1. This case concerns a lender’s intention to exercise its statutory power of sale as a consequence of alleged non-repayment of a loan advanced by the lender (1 st Defendant) to the borrower (Plaintiffs). The suit therefore seeks to block a charge redemption attempt.
2. The Plaintiff filed the suit through Messrs C.M. Advocates LLP , by way of the Plaint dated 25/02/2026 praying for, inter alia , an injunction to stop the redemption attempt targeted at selling the Plaintiff’s property L.R. No. 3734/549 (Original No. 3734/344 ) charged as security for the loan, a declaration that, in the absence of the requisite or proper notices, or proper valuation, the intended sale is unlawful and invalid, and an order compelling the 1 st Defendant to render a full, true and reconciled statement of account for each of the two facilities secured by the property. The Plaintiff also sought general damages for breach of statutory duty and unlawful impairment of its equity of redemption, and also for special damages for losses arising from the 1 st Defendant’s refusal to grant consent to the Plaintiff to use the property in a time-bound joint venture deal with a potential investor.
3. Together with the Plaint and the other usual Pleadings accompanying it, the Plaintiff also filed the Notice of Motion the subject of this Ruling, of the same date. The Motion, supported by unnecessarily very lengthy, repetitive and voluminous grounds, seeks prayers as follows:
“1) [……..] spent
2) [……..] spent
3) [……..] spent
4) THAT pending hearing and final determination of this suit, the Honourable Court be pleased to grant a temporary injunction restraining the Defendants/Respondents, whether by themselves, employees, servants and/or agents or otherwise assigns and/or any person whatsoever acting on their behalf and/or under their mandate and/or instructions from advertising for sale, selling whether by public auction or private treaty, disposing of or otherwise howsoever completing by conveyance on transfer of any sale concluded by auction or private treaty, taking possession, appointing receivers or administrators or exercising any power of a Chargee to lease let, charge or otherwise howsoever interfere with LAND REFERENCE NO. 3734/549 (ORIGINAL NO. 3734/344) (hereinafter "the suit property").
5) THAT the Honorable Court be pleased to issue an order that an independent valuation over LAND REFERENCE NO. 3734/549 (ORIGINAL NO. 3734/344) (hereinafter "the Suit Property") be conducted within Sixty (60) Days of delivery of the Ruling of this Application. The parties herein shall within Seven (Days agree on a joint valuer to value the suit property and in default of agreement, the Court shall appoint an independent valuer from the official list of Registered Valuers of Kenya to value the suit property and prepare a joint Valuation Report. The cost of the said valuation shall be borne equally by the Plaintiff/Applicant and the 1st Defendant/Respondent herein.
6) THAT the Honorable Court be and is hereby pleased to grant such other Orders as it may deem fit and necessary to give effect to the justice of this dispute and to preserve the subject matter in this suit being LAND REFERENCE NO. 3734/549 (ORIGINAL NO. 3734/ 344)) (hereinafter "the suit property")
7) The costs of this Application be borne by the Defendants/Respondents
4. The Application is supported by the, again, very lengthy and repetitive Affidavit sworn by one Ashok Rupshi Shah , who introduced himself as the Managing Director of the Plaintiff. In summary, he deponed that the 1 st Defendant has triggered the statutory power of sale without first serving the mandatory 40 days’ Notice to Sell required under Section 96(2) of the Land Act, 2012 , yet it has, instead, proceeded to serve the 45 days Redemption Notice and fixed a date for public auction. He contended further that the Valuation procured by the 1 st Defendant under Section 97 of the Land Act to secure the best price reasonably obtainable contains a materially depressed value of Kshs 1,050,000,000/- and Kshs 787,500,000/-, which figures are not only inconsistent with the Plaintiff’s recent professional valuation but, if used as a benchmark for reserve price or bidding guidance, will occasion an unlawful disposal at an undervalue. He also deponed that the 45 days-Redemption Notice has no mention of any Valuation Report, and it cannot therefore be ascertained whether the Valuation, if any, complies with the 12 months limit requirement. He then stated that the Plaintiff has commissioned an independent, recent valuation dated 20/01/2026 which places the property’s market value at Kshs 1,500,000,000/-, mortgage value at Kshs 1,125,000,000/-, and forced value at Kshs 1,050,000,000/-, urging that the disparity between the Defendant’s values and the Plaintiff’s is outrightly substantial. He deponed further that the Valuation company commissioned by the Plaintiff, known as Messrs R.R. Oswald & Co. Ltd , is also accredited on the 1 st Defendant’s own panel of approved valuers, and is, in fact, the same Valuer that previously conducted a valuation of the same property in June 2019 on behalf of the Plaintiff, and assessed a forced value of Kshs 800,000,000/-, and an open market value of Kshs 1,200,000,000/-. In his view therefore, it is inconceivable and commercially illogical that approximately 6 years later, the value of the property would have depreciated rather than appreciated. He thus contended that Rule 11(b)(x) has also been violated.
5. He further pointed out that as the property was utilized as security for two separate credit facilities advanced by the 1 st Defendant, and secured through two distinct instruments both registered against the same title, the 90-day statutory notice and 45 days Redemption Notice served by the 1 st Defendant were defective for failure to particularize with certainty as to, inter alia , which of the two facilities is allegedly in default, the outstanding sums attributable to each facility, whether the realization is in respect to one of the two charges or both, and which facility would be cleared or remain outstanding upon sale. According to him, this ambiguity strikes at the very purpose of statutory notices, which is to give a chargor clear, intelligible, and unequivocal information to enable informed redemption, settlement, reconciliation of accounts, and/or recourse to Court. He further deponed that the Plaintiff made a settlement effort to redeem the property and avert a distressed sale by notifying the 1 st Defendant that it had secured a time-bound joint venture proposal of Kshs 150,000,000/- and sought the 1 st Defendant’s prompt engagement/clearance to facilitate redemption but instead, the 1 st Defendant erected an extraneous and oppressive barrier by rejecting the settlement offer on the ground that the property had been further extended to secure the account of a separate entity, which is the subject of a separate suit between the parties, and which response effectively converted the Plaintiff’s right to redeem its charged asset into a hostage of a third party’s indebtness. He urged that the 1 st Defendant also rebuffed the Plaintiff’s further overtures informing the 1 st Defendant that it had secured a partner ready and willing to settle the debt. In his view therefore, this rebuffing of the proposals amounted to an oppressive clog on redemption. Regarding the prayer for injunction, he asserted that sale was imminent and should it proceed, damages will not be an adequate remedy, that the 1 st Defendant will not be prejudiced as the security remains secured by the registered charges, and that also for this reason, the balance of convenience favours granting the injunction.
