https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/11086

**REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA AT ELDORET** **CIVIL CASE NO. 3 OF 2022** ***(******Formerly KITALE*** ***ENVIRONMENT & LAND COURT CASE NO. 5 OF 2016, AND formerly ELDORET ENVIRONMENT & LAND COURT CASE NO. 435 OF 2015)*** **AMIT AGGARWAL (*suing as Administrator of*** ***the estate of* GURCHARAN DASS AGGARWAL)………………………….........PLAINTIFF** **VERSUS** **NATIONAL BANK OF KENYA LIMITED…………...……………………….DEFENDANT** **JUDGMENT** 1. This is one of those old matters that have remained pending in the Court corridoes for a long time having been filed in the year 2015 at the **Environment & Land Court** at **Eldoret** before it was transferred in 2016 to the **Environment & Land Court** at **Kitale** before it was transferred to this Court when cases relating to redemption of charged properties were declared to fall under the jurisdiction of the High Court Civil Division. 2. The suit was commenced by way of the Plaint dated 14/12/2015, filed through **Messrs Nyairo & Co. Advocates**, whereof the Plaintiff sought Judgment against the Defendant, as follows: 3. An order for provision by the Defendant of Accounts in respect of the facility to **Gurchan Dass Aggarwal**. 4. Permanent order of injunction to restrain the Defendant from taking possession of, advertising or offering for sale or auction, auctioning, selling, or disposing of, transferring, or in other way interfering with or dealing with the properties known as **Eldoret Municipality/Block 6/6, 2/32, 2/34, 8/301, 2/28, 8/123, 8/302, 8/303, 14/802, 14/805** and **779/482**. 5. Kshs 4,098,028/= 6. Specific performance requiring the Defendant to execute discharges of charge over properties title numbers **Eldoret Municipality/Block 6/6, 2/32, 2/34, 8/301, 2/28, 8/123, 8/302, 8/303, 14/802, 14/805** and **779/482** and surrender the said discharges together with title documents over the said properties to the Plaintiff. 7. Costs of the suit. 8. Such further or other order which this Court may deem fit to grant. 9. In the body of the Plaint, it was pleaded that the late **Gurcharan Dass Aggarwal** who died on 23/08/2005 (**hereinafter referred to as “*the deceased***”), was a businessman in Eldoret trading under the name and style of “***Turbo Highway Eldoret*”**, was the Plaintiff’s father, and was also the registered proprietor of the said 11 parcels of land (**hereinafter referred to as “*the properties***”), all which are developed. It was stated further that to facilitate the running of his business, the deceased applied and was granted financial facilities by the Defendant which were secured by respective charges registered over the properties listed above, and upon the death of the deceased, the Plaintiff obtained Letters of Administration in **Eldoret High Court Succession Cause No. 268 of 2010** to manage the state of the deceased. It was then pleaded that in or about the year 2007, the Plaintiff having previously learnt of the indebtness of the deceased to the Defendant, approached the Defendant and after discussions, it was agreed on 26/06/2007 that the estate shall continue paying the debt as had been agreed upon with the deceased in the year 2003, that the Defendant considered the amount of Kshs 5,800,422.90 already paid by the deceased and thus the total amount payable was agreed at Kshs 10,756,972/-, and which would be serviced at the rate of Kshs 270,000/- for month for 3 years with effect from June 2007. It was also stated that it was further agreed that two of the properties, namely, **Eldoret Municipality/Block 8/301** and **Eldoret Municipality/Block 8/302** would be sold by the Defendant private treaty at their present market value and the proceeds applied to reduce the debt, which sale the Defendant expected to be done within 3 months, and lastly, that it was agreed that in the event of default, the agreement would be nullified and the properties advertised for sale. 10. It was then pleaded further that, except for some months when payment of the instalments was delayed due to ethnic clashes that affected business in Eldoret, and which instalments the Plaintiff later regularized and made up for, the Plaintiff dutifully paid the sum of Kshs 270,000/- per month and has to date paid the Defendant the aggregate amount of Kshs 14,855,000/-, which is in excess of the sum Kshs 10,756,972/- that the Plaintiff was required to pay. It was then stated that in breach of the agreement, the Defendant, by the letter dated 17/11/2015, copied to the Plaintiff, demanded the sum of Kshs 7,658,191.40 from the deceased’s firm and threatened that it would in 40 days commence sale of the properties. According to the Plaintiff, no debt is owing to the Defendant as the Plaintiff has overpaid what was due by Kshs 4,098,028/-, and that the threat to sell the properties is also invalid as no statutory notice in terms of **Section 90** and **96** of the **Land Act**, **No. 6 of 2012** have been issued to the Plaintiff as the Administrator of the estate. 