of an interlocutory injunction was considered in the American Cyanamid Co. v Ethicon Limited (1975) A AER 504 where three elements were noted to be of great importance namely: -
i. There must be a serious/fair issue to be tried,
ii. Damages are not an adequate remedy,
iii. The balance of convenience lies in favour of granting or refusing the application.
29. As already submitted by Counsel, a prima facie case was defined in the case of Mrao Ltd v First American Bank of Kenya Ltd & 2 Others [2003] KLR 123 as follows;
A prima facie case in a civil application included but was not confined to a genuine and arguable case. It was a case which, on the material presented to the court, a tribunal properly directing itself would conclude that there existed a right which had apparently been infringed by the opposite party as to call for an explanation or rebuttal from the latter.
30. Further, in the case of Nguruman Ltd v Jan Bonde Nielsen Court of Appeal 77 of 2012, the court had the following to say on the three conditions that a party seeking an injunction must demonstrates as set out in the herein cited case of Giella v Cassman Brown;
These are the three pillars on which rests the foundation of any order of injunction, interlocutory or permanent. It is established that all the above three conditions and stages are to be applied as separate, distinct and logical hurdles which the applicant is expected to surmount sequentially. See Kenya Commercial Finance Co. Ltd V. Afraha Education Society [2001] Vol. 1 EA 86. If the applicant establishes a prima facie case that alone is not sufficient basis to grant an interlocutory injunction, the court must further be satisfied that the injury the respondent will suffer, in the event the injunction is not granted, will be irreparable. In other words, if damages recoverable in law is an adequate remedy and the respondent is capable of paying, no interlocutory order of injunction should normally be granted, however strong the applicant’s claim may appear at that stage. If prima facie case is not established, then irreparable injury and balance of convenience need no consideration. The existence of a prima facie case does not permit “leap-frogging” by the applicant to injunction directly without crossing the other hurdles in between.
31. On whether the injunction sought is merited, it is important to note that the law governing the grant of injunctions, whether temporary or permanent as pointed out by the Learned Judges in the Nguruman Case above is the same. The onus is on the Applicant who is seeking for the injunction to demonstrate as set out in order 40 and as elaborated in the authorities herein cited that he merits the same. Proceeding to the issue at hand then, I have considered the pleadings by both parties as well as the submissions filed on their behalf. It is common ground that the loan facility the subject matter of application was advanced to the Applicant by the 1st Respondent and because both parties have annexed the same loan agreement to their Applications, the presumption is that there is no dispute on the terms and conditions thereof.
32. The Applicant does not deny being indebted to the 1st Respondent, he deposed that he has being repaying the loan advanced diligently and in good time. However, he blames the Respondent for the accumulated arrears by deposing that it is the 1st Respondent who unilaterally reviewed the interest rate upwards and contrary to what is in the contract thereby always making the Applicant to be in default.
33. The court notes however, that apart from the letter dated 26th August 2024 which the Applicant says he wrote to the 1st Respondent to express his concern with the bank and seeking clarification on the matter of the revised interest rate, there is no evidence that any other complaint over the alleged increase in interest was raised. Further the Applicant did not demonstrate to court as he has deposed, how diligent he had been in the repayment of the loan.
34. The court also notes that annexed to his Application is a Bank Statement from Equity Bank (K) Limited. However, the said statement does not indicate which account it is affiliated to and in whose name the said account is. That aside, the court also takes into account the fact that no attempt was made at all by the Applicant to establish for the benefit of the court the nexus between the statement, the Applicant and the loan facility account. Moreover, the entries in the said statement, their purport and connection to the Applicant’s case were also not explained to court. All these issues it seems were left to the court to figure out by itself.
35. Further to the above, the Applicant did not explain to court at what point the interest on the loan facility was reviewed, what the rate was before the review and to what rate it was reviewed, what the monthly repayment before the review was, what the monthly repayment after the review was and how this review then caused the Applicant to always be in default as he has averred.
36. It should be noted that these omissions by the Applicant are very basic but they are the areas that are critical, substantial and necessary in demonstrating to court that the Applicant has a prima facie case to warrant the orders of injunction sought. My pointing out on these omissions only goes to show that the Applicant has failed to establish a prima facie case to warrant the orders of injunction that he seeks. In this regard as stated by the Learned Judges in held in the Nguruman Case, if a prima facie case is not established, then irreparable injury and balance of convenience need no consideration and I will therefore not delve into both.
37. Further to the above, as already noted the court observed that the Applicant is seeking for a permanent injunction. On whether or not this can issue at this stage the following cases to which I associate myself with fully are relevant. In the case of Kenya Power & Lighting Co. Limited v Sheriff Molana Habib [2018] eKLR, the court held as follows
“It is apparent from the pleadings that the Respondent was seeking a permanent injunction against disconnection of his electricity by the Appellant. A permanent injunction which is also known as perpetual injunction is granted upon the hearing of the suit. It fully determines the rights of the parties before the court and is thus a decree of the court. The injunction is granted upon the merits of the case after evidence in support of and against the claim has been tendered. A permanent injunction perpetually restrains the commission of an act by the defendant in order for the rights of the plaintiff to be protected.
A permanent injunction is different from a temporary/interim injunction since a temporary injunction is only meant to be in force for a specified time or until the issuance of further orders from the court. Interim injunctions are normally meant to protect the subject matter as the court hears the parties”
38. In the case of Kenya Consortium to Fight Aids, Tb & Malaria & Another V Brigitte Mukui Kitenge & 4 Others [2013] eKLR, the court held thus:
“In fact, the way the said prayers are crafted, they seem to be seeking perpetual injunctions. In The Headmaster Kiembeni Baptist Primary School & Another vs. The Pastor of Kiembeni Baptists Church Mombasa HCCA No. 103 of 2004, Maraga, J (as he then was) held that when dealing with applications for interlocutory injunctions it is wrong to grant a permanent injunction whose effect is to conclusively decide the suit as issues of fact should be decided after hearing evidence and that Courts should be wary of parties who make applications for interlocutory injunctive orders which if granted as prayed would have the effect of granting permanent or mandatory injunctions and sometimes even eviction orders as order 39 does not provide for grant of permanent injunctions at interlocutory stage.”
39. In the case of Kenya Breweries Limited v Washington Okeyo [2002] eKLR the Court of Appeal reasoned that:
“A Mandatory Injunction can be granted on an interlocutory application as well as at the hearing but, in the absence of special circumstances it will not normally be granted. However, if the case is clear, and one which the court thinks it ought to be decided at once, or if the act done is a simple and summary one which can be easily remedied or if the defendant attempted to steal a match on the plaintiff. A mandatory injunction will be granted on an interlocutory application.”
40. In light of my conclusions and findings as above therefore, I am of the finding that the Applicant’s Application is misconceived and lacks merit. The same is accordingly dismissed in its entirety with costs to the Respondents. The interim orders herein issued are now hereby vacated.
Read Dated and Signed at ELDORET on 4th June 2026