1. Peter Kipyegon Rotich, the plaintiff herein, filed an action against Elijah Kipng’eno Arap Bii, the Defendant herein, vide the plaint dated 6 th November, 2003. In the aforesaid plaint the plaintiff sought for judgment against the defendant as follows inter alia :
(a) An order for vacant possession of L.R No. Kericho/ Kabianga/1824
(b) Mesne profits
(c) Interest on Mesne profits
(d) Costs
2. The defendant entered appearance, filed his defence and counterclaim dated 16 th January, 2004 joining Kenya Commercial Bank (hereinafter referred to as the Bank ) as the 1 st defendant to the counter-claim.
3. In the counter-claim, the defendant sought for judgment against the plaintiff (2 nd defendant in the counter-claim) and Kenya Commercial Bank (1 st Defendant in the counter claim) inter alia as follows:
(a) A declaration that the sale of L.R No. Kericho/ Kabianga/1824 to the 2 nd defendant is void abinitio
(b) General damages
(c) Costs of the suit
4. The plaintiff filed his reply to defence and counter-claim. On its part the Bank also filed a defence to the counter-claim.
5. When the suit came up for hearing, the plaintiff testified and summoned two witnesses to testify in support of his case. The defendants on their part each summoned two witnesses to testify in their defence.
The Plaintiff’s Case
6. Peter Kipyegon Rotich (PW1) adopted his written witness statements dated 6 th December, 2023 as his evidence in chief. PW1 stated that he read an advertisement posted by M/s Solai Agencies in Kenya Times Newspaper of 7 th November, 2002 of sale by public auction of the parcel of land known as L. R No. Kericho/Kabianga/1824 scheduled for 20 th November, 2002.
7. He produced in evidence a copy of the newspaper advertisement as an exhibit. PW1 said he attended the public auction conducted by M/s Solai Agencies at Kericho on 20 th November, 2002 and that he was declared the highest bidder beating five other bidders on the suit property.
8. He produced in evidence a copy of the certificate of sale of land dated 20 th November, 2002. PW1 further stated that he bid for Ksh 1,310,000/=. He said he paid a deposit of Ksh 327,500/= being 20% of the purchase price. The plaintiff stated that he settled the purchase price by instalments as follows:
(i) 20.11.2002 Kshs 327,500/=
(ii) 20.11.2002 Kshs 202,500/=
(iii) 10.12.2002 Kshs 300,000/=
(iv) 17.12.2002 Kshs 120,000/=
(v) 23.12.2002 Kshs 250,000/=
(vi) 24.12.2002 Kshs 50,000/=
(vii) 24.12.2002 Kshs 60,000 /=
Total Kshs 1,310,000
9. The plaintiff further averred that Kenya Commercial Bank obtained the necessary Land Control Board consent for the transfer dated 12 th May, 2003 which he produced in evidence as an exhibit. He said that the property had been valued at Ksh 2,510,000/= and that the forced sale value was fixed at Ksh 1,280,000/=.
10. The plaintiff also stated that upon settling the purchase price in full the Bank transferred the aforesaid land to him free from encumbrances and that upon transfer he received documents to wit the title deed in his name and the application for consent and consent from the Land Control Board. PW1 produced the aforesaid documents as exhibits in evidence.
11. PW1 said that in the month of August, 2003, he took possession of the land and started fencing the same but the defendant hired violent farm-hands who attacked his workers and destroyed the fencing posts, wires, tree seedlings, nails and a tool box among other valuables.
12. The plaintiff stated that by virtue of his registration as a proprietor for value for consideration, he is entitled to hold the land free from claims and interests of the Defendant or his agents, which claims and interests were extinguished by the fall of the harmer at the public auction held on 20.11.2002.
13. The plaintiff further stated that the defendant’s remedy would lie in damages as against the selling bank or the auctioneer and therefore the defendant’s refusal to vacate the land is without merit. PW1 averred that the allegations of fraud contained in the counter-claim are baseless, scandalous and are intended to embarrass him. PW1 stated that he has been unable to realize the fruits of his investments in the suit land for over 24 years.
14. He prayed for an order for vacant possession, mesne profits from the time the suit land was transferred to him to the date of judgment.
15. The second witness who testified in support of the plaintiff’s case is Harrison Kirui (PW2) a holder of a masters degree in Rural Economics, told this court that he has worked in the Tea Industry for over 30 years. PW2 produced a report he prepared dated 17 th January, 2024 as an exhibit in evidence. In the aforesaid report, PW2 gave estimates on income per year on the tea farm established on L. R. No. Kericho/Kabianga/1824.
16. He stated that the total income per acre per year on average is Ksh 58,400/=. PW1 further indicated in his report that a sum of Ksh 525,600/= would be the annual income from 9 acres which amount would be Ksh 11,037,600/= in 21 years. PW1 said that he used his experience to prepare the report but admitted that he is not licensed to prepare such a report.
17. The third and final witness who testified in support of the plaintiff’s case is Lawrence Sang Kipngetich (PW3). He told this court that he is a valuer and a holder of a masters degree in valuation. PW3 confirmed that he prepared the valuation report dated November, 2023 in respect of L.R No. Kericho/ Kabianga/1824 which he produced as an exhibit in evidence.
18. In the aforesaid valuation report PW3 put the current value of suit land at Ksh 24,300,000/=. PW3 said that the land is entirely covered by tea though there are temporary developments.
Defence Case
19. Elijah Kipng’eno Bii (DW1) the Defendant in the main suit testified and summoned one witness namely: Fancy Jeruto Letyo (DW2) to testify in support of his case.
20. DW1 said that he was employed as a graduate trainee by Kenya Commercial Bank in 1973 and that he rose through the ranks until he became the General Manager of the bank. DW1 stated that he served as the General Manager for five (5) years from 1993 until 1998 when he was maliciously, unlawfully, fraudulently and criminally replaced as the General Manager of KCB by third parties.
21. The Defendant alleged that the third Party Margaret Chemengich who was then the Permanent Secretary Ministry, of Finance, with a group of collaborators removed him without lawful authority for their selfish interest. The Defendant however admitted, that in the years 1977,1978 and 1991 he charged the parcel of land known as L.R. Kericho/Kabianga/ 1824 and the developments therein to Kenya Commercial Bank (1 st Defendant in the counter-claim) for an advance of credit facilities with itself.
