' [1] The plaintiff, Mohamed Naqi Noorany, and his brother, one Hassan Mohamed Noorani, are former employees of the 1st defendant. They both worked in the 1st defendant’s Sales and Marketing Department. They were suspended sometime in September 2011 on suspicion that they were involved in loss of revenue by the 1st defendant to the tune of Kshs. 500,000,000/=. The plaintiff averred that the 1st defendant conducted internal investigations which exonerated him from any wrongdoing.
[2] Initially, the plaintiff filed the Plaint dated 18th March 2020 in which he sued Premier Flour Mills Ltd as the 1st defendant, Cargill Kenya Ltd as the 2nd defendant and Paramamba Limited as the 3rd defendant. That Plaint was amended with the leave of the Court on 29th September 2020. It was amended further on 13th October 2023 to delete the name of Cargill Kenya Ltd. Henceforth, the 3rd defendant, Paramamba Limited was designated as the 2nd defendant.
[3] The plaintiff averred that, in spite of the fact that he was innocent of the accusations of theft, the 1st defendant insisted that he sign and he did sign the Guarantee dated 8th November 2011. The plaintiff explained that the 1st defendant took a decision to have his services terminated and upon being exonerated by the internal investigations conducted by the 1st defendant, the 1st defendant insisted that, as a precondition to his return to work, he would have to sign a Guarantee as security for the payment of the money allegedly stolen by his brother.
[4] It was therefore the contention of the plaintiff that he was coerced into signing the Guarantee among other documents, and was never given an opportunity to read the documents. He averred that, fearing the risk of losing his job, which was his source of livelihood, he agreed to sign the documents upon the oral undertaking of the Chairman and Director of the 1st defendant, Diamond Lalji (DW1), that the Transfer was only on paper; and that the title to the properties would ultimately revert to his name.
[5] The Guarantee was exhibited as part of the plaintiff’s Bundle of Documents marked Exhibit 1 and it provided the particulars of the three properties and their alleged transfer value at Clause 2 thereof as follows:
[a] Plot No. Nakuru Municipality/Block 7/301 at a transfer value of Kshs. 2,800,000/=;
[b] Flat No. 4 on the first floor of all that development known as Subdivision N. 4756 (Original No. 1391/25) of Section I, Mainland North, at the last transfer value of Kshs. 1,500,000/=; and
[c] Apartment No. No. TF2, Block C of Riara Apartments on LR 330/140, Nairobi (Riara Apartment), at the last transfer value of Kshs. 8,500,000/=..
[6] The plaintiff further averred that despite various inquiries and numerous promises by DW1 to return the title documents, he did not honour his promises. In the meantime, the 1st defendant caused the arrest and prosecution of his brother, Hassan Mohamed Noorani, on allegations of theft; which prosecution ended up in an acquittal. The 1st defendant also filed a civil case against Hassan Mohamed Noorani for recovery of the allegedly stolen funds vide Nairobi High Court Civil Case No. 119 of 2012: Premier Flour Mills Limited v Hassan Mohamed Noorani & another (the Nairobi case). The suit was pending hearing and determination by the time the plaintiff filed this suit.
[7] At paragraphs 16, 17 and 18, the plaintiff explained that he only got to learn that the 1st defendant had sold the Riara Apartment to the 2nd defendant upon perusing an Affidavit sworn on behalf of the 1st defendant in the Nairobi case by its Chief Accountant, Erastus Kimanthi. As of the time of filing this suit, the plaintiff was informed that the 2nd defendant had given instructions to the tenant in the Riara Apartment not to pay rent to him. He accordingly filed this suit seeking the following reliefs:
[a] Spent
[b] A permanent injunction restraining the defendants or any other person/s whether by themselves and/or their servants, agents, assigns or other persons under them or otherwise howsoever from entering, subdividing, selling, transferring, assigning, leasing, subletting, charging or otherwise trespassing upon and/or alienating and/or interfering with the plaintiff’s ownership, use and quiet enjoyment of Flat No. 4 on Subdivision N. 4756 (Original No. 1391/25) Section I Mainland North, Plot No. Nakuru Municipality/Block 7/301 and Flat No. TF2, Block C on LR 330/140 registered as Vol. N80, Folio 55/3, File 24712 (Riara Apartment).
[c] A declaration that the Guarantee between the plaintiff and the 1st defendant is null and void ab initio for the reason that the same was entered into as a result of coercion and unconscionable bargain.
[d] An order of restitution compelling the defendants or any other person/s whether by themselves and/or their servants, agents, assigns or other persons under them or otherwise howsoever to transfer back the suit properties to the plaintiff within 7 days from the date of Judgment.
[e] In the alternative, an order cancelling the Transfer of the suit properties to the Defendants or any other person/s, whether by themselves and/or their servants, agents, assigns or other persons under them or otherwise howsoever and compelling the Registrar of Lands to register the plaintiff as the owner of the suit properties.
[f] Damages for deprived usage of the suit properties.
[g] Costs of this suit; and
[h] Any other relief which the Court deems just to grant.
[8] The 1st defendant denied the plaintiff’s allegations vide the Statement of Defence & Counterclaim dated 29th April 2020. Its contention was that the plaintiff willingly transferred the suit properties to it. It averred that, upon internal investigations being done, both the plaintiff and his brother were found culpable for the loss of Kshs. 500,000,000/=. It contended that nothing in law precludes it from filing a civil suit to recover the stolen funds.
[9] In its Counterclaim, the 1st defendant relied on the Guarantee dated 8th November 2011 for Kshs. 500,000,000/=, contending that, at Clause 2 of the Guarantee, the plaintiff willingly offered to transfer 3 of his properties the subject matter of this suit, valued at Kshs. 12,800,000/= to it. He further stated that the plaintiff knowingly signed the Transfers and completion documents in respect of the subject properties. It was therefore the case of the 1st defendant that it henceforth became the registered owner of the 3 properties.
[10] The 1st defendant averred further that it has continued to enjoy actual possession of the subject properties without any objection or adverse claims by the plaintiff for the last 8 years. The 1st defendant further pointed out that, since the plaintiff had taken no action to challenge the Guarantee, it is entitled to Kshs. 478,200,000/= which it claimed from the plaintiff by way of Counterclaim. Accordingly, the 1st defendant prayed that:
[a] The plaintiff’s suit against it be dismissed with costs.
[b] Judgment be entered for it against the plaintiff for the aforesaid sum of Kshs. 478,200,000/=.
[c] It be awarded the costs of the Counterclaim together with interest at commercial rates.
[d] Any such other or further relief as the Court may deem appropriate.