1. The Defendant, in response, through **Messrs G&A Advocates LLP**, filed the Statement of Defence dated 31/08/2021, in which it was pleaded that the Defendant advanced a banking facility of Kshs 10,197,390.40 to the deceased in the year 1999 repayable in monthly instalments of Kshs 283,252.15 but the deceased defaulted in the repayment and the outstanding amount stood at Kshs 24,751,001.40 as at 26/06/2007, which amount continued to attract interest. It was pleaded further that on or about 23/05/2007, the Plaintiff wrote a letter to the Defendant seeking engagement in discussions on reaching an agreed balance amount on the loan owed by his late father, which letter proposed the adoption of the arrangement dated 13/11/2003 for settlement of the arrears in terms that the agreed balance as at 13/11/2003 stood at Kshs 16,000,000/- less the amount paid of Kshs 11,137,394/-, a request to sell the two properties as stated in the Plaint and use proceeds thereof to pay a substantial part of the loan, and a request to pay a sum of Kshs 270,000/- as monthly instalments to thus clear the debt in 3 years and 5 months. It was pleaded that the proposal was adopted by the Defendant on 26/06/2007, by which the Defendant acknowledged that the balance owing stood at Kshs 24,751,001.40, and the Plaintiff agreed to forego the interest accrued on the balance but only if the Plaintiff did not default in repayment. 2. It was stated that contrary to what was alleged in the Plaint, the Plaintiff defaulted in repaying the instalments for June and December 2007, which defaults thus nullified the agreement. It was contended that however, the Defendant, in an act of good faith, made out a further proposal on 28/02/2008 in which the Defendant noted that the outstanding amount stood at Kshs 23,374,501.40, that in order for the 26/06/2007 agreement to remain binding, the Plaintiff would favour the Defendant with a cheque of Kshs 540,000/- cover for missed payments for the months of June and December 2007, and the Plaintiff would sell the two properties aforesaid by private treaty to assist in offsetting the loan balance. It was contended further that however, the Plaintiff did not take any steps to realize this said later proposal, and as such, breached the accommodation arrangement referred to above and consequently, the same stands as null and void. It was therefore pleaded that the Plaintiff seeks to rely on an agreement that has since been nullified due to non-compliance on his part, and that the amount owed to the Defendant stood at Kshs 7,658,191.40 as at 15/11/2015, which continued to attract interest, and which debt is yet to be paid. Regarding to the claim that no statutory notices were served, it was stated that the same, dated 27/04/2025 and 17/11/2015 were so served. It was then asserted that the Plaintiff voluntarily entered into the charge agreement hence he is estopped from latching on technicalities to defeat the Defendant’s rights under the agreement, and that even if there was any dispute on the amount outstanding or interest charged, the same cannot be a valid ground to stop the Defendant from pursuing recovery. 3. It was also pleaded that the Court would be setting a bad precedent were it to allow the Plaintiff’s claim since investors would lose confidence owing to the Defendant’s inability to recover any money lent to potentially cunning borrowers. The Defendant also pointed out that the Plaintiff did, in the course of this suit, file an application in which he sought, ***inter alia***, an order that the Defendant do release all charged titles to the Plaintiff, that the Court, in its Ruling dated on 29/05/2017, ordered the Defendant to release the titles together with registered discharges of charge to the Plaintiff, which orders the Defendant complied with but the Plaintiff defaulted in his loan repayments and that, as such, the securities that could otherwise be realized by the Defendant have been released to the Plaintiff and the Defendant has been left with no security for the debt. In conclusion, the Defendant asserted that the Plaintiff owes to it the sum of Kshs 12,442,777.77 as at 9/09/2019, which amount continues to attract interest, and therefore pleaded a Counterclaim and prayed for dismissal of the suit, and instead, for entry of Judgment in the Defendant’s favour at the said sum together with interest at bank rates until the date of payment, costs thereof, and any other relief “as this Court may deem fit.” 4. The Plaintiff then filed the Reply to Defence & Defence to Counterclaim dated 5/07/2021 in which the contents of the Plaint were basically reiterated and the claims made in the Defendant’s Counterclaims denied. It was further stated that a sum of Kshs 9,000,000/- was deposited by the Plaintiff in a joint interest earning account in the names of the Advocates on record herein as a pre-condition for release of the certificates of title of the charged properties, and that, as such, the Defendant cannot be heard to say that it has been left with no security. 