22. DW1 further stated that on or about October, 2003 the Bank Communicated to him that it had sold the parcel of land, to L. R No. Kericho/Kabianga/1824. It is his evidence that if the sale ever took place as purported by the Bank, then the same was done fraudulently in collusion with Peter Kipyegon Rotich, the plaintiff in the main suit in breach of the laid down provisions of law. DW1 listed the particulars of fraud by the defendants (in the counter claim) as follows:
• The bank (1 st defendant) sold the suit property in violation of the credit contract between itself and him by relying on a resolution passed by the bank’s board.
• The Bank sold the suit property for an inordinately low and fraudulent price of Ksh 1.34 million whereas the market value ought to have been about Ksh 7 million.
• The Bank and the plaintiff (main suit) colluded to fraudulently transfer the property to the plaintiff.
• The defendant (main suit) was not served with the mandatory statutory notice of sale by the bank.
• The plaintiff (2 nd defendant in the counter-claim) and the bank (1 st defendant in the counter-claim) colluded to fraudulently and deceptively obtain land control board consent for the transfer of the suit land to the plaintiff.
23. DW1 further stated that the bank maliciously stopped and frustrated the repayment of his credit facilities on the basis of directives and decisions of third parties. He also stated that his monthly salary was stopped with effect from 21 st March, 1998 on the basis of fraud perpetrated by its employees.
24. He further averred that his agreed credit terms were withdrawn with effect from 21 st March 1998 on the basis of an illegal 3 rd party directive thus applying the punitive interest rates of over 20% replacing his entitled rate of 3% and 8% on the same basis.
25. The Defendant stated that the Bank had no lawful authority to sell the suit land by public auction as it could not exercise its statutory power of sale the way it did. He further stated that the bank and the plaintiff colluded to get a fraudulent Land Control Board letter of consent for the transfer of ownership of L.R. No. Kericho/Kabianga/1824 from him to the plaintiff. Fancy Jeruto Letyo (DW2) appeared and testified in support of the Defendant’s case.
26. She produced in evidence as an exhibit a valuation report she prepared over L.R No. Kericho/Kabianga/1824 on the instructions of Elijah Kipng’eno Arap Bill (DW1).
27. DW2 stated that based on the market data, assumption and analysis, she gave the market value of the suit property between the years 2000 and 2020 as follows:
Year Market value
2000 Ksh 2,700,000/=
2002 Ksh 2,800,000/=
2010 Ksh 4,900,000/=
2020 Ksh 29,300,333/=
28. DW2 further averred that the reserve price under Section 97 of the Land Act, 2012 is capped at 75% of the Market value and that a chargee is required to act in good faith. In her report DW2 said that she looked at the developments on the land. In her report DW2 admitted that she did not indicate the forced sale value because the client merely wanted to know the market value.
29. The Bank (1 st defendant in the counter claim) summoned two witnesses to testify in support of its case. Nelly Musau (DW3), the bank’s credit manager, Moi Avenue, Branch, Nairobi confirmed in her evidence that Elijah Kipng’eno Arap Bill , the defendant indeed borrowed from the bank in 1977, 1988 and 1991 the following sums of Ksh 70,000/=, Ksh 200,000/= and Kshs 230,000/= respectively with legal charges over the suit property.
30. DW3 told this court that the defendant was lawfully dismissed from the employment of the bank as the General Manager in April, 1998 by the Bank’s Board of Directors. She further stated the defendant defaulted in the repayments of the loan facility thus the Bank’s statutory power of sale arose.
31. She also said that the defendant failed to service the outstanding loan despite being served with a demand notice thus prompting the bank to exercise its statutory power of sale. DW3 pointed out that as of 25 th July, 2001 the total outstanding aggregate sum was Ksh 187,855,378/=.
32. She further stated that the Bank adhered to the requirements and processes set by law including obtaining the Land Control Board consent. DW3 stated that the Bank instructed M/s Solai Agencies to auction L.R. No. Kericho/Kabianga/1824.
33. It is her evidence further that the auctioneers issued notification of sale and advertised the suit property for sale by public auction on 20/11/2002 vide Kenya Times Newspaper of 7.11.2002. DW3 confirmed in her evidence that Peter Kipyegon Rotich (plaintiff) was the highest bidder in the auction. DW3 also confirmed that the plaintiff required deposit and the balance of the purchase price totaling Ksh 1,310,000/= which amount is above the reserve price of Ksh 1,280,000/=.
34. DW3 further corroborated the evidence of the plaintiff (PW1) that after payment in full and obtaining the Land Control Board consent to transfer, the transfer by chargee in exercise of its statutory power of sale, was registered and a certificate of title was issued to the plaintiff. DW3 also refuted the claim that the bank was party to any fraudulent conspiracy with the plaintiff to defraud the defendant, Elijah Kipng’eno Arap Bii.
35. DW3 stated that she is aware that the purchase price was paid after the lapse of 30 days. It is her evidence that the parties mutually extended the completion period. The second witness summoned by the Bank is Gerald Kiptoo Ruto (DW4) who told this court that he is a registered valuer working for Highlands Valuers Ltd. DW4 produced a valuation report dated 13 th July, 2001 on behalf of Highlands Valuers as an exhibit in evidence. DW4 stated that in 2001, there was no law capping the forced sale value.
36. At the close of evidence, parties were invited to file written submissions which they did. The parties also individually identified the issues for determination. This court having considered the evidence and the rival submissions is of the view that the following two main issues arose for determination:
(i) Whether the defendant has proved fraud as particularized under paragraph11 of the defence and counter claim and whether prayers (a), (b) and (c) in terms of the counter-claim should be granted.
(ii) Whether the plaintiff is entitled to the prayers for vacant possession of the suit property, mesne profits, interest and costs in the plaint .
37. On the first issue as to whether the defendant has proved fraud as particularized in the defence and counter-claim and whether prayers (a), (b) and (c) of the counter-claim should be granted , it is the submission of the defendant that he has largely proved the allegations of fraud as particularized in paragraph 11 of the defence and counter-claim.
38. The defendant is of the averment that he has established that the bank (1 st defendant in the counter-claim) never served him with the statutory notice of the sale and or notification of sale. The defendant denied receiving the letter dated 15 th June, 1999 addressed to the defendant’s “P. O. Box 22333 Nairobi”. It is the defendant’s submissions that the bank did not controvert the defendant’s assertion of non-receipt of the letter as it never produced a certificate of posting to rebut the defendant’s claim.