[11] In its Further Amended Statement of Defence of 14th June 2023, the 1st defendant reiterated its stance that the plaintiff willingly executed the Guarantee; and that nothing prevented him from seeking and obtaining independent legal advice on the subject documents before appending his signature thereto. The 1st defendant denied any oral undertaking to return the plaintiff’s title documents and averred that the Guarantee is valid and enforceable against the plaintiff.
[12] The 1st defendant further contended that, if for any reason the plaintiff was discharged from the Deed of Guarantee, which it denied, then under Clause 4 the plaintiff is obliged to make good its loss on account of the indemnity clause. It was therefore the averment of the 1st defendant that the plaintiff has no right, constitutional or otherwise, over the suit properties, the same having lawfully devolved to it under the terms of the Deed of Guarantee. The 1st defendant reiterated its Counterclaim and averred that, since the transfer of the suit properties to it, the plaintiff has failed to discharge his obligations under the Guarantee.
[13] The 2nd defendant also denied the plaintiff’s claim. In its Defence dated 15th May 2020, it averred that it entered into an agreement with the 1st defendant for the sale of the apartment known as Flat No. TF2 (Block C) for which it paid the full purchase price, government taxes and duties; after which the apartment was transferred to it, free of encumbrances. The 2nd defendant also mentioned that prior to purchasing the apartment, it applied for and was issued with a Certificate of Official Search confirming that the 1st defendant was the duly registered proprietor of the apartment free of any encumbrances save for a Charge in favour of BTB Insurance Brokers Limited who duly discharged their Charge.
[14] In proof of his case, the plaintiff adopted his witness statement dated 18th March 2020 in which he gave an account as to how, jointly with his wife, Asma Khatoon Mohamed Naqi Noorani (now deceased), they acquired the subject property. He confirmed that, he and his brother Hassan Mohamed Noorani, were employees of the 1st defendant; both serving in the Sales and Marketing Department until sometime in September 2011 when they were suspended on suspicion that they had used customers’ accounts to divert and deliver wheat and maize flour for which they failed to raise invoices.
[15] It was further the evidence of the plaintiff that the 1st defendant conducted internal investigations following which he was exonerated of any wrong-doing. He was nevertheless called to a meeting with the 1st defendant’s Chairman, Diamond Hasham Lalji, and the 1st defendant’s lawyers and was required to sign a ready-made Deed of Guarantee for the settlement of the funds allegedly stolen by his brother, Hassan, as a precondition for his return to work. The plaintiff added that, out of fear of loss of his livelihood, he signed the documents and returned to work.
[16] The plaintiff testified that he was neither given an opportunity to seek professional advice before signing the said agreement nor a copy of the Guarantee itself; the effect of which was that he had transferred the subject 3 properties to the 1st defendant. His contention was therefore that the Guarantee agreement is unconscionable for the reason that the 1st defendant used its dominant position as an employer to coerce him into signing the Guarantee. He also mentioned that the 1st defendant’s Chairman, Diamond Hasham Lalji, verbally assured him that his 3 titles would only be used as security and would ultimately be returned to him.
[17] The plaintiff testified that he was buoyed in his belief that the titles would be returned to him because he continued to collect rent from the tenants occupying Flat No. 4 on Subdivision No. 4756 (Original No. 1391/25) Section I Mainland North and Flat No. TF2 on LR No. 330/140 registered as Vol N80, Folio 55/3, File 24712 otherwise known as Riara Apartment. He also stated that he was aware of the efforts the 1st defendant was making to recover the alleged stolen funds from his brother Hassan as well as other entities. He mentioned for instance that one such attempt as the filing of Mombasa High Court Civil Case No. 119 of 2012: Premier Flour Mills Limited v Hassan Mohamed Noorani & New Generation Self Service Store Limited.
[18] The plaintiff also stated that he came to know that the 1st defendant’s Chairperson, Diamond Hasham Lalji, was declared bankrupt by the High Court in Nairobi Insolvency Cause No. 1 of 2017: Diamond Hasham Lalji v Cargill Kenya Limited following his failure to settle a debt owed to Cargill Kenya Limited (the initial 2nd defendant herein). He added that he was surprised to learn from an affidavit filed on behalf of the 1st defendant by its Chief Accountant to the effect that the three titles were in the process of being sold in settlement of the outstanding debt owed by DW1 to Cargill Kenya Limited.
[19] The plaintiff therefore stated that he was surprised to discover that the 2nd defendant was claiming ownership of the Riara Apartment, and had purported to direct the tenant in the said property to henceforth pay rent to it. His evidence was therefore that the unjustified actions of the two defendants constitute unlawful interference with his constitutional right to property under Article 40 and will result in substantial loss, damage and inconvenience to him.
[20] In his supplementary witness statement dated 15th February 2022 the plaintiff stated that, sometime in the year 2012, the 1st defendant’s sister company, Atta (K) Ltd, instituted criminal proceedings against his brother, Hassan, for recovery of the alleged stolen sums in Mombasa High Court Criminal Case No. 211 of 2012: Republic v Hassan Mohammed Noorani. He availed a copy of the Charge Sheet as an exhibit and pointed out that the Charge Sheet was in respect of Kshs. 10,000,000/= only; and that his brother was ultimately acquitted of that charge. He therefore posited that he was thereby relieved of his obligation under the Guarantee.
[21] The 1st defendant relied on the evidence of its director, Diamond Hasham Lalji (DW1). DW1 adopted his witness statement dated 19th September 2022 and produced the 1st defendant’s Bundles of Documents (marked Defence Exhibits 1 and 2). He conceded that the plaintiff and his brother, Hassan, were employed by the 1st defendant in its Sales and Marketing Department. He testified that sometime in the year 2011, the 1st defendant instructed external auditors to audit its accounts; and that the audit revealed a huge hole in the 1st defendant’s balance sheet. As a result, the 1st defendant’s internal auditors investigated the company’s accounts and found that the plaintiff and his brother, Hassan, were culpable for using customers’ accounts to order goods which were then delivered to different customers; and that payment would thereafter be made in the names of the plaintiff and his brother.
[22] It was further the testimony of DW1 that following the result of the internal investigations, the plaintiff willingly offered a Guarantee in favour of the 1st defendant on behalf of his brother, Hassan, to cater for the Kshs. 500,000,000/= loss incurred by the 1st defendant. DW1 explained that, at Clause 2 of the Guarantee, the plaintiff willingly transferred to the 1st defendant the three properties, namely, Nakuru Municipality Block 7/307 valued at Kshs. 2,800,000/=, Flat No. 4 on subdivision 4756 (Original No. 1391/25 of Section I Mainland North, valued at Kshs. 1,500,000/= and Apartment No. TF2 Block C, Riara Apartment, on LR No. 330/140, Nairobi valued at Kshs. 8,500,000/=.