6. In opposing the Application, the 1 st Defendant, through Messrs Musyoka Murambi & Associates Advocates , filed the Replying Affidavit sworn by one Wilson Mwaura , who introduced himself as the 1 st Defendant’s Credit Controller. He deponed that the Plaintiff executed the Letter of Offer dated 2/09/2019 (1 st Letter of Offer) for purposes of procuring financial accommodation by way of two Term Loans, that under this arrangement, the Plaintiff provided the suit property as security by way of a Legal Charge, which was then used to secure the aggregate sum of Kshs 199,052,000/- (Kshs 153,052,000 and Kshs 46,000,000/- for each Term Loan secured by respective charges each dated 30/09/2019, respectively). He added that the Plaintiff subsequently executed a second Letter of Offer dated 10/11/2022 for purposes of restructuring and merging the facilities existing under the 1 st Letter of Offer, which restructuring was caused by the Plaintiff’s failure to keep the account fully serviced thus causing the same to fall in heavy arrears, which as at 30/03/2024, stood at Kshs 190,202,036/-, and still continues to accrue interest, by reason whereof the 1 st Defendant commenced the process of realizing the security by instructing the 2 nd Defendant accordingly. He contended that the 1 st Defendant duly served, between 20/03/2025 and 15/01/2026, upon the Plaintiff the 90-days Statutory Notice, 40-days-Notice to Sell, Notification of Sale, and also Redemption Notice, and as such, the statutory power of sale has validly accrued, and that the Plaintiff has not established any legal basis to warrant grant of the injunction.
7. He also asserted that the loss alleged by the Plaintiff, if any, is purely commercial in nature and capable of compensation by damages, and that grant of the orders will unjustly prejudice the 1 st Defendant as interest and penalties continue to accrue. Regarding the issue of valuation, he deponed that, contrary to the Plaintiff’s allegations, prior to instructing the 2 nd Defendant to proceed with the security realization, the 1 st Defendant commissioned a valuation of the property under the provisions of Section 97(2) of the Land Act . He also termed as fraudulent, the Plaintiff’s allegations that the 1 st Defendant had also earlier instructed the same valuers known as Messrs R.R. Oswald & Co. Ltd to undertake valuation of the property, terming the instructions allegedly received from the 1 st Defendant as a forgery, and pointing out that the Plaintiff has not even attached any letter of instructions from the 1 st Defendant. He urged that in any event, the alleged valuation was in respect to 28 plots to be sub-divided out of the suit property yet the suit property is a single unit, urging further that the alleged 28 plots are unknown to the 1 st Defendant, and that no disclosure has been made that valuing the property as 28 plots sub-divided plots would inevitably give a higher figure. He also pointed out that the valuation does not share comparable valuation figures for other properties within the same neighbourhood.
8. Regarding the 90-days Statutory Notice, and the 45-day Redemption Notice, he maintained that the same were regular and lawful as the two Term Loan facilities were restructured and merged at the request of the Plaintiff under the 2 nd Letter of Offer, and that by merging the two facilities, the Plaintiff and the 1 st Defendant exercised the right reserved in law. He urged that, as such, the Plaintiff cannot be allowed to benefit from the merger of the two facilities when the request to merge was made by the Plaintiff, effectively creating one facility, that in any event, the security for the previously two facilities is one and therefore the 1 st Defendant could not have issued two notices over a single security; and that the statutory notices clearly notified the Plaintiff of the existence of default and the 1 st Defendant's intention to exercise its statutory power of sale. In his view therefore, the Plaintiff cannot feign ignorance of the facilities in default or the outstanding indebtedness
9. The Plaintiff then filed yet another unnecessarily lengthy, wordy and voluminous Supplementary Affidavit again sworn by the said Ashok Rupshi Shah . In the Affidavit, Mr. Shah basically averred that the Defendants’ Replying Affidavit does not answer the fundamental statutory and equitable grievances raised by the Plaintiff, but instead, seeks to conceal the real issues by making generalized denials, selective references to historical facility documents, and unsubstantiated allegations intended to sanitize an unlawful, premature and oppressive sale process. The rest of the matters stated are basically denials of the allegations made in the Replying Affidavit, and simply restatements of the arguments already made in the Supporting Affidavit.
10. The parties were then granted leave to file written Submissions. However, by the time I concluding preparing this Judgment, despite lapse of the timelines fixed, only the Plaintiffs’ Submissions dated 26/06/2026, another lengthy 16-page venture, was on record, though filed way out of time. The Defendants, on their part, appear to have opted not to file any Submissions.
Plaintiff’s Submissions
11. Despite the length of the Plaintiff’s Submissions, it, too, is basically a restatement of the arguments and denials already made in its respective Affidavits, save for the authorities cited. Counsel however added that the Defendants have failed to provide any credible evidence of service of the 40-days notice under Section 96(2) of the Land Act as the only document exhibited is a stamped plain page which does not constitute proof of service, urging that the Defendants have failed to provide any certificate of posting, or registered mail receipt, or Affidavit of Service, or courier documentation, or email transmission or acknowledgment of receipt. He also opined that the alleged 40-days notice dated 26/11/2025 and the postal stamp allegedly evidencing dispatch are forgeries and/or a backdated or fabricated, and submitted that the Court should be slow to permit a sale where service of the statutory notice is contested and not strictly proved. Regarding the allegation by the Defendants that the counter-Valuation Report supplied by the Plaintiff is fraudulent, Counsel submitted that instead of proposing a transparent solution such as conducting a joint valuation, the Defendants seek to discredit the counter-valuation through allegations that are unsupported at this interlocutory stage, designed to divert attention from the question whether the 1 st Defendant has discharged its duty under Section 97 . He contended that allegations of fraud are serious, and it is trite they must be specifically pleaded and strictly proved, and cannot be casually introduced in a Replying Affidavit as a tactic to prevent scrutiny of the chargee's valuation. He thus insisted on an independent valuation being taken.