39. The defendant further pointed out that the letter from the bank dated 3 rd June, 1999 was sent to a wrong address “P. O. Box 48400 c/o Mr. S.K. Towett” which address did not belong to the defendant. The Defendant also pointed out that the letter dated 10 th November, 1999 and another dated 25 th July, 2001 were addressed to the defendant by the Bank’s advocates through his Box number 22333, Nairobi.
40. The defendant denied receiving the aforesaid letters and according to the defendant, the bank did not rebut the defendant’s assertion since the bank did not produce a certificate of posting. The defendant further denied receiving the notification of sale by M/s Solai Agencies Auctioneers and that the Bank failed to produce a certificate of posting.
41. It is the final submission of the defendant that no statutory notice and or notification of sale was served on the defendant. The defendant further submitted that the failure to serve the statutory notice is a clear breach of the provisions of section 74(1) of the Registered Land Act, Cap 300 Laws of Kenya (now repealed) and that the remedy is the nullification of the auction sale undertaken therein as the same is in law void abinitio.
42. In response to the defendant’s submission, the Bank is categorical that it proved during the trial and in its documentary evidence that the defendant was served with the requisite statutory notices through the original and registered post to his confirmed postal address “P. O. Box 22333, Nairobi”.
43. The Bank further pointed out that it duly served on an adult member of the family of the defendant which is deemed in law to be proper and effective service. The plaintiff made submissions similar to those made by the Bank. It is the submission of the plaintiff that the defendant’s claim that he was never served with the statutory notice is untrue.
44. It is trite law that under section 74(1) of the Registered Land Act (now repealed) that a duty is imposed on the chargee to serve a notice on the chargor before exercising its statutory power of sale. It is apparent from the evidence presented by the Bank that the Bank sent several notices and reminders. The Bank presented evidence showing that on 10 th November, 1999, it served a statutory notice of even date upon the defendant at his acknowledged address “P. O. Box 22333, Nairobi” by registered post and a copy of the said notice was forwarded by ordinary post.
45. This court is satisfied that the Defendant was duly served. In fact, the Bank produced in evidence as an exhibit the certificate of posting. “A Registered Post Article”. It is also clear from the defendant’s evidence that he acknowledged that the postal address “P. O. Box 22333, Nairobi” was his.
46. In the letter dated 10 th November, 1999, the Bank notified the defendant that his properties including the suit property namely L. R. No. Kericho/Kabianga/1824 would be sold if he did not remit the full settlement amount on his outstanding loan within three (3) months. Again, on 25 th July, 2001, the Bank notified the Defendant of the appointment of M/s Solai Agencies to sell the suit property.
47. The aforesaid letter was sent to the Defendant’s Acknowledged address of “P.O. Box 22333, Nairobi”. This court is satisfied that despite his denial that the Defendant received the requisite statutory notice.
48. The other issue which the Defendant raised is that the Bank sold the suit property for an inordinately low and fraudulent price of Ksh 1,310,000/=. It is the submission of the Defendant that the Bank colluded with the plaintiff to sell the suit property at hardly half the price of the market value. The Defendant referred to the valuation report prepared by Fancy Jeruto Letyo (DW2) dated 2 nd February, 2026 which she produced as an exhibit in evidence. The defendant stated that the valuation report is the one and only legitimate one. He pointed out that the valuation report put the market value of the suit property at Ksh 2,800,000/=.
49. According to the evidence of the valuer (DW2), the forced sale value as per the practice before the enactment of the Land Act, 2012 was 75% of the market value and that under Section 97 of the Land Act, 2012, the forced sale in an auction could not go below 70% of the market value. The Defendant argued that the Bank/auctioneer sold the suit property at Ksh 1,310,000/= which is way below 50% of the market value of Ksh 2,800,000/=.
50. The defendant argued that the bank’s selling price was outrightly fraudulent as the same was too low. It is argued that the Bank acted in bad faith in the circumstances. The Defendant urged this court to reject the valuation reports prepared by Lawrence Sang c/o Primeland and Apprails Ltd dated 30.11.2023 and that of S. K. Chemilil c/o Highlands Valuers dated 13 th July, 2001.
51. It is the defendant’s submissions that Lawrence Sang, did not produce his valuer’s certificate of registration, the practicing license and gazette notice for the year 2023 in blatant breach of provisions of sections 8(2) and 9 of the Valuers Act, therefore his valuation report cannot be admissible. This court was also urged by the defendant not to admit the valuation report by Highlands Valuers because a third party namely Gerald Kiptoo Ruto produced it yet it was prepared by Mr. S. K. Chemelil who did not produce in court his licenses and professional certificates.
52. The defendant argued that the certificate of registration as a valuer dated 19/10/2023 and the annual practicing certificate for the year 2024 produced by Gerald Kiptoo Ruto cannot legitimize a valuation report prepared in 2001 by a different party altogether. The defendant further argued that the report by Fancy J. Letyo of Kinyua Koech Valuers dated 7/12/2023 is the only credible valuation.
53. The market value is fixed at Ksh 2,800,000/=, therefore the force sale value of Ksh 1,310,000/= is a gross and fraudulent under value of less than 50%, thus justifying the cancellation of the said sale as void. In response to the defendant’s submission over the question as to whether the suit property was sold at an inordinately low and fraudulent price, the Bank argued that it carried out its duty to obtain a proper price making the sale of the suit property legal and non-fraudulent.
54. The Bank urged this court to find, that the Bank proved that it obtained a proper price for the suit property. It pointed out that the suit property was sold at Ksh 1,310,000 which was above the reserve price by Ksh 1,280,000/= based on the valuation report commissioned by the bank which is the only valuation report that provided a reserve price.
55. The bank further pointed out that the defendant’s own valuation was done years after the sale of suit property and as produced by its expert witness indicated that the market value at the time of sale would be Ksh 2.8 million whereas in the valuation commissioned by the bank at the time of sale was Ksh 2.51 million with an acceptable margin difference given the time as admitted by the defendant’s expert witness.
56. The Bank further stated that the practice and the law before the year 2012 confirmed that there was no capping of the reserve price based on the market value. The Bank stated that its expert witness (DW3) was entitled to produce the valuation report on behalf of Highlands Valuers where he is employed.
