https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/7254

Bank of Baroda (Kenya) Limited (Miscellaneous Civil Cause E559 of 2026) [2026] KEHC 7254 (KLR) (Commercial and Tax) (25 May 2026) (Ruling) Neutral citation: [2026] KEHC 7254 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Commercial Courts) Commercial and Tax Miscellaneous Civil Cause E559 of 2026 BK Njoroge, J May 25, 2026 In the matter of Bank of Baroda (Kenya) Limited Ex parte Applicant Ruling 1.This Ruling is in respect to the Applicant’s exparte Notice of Motion dated 22nd May, 2026, Through the said application, the Applicant has moved this Court seeking the following reliefs:1.That this Honourable Court be pleased to certify this Application as urgent and the same be heard on priority basis.2.That this Honourable Court be pleased to extend the time within which to register the fourth further third-party charge dated 7th February 2024 over property Title Number Land Reference Number 24393 created by Bahati Industries Limited ("the Chargor") in favour of Bank of Baroda (Kenya) Limited, with the Registrar of Companies by a further thirty (30) days pursuant to the powers conferred on this Honourable Court by section 888 and (2) of the Companies Act (No. 17 of 2015).3.That the costs of this application be in the cause. 2.This Application was supported by the sworn affidavit of Joel Weru, an Advocate of the High Court of Kenya, dated the same day as the Application. Mr. WERU practices in the firm of M/s MKJ Advocates LLP Nairobi, who have conduct of this matter on behalf of the Applicant. Issues For Determination 3.The Court has carefully considered the Motion, the statutory provisions cited, the Supporting Affidavit, and the annexures thereto. Upon such consideration, the Court is of the view that only one issue arises for determination:(a)Whether leave should be granted to the Applicant to register the Fourth Further Third-party Charge dated 7th February, 2024 at the Companies Registry out of time. Analysis 4.Pursuant to Section 884 of the Companies Act, the Registrar of Companies is mandated to maintain a register of charges, register such charges, issue certificates of registration thereof, and authenticate the same with the Registrar’s Official Seal. Under Section 885 of the Act, the statutory timeline for registration of a charge is thirty (30) days from the date of its creation. In the event of non-compliance, Section 888(1) of the Companies Act empowers any interested party or the company itself to apply to the Court for an extension of the prescribed period for registration. 5.Further, when considering an extension under Section 888, the Court examines whether the delay was accidental or reasonably explained, whether it prejudiced creditors or members, whether granting the extension is just and fair, and whether the omission is rectifiable. This requirement that such a charge must be registered with the Registrar of Companies within thirty (30) days from the date of its creation is statutory and not discretionary. It is evident that the parties have complied with all the necessary legal requirements in the creation of the charge, save for the registration, which was delayed due to reasons sufficiently explained and which were beyond their control. 6.The Court has considered the reasons for delay as advanced by Counsel for the Applicant. The security instruments were misplaced or went missing at the Lands Registry, which led to delayed registration. This led to the expiry of the period of thirty (30) days for the registration of the instruments. This delay is excusable. 7.The Applicant instructed Counsel to prepare a Fourth Further Third-party Charge over property Title Number Land Reference Number 24393 ('the Property") in order to secure the sum of Ksh. 5,000,000/= advanced by the Applicant to Vimit Converters Limited ("the Borrower"). The Fourth Further Third-party Charge over the said property Title Number Land Reference Number 24393 was dated 7th February, 2024. It was lodged at the land's registry on 20th February, 2024 for registration purposes. 8.That upon following up on the progress of registration, the Advocates were advised that the registry file had inadvertently been misplaced within the Registry. This was owing to the then ongoing digitization process of the records at the registry. The omission to register the Fourth Further Third-party Charge within the required time was not occasioned by negligence or deliberate delay on the part of the Applicant's Advocates. Therefore, an Order of this Honourable Court must be obtained for the Fourth Further Third-party Charge to be registered at the Companies' Registry out of time. 9.Counsel averred that, while they were able to obtain duly registered security documents from the Lands Registry, they were unable to register the Fourth Further Third-party Charge at the Companies Registry as the statutory period for such registration had already lapsed during the period taken to assess, stamp, and register the Fourth Further Third-party Charge at the Lands Office. Pursuant to Section 885 of the Companies Act, No. 17 of 2015, the Company was required to register the Fourth Further Third-party Charge with the Registrar of Companies within thirty (30) days from the date of its creation. The delay in presenting the Fourth Further Third-party Charge for registration at the Companies Registry was occasioned by delays in the registration of Fourth Further Third-party Charge, which delay was unintentional and beyond the control of both the Applicant and the Chargor. 8.The omission in the present case pertains solely to the failure to register the Fourth Further Third-party Charge at the Companies Registry within the statutory period prescribed under Section 885 of the Companies Act. Notwithstanding this procedural lapse, the Fourth Further Third-party Charge was duly executed, assessed for stamp duty, duly franked, and registered at the Lands Registry. The omission is therefore procedural in nature and, in the Court’s view, clearly rectifiable. While it is acknowledged that non-registration at the Companies Registry may affect the enforceability of the Fourth Further Third-party Charge as against third parties, the failure to comply with the prescribed timeline was neither wilful nor negligent. In the circumstances, the delay should not defeat an otherwise valid security instrument. This approach aligns with the provisions of Article 159(2)(d) of the Constitution, which enjoins courts to administer justice without undue regard to procedural technicalities, and with the general principles of the Companies Act, which favour the promotion of substantive rights and commercial certainty. 9.There is no evidence on record to suggest that the delay in registration has occasioned any prejudice to the company’s creditors or members. On the contrary, the regularisation of the registration will enhance the protection of the lender’s interest and promote commercial transparency. The affidavit and annexures confirm that all substantive steps in the creation of the Fourth Further Third-party Charge, execution, stamping, and registration at the Lands Registry, were duly undertaken in a timely manner, save for the Companies Registry filing. Accordingly, the Court is satisfied that the Applicant has provided a reasonable explanation for the delay, that the omission is capable of remedy, and that no prejudice has been occasioned to any party. The Court therefore finds it just and equitable to exercise its discretion under Section 888(1) of the Companies Act. In the result, the prayers sought in the Notice of Motion dated 22nd May, 2026 are hereby granted. Determination 10.The application dated 22nd May, 2026 is allowed as follows;a.That this Honourable Court hereby certifies this Application as urgent and the same is hereby heard on a priority basis.b.That this Honourable Court hereby extends the time within which to register the Fourth Further Third-party Charge dated 7th February 2024 over property Title Number Land Reference Number 24393 created by Bahati Industries Limited ("the Chargor") in favour of Bank Of Baroda (Kenya) Limited, with the Registrar of Companies by a further thirty (30) days pursuant to the powers conferred on this Honourable Court by section 888 and (2) of the Companies Act (No. 17 of 2015).c.That the costs of this application be in the cause. 13.It is so ordered. 14.The file is hereby marked as closed. DATED, SIGNED AND DELIVERED AT MILIMANI THIS 25TH DAY OF MAY, 2026.NJOROGE BENJAMIN K.JUDGE