12. On the Defendant’s allegation that the two facilities were merged and that as such, the notices were sufficient as drawn, Counsel contended that as the property secured two charge arrangements and/or facilities, the Plaintiff was entitled to know whether the 1 st Defendant was enforcing the 1 st charge or the 2 nd charge, or the alleged merged facility, or all facilities collectively, and to also know what amount was outstanding under each charge, what amount would redeem the property, and how any sale proceeds would be appropriated. He however denied that that the facilities were merged and asserted that if the facilities were merged, then the notices should have said so clearly and should have particularized the merged obligations, the contractual basis of the merger, the amount outstanding after merger, and the precise steps required to redeem the property. He submitted that the 1 st Defendant cannot rely on an alleged merger as an answer to ambiguity while failing to show that the notices themselves clearly communicated that position to the Plaintiff.
Determination
13. The broad issue herein is evidently “whether an interim injunction should issue to restrain the Defendants from exercising the statutory power of sale pending hearing and determination of the suit”
14. Determination on whether to grant interim injunctions is governed by Order 40 Rule 1 of the Civil Procedure Rules which provides as follows;
“Where in any suit it is proved by affidavit or otherwise —
(a) that any property in dispute in a suit is in danger of being wasted, damaged, or alienated by any party to the suit, or wrongfully sold in execution of a decree; or
(b) that the defendant threatens or intends to remove or dispose of his property in circumstances affording reasonable probability that the plaintiff will or may be obstructed or delayed in the execution of any decree that may be passed against the defendant in the suit, the court may by order grant a temporary injunction to restrain such act, or make such other order for the purpose of staying and preventing the wasting, damaging, alienation, sale, removal, or disposition of the property as the court thinks fit until the disposal of the suit or until further orders.
15. The principles that apply in applications for injunctions were well settled in the case of Giella –vs-Cassman Brown and Company Limited, Civil Appeal No. 51 of 1972 , in which it was held that the Applicant must establish or demonstrate; ( i ) the existence of a prima facie case with a probability of success , ( ii ) that he will suffer irreparable injury which cannot be compensated by damages , and ( iii ) that the balance of convenience tilts in his favour.
16. The Court of Appeal, in the case of Nguruman Limited v Jane Bonde Nielsen and 2 Others NRB CA Civil Appeal No. 77 of 2012 [2014] eKLR, explained the sequential application of the above principles as follows:
“These are the three pillars on which rests the foundation of any order of injunction, interlocutory or permanent. It is established that all the above three conditions and stages are to be applied as separate, distinct and logical hurdles which the applicant is expected to surmount sequentially. (See Kenya Commercial Finance Co. Ltd V. Afraha Education Society [2001] Vol. 1 EA 86 ). If the applicant establishes a prima facie case that alone is not sufficient basis to grant an interlocutory injunction, the court must further be satisfied that the injury the respondent will suffer, in the event the injunction is not granted, will be irreparable. In other words, if damages recoverable in law is an adequate remedy and the respondent is capable of paying, no interlocutory order of injunction should normally be granted, however strong the applicant’s claim may appear at that stage. If prima facie case is not established, then irreparable injury and balance of convenience need no consideration. The existence of a prima facie case does not permit “leap-frogging” by the applicant to injunction directly without crossing the other hurdles in between.”
17. It is also settled that in interim applications, such as in this case, the Court should avoid making final determinations on matters of fact made on the basis of the conflicting Affidavit evidence. In connection thereto, in Mbuthia vs Jimba Credit Finance Corporation & Another [1988] KLR 1, the Court of Appeal guided as follows:
“……. the correct approach in dealing with an application for an interlocutory injunction is not to decide the issues of fact, but rather to weigh up the relevant strength of each side’s propositions.”
18. The first limb that I have to therefore determine is whether the Plaintiff has established a prima facie case. What constitutes a “ prima facie ” case was discussed in the case of Mrao Ltd vs. First American Bank of Kenya Ltd & 2 Others [2003] KLR 125 , in which the Court of Appeal held as follows:
“It may not be easy to define what is meant by “ prima facie case ”, but at least it must mean one on which a reasonable tribunal, properly directing its mind to the law and the evidence could convict if no explanation is offered by the defence ... The terms “ prima facie ” case, and “ genuine and arguable ” case do not necessarily mean the same thing, for in using another term, namely a sustainable cause of action, the words “ prima facie ” are frequently used to refer to a case which shifts the evidential burden of proof, rather than as giving rise to a legal burden of proof in the manner of considering, which was in relation to the pleadings that had been put forward in the case. It would be in the appellant’s interest to adopt a genuine and arguable case standard rather than one of a prima facie case, the former being the lesser standard of the two ... In civil cases a prima facie case is a case in which on the material presented to the Court a tribunal properly directing itself will conclude that there exists a right which has apparently been infringed by the opposite party to call for an explanation or rebuttal from the latter. A prima facie case is more than an arguable case. It is not sufficient to raise issues but the evidence must show an infringement of a right, and the probability of success of the Applicant’s case upon trial. That is clearly a standard, which is higher than an arguable case.”
19. Before I venture into determination of this matter, I may also mention that it cannot be a point of debate that a person who receives a loan from a lender and who voluntarily and lawfully gives out his property as collateral or security for the loan is presumed to be fully aware that in the event of default in repayment thereof under the terms and within the timelines agreed, the lender assumes liberty to sell off the property to recover its money. On this point, Pall J in Muhani & Another vs. National Bank of Kenya Ltd [1990] KLR 73 held as follows;
“The mortgagor who has given an express power of sale cannot by starting a suit perhaps a perfectly hopeless suit derogate from that which it has in express terms conferred upon the mortgagee by the instrument namely a statutory power of sale and to hold otherwise would be simply to tear up the instrument which contains the contract agreed upon by the parties ....... The very object of the legislation granting a chargee a statutory power of sale would be negated if the courts interfere with his statutory or contractual powers unless, of course there is an allegation of fraud or improper exercise of the power of sale”.