5. The parties had also filed respective Witness Statements, which basically reiterated the positions advanced in the Plaint and the Defence as already set out. They also filed respective bundle of documents. The matter then proceeded to trial in which each side called 1 witness. **Plaintiff’s Testimony** 1. The Plaintiff,testifying as **PW1**,led by his Counsel, **Ms. Odwa**, adopted his Witness Statement which was basically a restatement of the contents of the Plaint, and also produced the several documents contained in his bundle of documents. He then reiterated that in respect to the amount of Kshs 10,756,972, agreed upon in the letter dated 26/06/2007 as the debt owing and which he took over, he has since paid an aggregate sum of Kshs 14,855,000/- but the Defendant still refused to release to him the titles for the properties. He also reiterated that despite the Court ordering the Defendant to supply him with statements of account, the same are yet to be so supplied, and that the Counterclaim is baseless since there is no computation of how the figure claimed has been arrived at. 2. Regarding the one title not supplied by the Defendant on the ground that it is was lost, namely, **Eldoret Municipality Block 8/103**, he testified that the Defendant is yet to commence the process of applying for a duplicate title despite the Plaintiff having supplied all documents requested for that purpose. Regarding the Court order directing the Defendant place the amount of Kshs 9,000,000/- in an interest earning account, he testified that he has not been supplied with any evidence to confirm that the order has been complied with. Under cross-examination by **Mr. Mwangi Kangu**, Counsel for the Defendant, the Plaintiff agreed that his father was advanced a loan in 1999 but stated that he does not know the amount advanced or the terms thereof. He agreed that under the agreement he negotiated with the Defendant as reduced into the letter dated 26/06/2007 when he took over the loan, he was required to sell two properties, namely, **Eldoret Municipality Block 8/301**, and **Eldoret Municipality Block 8/302**, by private treaty and deposit the proceeds into the loan account within 3 months, but that he did not however manage to sell the properties. 3. He also conceded that the computation he is relying on to demonstrate that he fully paid the loan balance was authored for him by his own auditor/accountant, although he pointed out that he has attached about 13 cheques slips and e-slips to show the payments he made, and that the other payments he made are apparent from the statements supplied by the Defendant. He also reiterated that in respect to the negotiated agreement contained in the letter dated 26/06/2007, he subsequently made good the instalment payments he had missed, and that the statutory notices dated 16/03/2015, 27/04/2015 and 17/11/2015 were served after he had already fully paid the loan balance, which is what prompting him to sue. In re-examination, he reiterated that he was unable to sell the two properties as required in the negotiated agreement because of the 2007 post-election violence and the aftermath thereof as it took long for the economy to recover from the violence, and that he kept the Defendant informed. **Defendant’s Witness’ Testimony** 1. The Defendant’s witness, **DW1**, **Grace Wanyonyi**, introduced herself as a Business Banker at the Defendant. Led by **Mr. Mwangi Kangu**, she, too, adopted her Witness Statement and produced the Defendant’s bundle of documents. She disowned the computation presented by the Plaintiff terming it as not complying with the Defendant’s statements, and reiterated that the Plaintiff owes a balance of Kshs 12,175,001.42. Under cross-examination by **Ms. Odwa**, she insisted that at the time of the Plaintiff’s death, the amount outstanding was Kshs 24,751,001.40 which debt the Plaintiff took over under the said letter dated 26/06/2007. She testified that the Plaintiff did not fully honour his part of the bargain as he only reduced the debt marginally to Kshs 23,374,501/- as appears in the Defendant’s letter dated 28/02/2008. 