57. The plaintiff filed a response to the defendant’s submissions on whether the Bank sold the suit property at an undervalue. It’s the plaintiff’s submission that this court should not put much weight to the report filed by the defendant’s experts witness since the same was a belated effort to establish a convenient value for the purposes of this suit.
58. It is also pointed out that the report was prepared 22 years after the public auction and no weight should be attached to the report and should not be used to impeach the sale. I have considered rival submissions over the issue and I have come to the conclusion that the Defendant submission that the Bank’s expert witness was not fit to produce the Banks valuation report is unfounded since the same was drawn on behalf of Highlands Valuers where the Bank’s expert witness is employed.
59. I am also not persuaded that the valuation report commissioned by the bank should be disregarded since no gazette notice was produced. It should be noted that a gazette notice is a public document which is accessible by any party. In any case one cannot obtain a license or certification to practice as a surveyor from the regulatory body without issuance of the gazette notice. I therefore decline to disregard the valuation report commissioned by the Bank dated 13 th July 2001.
60. It is apparent from the aforesaid valuation report that the market value of the suit property was put at Ksh 2,510,000/= while the forced sale value was set at Ksh 1,280.000/=. The plaintiff participated in the public auction and was declared the highest bidder having bid for ksh 1,310,000/=. The defendant relied on the valuation report prepared by Kinyua, Koech Valuers dated 7 th December 2023.
61. This court notes that the aforesaid valuation report omitted the forced sale value. The report was not also prepared within one year of the auction but was instead prepared 22 years after the public auction. This court is of the opinion that in the circumstances, that no weight should be attached to the said valuation report and should not be used to impeach the sale.
62. The plaintiff bought the suit property at Ksh 1,310,000/= which value is above the forced sale value of Ksh 1,280,000/= and exceeds 50% of the market value. This court is convinced that the property was not undervalued. It is trite law that the chargee has an obligation under Section 77(1) of the Registered Land Act (now repealed) to act in good faith by obtaining the best price possible. It is clear from the evidence tendered that the suit property was not undervalued.
63. The bank obtained the most favourable price from the highest bidder being the plaintiff herein. It would also appear that an undervaluation would not in itself vitiate a sale by public auction.
64. In Desnol Investment Ltd Vs Family Bank Limited [2022] KEHC 15805 (KLR) the court referred to section 97(3) of the Land Act, which is para materia with section 77(3) of the Registered Land Act (repealed) holding inter alia that:
“29….. An assertion that there was undervaluation of a charged property was not in itself a ground for a chargor to stand in the way of a chargee whose power of sale has arisen as was held in the case of Palmy Limited Vs Consolidated Bank of Kenya (supra)
30. However, it is important to point out that auctioneers and chargees cannot act with impunity. They have no free hand to sell charged properties at whatever amounts they fancy. If they do, they do so at their own peril. Indeed, chargees also have protection of the law that auctioneers and chargees must adhere to.
31. Consequently, in the event the plaintiff herein felt that the subject properties were sold at an undervalue, its remedy the defendant lay with suing for damages as provided for in section 97(3) of the Land Act”.
65. In the case of Bank of Baroda Vs Kenya Reclaimed Rubber [1985] 2006 KEHC 690 (KLR), the court also held inter alia :
“The 2 nd Defendant now complains that his property was sold at an under-value. It is true that the sale by public auction did not realize a price anywhere near the value of the property. But then, forced sales rarely realize prices comparable to the value of the property sold. In any event, under section 77(3) of the Registered Land Act, Cap. 300, the 2 nd Defendant’s remedy for any loss suffered because of the plaintiff’s alleged irregular exercise of its statutory power of sale, lies in damages ”.
66. The defendant also submitted in support of the allegation that the Bank fraudulently and deceptively obtained the Land Control Board Consent for the transfer of the suit property to the plaintiff and also from an inappropriate Land Control Board.
67. The defendant is of the submission that no Land Control Board consent was obtained. He pointed out that the documents produced by the plaintiff indicated that the Control Board consent was obtained from Kericho Land Control Board and not Belgut Land Control. He also pointed out that the consent is addressed to the chairman, Land Control Board P. O. Box 30081, Nairobi instead of the chairman Land Control Board Belgut.
68. It is the submission of the defendant therefore that the Land Control Board consent was fraudulent. In response to the defendant submissions the Bank submitted that it together with the plaintiff lawfully and procedurally obtained the Land Control Board consent for the transfer of the suit property to the plaintiff.
69. The Bank pointed out that the address in the consent is for the chairperson of the Board of the Bank. It is also pointed out that the defendant conceded that the District Commissioner served as the chair of the Land Control Board at the time of the transaction. The Bank argued that the defendant failed to establish that the Bank had fraudulently obtained the Land Control Board consent. The plaintiff testified that upon payment of the purchase price the Bank applied for the Land Control Board consent on 27 th March, 2003 and the same was issued on 8 th May, 2003.
70. It is further the submission of the plaintiff that it was not a legal requirement to obtain a Land Control Board consent in the circumstances of this case where the property is transferred by operation of law.
71. I have carefully considered the evidence and the rival submissions and it clear to me that the plaintiff presented credible evidence that the Bank lawfully obtained the Land Control Board consent. There is evidence showing that the Bank applied for the Land Control Board consent and was granted a duly signed consent by the then District Commissioner, the Chairman of the Land Control Board, Kericho District.
72. The defendant alleged that the consent was fraudulently obtained, as the application was addressed to Kericho District Commissioner, who had no authority to issue it. At the hearing of this case, the defendant conceded that there was only one Land Control Board for Kericho and the District Commissioner served as its chair. It also came out clearly that after the creation of Divisions the suit property fell under the jurisdiction of Belgut Land Control Board.
73. It is apparent that at the material time. The District Commissioner, Kericho was the chair of the relevant Land Control Board within which the suit land fell. This court after considering the evidence and the submissions, has come to the conclusion that the defendant’s claims is without any basis. The allegations of fraud particularized by the defendant in paragraph 11 of his counter-claim ought to have been proved. The defendant did not tender any evidence to prove the claims or allegations.