20. Further, in the case of Maltex Commercial Supplies Limited & Another v Euro Bank Limited (In Liquidation) , HCCC No. 82 of 2006) , Warsame J ( as he then was ) observed as follows:
“….. Any property whether it is a matrimonial or spiritual house, which is offered as security for loan/overdraft is made on the understanding that the same stands the risk of being sold by the lender if default is made on the payment of the debt secured”.
21. Similarly, Ringera J , in the case of Martha Khayanga Simiyu vs. Housing Finance Co. of Kenya & 2 Others Nairobi HCCC No. 937 of 2001 [2001] 2 EA 540 , also held that:
“Once a property has been charged to secure financial accommodation it ipso facto becomes a commodity for sale and there is no commodity for sale whose loss cannot be compensated in damages but the law is not that an interlocutory injunction can never issue where damages would be an adequate remedy and the Respondent is in a position to pay them.”
22. In this matter, there is no dispute that the Plaintiff executed the Letter of Offer dated 2/09/2019 (1 st Letter of Offer) for purposes of procuring financial accommodation by way of two Term Loans. It is also not in dispute that under this arrangement, the Plaintiff provided the suit property as security by way of registration of a Legal Charge thereon, which secured the aggregate sum of Kshs 199,052,000/- (Kshs 153,052,000 and Kshs 46,000,000/- for each Term Loan secured by respective charges each dated 30/09/2019, respectively). It is also not in issue that the Plaintiff subsequently executed a 2 nd Letter of Offer dated 10/11/2022. The 1 st Defendant’s statement that the 2 nd Letter of Offer was executed for purposes of restructuring the loan caused by the Plaintiff’s failure to keep the account fully serviced has not been disputed. The Plaintiff has however heavily disputed the part of the 1 st Defendant’s contention that this 2 nd Letter of Offer also merged the facilities existing under the 1 st Letter of Offer. Be that as it may, the Plaintiff has not expressly disputed the 1 st Defendant’s assertion that the loan account fell into heavy arrears, which, as at 30/03/2024, stood at Kshs 190,202,036/-. Indeed, there is substantial evidence on record, both by way of correspondence from the Plaintiff requesting for restructuring of the loan, which amounts to admission, and, and also by way of the bank statements produced by the 1 st Defendant, whose contents have not been disputed. There is also no allegation that the Plaintiff has reduced the arrears since then.
23. There cannot therefore be any serious contestation to the inevitable conclusion that the 1 st Defendant’s right to invoke its statutory power of sale has indeed arisen. The question is however whether in exercising that right of statutory sale, the 1 st Defendant has followed the law by serving upon the 1 st Defendant the stipulated notices and procured a competent valuation of the property.
24. In respect to the right of a lender to exercise its statutory power of sale in the event of the borrower’s default in making repayments, it is indeed true that before the lender can exercise such right, the law requires it to issue and serve notices upon the borrower and/or chargor as follows:
a) 90 days’ statutory notice of default, pursuant to Section 90(1) and (2) of the Land Act, 2012 .
b) 40 days’ notice of intention to sell, pursuant to Section 96(2) of the Land Act, 2012 .
c) 45 days’ redemption notice pursuant to Rule 15(d) of the Auctioneers’ Rules, 1997 .
d) 14 days’ notification of sale, pursuant to Rule 25(e) of the Auctioneers’ Rules, 1997 .
25. Section 97(1) of the Land Act also imposes a strict "duty of care" on the lender (chargee) to obtain the “ best price reasonably obtainable at the time of the sale ” so as to protect the borrower (chargor) from disposal of the security at an undervalue. Section 97(2) then stipulates that the lender must before exercising the right of sale, ensure that “ a forced sale valuation is undertaken by a valuer ” . Rule 11(b)(x) of the Auctioneers Rules, 1997 then mandates that a professional forced sale valuation must be conducted “ not more than 12 months” prior to the proposed date of sale of the sale, and on the basis whereof “ a reserve price ” is to be fixed .
26. In this case, the Plaintiff has not challenged or disputed service or receipt of all the notices listed above, save for the 40-days’ Notice of Intention to Sell. I note that indeed, copies of the notices not disputed correctly bear the postal address captured in the charge documents as the addresses for service submitted by the Plaintiff, they are also supported by copies of postage receipts. For the 40-days’ Notice of Intention to Sell however, only a blank page bearing some unidentifiable stamp has been exhibited. Although the Plaintiff has raised this question, the 1 st Respondent has loudly maintained silence thereon prompting me to conclude that it has no answer thereto. In the circumstances, I have no hesitation in finding that the 1 st Defendant has failed to demonstrate that it served the 40-days’ Notice of Intention to Sell.
27. By dint of Section 90 , 96 , and 97 of the Land Act , a lender is generally not allowed to proceed with the sale of a property if it fails to properly serve even a single mandatory statutory notice as the procedure for exercising a statutory power of sale is strictly sequential and non-negotiable. Missing out on even one notice therefore amounts, generally, to a fatal procedural defect capable of invalidating the exercise of the power of sale since such power only matures once a perfect chain of notices has been served. In the design of our land law, a chargor’s equity of redemption is jealously guarded. Even where default in repayment of the debt is apparent, the law still requires that a chargor be given all the notices before the chargee exercises his power of sale. The law is therefore designed to give the chargor extended statutory periods after default in payment to redeem his property. Any curtailment of the periods donated by statute is heavily frowned upon.
28. It is however also true that although Courts generally treat service of recovery notices, or failure to adhere to the laid down valuation rules under the Land Act, 2012 as strictly mandatory, thus treating any failure to properly serve notices or to comply with valuation rules as invalidating a forced sale, there are scenarios where a lender has deviated from the standard Section 97 requirements, or missed related mandatory steps, but has, due to the unique circumstances of the case, nonetheless been permitted to proceed with the sale. There are indeed cases where the Courts have ruled that minor procedural hitches relating to service of notices, or valuation disputes, do not automatically stop a sale. In such cases, the Courts have ruled that because the value of the property is known and ascertainable, any procedural breach under Section 97 has not caused “irreparable harm”. Courts have therefore in many cases, allowed lenders to proceed with sale, safely re-allocating the borrower's remedy to a post-sale claim for monetary damages rather than blocking the commercial foreclosure. For instance, although Section 97(2) bars lenders from selling a property for less than 75% of its open market value, the Courts have in some instances, allowed the sale to still proceed despite the lender failing to meet this threshold because it has faced an un-cooperative borrower or an illiquid market. The Courts have also, in some instances, allowed sales to proceed below
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2. The Plaintiff filed the suit through Messrs C.M. Advocates LLP , by way of the Plaint dated 25/02/2026 praying for, inter alia , an injunction to stop the redemption attempt targeted at selling the Plaintiff’s property L.R. No. 3734/549 (Original No. 3734/344 ) charged as security for the loan, a declaration that, in the absence of the requisite or proper notices, or proper valuation, the intended sale is unlawful and invalid, and an order compelling the 1 st Defendant to render a full, true and reconciled statement of account for each of the two facilities secured by the property. The Plaintiff also sought general damages for breach of statutory duty and unlawful impairment of its equity of redemption, and also for special damages for losses arising from the 1 st Defendant’s refusal to grant consent to the Plaintiff to use the property in a time-bound joint venture deal with a potential investor.