[23] According to DW1, the aforementioned properties were transferred to the 1st defendant on the 23rd May 2012 and the 1st defendant wrote to the plaintiff and his wife, informing them of the successful transfer of the 3 properties. He added that the plaintiff took no step to challenge the transfer. Concerning Mombasa Criminal Case No. 211 of 2012: Republic v Hassan Mohamed Noorany, DW1 testified that the plaintiff’s brother, Hassan, was the face of the fraudulent activities and that a complaint was lodged with the Police against him by the 1st defendant. He added that, to his knowledge, Hassan was acquitted, not on merit, but due to the Prosecution’s failure to avail witnesses. It was therefore the evidence of DW1 that the acquittal of Hassan in the said criminal case is inconsequential to this suit.
[24] DW1 concluded his evidence by reiterating that once the title to the suit properties passed to the 1st defendant, it had the right to deal with the properties as it deemed fit. He also stated that the 1st defendant has been paying the rates and rent for the suit properties as well as security charges for the Nakuru property. He asserted that, as things stand, the plaintiff is indebted to the 1st defendant to the tune of Kshs. 478,200,000/=. He consequently urged for the dismissal of the plaintiff’s case and for judgment to be entered in the 1st defendant’s favour as per the prayers set out in its Counterclaim. An oral application was made on 25th January 2024 to amend the figure to Kshs. 487,200,000/= on account of what counsel for the 1st defendant attributed to a typographical error.
[25] The 2nd defendant relied on the evidence of one of its directors, Rahul Dilesh Bid (DW2). DW2 similarly adopted his witness statement dated 15th May 2020. His evidence was that on or about 31st October 2019, the 2nd defendant entered into an agreement with the 1st defendant for the sale of the apartment known as Flat No. TF2 (Block C) on the plan registered in Folios 374/576, 379/605, 411/854 & 411/856 File MMVII. He confirmed that the 2nd defendant paid the entire purchase price, government taxes and duties; whereupon the apartment was transferred to the 2nd defendant free of all encumbrances.
[26] DW1 explained that, prior to purchasing the apartment, the 2nd defendant applied for and was issued with an official search that confirmed that the 1st defendant was the duly registered propriety of the apartment, free of any encumbrances save for a legal Charge in favour of BTB Insurance Brokers Limited. His evidence was therefore that the 2nd defendant was an innocent purchaser for value without notice of any claims from the plaintiff or whatsoever, save for the Charge in favour of BTB Insurance Brokers Ltd; which Charge was duly discharged. He prayed for the dismissal of the plaintiff’s suit.
[27] In his written submissions dated 17th September 2024, the plaintiff reiterated the factual background of his case and proposed the following issues for determination:
[a] Whether the impugned agreement is valid?
[b] Whether the transfers of the subject properties vas valid and legal?
[c] Whether the instant suit is time barred?
[d] Whether the 1st Defendant''s counterclaim has any merit?
[e] Costs of the suit
[28] The Plaintiff submitted that, being an employee of the 1st defendant, he was under duress when he appended his signature in that he was threatened with arrest, prosecution and loss of job. He posited that the 1st defendant used its superior bargaining power, as the employer of the plaintiff, to induce the execution of the agreement. For the definition of undue influence, the plaintiff relied on Black’s Law Dictionary and the cases of Nabro Properties Limited v Sky Structures Limited (Z.R. Shah) Southfork Investments Limited [19861 eKLR, and Mombasa Bricks & Tiles Ltd & 5 others v Arvind Shah & 7 others [20191 eKLR Mohamed Ahmed Abdun & another v Mini Bakeries (MSA) Limited [2019] eKLR.
[29] The Plaintiff further submitted that the circumstances in which the agreement was signed were such that he did not have the opportunity to either study the documents or seek legal counsel before appending his signature. He also contended that he was misled into believing that the Guarantee and transfer documents were meant to serve only as security. He added that this is not only clear from the words used in the Guarantee itself but also from the fact that he continued to collect and enjoy the rental income from the properties long after the purported transfers were registered.
[30] The plaintiff relied on the decision of the Court of Appeal in Sambayon Ole Semera v Kalka Flowers Limited & another [2021] eKLR for the proposition that a contract founded on illegalities or misrepresentations cannot be binding. He therefore faulted the 1st defendant for having gone ahead to use the documents offered as security to discharge his liability in respect of another transaction. Accordingly, the plaintiff invited the Court to find that the Guarantee is null and void ab initio.
[31] Without prejudice to the foregoing, the plaintiff submitted that the Guarantee is not enforceable as the pre-conditions to his liability, as stated in the Guarantee, have not been fulfilled. He made reference to the principle that the liability of a guarantor can only arise after the principal debtor has failed to discharge his liability. He relied on Gakenga v Consolidated Bank of Kenya Limited & 2 others (Civil Case 13 of 2018) [2022] KEHC 436 (KLR) to buttress his argument.
[32] On whether the transfer of the three subject properties was valid or legal, the plaintiff urged the Court to note what he referred to as illegalities, fraud and irregularities as detailed below:
[a] The transfer of property of Nakuru Municipality/Block 7/301 was initiated and effected by the 1st defendant and transferred to the 2nd defendant under misrepresentation and duress, in execution of the guarantee agreement and transfer of lease.
[b] Vide a transfer of the lease dated 14th December 2011, barely a month from the date the plaintiff was made to sign the impugned guarantee agreement, the 1st defendant transferred property Nakuru Municipality/Block 7/301 to themselves.
[c] The said Transfer of Lease indicates that in consideration for the said Transfer, the Plaintiff was paid by the 1st defendant a sum of Kshs. 2,800,000/=, yet on 10th June 2024, during cross- examination DWI confirmed that the Kshs. 2,800,000/= was not paid to the plaintiff.
[d] Vide a transfer of the lease dated 15th December 2011, barely a month from the date the plaintiff was made to sign the Impugned guarantee agreement, the 1st Defendant transferred a second property being Apartment No. Tf2 Block C of Riara Apartments on Land Reference Number 330/140 from the plaintiff to themselves.
[e] Under Paragraph B on Page 2 of the said Transfer it is indicated that in consideration for the said transfer, the Plaintiff was paid by the 1st Defendant a sum of Kshs. 8,500,000.00. On 10th June 2024, during cross-examination of 1st Defendant witness, DWI confirmed that the Kshs. 8,500,000/= was not paid to the Plaintiff.