74. The other question which arose from the arguments over the issue on Land Control board consent is whether it is a legal requirement to obtain Land Control Board consent. The Court of Appeal in Public Trustee Vs Wanduru [1984] KLR 314 held inter alia as follows
“What the Land Control Legislation prohibits without consent is an agreement, a transaction or dealing in agricultural land which comes about as a result of a volitional act between parties themselves. The ownership of land, of whatever type is, also mutable by operation of law: eg by succession or adverse possession. The provisions of the Land Control Ac
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(a) An order for vacant possession of L.R No. Kericho/ Kabianga/1824
(b) Mesne profits
(c) Interest on Mesne profits
(d) Costs
2. The defendant entered appearance, filed his defence and counterclaim dated 16 th January, 2004 joining Kenya Commercial Bank (hereinafter referred to as the Bank ) as the 1 st defendant to the counter-claim.
3. In the counter-claim, the defendant sought for judgment against the plaintiff (2 nd defendant in the counter-claim) and Kenya Commercial Bank (1 st Defendant in the counter claim) inter alia as follows:
(a) A declaration that the sale of L.R No. Kericho/ Kabianga/1824 to the 2 nd defendant is void abinitio
(b) General damages
(c) Costs of the suit
4. The plaintiff filed his reply to defence and counter-claim. On its part the Bank also filed a defence to the counter-claim.
5. When the suit came up for hearing, the plaintiff testified and summoned two witnesses to testify in support of his case. The defendants on their part each summoned two witnesses to testify in their defence.
The Plaintiff’s Case
6. Peter Kipyegon Rotich (PW1) adopted his written witness statements dated 6 th December, 2023 as his evidence in chief. PW1 stated that he read an advertisement posted by M/s Solai Agencies in Kenya Times Newspaper of 7 th November, 2002 of sale by public auction of the parcel of land known as L. R No. Kericho/Kabianga/1824 scheduled for 20 th November, 2002.
7. He produced in evidence a copy of the newspaper advertisement as an exhibit. PW1 said he attended the public auction conducted by M/s Solai Agencies at Kericho on 20 th November, 2002 and that he was declared the highest bidder beating five other bidders on the suit property.
8. He produced in evidence a copy of the certificate of sale of land dated 20 th November, 2002. PW1 further stated that he bid for Ksh 1,310,000/=. He said he paid a deposit of Ksh 327,500/= being 20% of the purchase price. The plaintiff stated that he settled the purchase price by instalments as follows:
(i) 20.11.2002 Kshs 327,500/=
(ii) 20.11.2002 Kshs 202,500/=
(iii) 10.12.2002 Kshs 300,000/=
(iv) 17.12.2002 Kshs 120,000/=
(v) 23.12.2002 Kshs 250,000/=
(vi) 24.12.2002 Kshs 50,000/=
(vii) 24.12.2002 Kshs 60,000 /=
Total Kshs 1,310,000
9. The plaintiff further averred that Kenya Commercial Bank obtained the necessary Land Control Board consent for the transfer dated 12 th May, 2003 which he produced in evidence as an exhibit. He said that the property had been valued at Ksh 2,510,000/= and that the forced sale value was fixed at Ksh 1,280,000/=.
10. The plaintiff also stated that upon settling the purchase price in full the Bank transferred the aforesaid land to him free from encumbrances and that upon transfer he received documents to wit the title deed in his name and the application for consent and consent from the Land Control Board. PW1 produced the aforesaid documents as exhibits in evidence.
11. PW1 said that in the month of August, 2003, he took possession of the land and started fencing the same but the defendant hired violent farm-hands who attacked his workers and destroyed the fencing posts, wires, tree seedlings, nails and a tool box among other valuables.
12. The plaintiff stated that by virtue of his registration as a proprietor for value for consideration, he is entitled to hold the land free from claims and interests of the Defendant or his agents, which claims and interests were extinguished by the fall of the harmer at the public auction held on 20.11.2002.
13. The plaintiff further stated that the defendant’s remedy would lie in damages as against the selling bank or the auctioneer and therefore the defendant’s refusal to vacate the land is without merit. PW1 averred that the allegations of fraud contained in the counter-claim are baseless, scandalous and are intended to embarrass him. PW1 stated that he has been unable to realize the fruits of his investments in the suit land for over 24 years.
14. He prayed for an order for vacant possession, mesne profits from the time the suit land was transferred to him to the date of judgment.
15. The second witness who testified in support of the plaintiff’s case is Harrison Kirui (PW2) a holder of a masters degree in Rural Economics, told this court that he has worked in the Tea Industry for over 30 years. PW2 produced a report he prepared dated 17 th January, 2024 as an exhibit in evidence. In the aforesaid report, PW2 gave estimates on income per year on the tea farm established on L. R. No. Kericho/Kabianga/1824.
16. He stated that the total income per acre per year on average is Ksh 58,400/=. PW1 further indicated in his report that a sum of Ksh 525,600/= would be the annual income from 9 acres which amount would be Ksh 11,037,600/= in 21 years. PW1 said that he used his experience to prepare the report but admitted that he is not licensed to prepare such a report.
17. The third and final witness who testified in support of the plaintiff’s case is Lawrence Sang Kipngetich (PW3). He told this court that he is a valuer and a holder of a masters degree in valuation. PW3 confirmed that he prepared the valuation report dated November, 2023 in respect of L.R No. Kericho/ Kabianga/1824 which he produced as an exhibit in evidence.
18. In the aforesaid valuation report PW3 put the current value of suit land at Ksh 24,300,000/=. PW3 said that the land is entirely covered by tea though there are temporary developments.
Defence Case
19. Elijah Kipng’eno Bii (DW1) the Defendant in the main suit testified and summoned one witness namely: Fancy Jeruto Letyo (DW2) to testify in support of his case.
20. DW1 said that he was employed as a graduate trainee by Kenya Commercial Bank in 1973 and that he rose through the ranks until he became the General Manager of the bank. DW1 stated that he served as the General Manager for five (5) years from 1993 until 1998 when he was maliciously, unlawfully, fraudulently and criminally replaced as the General Manager of KCB by third parties.
21. The Defendant alleged that the third Party Margaret Chemengich who was then the Permanent Secretary Ministry, of Finance, with a group of collaborators removed him without lawful authority for their selfish interest. The Defendant however admitted, that in the years 1977,1978 and 1991 he charged the parcel of land known as L.R. Kericho/Kabianga/ 1824 and the developments therein to Kenya Commercial Bank (1 st Defendant in the counter-claim) for an advance of credit facilities with itself.