2. She conceded that there is no evidence on record that the Defendant responded to the Plaintiff’s letters requesting to be supplied with the “missing” statements and protesting about the balance demanded by the Defendant. She also conceded that the Defendant is yet to comply with the Court order directing it to release the missing portions of the statements to the Plaintiff, and agreed that without the full statements, it may indeed be difficult to explain how the claimed arrears arose but pointed out that by the letter dated 26/06/2007, the parties agreed that the negotiated amount due was Kshs 10,756,972. She also conceded that the statutory notices were addressed to “***The Directors Turbo Highway***” despite the agreement having been entered into with the Plaintiff, and that the notice dated 16/03/2015 was sent by post much later on 23/11/2015, long after lapse of the 30 days’ notice period. She also conceded that deducting the amount of Kshs 10,197,329.10 said to have been the agreed figure owing, from the sum of Kshs 24,751,001.40 claimed to have been owing at the time of entering into the settlement, it would appear to mean that an amount of about Kshs 14,000,000/- had been received by the Defendant, and also agreed that in view thereof, that difference of about Kshs 14,000,000/- seems to be interest accrued only, and more than double the principal amount. 3. She also agreed that the Defendant made no attempt to recover the balance from the deceased during his lifetime but denied that the Defendant sat on his rights or that its intention was to sell off the properties rather than recover its money. She also agreed that the letter dated 26/06/2007 containing the negotiated settlement did not have a clause dictating that upon default, the Defendant would revert to its original position although she was unable to state what this original position amount would be, nor state the charges and penalties that would be levied. She also agreed that between 2015 when the Defendant claimed the amount in excess of Kshs 7,000,000/- and 2019 when it filed the Counterclaim, the debt had escalated to the amount in excess of Kshs 12,000,000/-. She also conceded that the Defendant’s bundle does not contain any evidence of postage of the last notice dated 27/04/2015 4. At the close of the trial, the parties filed written Submissions. The Plaintiff’s Submissions is dated 7/11/2025, while the Defendant’s is dated 7/01/2026. **Plaintiff’s Submissions** 1. **Ms. Odwa**, Counsel for the Plaintiff, after recounting the background to the case and reciting the Plaintiff’s case, pointed out that, as indicated in the Valuation Reports on record in respect to 5 out of the 11 charged properties and prepared at the behest of the Defendant, the aggregate value of the 5 properties was about Kshs 100,000,000/-. She also highlighted that despite the Court, by its Ruling delivered on 17/05/2016, having ordered the Defendant to supply a complete statement of account, the Defendant has never complied with that order. 2. She also pointed out that despite the parties recording the partial consent dated 21/01/2016 whereof the Plaintiff deposited the sum of Kshs 9,000,000/- in an interest earning bank account in the joint names of the Advocates on record herein in exchange for the Defendant releasing to the Plaintiff the Certificate of Lease and discharge of charge over the property **Eldoret Municipality/Block 6/6**, the Defendant never deposited the amount in an interest earning account as agreed until the Court, by its Ruling dated 17/11/2023, 7 years later, intervened and compelled the Defendant to do so. Counsel also observed that the Court, by its Ruling dated 29/05/2017, ordered the Defendant to release the titles and discharges of charge for the rest of the properties, which titles and discharges the Defendant released save for those relating to the property **Eldoret Municipality/Block 8/123**, which the Defendant claimed to have lost. In respect to the issue whether the loan has been cleared, Counsel then observed that the deceased had taken a loan facility with the Defendant which was restructured to Kshs 10,197,329.40, and that the Defendant, by the time that the deceased died, was demanding Kshs 16,000,000/-, out of which amount, the deceased had by the time he died, paid an amount of Kshs 5,800,422/-. She thus pointed out that by the Defendant’s letter dated 26/07/2007, which was accepted by the Plaintiff, the debt which the Plaintiff took over was Kshs 10,756,972/-. She then submitted that from the documents that he was unable to gather, considering that the Defendant had refused to supply him with full statements of account, that he had not only paid the full debt of Kshs 10,756,672 but had overpaid it by a sum of Kshs 4,098,028/-. 