3. Together with the Plaint and the other usual Pleadings accompanying it, the Plaintiff also filed the Notice of Motion the subject of this Ruling, of the same date. The Motion, supported by unnecessarily very lengthy, repetitive and voluminous grounds, seeks prayers as follows:
“1) [……..] spent
2) [……..] spent
3) [……..] spent
4) THAT pending hearing and final determination of this suit, the Honourable Court be pleased to grant a temporary injunction restraining the Defendants/Respondents, whether by themselves, employees, servants and/or agents or otherwise assigns and/or any person whatsoever acting on their behalf and/or under their mandate and/or instructions from advertising for sale, selling whether by public auction or private treaty, disposing of or otherwise howsoever completing by conveyance on transfer of any sale concluded by auction or private treaty, taking possession, appointing receivers or administrators or exercising any power of a Chargee to lease let, charge or otherwise howsoever interfere with LAND REFERENCE NO. 3734/549 (ORIGINAL NO. 3734/344) (hereinafter "the suit property").
5) THAT the Honorable Court be pleased to issue an order that an independent valuation over LAND REFERENCE NO. 3734/549 (ORIGINAL NO. 3734/344) (hereinafter "the Suit Property") be conducted within Sixty (60) Days of delivery of the Ruling of this Application. The parties herein shall within Seven (Days agree on a joint valuer to value the suit property and in default of agreement, the Court shall appoint an independent valuer from the official list of Registered Valuers of Kenya to value the suit property and prepare a joint Valuation Report. The cost of the said valuation shall be borne equally by the Plaintiff/Applicant and the 1st Defendant/Respondent herein.
6) THAT the Honorable Court be and is hereby pleased to grant such other Orders as it may deem fit and necessary to give effect to the justice of this dispute and to preserve the subject matter in this suit being LAND REFERENCE NO. 3734/549 (ORIGINAL NO. 3734/ 344)) (hereinafter "the suit property")
7) The costs of this Application be borne by the Defendants/Respondents
4. The Application is supported by the, again, very lengthy and repetitive Affidavit sworn by one Ashok Rupshi Shah , who introduced himself as the Managing Director of the Plaintiff. In summary, he deponed that the 1 st Defendant has triggered the statutory power of sale without first serving the mandatory 40 days’ Notice to Sell required under Section 96(2) of the Land Act, 2012 , yet it has, instead, proceeded to serve the 45 days Redemption Notice and fixed a date for public auction. He contended further that the Valuation procured by the 1 st Defendant under Section 97 of the Land Act to secure the best price reasonably obtainable contains a materially depressed value of Kshs 1,050,000,000/- and Kshs 787,500,000/-, which figures are not only inconsistent with the Plaintiff’s recent professional valuation but, if used as a benchmark for reserve price or bidding guidance, will occasion an unlawful disposal at an undervalue. He also deponed that the 45 days-Redemption Notice has no mention of any Valuation Report, and it cannot therefore be ascertained whether the Valuation, if any, complies with the 12 months limit requirement. He then stated that the Plaintiff has commissioned an independent, recent valuation dated 20/01/2026 which places the property’s market value at Kshs 1,500,000,000/-, mortgage value at Kshs 1,125,000,000/-, and forced value at Kshs 1,050,000,000/-, urging that the disparity between the Defendant’s values and the Plaintiff’s is outrightly substantial. He deponed further that the Valuation company commissioned by the Plaintiff, known as Messrs R.R. Oswald & Co. Ltd , is also accredited on the 1 st Defendant’s own panel of approved valuers, and is, in fact, the same Valuer that previously conducted a valuation of the same property in June 2019 on behalf of the Plaintiff, and assessed a forced value of Kshs 800,000,000/-, and an open market value of Kshs 1,200,000,000/-. In his view therefore, it is inconceivable and commercially illogical that approximately 6 years later, the value of the property would have depreciated rather than appreciated. He thus contended that Rule 11(b)(x) has also been violated.
5. He further pointed out that as the property was utilized as security for two separate credit facilities advanced by the 1 st Defendant, and secured through two distinct instruments both registered against the same title, the 90-day statutory notice and 45 days Redemption Notice served by the 1 st Defendant were defective for failure to particularize with certainty as to, inter alia , which of the two facilities is allegedly in default, the outstanding sums attributable to each facility, whether the realization is in respect to one of the two charges or both, and which facility would be cleared or remain outstanding upon sale. According to him, this ambiguity strikes at the very purpose of statutory notices, which is to give a chargor clear, intelligible, and unequivocal information to enable informed redemption, settlement, reconciliation of accounts, and/or recourse to Court. He further deponed that the Plaintiff made a settlement effort to redeem the property and avert a distressed sale by notifying the 1 st Defendant that it had secured a time-bound joint venture proposal of Kshs 150,000,000/- and sought the 1 st Defendant’s prompt engagement/clearance to facilitate redemption but instead, the 1 st Defendant erected an extraneous and oppressive barrier by rejecting the settlement offer on the ground that the property had been further extended to secure the account of a separate entity, which is the subject of a separate suit between the parties, and which response effectively converted the Plaintiff’s right to redeem its charged asset into a hostage of a third party’s indebtness. He urged that the 1 st Defendant also rebuffed the Plaintiff’s further overtures informing the 1 st Defendant that it had secured a partner ready and willing to settle the debt. In his view therefore, this rebuffing of the proposals amounted to an oppressive clog on redemption. Regarding the prayer for injunction, he asserted that sale was imminent and should it proceed, damages will not be an adequate remedy, that the 1 st Defendant will not be prejudiced as the security remains secured by the registered charges, and that also for this reason, the balance of convenience favours granting the injunction.