22. DW1 further stated that on or about October, 2003 the Bank Communicated to him that it had sold the parcel of land, to L. R No. Kericho/Kabianga/1824. It is his evidence that if the sale ever took place as purported by the Bank, then the same was done fraudulently in collusion with Peter Kipyegon Rotich, the plaintiff in the main suit in breach of the laid down provisions of law. DW1 listed the particulars of fraud by the defendants (in the counter claim) as follows:
• The bank (1 st defendant) sold the suit property in violation of the credit contract between itself and him by relying on a resolution passed by the bank’s board.
• The Bank sold the suit property for an inordinately low and fraudulent price of Ksh 1.34 million whereas the market value ought to have been about Ksh 7 million.
• The Bank and the plaintiff (main suit) colluded to fraudulently transfer the property to the plaintiff.
• The defendant (main suit) was not served with the mandatory statutory notice of sale by the bank.
• The plaintiff (2 nd defendant in the counter-claim) and the bank (1 st defendant in the counter-claim) colluded to fraudulently and deceptively obtain land control board consent for the transfer of the suit land to the plaintiff.
23. DW1 further stated that the bank maliciously stopped and frustrated the repayment of his credit facilities on the basis of directives and decisions of third parties. He also stated that his monthly salary was stopped with effect from 21 st March, 1998 on the basis of fraud perpetrated by its employees.
24. He further averred that his agreed credit terms were withdrawn with effect from 21 st March 1998 on the basis of an illegal 3 rd party directive thus applying the punitive interest rates of over 20% replacing his entitled rate of 3% and 8% on the same basis.
25. The Defendant stated that the Bank had no lawful authority to sell the suit land by public auction as it could not exercise its statutory power of sale the way it did. He further stated that the bank and the plaintiff colluded to get a fraudulent Land Control Board letter of consent for the transfer of ownership of L.R. No. Kericho/Kabianga/1824 from him to the plaintiff. Fancy Jeruto Letyo (DW2) appeared and testified in support of the Defendant’s case.
26. She produced in evidence as an exhibit a valuation report she prepared over L.R No. Kericho/Kabianga/1824 on the instructions of Elijah Kipng’eno Arap Bill (DW1).
27. DW2 stated that based on the market data, assumption and analysis, she gave the market value of the suit property between the years 2000 and 2020 as follows:
Year Market value
2000 Ksh 2,700,000/=
2002 Ksh 2,800,000/=
2010 Ksh 4,900,000/=
2020 Ksh 29,300,333/=
28. DW2 further averred that the reserve price under Section 97 of the Land Act, 2012 is capped at 75% of the Market value and that a chargee is required to act in good faith. In her report DW2 said that she looked at the developments on the land. In her report DW2 admitted that she did not indicate the forced sale value because the client merely wanted to know the market value.
29. The Bank (1 st defendant in the counter claim) summoned two witnesses to testify in support of its case. Nelly Musau (DW3), the bank’s credit manager, Moi Avenue, Branch, Nairobi confirmed in her evidence that Elijah Kipng’eno Arap Bill , the defendant indeed borrowed from the bank in 1977, 1988 and 1991 the following sums of Ksh 70,000/=, Ksh 200,000/= and Kshs 230,000/= respectively with legal charges over the suit property.
30. DW3 told this court that the defendant was lawfully dismissed from the employment of the bank as the General Manager in April, 1998 by the Bank’s Board of Directors. She further stated the defendant defaulted in the repayments of the loan facility thus the Bank’s statutory power of sale arose.
31. She also said that the defendant failed to service the outstanding loan despite being served with a demand notice thus prompting the bank to exercise its statutory power of sale. DW3 pointed out that as of 25 th July, 2001 the total outstanding aggregate sum was Ksh 187,855,378/=.
32. She further stated that the Bank adhered to the requirements and processes set by law including obtaining the Land Control Board consent. DW3 stated that the Bank instructed M/s Solai Agencies to auction L.R. No. Kericho/Kabianga/1824.
33. It is her evidence further that the auctioneers issued notification of sale and advertised the suit property for sale by public auction on 20/11/2002 vide Kenya Times Newspaper of 7.11.2002. DW3 confirmed in her evidence that Peter Kipyegon Rotich (plaintiff) was the highest bidder in the auction. DW3 also confirmed that the plaintiff required deposit and the balance of the purchase price totaling Ksh 1,310,000/= which amount is above the reserve price of Ksh 1,280,000/=.
34. DW3 further corroborated the evidence of the plaintiff (PW1) that after payment in full and obtaining the Land Control Board consent to transfer, the transfer by chargee in exercise of its statutory power of sale, was registered and a certificate of title was issued to the plaintiff. DW3 also refuted the claim that the bank was party to any fraudulent conspiracy with the plaintiff to defraud the defendant, Elijah Kipng’eno Arap Bii.
35. DW3 stated that she is aware that the purchase price was paid after the lapse of 30 days. It is her evidence that the parties mutually extended the completion period. The second witness summoned by the Bank is Gerald Kiptoo Ruto (DW4) who told this court that he is a registered valuer working for Highlands Valuers Ltd. DW4 produced a valuation report dated 13 th July, 2001 on behalf of Highlands Valuers as an exhibit in evidence. DW4 stated that in 2001, there was no law capping the forced sale value.
36. At the close of evidence, parties were invited to file written submissions which they did. The parties also individually identified the issues for determination. This court having considered the evidence and the rival submissions is of the view that the following two main issues arose for determination:
(i) Whether the defendant has proved fraud as particularized under paragraph11 of the defence and counter claim and whether prayers (a), (b) and (c) in terms of the counter-claim should be granted.
(ii) Whether the plaintiff is entitled to the prayers for vacant possession of the suit property, mesne profits, interest and costs in the plaint .
37. On the first issue as to whether the defendant has proved fraud as particularized in the defence and counter-claim and whether prayers (a), (b) and (c) of the counter-claim should be granted , it is the submission of the defendant that he has largely proved the allegations of fraud as particularized in paragraph 11 of the defence and counter-claim.
38. The defendant is of the averment that he has established that the bank (1 st defendant in the counter-claim) never served him with the statutory notice of the sale and or notification of sale. The defendant denied receiving the letter dated 15 th June, 1999 addressed to the defendant’s “P. O. Box 22333 Nairobi”. It is the defendant’s submissions that the bank did not controvert the defendant’s assertion of non-receipt of the letter as it never produced a certificate of posting to rebut the defendant’s claim.