3. She submitted that in total, the Defendant had received an amount of Kshs 20,655,422/-. Counsel also pointed out that the Defendant had in the said letter dated 27/06/2007, admitted receipt of the payment of Kshs 5,800,422/- from the deceased, and also subsequently confirmed receipt of the payment of Kshs 17,092,810/- from the Plaintiff, thus confirming a total payment of Kshs 22,893,232/-. She compared that computation to that of deducting the sum of Kshs 7,658,191.40 claimed in the statutory demand from the sum of Kshs 24,751,001.40 claimed as outstanding debt in the letter dated 26/06/2007, and submitted that either way, the amount received by the Defendant could not be less than Kshs 20,000,000/-. She thus submitted that the ball rested with the Defendant to prove how the alleged amount of Kshs 7,658,191.40 had accrued for it to exercise its statutory power of sale. She also observed that the statutory notice is expressly premised on the charge for Kshs 5,000,000/-, and not on the subsequent agreement contained in the letter dated 27/06/2007. She also refuted the Defendant’s contention that it reverted to the original debt of Kshs 24,751,001.40 upon breach by the Plaintiff, urging that the letter dated 27/06/2007 did not contain any clause to that effect. 4. Counsel further observed that the Defendant presented a statement of account for the period 15/05/2004 – 13/09/2019 but pointed out that the start period is 6/03/2012 whereof a balance of Kshs 15,635,001.40 was brought forward yet no explanation was given on how and where that figure emanated from. She observed further that the Defendant’s witness, **DW1**, also did not have an answer on interest rates, penalties or other charges that may have been levied on the loan. Counsel also doubted **DW1**‘s testimony that the Defendant underwent a system change which is why it could only supply incomplete statements, terming the claim as an afterthought, noting that from the inception of the suit, the Defendant’s failure to supply the statements has been a live issue but the Defendant ignored the Plaintiff’s demands to be supplied with the same, and that even when the Court itself ordered for supply of the statements, the Defendant never expressed any challenges in complying. She urged further that nowhere in the pleadings did the Defendant make any reference to the alleged system change. Counsel then also brought in the in ***duplum rule*** urging that if the Defendant claims that the loan had ballooned to a sum of Kshs 24,751,001.40 as at 27/06/2008 despite receiving Kshs 17,000,000/- from the Plaintiff, the Defendant still demanded Kshs 7,658,191.40 which figure has again risen to Kshs 12,422,77.77, then the Defendant could still not exercise its statutory power as the same would be an affront to the ***duplum rule*** as codified under **Section 44A** of the **Banking Act** which limits an institution such as the Defendant to recover the principal and interest not exceeding the principal when the loan becomes non-performing. She observed that the loan was for Kshs 5,000,000/- and to date, the Defendant has received over Kshs 20,000,000/-, over and above the principal and interest. 5. Counsel also brought in the argument on the principle of “***laches***”, arguing that the loan of Kshs 5,000,000/- was taken between 1991 and 1995 and no evidence was presented to show whether the Defendant attempted to exercise its statutory power of sale during the lifetime of the deceased so as to avert the ballooning of the loan to Kshs 24,751,001.40. According to Counsel therefore, the Defendant’s lethargy in pursuing recovery signals that its intention was never to mitigate its losses but rather, to ensure that the Plaintiff was kept in endless cycle of debt by saddling the loan with interest with the hope that the amount would become too high for the deceased to redeem the properties. In respect to service of the statutory notices, she pointed out that the demand letter dated 16/03/2015 was addressed to “***Turbo Highway Eldoret Limited***”, and not to the estate of the deceased or the Administrator thereof yet the deceased was aware that the deceased died in 2007. She also observed that while the letter gave a notice period of 30 days, **DW1** admitted that the letter was itself sent out much later in November 2015, way past the 30 days period indicated in the letter. 6. She also submitted that the 3-months statutory notice dated 27/04/2015 was also irregularly addressed to the deceased, not to the Plaintiff, and copied to “***Turbo Highway Eldoret*”**, and no evidence was presented to even show when it was sent, or whether it was received by the Plaintiff. Counsel observed that the only notice that was addressed to the Plaintiff as Administrator was the Notice of Intention to Sell dated 17/11/2015, copied to the Plaintiff, and which is what prompted the Plaintiff to file this suit. She also reiterated that out of the 11 properties whose titles and discharges the Court ordered to be released to the Plaintiff, those for one property, namely, **Eldoret Municipality/Block 8/123**, is yet to be released. She reiterated that in any event, the option of the Defendant’s