[f] Vide a transfer of the lease dated 13th December 2011, barely a month from the date the Plaintiff was made to sign the impugned guarantee agreement, the 1st Defendant transferred the third property being Land known as subdivision No. 4756 to its name.
[g] Under Paragraph 1 on Page 2 of the said Transfer it is indicated that in consideration for the said transfer, the Plaintiff was paid by the 1st Defendant a sum of Kshs. 1,500,000/=. However, on 10th June 2024, during cross-examination, DWI confirmed that the said Kshs. l,500,000/= was not paid to the plaintiff as indicated in the transfer of sub lease.
[33] Further to the foregoing, the plaintiff urged the Court to note that: [a] The 1st defendant did not specify the duties expected of the plaintiff, or of his brother for compliance within the framework of the Guarantee.
[b] The 1st defendant did not specify the duration within which the guarantor was to comply and perform his obligation under the agreement before the properties in question could be sold/ transferred under the Guarantee.
[c] The Transfer of Lease was signed and executed without legal representation on the part of the plaintiff.
[e] DW1 confirmed that the plaintiff was under employment of the 1st defendant at the time of signing the Transfer of Lease.
[34] The plaintiff relied on the doctrine of Nemo Dat Quod Non Habet, and submitted that the 1st defendant had no title to pass to the 2nd defendant at the time of the alleged transfers. He further argued that the 1st Defendant, as holder of the properties by way of security, was bound by law to issue the requisite notices and follow the due procedures before enforcing the security over the parcels of land. He further reiterated that the 1st defendant purported to enforce the securities prematurely before the Guarantee became enforceable under its own terms. Therefore, according to the plaintiff, the 1st defendant could not have obtained nor passed a good title to the 2nd defendant or any other party. The plaintiff also relied on Samuel Odhiambo Oludhe & 2 others v Jubilee Jumbo Hardware Limited & another [20181 eKLR to buttress his arguments.
[35] On whether the instant suit is time-barred, the plaintiff reiterated that the purported Guarantee was executed on 8th November 2011, while the subject Transfers were registered on 20th December 2011, 20th February 2012 and 28th February 2012, respectively. This suit was filed on 19th March 2020, approximately 9 years after registration of the said Transfers. The plaintiff submitted that, in asserting that the suit is time barred because more than 6 years have elapsed since the purported Guarantee was signed, the 1st defendant was labouring under the misconception that the suit is based on breach of contract. The plaintiff contended that his claim is not for breach of contract but for recovery of land. He submitted that his properties, which were transferred to the 1st Defendant as security were transferred to third parties without prior notice and in disregard of the applicable procedures.
[36] The plaintiff’s position is that the Guarantee is void and cannot comprise a freely and willingly given Guarantee by him. In his view, the fact that a period of six years had lapsed does not and should not convert a void Guarantee into a valid one. He referred the Court to Odero & another v Ndivo & another (Civil Case E105 of 2021) [2021] KEELC 289 (KLR).
[37] In addition, the plaintiff relied on Section 7 of the Limitation of Actions Act (Cap. 22) which provides that the limitation period for an action to recover land is 12 years from the date on which the right of action accrued. He consequently submitted that this suit was filed within the 12-year period provided for in law.
[38] With regard to the 1st defendant’s Counterclaim, the plaintiff submitted that since the 1st defendant did not tender or produce any evidence to advance their Counterclaim, the same lacks merit. He relied on his submissions above and prayed that the Counterclaim be dismissed with costs.
[39] In its final submissions dated 7th October 2024, the 1st defendant proposed the following issues for determination:
[a] Whether coercion has been pleaded with particularity;
[b] Whether there was coercion in signing of the Deed of Guarantee;
[c] Whether the properties were legitimately transferred to the 1st defendant and later to the 2nd defendant;
[d] Whether the Counterclaim has merit.
[40] The 1st defendant submitted that, although the plaintiff placed reliance on coercion and undue influence as the reasons to have the Guarantee invalidated, no particulars had been pleaded in the Plaint. In support of this argument, the 1st defendant cited Order 2 Rule 10(1)(a) of the Civil Procedure Rules and the cases of Amesnet Enterprises Limited & 2 others v Susan Wanjiru Wagendo [2021] eKLR and Kuria Kiarie & 2 others v Sammy Magera [2018] eKLR.
[41] On whether there was coercion in signing of the Deed of Guarantee, the 1st defendant explained that the purpose of the Guarantee was to indemnify it against the loss of Kshs. 500,000,000/= incurred as a result of theft by the plaintiff’s brother, Hassan M.H. Noorany. The 1st defendant further submitted that the plaintiff offered the titles to the three properties willingly and voluntarily as stated at Clauses 2 and 4 of the Guarantee. It urged the Court to take into consideration the conduct of the plaintiff before and after the signing of the Guarantee. The 1st defendant also pointed out that, in addition to the Guarantee, the plaintiff thereafter signed Transfer instruments in respect of the subject properties one month later.
[42] It was further the submission of the 1st defendant that the Riara apartment was legitimately transferred to it and thereafter to the 2nd defendant. It contended that the purpose of handing over all the completion documents was to ensure that in the event of non-payment the Guarantee would be realized and the subject properties transferred to the 1st defendant. The 1st defendant made reference to Clause 4 as the unequivocal expression of the intention of both the plaintiff and his wife to indemnify the 1st defendant for the loss.
[43] Regarding its Counterclaim, the 1st defendant explained that the sum claimed is the difference between the value of the properties transferred to it by the plaintiff and the total amount stolen from it in respect of which the Guarantee was given. It relied on the Deed of Guarantee and submitted that it forms the basis of this suit. While conceding that it had filed Mombasa HCCC No. 119 of 2012 for the recovery of Kshs. 330,000,000/= from the plaintiff’s brother, the 1st defendant denied that it seeks to unjustly enrich itself at the expense of the plaintiff. It submitted that any sums recovered via the Counterclaim can be set-off from the sum claimed in the above-mentioned case; which is still pending hearing and determination.
[44] The 1st defendant also submitted that this suit is time-barred; and that the argument by the plaintiff that it is an action for recovery of land is defeatist as, otherwise, the Court would have no jurisdiction to entertain the suit in view of the provisions of Article 162(2) of the Constitution. The 1st defendant argued that this is a commercial dispute for the enforcement of a Guarantee and prayed that its counterclaim be allowed with costs; and the plaintiff’s case dismissed with costs.
[45] The 2nd defendant filed written submissions dated 15th October 2024. It proposed the following issues for determination:
[a] Whether the 2nd defendant is a bona fide purchaser of Flat No. TF2 (Block C) for value without notice.