6. In opposing the Application, the 1 st Defendant, through Messrs Musyoka Murambi & Associates Advocates , filed the Replying Affidavit sworn by one Wilson Mwaura , who introduced himself as the 1 st Defendant’s Credit Controller. He deponed that the Plaintiff executed the Letter of Offer dated 2/09/2019 (1 st Letter of Offer) for purposes of procuring financial accommodation by way of two Term Loans, that under this arrangement, the Plaintiff provided the suit property as security by way of a Legal Charge, which was then used to secure the aggregate sum of Kshs 199,052,000/- (Kshs 153,052,000 and Kshs 46,000,000/- for each Term Loan secured by respective charges each dated 30/09/2019, respectively). He added that the Plaintiff subsequently executed a second Letter of Offer dated 10/11/2022 for purposes of restructuring and merging the facilities existing under the 1 st Letter of Offer, which restructuring was caused by the Plaintiff’s failure to keep the account fully serviced thus causing the same to fall in heavy arrears, which as at 30/03/2024, stood at Kshs 190,202,036/-, and still continues to accrue interest, by reason whereof the 1 st Defendant commenced the process of realizing the security by instructing the 2 nd Defendant accordingly. He contended that the 1 st Defendant duly served, between 20/03/2025 and 15/01/2026, upon the Plaintiff the 90-days Statutory Notice, 40-days-Notice to Sell, Notification of Sale, and also Redemption Notice, and as such, the statutory power of sale has validly accrued, and that the Plaintiff has not established any legal basis to warrant grant of the injunction.
7. He also asserted that the loss alleged by the Plaintiff, if any, is purely commercial in nature and capable of compensation by damages, and that grant of the orders will unjustly prejudice the 1 st Defendant as interest and penalties continue to accrue. Regarding the issue of valuation, he deponed that, contrary to the Plaintiff’s allegations, prior to instructing the 2 nd Defendant to proceed with the security realization, the 1 st Defendant commissioned a valuation of the property under the provisions of Section 97(2) of the Land Act . He also termed as fraudulent, the Plaintiff’s allegations that the 1 st Defendant had also earlier instructed the same valuers known as Messrs R.R. Oswald & Co. Ltd to undertake valuation of the property, terming the instructions allegedly received from the 1 st Defendant as a forgery, and pointing out that the Plaintiff has not even attached any letter of instructions from the 1 st Defendant. He urged that in any event, the alleged valuation was in respect to 28 plots to be sub-divided out of the suit property yet the suit property is a single unit, urging further that the alleged 28 plots are unknown to the 1 st Defendant, and that no disclosure has been made that valuing the property as 28 plots sub-divided plots would inevitably give a higher figure. He also pointed out that the valuation does not share comparable valuation figures for other properties within the same neighbourhood.
8. Regarding the 90-days Statutory Notice, and the 45-day Redemption Notice, he maintained that the same were regular and lawful as the two Term Loan facilities were restructured and merged at the request of the Plaintiff under the 2 nd Letter of Offer, and that by merging the two facilities, the Plaintiff and the 1 st Defendant exercised the right reserved in law. He urged that, as such, the Plaintiff cannot be allowed to benefit from the merger of the two facilities when the request to merge was made by the Plaintiff, effectively creating one facility, that in any event, the security for the previously two facilities is one and therefore the 1 st Defendant could not have issued two notices over a single security; and that the statutory notices clearly notified the Plaintiff of the existence of default and the 1 st Defendant's intention to exercise its statutory power of sale. In his view therefore, the Plaintiff cannot feign ignorance of the facilities in default or the outstanding indebtedness
9. The Plaintiff then filed yet another unnecessarily lengthy, wordy and voluminous Supplementary Affidavit again sworn by the said Ashok Rupshi Shah . In the Affidavit, Mr. Shah basically averred that the Defendants’ Replying Affidavit does not answer the fundamental statutory and equitable grievances raised by the Plaintiff, but instead, seeks to conceal the real issues by making generalized denials, selective references to historical facility documents, and unsubstantiated allegations intended to sanitize an unlawful, premature and oppressive sale process. The rest of the matters stated are basically denials of the allegations made in the Replying Affidavit, and simply restatements of the arguments already made in the Supporting Affidavit.
10. The parties were then granted leave to file written Submissions. However, by the time I concluding preparing this Judgment, despite lapse of the timelines fixed, only the Plaintiffs’ Submissions dated 26/06/2026, another lengthy 16-page venture, was on record, though filed way out of time. The Defendants, on their part, appear to have opted not to file any Submissions.
Plaintiff’s Submissions
11. Despite the length of the Plaintiff’s Submissions, it, too, is basically a restatement of the arguments and denials already made in its respective Affidavits, save for the authorities cited. Counsel however added that the Defendants have failed to provide any credible evidence of service of the 40-days notice under Section 96(2) of the Land Act as the only document exhibited is a stamped plain page which does not constitute proof of service, urging that the Defendants have failed to provide any certificate of posting, or registered mail receipt, or Affidavit of Service, or courier documentation, or email transmission or acknowledgment of receipt. He also opined that the alleged 40-days notice dated 26/11/2025 and the postal stamp allegedly evidencing dispatch are forgeries and/or a backdated or fabricated, and submitted that the Court should be slow to permit a sale where service of the statutory notice is contested and not strictly proved. Regarding the allegation by the Defendants that the counter-Valuation Report supplied by the Plaintiff is fraudulent, Counsel submitted that instead of proposing a transparent solution such as conducting a joint valuation, the Defendants seek to discredit the counter-valuation through allegations that are unsupported at this interlocutory stage, designed to divert attention from the question whether the 1 st Defendant has discharged its duty under Section 97 . He contended that allegations of fraud are serious, and it is trite they must be specifically pleaded and strictly proved, and cannot be casually introduced in a Replying Affidavit as a tactic to prevent scrutiny of the chargee's valuation. He thus insisted on an independent valuation being taken.