right to exercise of its statutory sale has been extinguished by virtue of the filing of the Counterclaim as **Section 90** of the **Land Act** does not allow the Defendant to pursue both remedies simultaneously. She again reminded the Court that a sum of Kshs 9,000,000/- had already been deposited by the Plaintiff in exchange for release of the titles for properties in accordance with the consent dated 21/12/2016, and also that the value of only 5 out of the 11 properties having been established to be in excess of Kshs 100,000,000/-, it would be unconscionable for the Defendant to be allowed to sell all the 11 properties for a debt of less than Kshs 8,000,000/-. Regarding the Counterclaim, she asserted that the same should be dismissed as no evidence has been led to prove how the amount of Kshs 12,442,777.77 claimed by the Defendant was arrived at. **Defendants’ Submissions** 1. **Mr. Mwangi Kangu**, Counsel for the Defendant, also after recounting the background of the dispute, urged that the agreement contained in the letter dated 26/06/2007, having been acknowledged and executed by the Plaintiff, created a binding contract but the Plaintiff failed to comply with its terms. He acknowledged that the Plaintiff, by an order of the Court, deposited the sum of Kshs 9,000,000/- in an escrow account in exchange for release of the titles to the properties and discharges of charge. He then submitted that the Plaintiff, during cross-examination, admitted that in 1999, “***Turbo Highway Wholesalers*”**, a borrower in which his late father was a director obtained a loan facility of Kshs 10,197,329.40, which the Plaintiff then proposed to take over and repay, and that the Plaintiff also admitted that he did not comply with the terms of the proposal. Counsel submitted that as at 17/11/2015, the arrears stood at Kshs 7,658,191/-, and that the Plaintiff admitted that he was served with stationery demand notices, and that he had no evidence to prove the alleged overpayment of Kshs 4,098,024/-. Counsel also submitted that the Plaintiff also failed to produce alleged payment deposit slips for the period he claims to have made repayments, and that the Plaintiff stated that his inability to sell the properties as agreed under the agreement was occasioned by the post-election violence. 2. In respect to the testimony given by the Defendant’s witness, **DW1**, Counsel observed that she testified that the outstanding balance as at 26/06/2007, stood in excess of Kshs 24,000,000/-, and that as agreed in the letter dated 13/11/2003, the amount to be paid was Kshs 10,756,972/-. He acknowledged that **DW1** admitted that she did not produce statements covering the entire period which, according to **DW1**, was because the bank had transitioned its core business banking system thus making it difficult to retrieve records for older accounts. He however insisted that the statements produced captured the applicable period and reflected the balance brought forward as Kshs 7,200,200/- as at 2015. Regarding the prayer for supply of statements, Counsel submitted that all the relevant statements were furnished and that indeed, the Plaintiff included the same in his own bundle of documents thus confirming that the Plaintiff was supplied with the statements. He observed further that the Defendant, too, included the same in its own bundle which bundle has been on record since it was filed on 3/08/2021, that the Plaintiff did not dispute the accuracy of the accounts, and that nothing prevented the Plaintiff from engaging an actuary or expert to interrogate the figures. Counsel also urged that it is untenable for the Plaintiff to claim that the statements are incapable of ascertainment yet the Plaintiff has himself relied on the same statements. 3. He also asserted that the loan facility having been advanced to “***Turbo Highway Wholesalers Limited***” as the borrower, the Plaintiff has no ***locus standi*** to demand for the statements nor to even have instituted this suit, and also that, in any event, the Plaintiff having since released the titles and discharges for the properties in exchange for the depositing of the Kshs 9,000,000/- by the Plaintiff in the escrow account, the claim founded on the Defendant’s exercise of its statutory power of sale was rendered moot leaving the sole issue for determination to be the one of the accounts, namely, the proper computation of the loan outstanding balance, if any. In respect to the issue of the ***in duplum rule*** raised by the Plaintiff in his Submissions, Counsel responded that the same has been introduced through the “back-door” as it was never pleaded in the first place, and that it cannot therefore be litigated herein as parties are bound by their pleadings. Regarding the claim of overpayment of Kshs 4,098,028/- by the Plaintiff, Counsel asserted