[b] Whether the sale of the subject apartment should be set aside.
[46] The 2nd defendant submitted that it has demonstrated that it is an innocent purchaser for value without notice and reiterated that the searches conducted before the sale
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[2] Initially, the plaintiff filed the Plaint dated 18th March 2020 in which he sued Premier Flour Mills Ltd as the 1st defendant, Cargill Kenya Ltd as the 2nd defendant and Paramamba Limited as the 3rd defendant. That Plaint was amended with the leave of the Court on 29th September 2020. It was amended further on 13th October 2023 to delete the name of Cargill Kenya Ltd. Henceforth, the 3rd defendant, Paramamba Limited was designated as the 2nd defendant.
[3] The plaintiff averred that, in spite of the fact that he was innocent of the accusations of theft, the 1st defendant insisted that he sign and he did sign the Guarantee dated 8th November 2011. The plaintiff explained that the 1st defendant took a decision to have his services terminated and upon being exonerated by the internal investigations conducted by the 1st defendant, the 1st defendant insisted that, as a precondition to his return to work, he would have to sign a Guarantee as security for the payment of the money allegedly stolen by his brother.
[4] It was therefore the contention of the plaintiff that he was coerced into signing the Guarantee among other documents, and was never given an opportunity to read the documents. He averred that, fearing the risk of losing his job, which was his source of livelihood, he agreed to sign the documents upon the oral undertaking of the Chairman and Director of the 1st defendant, Diamond Lalji (DW1), that the Transfer was only on paper; and that the title to the properties would ultimately revert to his name.
[5] The Guarantee was exhibited as part of the plaintiff’s Bundle of Documents marked Exhibit 1 and it provided the particulars of the three properties and their alleged transfer value at Clause 2 thereof as follows:
[a] Plot No. Nakuru Municipality/Block 7/301 at a transfer value of Kshs. 2,800,000/=;
[b] Flat No. 4 on the first floor of all that development known as Subdivision N. 4756 (Original No. 1391/25) of Section I, Mainland North, at the last transfer value of Kshs. 1,500,000/=; and
[c] Apartment No. No. TF2, Block C of Riara Apartments on LR 330/140, Nairobi (Riara Apartment), at the last transfer value of Kshs. 8,500,000/=..
[6] The plaintiff further averred that despite various inquiries and numerous promises by DW1 to return the title documents, he did not honour his promises. In the meantime, the 1st defendant caused the arrest and prosecution of his brother, Hassan Mohamed Noorani, on allegations of theft; which prosecution ended up in an acquittal. The 1st defendant also filed a civil case against Hassan Mohamed Noorani for recovery of the allegedly stolen funds vide Nairobi High Court Civil Case No. 119 of 2012: Premier Flour Mills Limited v Hassan Mohamed Noorani & another (the Nairobi case). The suit was pending hearing and determination by the time the plaintiff filed this suit.
[7] At paragraphs 16, 17 and 18, the plaintiff explained that he only got to learn that the 1st defendant had sold the Riara Apartment to the 2nd defendant upon perusing an Affidavit sworn on behalf of the 1st defendant in the Nairobi case by its Chief Accountant, Erastus Kimanthi. As of the time of filing this suit, the plaintiff was informed that the 2nd defendant had given instructions to the tenant in the Riara Apartment not to pay rent to him. He accordingly filed this suit seeking the following reliefs:
[a] Spent
[b] A permanent injunction restraining the defendants or any other person/s whether by themselves and/or their servants, agents, assigns or other persons under them or otherwise howsoever from entering, subdividing, selling, transferring, assigning, leasing, subletting, charging or otherwise trespassing upon and/or alienating and/or interfering with the plaintiff’s ownership, use and quiet enjoyment of Flat No. 4 on Subdivision N. 4756 (Original No. 1391/25) Section I Mainland North, Plot No. Nakuru Municipality/Block 7/301 and Flat No. TF2, Block C on LR 330/140 registered as Vol. N80, Folio 55/3, File 24712 (Riara Apartment).
[c] A declaration that the Guarantee between the plaintiff and the 1st defendant is null and void ab initio for the reason that the same was entered into as a result of coercion and unconscionable bargain.
[d] An order of restitution compelling the defendants or any other person/s whether by themselves and/or their servants, agents, assigns or other persons under them or otherwise howsoever to transfer back the suit properties to the plaintiff within 7 days from the date of Judgment.
[e] In the alternative, an order cancelling the Transfer of the suit properties to the Defendants or any other person/s, whether by themselves and/or their servants, agents, assigns or other persons under them or otherwise howsoever and compelling the Registrar of Lands to register the plaintiff as the owner of the suit properties.
[f] Damages for deprived usage of the suit properties.
[g] Costs of this suit; and
[h] Any other relief which the Court deems just to grant.
[8] The 1st defendant denied the plaintiff’s allegations vide the Statement of Defence & Counterclaim dated 29th April 2020. Its contention was that the plaintiff willingly transferred the suit properties to it. It averred that, upon internal investigations being done, both the plaintiff and his brother were found culpable for the loss of Kshs. 500,000,000/=. It contended that nothing in law precludes it from filing a civil suit to recover the stolen funds.
[9] In its Counterclaim, the 1st defendant relied on the Guarantee dated 8th November 2011 for Kshs. 500,000,000/=, contending that, at Clause 2 of the Guarantee, the plaintiff willingly offered to transfer 3 of his properties the subject matter of this suit, valued at Kshs. 12,800,000/= to it. He further stated that the plaintiff knowingly signed the Transfers and completion documents in respect of the subject properties. It was therefore the case of the 1st defendant that it henceforth became the registered owner of the 3 properties.
[10] The 1st defendant averred further that it has continued to enjoy actual possession of the subject properties without any objection or adverse claims by the plaintiff for the last 8 years. The 1st defendant further pointed out that, since the plaintiff had taken no action to challenge the Guarantee, it is entitled to Kshs. 478,200,000/= which it claimed from the plaintiff by way of Counterclaim. Accordingly, the 1st defendant prayed that:
[a] The plaintiff’s suit against it be dismissed with costs.
[b] Judgment be entered for it against the plaintiff for the aforesaid sum of Kshs. 478,200,000/=.
[c] It be awarded the costs of the Counterclaim together with interest at commercial rates.
[d] Any such other or further relief as the Court may deem appropriate.
[11] In its Further Amended Statement of Defence of 14th June 2023, the 1st defendant reiterated its stance that the plaintiff willingly executed the Guarantee; and that nothing prevented him from seeking and obtaining independent legal advice on the subject documents before appending his signature thereto. The 1st defendant denied any oral undertaking to return the plaintiff’s title documents and averred that the Guarantee is valid and enforceable against the plaintiff.