39. The defendant further pointed out that the letter from the bank dated 3 rd June, 1999 was sent to a wrong address “P. O. Box 48400 c/o Mr. S.K. Towett” which address did not belong to the defendant. The Defendant also pointed out that the letter dated 10 th November, 1999 and another dated 25 th July, 2001 were addressed to the defendant by the Bank’s advocates through his Box number 22333, Nairobi.
40. The defendant denied receiving the aforesaid letters and according to the defendant, the bank did not rebut the defendant’s assertion since the bank did not produce a certificate of posting. The defendant further denied receiving the notification of sale by M/s Solai Agencies Auctioneers and that the Bank failed to produce a certificate of posting.
41. It is the final submission of the defendant that no statutory notice and or notification of sale was served on the defendant. The defendant further submitted that the failure to serve the statutory notice is a clear breach of the provisions of section 74(1) of the Registered Land Act, Cap 300 Laws of Kenya (now repealed) and that the remedy is the nullification of the auction sale undertaken therein as the same is in law void abinitio.
42. In response to the defendant’s submission, the Bank is categorical that it proved during the trial and in its documentary evidence that the defendant was served with the requisite statutory notices through the original and registered post to his confirmed postal address “P. O. Box 22333, Nairobi”.
43. The Bank further pointed out that it duly served on an adult member of the family of the defendant which is deemed in law to be proper and effective service. The plaintiff made submissions similar to those made by the Bank. It is the submission of the plaintiff that the defendant’s claim that he was never served with the statutory notice is untrue.
44. It is trite law that under section 74(1) of the Registered Land Act (now repealed) that a duty is imposed on the chargee to serve a notice on the chargor before exercising its statutory power of sale. It is apparent from the evidence presented by the Bank that the Bank sent several notices and reminders. The Bank presented evidence showing that on 10 th November, 1999, it served a statutory notice of even date upon the defendant at his acknowledged address “P. O. Box 22333, Nairobi” by registered post and a copy of the said notice was forwarded by ordinary post.
45. This court is satisfied that the Defendant was duly served. In fact, the Bank produced in evidence as an exhibit the certificate of posting. “A Registered Post Article”. It is also clear from the defendant’s evidence that he acknowledged that the postal address “P. O. Box 22333, Nairobi” was his.
46. In the letter dated 10 th November, 1999, the Bank notified the defendant that his properties including the suit property namely L. R. No. Kericho/Kabianga/1824 would be sold if he did not remit the full settlement amount on his outstanding loan within three (3) months. Again, on 25 th July, 2001, the Bank notified the Defendant of the appointment of M/s Solai Agencies to sell the suit property.
47. The aforesaid letter was sent to the Defendant’s Acknowledged address of “P.O. Box 22333, Nairobi”. This court is satisfied that despite his denial that the Defendant received the requisite statutory notice.
48. The other issue which the Defendant raised is that the Bank sold the suit property for an inordinately low and fraudulent price of Ksh 1,310,000/=. It is the submission of the Defendant that the Bank colluded with the plaintiff to sell the suit property at hardly half the price of the market value. The Defendant referred to the valuation report prepared by Fancy Jeruto Letyo (DW2) dated 2 nd February, 2026 which she produced as an exhibit in evidence. The defendant stated that the valuation report is the one and only legitimate one. He pointed out that the valuation report put the market value of the suit property at Ksh 2,800,000/=.
49. According to the evidence of the valuer (DW2), the forced sale value as per the practice before the enactment of the Land Act, 2012 was 75% of the market value and that under Section 97 of the Land Act, 2012, the forced sale in an auction could not go below 70% of the market value. The Defendant argued that the Bank/auctioneer sold the suit property at Ksh 1,310,000/= which is way below 50% of the market value of Ksh 2,800,000/=.
50. The defendant argued that the bank’s selling price was outrightly fraudulent as the same was too low. It is argued that the Bank acted in bad faith in the circumstances. The Defendant urged this court to reject the valuation reports prepared by Lawrence Sang c/o Primeland and Apprails Ltd dated 30.11.2023 and that of S. K. Chemilil c/o Highlands Valuers dated 13 th July, 2001.
51. It is the defendant’s submissions that Lawrence Sang, did not produce his valuer’s certificate of registration, the practicing license and gazette notice for the year 2023 in blatant breach of provisions of sections 8(2) and 9 of the Valuers Act, therefore his valuation report cannot be admissible. This court was also urged by the defendant not to admit the valuation report by Highlands Valuers because a third party namely Gerald Kiptoo Ruto produced it yet it was prepared by Mr. S. K. Chemelil who did not produce in court his licenses and professional certificates.
52. The defendant argued that the certificate of registration as a valuer dated 19/10/2023 and the annual practicing certificate for the year 2024 produced by Gerald Kiptoo Ruto cannot legitimize a valuation report prepared in 2001 by a different party altogether. The defendant further argued that the report by Fancy J. Letyo of Kinyua Koech Valuers dated 7/12/2023 is the only credible valuation.
53. The market value is fixed at Ksh 2,800,000/=, therefore the force sale value of Ksh 1,310,000/= is a gross and fraudulent under value of less than 50%, thus justifying the cancellation of the said sale as void. In response to the defendant’s submission over the question as to whether the suit property was sold at an inordinately low and fraudulent price, the Bank argued that it carried out its duty to obtain a proper price making the sale of the suit property legal and non-fraudulent.
54. The Bank urged this court to find, that the Bank proved that it obtained a proper price for the suit property. It pointed out that the suit property was sold at Ksh 1,310,000 which was above the reserve price by Ksh 1,280,000/= based on the valuation report commissioned by the bank which is the only valuation report that provided a reserve price.
55. The bank further pointed out that the defendant’s own valuation was done years after the sale of suit property and as produced by its expert witness indicated that the market value at the time of sale would be Ksh 2.8 million whereas in the valuation commissioned by the bank at the time of sale was Ksh 2.51 million with an acceptable margin difference given the time as admitted by the defendant’s expert witness.
56. The Bank further stated that the practice and the law before the year 2012 confirmed that there was no capping of the reserve price based on the market value. The Bank stated that its expert witness (DW3) was entitled to produce the valuation report on behalf of Highlands Valuers where he is employed.
57. The plaintiff filed a response to the defendant’s submissions on whether the Bank sold the suit property at an undervalue. It’s the plaintiff’s submission that this court should not put much weight to the report filed by the defendant’s experts witness since the same was a belated effort to establish a convenient value for the purposes of this suit.