that the Plaintiff failed to discharge his burden of proving the claim as required under **Section 107** of the **Evidence Act**. He also observed that in attempting to demonstrate the overpayment, the Plaintiff relied on a statement authored by himself, and that during cross-examination, the Plaintiff admitted that he had no documentary evidence to substantiate the claim nor any deposit slips. He submitted further that in any event, in the Plaintiff’s personal computation of the purported statement, the interest component which was being compounded and penalties have not been factored, as for instance, the period 30/06/2008 - 15/04/2011 is blank. **Determination** 1. The issues that call for determination in this case are, in my view, the following: 1. **Whether determination of the question whether the Defendant is** **entitled to auction the properties charged as security in exercise of** **its statutory power of sale to recover the amounts alleged to be outstanding is still alive for determination in this case, or whether that question has since been overtaken by events and is now moot.** 2. **If there is indeed a debt owing from the Plaintiff, what the amount thereof is, or whether the Defendant has fully settled the debt and even overpaid the same thus entitled to a refund of such overpayment.** 3. **If** **there is a debt owing from the Plaintiff and the Defendant is still entitled to auction the properties in exercise of its statutory power of sale, whether the Defendant has complied with all the prerequisites, including service of statutory notices.** 4. **If so, whether Defendant is therefore entitled to auction the properties in exercise of its statutory power of sale to recover such amount alleged to be outstanding.** 5. **If there is indeed a debt owing from the Plaintiff but the option of exercise of its statutory power of sale is no longer available to the Defendant, whether the Defendant is entitled to recover the debt by the alternative way of the Counterclaim filed herein.** 2. In respect to the question whether the Defendant is still entitled to auction the properties in exercise of its statutory power of sale, I may mention that **Ms. Odwa**, Counsel for the Plaintiff, correctly in my view, submitted that the option of the Defendant’s right to the exercise of its statutory sale was extinguished by virtue of the Defendant’s action of filing the Counterclaim seeking Judgment for the sum of Kshs 12,442,777.77 being the alleged loan outstanding balance. This is because **Section 90** of the **Land Act** does not allow the Defendant to pursue both remedies simultaneously. 3. I upheld the above position in my decision in the case of **Njer v Kenya Commercial Bank Limited & another (Civil Case 24 of 2018) [2025] KEHC 8705 (KLR) (20 June 2025) (Judgment)**, in which ironically, **Mr. Mwangi Kangu** was also involved as Counsel. The same position has also been upheld in various other cases, such as by **G. Nzioka J** in the case of [**Clesoi Holdings Limited v Prime Bank Limited**](http://resolver.caselaw.kenyalaw.org/resolver/akn/ke/judgment/kehc/2016/3696)**[2016] eKLR**, **E. Mwita J** (**as he then was**) in the case [**David Karanja Kamau v Harrison Wambugu Gaita & another**](http://resolver.caselaw.kenyalaw.org/resolver/akn/ke/judgment/kehc/2020/2591)**[2020] eKLR**, **M. Muigai J** in the case of **Logitac Global Logistics Limited v Stanbic Bank Kenya Limited; Osman Abdullahi Osman & another (Interested Parties) [2021] eKLR**, and also by **A. Mabeya J** in the case of **Spire Bank Limited v Obora & 2 others (Civil Suit E640 of 2021) [2022] KEHC 13791 (KLR) (Commercial and Tax) (14 October 2022) (Ruling)**, among many others. 4. Further, as already observed above, the amount demanded by the Defendant in its statutory notices was Kshs 7,658,191.40, and the Plaintiff did, in accordance with the consent dated 21/12/2016 recorded in this matter, deposit the sum of Kshs 9,000,000/- in an escrow account opened in the joint names of the Advocates on record herein. It is further not disputed that by virtue thereof, the Defendant, in accordance with the subsequent Court order made by way of the Ruling delivered on 29/05/2017, already surrendered and released back to the Plaintiff the available titles together with discharges of the charge. **Mr. Mwangi Kangu**, Counsel for the Defendant has, in his Submissions, also correctly in my view, acknowledged that in view of the said intervening developments that took place after filing of the suit and before trial, the Defendant’s intention to sell the charged properties in exercise of its statutory power of sale has been overtaken by events and is now moot. I understand **Mr. Mwangi Kangu** to have therefore, in essence, conveyed to the Court the Defendant’s concession that its intention to auction the properties in exercise of its statutory power of sale is no longer available. 