[12] The 1st defendant further contended that, if for any reason the plaintiff was discharged from the Deed of Guarantee, which it denied, then under Clause 4 the plaintiff is obliged to make good its loss on account of the indemnity clause. It was therefore the averment of the 1st defendant that the plaintiff has no right, constitutional or otherwise, over the suit properties, the same having lawfully devolved to it under the terms of the Deed of Guarantee. The 1st defendant reiterated its Counterclaim and averred that, since the transfer of the suit properties to it, the plaintiff has failed to discharge his obligations under the Guarantee.
[13] The 2nd defendant also denied the plaintiff’s claim. In its Defence dated 15th May 2020, it averred that it entered into an agreement with the 1st defendant for the sale of the apartment known as Flat No. TF2 (Block C) for which it paid the full purchase price, government taxes and duties; after which the apartment was transferred to it, free of encumbrances. The 2nd defendant also mentioned that prior to purchasing the apartment, it applied for and was issued with a Certificate of Official Search confirming that the 1st defendant was the duly registered proprietor of the apartment free of any encumbrances save for a Charge in favour of BTB Insurance Brokers Limited who duly discharged their Charge.
[14] In proof of his case, the plaintiff adopted his witness statement dated 18th March 2020 in which he gave an account as to how, jointly with his wife, Asma Khatoon Mohamed Naqi Noorani (now deceased), they acquired the subject property. He confirmed that, he and his brother Hassan Mohamed Noorani, were employees of the 1st defendant; both serving in the Sales and Marketing Department until sometime in September 2011 when they were suspended on suspicion that they had used customers’ accounts to divert and deliver wheat and maize flour for which they failed to raise invoices.
[15] It was further the evidence of the plaintiff that the 1st defendant conducted internal investigations following which he was exonerated of any wrong-doing. He was nevertheless called to a meeting with the 1st defendant’s Chairman, Diamond Hasham Lalji, and the 1st defendant’s lawyers and was required to sign a ready-made Deed of Guarantee for the settlement of the funds allegedly stolen by his brother, Hassan, as a precondition for his return to work. The plaintiff added that, out of fear of loss of his livelihood, he signed the documents and returned to work.
[16] The plaintiff testified that he was neither given an opportunity to seek professional advice before signing the said agreement nor a copy of the Guarantee itself; the effect of which was that he had transferred the subject 3 properties to the 1st defendant. His contention was therefore that the Guarantee agreement is unconscionable for the reason that the 1st defendant used its dominant position as an employer to coerce him into signing the Guarantee. He also mentioned that the 1st defendant’s Chairman, Diamond Hasham Lalji, verbally assured him that his 3 titles would only be used as security and would ultimately be returned to him.
[17] The plaintiff testified that he was buoyed in his belief that the titles would be returned to him because he continued to collect rent from the tenants occupying Flat No. 4 on Subdivision No. 4756 (Original No. 1391/25) Section I Mainland North and Flat No. TF2 on LR No. 330/140 registered as Vol N80, Folio 55/3, File 24712 otherwise known as Riara Apartment. He also stated that he was aware of the efforts the 1st defendant was making to recover the alleged stolen funds from his brother Hassan as well as other entities. He mentioned for instance that one such attempt as the filing of Mombasa High Court Civil Case No. 119 of 2012: Premier Flour Mills Limited v Hassan Mohamed Noorani & New Generation Self Service Store Limited.
[18] The plaintiff also stated that he came to know that the 1st defendant’s Chairperson, Diamond Hasham Lalji, was declared bankrupt by the High Court in Nairobi Insolvency Cause No. 1 of 2017: Diamond Hasham Lalji v Cargill Kenya Limited following his failure to settle a debt owed to Cargill Kenya Limited (the initial 2nd defendant herein). He added that he was surprised to learn from an affidavit filed on behalf of the 1st defendant by its Chief Accountant to the effect that the three titles were in the process of being sold in settlement of the outstanding debt owed by DW1 to Cargill Kenya Limited.
[19] The plaintiff therefore stated that he was surprised to discover that the 2nd defendant was claiming ownership of the Riara Apartment, and had purported to direct the tenant in the said property to henceforth pay rent to it. His evidence was therefore that the unjustified actions of the two defendants constitute unlawful interference with his constitutional right to property under Article 40 and will result in substantial loss, damage and inconvenience to him.
[20] In his supplementary witness statement dated 15th February 2022 the plaintiff stated that, sometime in the year 2012, the 1st defendant’s sister company, Atta (K) Ltd, instituted criminal proceedings against his brother, Hassan, for recovery of the alleged stolen sums in Mombasa High Court Criminal Case No. 211 of 2012: Republic v Hassan Mohammed Noorani. He availed a copy of the Charge Sheet as an exhibit and pointed out that the Charge Sheet was in respect of Kshs. 10,000,000/= only; and that his brother was ultimately acquitted of that charge. He therefore posited that he was thereby relieved of his obligation under the Guarantee.
[21] The 1st defendant relied on the evidence of its director, Diamond Hasham Lalji (DW1). DW1 adopted his witness statement dated 19th September 2022 and produced the 1st defendant’s Bundles of Documents (marked Defence Exhibits 1 and 2). He conceded that the plaintiff and his brother, Hassan, were employed by the 1st defendant in its Sales and Marketing Department. He testified that sometime in the year 2011, the 1st defendant instructed external auditors to audit its accounts; and that the audit revealed a huge hole in the 1st defendant’s balance sheet. As a result, the 1st defendant’s internal auditors investigated the company’s accounts and found that the plaintiff and his brother, Hassan, were culpable for using customers’ accounts to order goods which were then delivered to different customers; and that payment would thereafter be made in the names of the plaintiff and his brother.
[22] It was further the testimony of DW1 that following the result of the internal investigations, the plaintiff willingly offered a Guarantee in favour of the 1st defendant on behalf of his brother, Hassan, to cater for the Kshs. 500,000,000/= loss incurred by the 1st defendant. DW1 explained that, at Clause 2 of the Guarantee, the plaintiff willingly transferred to the 1st defendant the three properties, namely, Nakuru Municipality Block 7/307 valued at Kshs. 2,800,000/=, Flat No. 4 on subdivision 4756 (Original No. 1391/25 of Section I Mainland North, valued at Kshs. 1,500,000/= and Apartment No. TF2 Block C, Riara Apartment, on LR No. 330/140, Nairobi valued at Kshs. 8,500,000/=.