12. On the Defendant’s allegation that the two facilities were merged and that as such, the notices were sufficient as drawn, Counsel contended that as the property secured two charge arrangements and/or facilities, the Plaintiff was entitled to know whether the 1 st Defendant was enforcing the 1 st charge or the 2 nd charge, or the alleged merged facility, or all facilities collectively, and to also know what amount was outstanding under each charge, what amount would redeem the property, and how any sale proceeds would be appropriated. He however denied that that the facilities were merged and asserted that if the facilities were merged, then the notices should have said so clearly and should have particularized the merged obligations, the contractual basis of the merger, the amount outstanding after merger, and the precise steps required to redeem the property. He submitted that the 1 st Defendant cannot rely on an alleged merger as an answer to ambiguity while failing to show that the notices themselves clearly communicated that position to the Plaintiff.
Determination
13. The broad issue herein is evidently “whether an interim injunction should issue to restrain the Defendants from exercising the statutory power of sale pending hearing and determination of the suit”
14. Determination on whether to grant interim injunctions is governed by Order 40 Rule 1 of the Civil Procedure Rules which provides as follows;
“Where in any suit it is proved by affidavit or otherwise —
(a) that any property in dispute in a suit is in danger of being wasted, damaged, or alienated by any party to the suit, or wrongfully sold in execution of a decree; or
(b) that the defendant threatens or intends to remove or dispose of his property in circumstances affording reasonable probability that the plaintiff will or may be obstructed or delayed in the execution of any decree that may be passed against the defendant in the suit, the court may by order grant a temporary injunction to restrain such act, or make such other order for the purpose of staying and preventing the wasting, damaging, alienation, sale, removal, or disposition of the property as the court thinks fit until the disposal of the suit or until further orders.
15. The principles that apply in applications for injunctions were well settled in the case of Giella –vs-Cassman Brown and Company Limited, Civil Appeal No. 51 of 1972 , in which it was held that the Applicant must establish or demonstrate; ( i ) the existence of a prima facie case with a probability of success , ( ii ) that he will suffer irreparable injury which cannot be compensated by damages , and ( iii ) that the balance of convenience tilts in his favour.
16. The Court of Appeal, in the case of Nguruman Limited v Jane Bonde Nielsen and 2 Others NRB CA Civil Appeal No. 77 of 2012 [2014] eKLR, explained the sequential application of the above principles as follows:
“These are the three pillars on which rests the foundation of any order of injunction, interlocutory or permanent. It is established that all the above three conditions and stages are to be applied as separate, distinct and logical hurdles which the applicant is expected to surmount sequentially. (See Kenya Commercial Finance Co. Ltd V. Afraha Education Society [2001] Vol. 1 EA 86 ). If the applicant establishes a prima facie case that alone is not sufficient basis to grant an interlocutory injunction, the court must further be satisfied that the injury the respondent will suffer, in the event the injunction is not granted, will be irreparable. In other words, if damages recoverable in law is an adequate remedy and the respondent is capable of paying, no interlocutory order of injunction should normally be granted, however strong the applicant’s claim may appear at that stage. If prima facie case is not established, then irreparable injury and balance of convenience need no consideration. The existence of a prima facie case does not permit “leap-frogging” by the applicant to injunction directly without crossing the other hurdles in between.”
17. It is also settled that in interim applications, such as in this case, the Court should avoid making final determinations on matters of fact made on the basis of the conflicting Affidavit evidence. In connection thereto, in Mbuthia vs Jimba Credit Finance Corporation & Another [1988] KLR 1, the Court of Appeal guided as follows:
“……. the correct approach in dealing with an application for an interlocutory injunction is not to decide the issues of fact, but rather to weigh up the relevant strength of each side’s propositions.”
18. The first limb that I have to therefore determine is whether the Plaintiff has established a prima facie case. What constitutes a “ prima facie ” case was discussed in the case of Mrao Ltd vs. First American Bank of Kenya Ltd & 2 Others [2003] KLR 125 , in which the Court of Appeal held as follows:
“It may not be easy to define what is meant by “ prima facie case ”, but at least it must mean one on which a reasonable tribunal, properly directing its mind to the law and the evidence could convict if no explanation is offered by the defence ... The terms “ prima facie ” case, and “ genuine and arguable ” case do not necessarily mean the same thing, for in using another term, namely a sustainable cause of action, the words “ prima facie ” are frequently used to refer to a case which shifts the evidential burden of proof, rather than as giving rise to a legal burden of proof in the manner of considering, which was in relation to the pleadings that had been put forward in the case. It would be in the appellant’s interest to adopt a genuine and arguable case standard rather than one of a prima facie case, the former being the lesser standard of the two ... In civil cases a prima facie case is a case in which on the material presented to the Court a tribunal properly directing itself will conclude that there exists a right which has apparently been infringed by the opposite party to call for an explanation or rebuttal from the latter. A prima facie case is more than an arguable case. It is not sufficient to raise issues but the evidence must show an infringement of a right, and the probability of success of the Applicant’s case upon trial. That is clearly a standard, which is higher than an arguable case.”
19. Before I venture into determination of this matter, I may also mention that it cannot be a point of debate that a person who receives a loan from a lender and who voluntarily and lawfully gives out his property as collateral or security for the loan is presumed to be fully aware that in the event of default in repayment thereof under the terms and within the timelines agreed, the lender assumes liberty to sell off the property to recover its money. On this point, Pall J in Muhani & Another vs. National Bank of Kenya Ltd [1990] KLR 73 held as follows;
“The mortgagor who has given an express power of sale cannot by starting a suit perhaps a perfectly hopeless suit derogate from that which it has in express terms conferred upon the mortgagee by the instrument namely a statutory power of sale and to hold otherwise would be simply to tear up the instrument which contains the contract agreed upon by the parties ....... The very object of the legislation granting a chargee a statutory power of sale would be negated if the courts interfere with his statutory or contractual powers unless, of course there is an allegation of fraud or improper exercise of the power of sale”.
20. Further, in the case of Maltex Commercial Supplies Limited & Another v Euro Bank Limited (In Liquidation) , HCCC No. 82 of 2006) , Warsame J ( as he then was ) observed as follows:
“….. Any property whether it is a matrimonial or spiritual house, which is offered as security for loan/overdraft is made on the understanding that the same stands the risk of being sold by the lender if default is made on the payment of the debt secured”.