58. It is also pointed out that the report was prepared 22 years after the public auction and no weight should be attached to the report and should not be used to impeach the sale. I have considered rival submissions over the issue and I have come to the conclusion that the Defendant submission that the Bank’s expert witness was not fit to produce the Banks valuation report is unfounded since the same was drawn on behalf of Highlands Valuers where the Bank’s expert witness is employed.
59. I am also not persuaded that the valuation report commissioned by the bank should be disregarded since no gazette notice was produced. It should be noted that a gazette notice is a public document which is accessible by any party. In any case one cannot obtain a license or certification to practice as a surveyor from the regulatory body without issuance of the gazette notice. I therefore decline to disregard the valuation report commissioned by the Bank dated 13 th July 2001.
60. It is apparent from the aforesaid valuation report that the market value of the suit property was put at Ksh 2,510,000/= while the forced sale value was set at Ksh 1,280.000/=. The plaintiff participated in the public auction and was declared the highest bidder having bid for ksh 1,310,000/=. The defendant relied on the valuation report prepared by Kinyua, Koech Valuers dated 7 th December 2023.
61. This court notes that the aforesaid valuation report omitted the forced sale value. The report was not also prepared within one year of the auction but was instead prepared 22 years after the public auction. This court is of the opinion that in the circumstances, that no weight should be attached to the said valuation report and should not be used to impeach the sale.
62. The plaintiff bought the suit property at Ksh 1,310,000/= which value is above the forced sale value of Ksh 1,280,000/= and exceeds 50% of the market value. This court is convinced that the property was not undervalued. It is trite law that the chargee has an obligation under Section 77(1) of the Registered Land Act (now repealed) to act in good faith by obtaining the best price possible. It is clear from the evidence tendered that the suit property was not undervalued.
63. The bank obtained the most favourable price from the highest bidder being the plaintiff herein. It would also appear that an undervaluation would not in itself vitiate a sale by public auction.
64. In Desnol Investment Ltd Vs Family Bank Limited [2022] KEHC 15805 (KLR) the court referred to section 97(3) of the Land Act, which is para materia with section 77(3) of the Registered Land Act (repealed) holding inter alia that:
“29….. An assertion that there was undervaluation of a charged property was not in itself a ground for a chargor to stand in the way of a chargee whose power of sale has arisen as was held in the case of Palmy Limited Vs Consolidated Bank of Kenya (supra)
30. However, it is important to point out that auctioneers and chargees cannot act with impunity. They have no free hand to sell charged properties at whatever amounts they fancy. If they do, they do so at their own peril. Indeed, chargees also have protection of the law that auctioneers and chargees must adhere to.
31. Consequently, in the event the plaintiff herein felt that the subject properties were sold at an undervalue, its remedy the defendant lay with suing for damages as provided for in section 97(3) of the Land Act”.
65. In the case of Bank of Baroda Vs Kenya Reclaimed Rubber [1985] 2006 KEHC 690 (KLR), the court also held inter alia :
“The 2 nd Defendant now complains that his property was sold at an under-value. It is true that the sale by public auction did not realize a price anywhere near the value of the property. But then, forced sales rarely realize prices comparable to the value of the property sold. In any event, under section 77(3) of the Registered Land Act, Cap. 300, the 2 nd Defendant’s remedy for any loss suffered because of the plaintiff’s alleged irregular exercise of its statutory power of sale, lies in damages ”.
66. The defendant also submitted in support of the allegation that the Bank fraudulently and deceptively obtained the Land Control Board Consent for the transfer of the suit property to the plaintiff and also from an inappropriate Land Control Board.
67. The defendant is of the submission that no Land Control Board consent was obtained. He pointed out that the documents produced by the plaintiff indicated that the Control Board consent was obtained from Kericho Land Control Board and not Belgut Land Control. He also pointed out that the consent is addressed to the chairman, Land Control Board P. O. Box 30081, Nairobi instead of the chairman Land Control Board Belgut.
68. It is the submission of the defendant therefore that the Land Control Board consent was fraudulent. In response to the defendant submissions the Bank submitted that it together with the plaintiff lawfully and procedurally obtained the Land Control Board consent for the transfer of the suit property to the plaintiff.
69. The Bank pointed out that the address in the consent is for the chairperson of the Board of the Bank. It is also pointed out that the defendant conceded that the District Commissioner served as the chair of the Land Control Board at the time of the transaction. The Bank argued that the defendant failed to establish that the Bank had fraudulently obtained the Land Control Board consent. The plaintiff testified that upon payment of the purchase price the Bank applied for the Land Control Board consent on 27 th March, 2003 and the same was issued on 8 th May, 2003.
70. It is further the submission of the plaintiff that it was not a legal requirement to obtain a Land Control Board consent in the circumstances of this case where the property is transferred by operation of law.
71. I have carefully considered the evidence and the rival submissions and it clear to me that the plaintiff presented credible evidence that the Bank lawfully obtained the Land Control Board consent. There is evidence showing that the Bank applied for the Land Control Board consent and was granted a duly signed consent by the then District Commissioner, the Chairman of the Land Control Board, Kericho District.
72. The defendant alleged that the consent was fraudulently obtained, as the application was addressed to Kericho District Commissioner, who had no authority to issue it. At the hearing of this case, the defendant conceded that there was only one Land Control Board for Kericho and the District Commissioner served as its chair. It also came out clearly that after the creation of Divisions the suit property fell under the jurisdiction of Belgut Land Control Board.
73. It is apparent that at the material time. The District Commissioner, Kericho was the chair of the relevant Land Control Board within which the suit land fell. This court after considering the evidence and the submissions, has come to the conclusion that the defendant’s claims is without any basis. The allegations of fraud particularized by the defendant in paragraph 11 of his counter-claim ought to have been proved. The defendant did not tender any evidence to prove the claims or allegations.
74. The other question which arose from the arguments over the issue on Land Control board consent is whether it is a legal requirement to obtain Land Control Board consent. The Court of Appeal in Public Trustee Vs Wanduru [1984] KLR 314 held inter alia as follows
“What the Land Control Legislation prohibits without consent is an agreement, a transaction or dealing in agricultural land which comes about as a result of a volitional act between parties themselves. The ownership of land, of whatever type is, also mutable by operation of law: eg by succession or adverse possession. The provisions of the Land Control Ac
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