[23] According to DW1, the aforementioned properties were transferred to the 1st defendant on the 23rd May 2012 and the 1st defendant wrote to the plaintiff and his wife, informing them of the successful transfer of the 3 properties. He added that the plaintiff took no step to challenge the transfer. Concerning Mombasa Criminal Case No. 211 of 2012: Republic v Hassan Mohamed Noorany, DW1 testified that the plaintiff’s brother, Hassan, was the face of the fraudulent activities and that a complaint was lodged with the Police against him by the 1st defendant. He added that, to his knowledge, Hassan was acquitted, not on merit, but due to the Prosecution’s failure to avail witnesses. It was therefore the evidence of DW1 that the acquittal of Hassan in the said criminal case is inconsequential to this suit.
[24] DW1 concluded his evidence by reiterating that once the title to the suit properties passed to the 1st defendant, it had the right to deal with the properties as it deemed fit. He also stated that the 1st defendant has been paying the rates and rent for the suit properties as well as security charges for the Nakuru property. He asserted that, as things stand, the plaintiff is indebted to the 1st defendant to the tune of Kshs. 478,200,000/=. He consequently urged for the dismissal of the plaintiff’s case and for judgment to be entered in the 1st defendant’s favour as per the prayers set out in its Counterclaim. An oral application was made on 25th January 2024 to amend the figure to Kshs. 487,200,000/= on account of what counsel for the 1st defendant attributed to a typographical error.
[25] The 2nd defendant relied on the evidence of one of its directors, Rahul Dilesh Bid (DW2). DW2 similarly adopted his witness statement dated 15th May 2020. His evidence was that on or about 31st October 2019, the 2nd defendant entered into an agreement with the 1st defendant for the sale of the apartment known as Flat No. TF2 (Block C) on the plan registered in Folios 374/576, 379/605, 411/854 & 411/856 File MMVII. He confirmed that the 2nd defendant paid the entire purchase price, government taxes and duties; whereupon the apartment was transferred to the 2nd defendant free of all encumbrances.
[26] DW1 explained that, prior to purchasing the apartment, the 2nd defendant applied for and was issued with an official search that confirmed that the 1st defendant was the duly registered propriety of the apartment, free of any encumbrances save for a legal Charge in favour of BTB Insurance Brokers Limited. His evidence was therefore that the 2nd defendant was an innocent purchaser for value without notice of any claims from the plaintiff or whatsoever, save for the Charge in favour of BTB Insurance Brokers Ltd; which Charge was duly discharged. He prayed for the dismissal of the plaintiff’s suit.
[27] In his written submissions dated 17th September 2024, the plaintiff reiterated the factual background of his case and proposed the following issues for determination:
[a] Whether the impugned agreement is valid?
[b] Whether the transfers of the subject properties vas valid and legal?
[c] Whether the instant suit is time barred?
[d] Whether the 1st Defendant''s counterclaim has any merit?
[e] Costs of the suit
[28] The Plaintiff submitted that, being an employee of the 1st defendant, he was under duress when he appended his signature in that he was threatened with arrest, prosecution and loss of job. He posited that the 1st defendant used its superior bargaining power, as the employer of the plaintiff, to induce the execution of the agreement. For the definition of undue influence, the plaintiff relied on Black’s Law Dictionary and the cases of Nabro Properties Limited v Sky Structures Limited (Z.R. Shah) Southfork Investments Limited [19861 eKLR, and Mombasa Bricks & Tiles Ltd & 5 others v Arvind Shah & 7 others [20191 eKLR Mohamed Ahmed Abdun & another v Mini Bakeries (MSA) Limited [2019] eKLR.
[29] The Plaintiff further submitted that the circumstances in which the agreement was signed were such that he did not have the opportunity to either study the documents or seek legal counsel before appending his signature. He also contended that he was misled into believing that the Guarantee and transfer documents were meant to serve only as security. He added that this is not only clear from the words used in the Guarantee itself but also from the fact that he continued to collect and enjoy the rental income from the properties long after the purported transfers were registered.
[30] The plaintiff relied on the decision of the Court of Appeal in Sambayon Ole Semera v Kalka Flowers Limited & another [2021] eKLR for the proposition that a contract founded on illegalities or misrepresentations cannot be binding. He therefore faulted the 1st defendant for having gone ahead to use the documents offered as security to discharge his liability in respect of another transaction. Accordingly, the plaintiff invited the Court to find that the Guarantee is null and void ab initio.
[31] Without prejudice to the foregoing, the plaintiff submitted that the Guarantee is not enforceable as the pre-conditions to his liability, as stated in the Guarantee, have not been fulfilled. He made reference to the principle that the liability of a guarantor can only arise after the principal debtor has failed to discharge his liability. He relied on Gakenga v Consolidated Bank of Kenya Limited & 2 others (Civil Case 13 of 2018) [2022] KEHC 436 (KLR) to buttress his argument.
[32] On whether the transfer of the three subject properties was valid or legal, the plaintiff urged the Court to note what he referred to as illegalities, fraud and irregularities as detailed below:
[a] The transfer of property of Nakuru Municipality/Block 7/301 was initiated and effected by the 1st defendant and transferred to the 2nd defendant under misrepresentation and duress, in execution of the guarantee agreement and transfer of lease.
[b] Vide a transfer of the lease dated 14th December 2011, barely a month from the date the plaintiff was made to sign the impugned guarantee agreement, the 1st defendant transferred property Nakuru Municipality/Block 7/301 to themselves.
[c] The said Transfer of Lease indicates that in consideration for the said Transfer, the Plaintiff was paid by the 1st defendant a sum of Kshs. 2,800,000/=, yet on 10th June 2024, during cross- examination DWI confirmed that the Kshs. 2,800,000/= was not paid to the plaintiff.
[d] Vide a transfer of the lease dated 15th December 2011, barely a month from the date the plaintiff was made to sign the Impugned guarantee agreement, the 1st Defendant transferred a second property being Apartment No. Tf2 Block C of Riara Apartments on Land Reference Number 330/140 from the plaintiff to themselves.
[e] Under Paragraph B on Page 2 of the said Transfer it is indicated that in consideration for the said transfer, the Plaintiff was paid by the 1st Defendant a sum of Kshs. 8,500,000.00. On 10th June 2024, during cross-examination of 1st Defendant witness, DWI confirmed that the Kshs. 8,500,000/= was not paid to the Plaintiff.
[f] Vide a transfer of the lease dated 13th December 2011, barely a month from the date the Plaintiff was made to sign the impugned guarantee agreement, the 1st Defendant transferred the third property being Land known as subdivision No. 4756 to its name.