21. Similarly, Ringera J , in the case of Martha Khayanga Simiyu vs. Housing Finance Co. of Kenya & 2 Others Nairobi HCCC No. 937 of 2001 [2001] 2 EA 540 , also held that:
“Once a property has been charged to secure financial accommodation it ipso facto becomes a commodity for sale and there is no commodity for sale whose loss cannot be compensated in damages but the law is not that an interlocutory injunction can never issue where damages would be an adequate remedy and the Respondent is in a position to pay them.”
22. In this matter, there is no dispute that the Plaintiff executed the Letter of Offer dated 2/09/2019 (1 st Letter of Offer) for purposes of procuring financial accommodation by way of two Term Loans. It is also not in dispute that under this arrangement, the Plaintiff provided the suit property as security by way of registration of a Legal Charge thereon, which secured the aggregate sum of Kshs 199,052,000/- (Kshs 153,052,000 and Kshs 46,000,000/- for each Term Loan secured by respective charges each dated 30/09/2019, respectively). It is also not in issue that the Plaintiff subsequently executed a 2 nd Letter of Offer dated 10/11/2022. The 1 st Defendant’s statement that the 2 nd Letter of Offer was executed for purposes of restructuring the loan caused by the Plaintiff’s failure to keep the account fully serviced has not been disputed. The Plaintiff has however heavily disputed the part of the 1 st Defendant’s contention that this 2 nd Letter of Offer also merged the facilities existing under the 1 st Letter of Offer. Be that as it may, the Plaintiff has not expressly disputed the 1 st Defendant’s assertion that the loan account fell into heavy arrears, which, as at 30/03/2024, stood at Kshs 190,202,036/-. Indeed, there is substantial evidence on record, both by way of correspondence from the Plaintiff requesting for restructuring of the loan, which amounts to admission, and, and also by way of the bank statements produced by the 1 st Defendant, whose contents have not been disputed. There is also no allegation that the Plaintiff has reduced the arrears since then.
23. There cannot therefore be any serious contestation to the inevitable conclusion that the 1 st Defendant’s right to invoke its statutory power of sale has indeed arisen. The question is however whether in exercising that right of statutory sale, the 1 st Defendant has followed the law by serving upon the 1 st Defendant the stipulated notices and procured a competent valuation of the property.
24. In respect to the right of a lender to exercise its statutory power of sale in the event of the borrower’s default in making repayments, it is indeed true that before the lender can exercise such right, the law requires it to issue and serve notices upon the borrower and/or chargor as follows:
a) 90 days’ statutory notice of default, pursuant to Section 90(1) and (2) of the Land Act, 2012 .
b) 40 days’ notice of intention to sell, pursuant to Section 96(2) of the Land Act, 2012 .
c) 45 days’ redemption notice pursuant to Rule 15(d) of the Auctioneers’ Rules, 1997 .
d) 14 days’ notification of sale, pursuant to Rule 25(e) of the Auctioneers’ Rules, 1997 .
25. Section 97(1) of the Land Act also imposes a strict "duty of care" on the lender (chargee) to obtain the “ best price reasonably obtainable at the time of the sale ” so as to protect the borrower (chargor) from disposal of the security at an undervalue. Section 97(2) then stipulates that the lender must before exercising the right of sale, ensure that “ a forced sale valuation is undertaken by a valuer ” . Rule 11(b)(x) of the Auctioneers Rules, 1997 then mandates that a professional forced sale valuation must be conducted “ not more than 12 months” prior to the proposed date of sale of the sale, and on the basis whereof “ a reserve price ” is to be fixed .
26. In this case, the Plaintiff has not challenged or disputed service or receipt of all the notices listed above, save for the 40-days’ Notice of Intention to Sell. I note that indeed, copies of the notices not disputed correctly bear the postal address captured in the charge documents as the addresses for service submitted by the Plaintiff, they are also supported by copies of postage receipts. For the 40-days’ Notice of Intention to Sell however, only a blank page bearing some unidentifiable stamp has been exhibited. Although the Plaintiff has raised this question, the 1 st Respondent has loudly maintained silence thereon prompting me to conclude that it has no answer thereto. In the circumstances, I have no hesitation in finding that the 1 st Defendant has failed to demonstrate that it served the 40-days’ Notice of Intention to Sell.
27. By dint of Section 90 , 96 , and 97 of the Land Act , a lender is generally not allowed to proceed with the sale of a property if it fails to properly serve even a single mandatory statutory notice as the procedure for exercising a statutory power of sale is strictly sequential and non-negotiable. Missing out on even one notice therefore amounts, generally, to a fatal procedural defect capable of invalidating the exercise of the power of sale since such power only matures once a perfect chain of notices has been served. In the design of our land law, a chargor’s equity of redemption is jealously guarded. Even where default in repayment of the debt is apparent, the law still requires that a chargor be given all the notices before the chargee exercises his power of sale. The law is therefore designed to give the chargor extended statutory periods after default in payment to redeem his property. Any curtailment of the periods donated by statute is heavily frowned upon.
28. It is however also true that although Courts generally treat service of recovery notices, or failure to adhere to the laid down valuation rules under the Land Act, 2012 as strictly mandatory, thus treating any failure to properly serve notices or to comply with valuation rules as invalidating a forced sale, there are scenarios where a lender has deviated from the standard Section 97 requirements, or missed related mandatory steps, but has, due to the unique circumstances of the case, nonetheless been permitted to proceed with the sale. There are indeed cases where the Courts have ruled that minor procedural hitches relating to service of notices, or valuation disputes, do not automatically stop a sale. In such cases, the Courts have ruled that because the value of the property is known and ascertainable, any procedural breach under Section 97 has not caused “irreparable harm”. Courts have therefore in many cases, allowed lenders to proceed with sale, safely re-allocating the borrower's remedy to a post-sale claim for monetary damages rather than blocking the commercial foreclosure. For instance, although Section 97(2) bars lenders from selling a property for less than 75% of its open market value, the Courts have in some instances, allowed the sale to still proceed despite the lender failing to meet this threshold because it has faced an un-cooperative borrower or an illiquid market. The Courts have also, in some instances, allowed sales to proceed below
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