[g] Under Paragraph 1 on Page 2 of the said Transfer it is indicated that in consideration for the said transfer, the Plaintiff was paid by the 1st Defendant a sum of Kshs. 1,500,000/=. However, on 10th June 2024, during cross-examination, DWI confirmed that the said Kshs. l,500,000/= was not paid to the plaintiff as indicated in the transfer of sub lease.
[33] Further to the foregoing, the plaintiff urged the Court to note that: [a] The 1st defendant did not specify the duties expected of the plaintiff, or of his brother for compliance within the framework of the Guarantee.
[b] The 1st defendant did not specify the duration within which the guarantor was to comply and perform his obligation under the agreement before the properties in question could be sold/ transferred under the Guarantee.
[c] The Transfer of Lease was signed and executed without legal representation on the part of the plaintiff.
[e] DW1 confirmed that the plaintiff was under employment of the 1st defendant at the time of signing the Transfer of Lease.
[34] The plaintiff relied on the doctrine of Nemo Dat Quod Non Habet, and submitted that the 1st defendant had no title to pass to the 2nd defendant at the time of the alleged transfers. He further argued that the 1st Defendant, as holder of the properties by way of security, was bound by law to issue the requisite notices and follow the due procedures before enforcing the security over the parcels of land. He further reiterated that the 1st defendant purported to enforce the securities prematurely before the Guarantee became enforceable under its own terms. Therefore, according to the plaintiff, the 1st defendant could not have obtained nor passed a good title to the 2nd defendant or any other party. The plaintiff also relied on Samuel Odhiambo Oludhe & 2 others v Jubilee Jumbo Hardware Limited & another [20181 eKLR to buttress his arguments.
[35] On whether the instant suit is time-barred, the plaintiff reiterated that the purported Guarantee was executed on 8th November 2011, while the subject Transfers were registered on 20th December 2011, 20th February 2012 and 28th February 2012, respectively. This suit was filed on 19th March 2020, approximately 9 years after registration of the said Transfers. The plaintiff submitted that, in asserting that the suit is time barred because more than 6 years have elapsed since the purported Guarantee was signed, the 1st defendant was labouring under the misconception that the suit is based on breach of contract. The plaintiff contended that his claim is not for breach of contract but for recovery of land. He submitted that his properties, which were transferred to the 1st Defendant as security were transferred to third parties without prior notice and in disregard of the applicable procedures.
[36] The plaintiff’s position is that the Guarantee is void and cannot comprise a freely and willingly given Guarantee by him. In his view, the fact that a period of six years had lapsed does not and should not convert a void Guarantee into a valid one. He referred the Court to Odero & another v Ndivo & another (Civil Case E105 of 2021) [2021] KEELC 289 (KLR).
[37] In addition, the plaintiff relied on Section 7 of the Limitation of Actions Act (Cap. 22) which provides that the limitation period for an action to recover land is 12 years from the date on which the right of action accrued. He consequently submitted that this suit was filed within the 12-year period provided for in law.
[38] With regard to the 1st defendant’s Counterclaim, the plaintiff submitted that since the 1st defendant did not tender or produce any evidence to advance their Counterclaim, the same lacks merit. He relied on his submissions above and prayed that the Counterclaim be dismissed with costs.
[39] In its final submissions dated 7th October 2024, the 1st defendant proposed the following issues for determination:
[a] Whether coercion has been pleaded with particularity;
[b] Whether there was coercion in signing of the Deed of Guarantee;
[c] Whether the properties were legitimately transferred to the 1st defendant and later to the 2nd defendant;
[d] Whether the Counterclaim has merit.
[40] The 1st defendant submitted that, although the plaintiff placed reliance on coercion and undue influence as the reasons to have the Guarantee invalidated, no particulars had been pleaded in the Plaint. In support of this argument, the 1st defendant cited Order 2 Rule 10(1)(a) of the Civil Procedure Rules and the cases of Amesnet Enterprises Limited & 2 others v Susan Wanjiru Wagendo [2021] eKLR and Kuria Kiarie & 2 others v Sammy Magera [2018] eKLR.
[41] On whether there was coercion in signing of the Deed of Guarantee, the 1st defendant explained that the purpose of the Guarantee was to indemnify it against the loss of Kshs. 500,000,000/= incurred as a result of theft by the plaintiff’s brother, Hassan M.H. Noorany. The 1st defendant further submitted that the plaintiff offered the titles to the three properties willingly and voluntarily as stated at Clauses 2 and 4 of the Guarantee. It urged the Court to take into consideration the conduct of the plaintiff before and after the signing of the Guarantee. The 1st defendant also pointed out that, in addition to the Guarantee, the plaintiff thereafter signed Transfer instruments in respect of the subject properties one month later.
[42] It was further the submission of the 1st defendant that the Riara apartment was legitimately transferred to it and thereafter to the 2nd defendant. It contended that the purpose of handing over all the completion documents was to ensure that in the event of non-payment the Guarantee would be realized and the subject properties transferred to the 1st defendant. The 1st defendant made reference to Clause 4 as the unequivocal expression of the intention of both the plaintiff and his wife to indemnify the 1st defendant for the loss.
[43] Regarding its Counterclaim, the 1st defendant explained that the sum claimed is the difference between the value of the properties transferred to it by the plaintiff and the total amount stolen from it in respect of which the Guarantee was given. It relied on the Deed of Guarantee and submitted that it forms the basis of this suit. While conceding that it had filed Mombasa HCCC No. 119 of 2012 for the recovery of Kshs. 330,000,000/= from the plaintiff’s brother, the 1st defendant denied that it seeks to unjustly enrich itself at the expense of the plaintiff. It submitted that any sums recovered via the Counterclaim can be set-off from the sum claimed in the above-mentioned case; which is still pending hearing and determination.
[44] The 1st defendant also submitted that this suit is time-barred; and that the argument by the plaintiff that it is an action for recovery of land is defeatist as, otherwise, the Court would have no jurisdiction to entertain the suit in view of the provisions of Article 162(2) of the Constitution. The 1st defendant argued that this is a commercial dispute for the enforcement of a Guarantee and prayed that its counterclaim be allowed with costs; and the plaintiff’s case dismissed with costs.
[45] The 2nd defendant filed written submissions dated 15th October 2024. It proposed the following issues for determination:
[a] Whether the 2nd defendant is a bona fide purchaser of Flat No. TF2 (Block C) for value without notice.
[b] Whether the sale of the subject apartment should be set aside.
[46] The 2nd defendant submitted that it has demonstrated that it is an innocent purchaser for value without notice and reiterated that the searches conducted before the sale
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