5. In view thereof, I find and hold that the Defendant, having elected to pursue recovery by way of seeking a Judgment under a Counterclaim for the alleged loan amount outstanding, the question whether Defendant is also still entitled to pursue the alternative option of auctioning the properties in exercise of its statutory power of sale no longer arises. As aforesaid, this is because of the simple answer that **Section 90** of the **Land Act** does not allow the Defendant to pursue both remedies simultaneously. 6. In answering the second question, namely, whether there is a debt owing from the Plaintiff, and if so, what the amount thereof is, or whether the Defendant has fully settled the debt and even overpaid the same, I must start with the background and contents of the letter dated 26/06/2007. 7. The parties basically agree that in or about the year 2007, the Plaintiff having learnt of the indebtness of the deceased (his father) to the Defendant, approached the Defendant for settlement negotiations, and after discussions, it was agreed, in terms of the Defendant’s letter dated 26/06/2007 signed by the Plaintiff in acknowledgment, that the estate of the deceased, through the Plaintiff as its Administrator, would continue repaying the debt as had been agreed upon with the deceased in the year 2003. The agreement of 2003 was however not produced before this Court but from the Plaintiff’s letter dated 23/05/2005, it appears that the amount agreed upon with the deceased as owing was Kshs 16,000,000/-. Be that as it may, the parties agree that the Defendant acknowledged that the amount of Kshs 5,800,422.90 had already been paid by the deceased before his demise, and as such, the net balance outstanding was agreed at Kshs 10,756,972/-, payable by monthly instalments of Kshs 270,000/- for a period of 3 years with effect from June 2007. The letter was crafted in the following terms: ***“RE: OUTSTANDING LIABILITTES KSHS.24. 751,001 = 40*** ***We refer to your letter dated 23/05/2007 requesting to be allowed to continue to pay the debt as had been agreed in 2003. We wish to advise that the management have exceptionally approved your request as hereunder:*** ***1) That you shall continue paying the debt as had been agreed upon with your late father in the year 2003*** ***2) That the Bank has considered the amount of kshs 5,800.422 =90 already paid by your late father and thus the total kshs.10.756.972 = 00 amount payable is*** ***3) That the said amount of kshs. 10,756,972=00 will be serviced at the rate of kshs.270, 000=00 per month for three years with effect from June 2007*** ***4 That you sell properties Eld.Municipality Block 8/301 & 8/302 by private treaty at their present market value and apply the proceeds to reduce the debt. We expect this to be lone within 3 months from the date hereof.*** ***5) That in the event of default the Bank shall nullify the agreement and advertıse all the properties for sale without further reference or indulgence to you at your costs and consequences.”*** 1. As aforesaid, the Plaintiff accepted the above terms by way of his signature he appended to the letter and the agreement therefore became binding. 2. It is not in dispute that the Plaintiff however defaulted in payment of the instalments for the months of June and December 2007 and also failed to sell the property aforesaid. The Plaintiff has explained that he failed to do so because of the effects of the 2007 post-election violence and that in any event, he eventually made good the two missed instalments which he paid subsequently. The Defendant would however hear none of it and submits that the agreement automatically lapsed the moment the Plaintiff fell into breach thus entitling the Defendant to revert to the original position of the debt. Although **Ms. Odwa** has argued that such original position was not clarified in the letter and remained ambiguous, and that the letter did not have a default clause, I disagree. From my reading of the letter, it is clear that the parties agreed that the original position was that the debt owing before the agreement was Kshs 24,751,001.40. Default therefore clearly reverted the debt to that sum of Kshs 24,751,001.40. What was however not clearly addressed or clarified is whether this debt of Kshs 24,751,001.40 would attract penalties for default and interest and if, so at what rates. I say so because there is also no documentation to revert to for answers. 3. Although there is no computation or explanation on how that figure was Kshs 24,751,001.40 was arrived at, it is the figure agreed as originally owing and which the Plaintiff never challenged. The Plaintiff cannot now therefore belatedly purport to disown the figure. For this reason, there is no need for this Court to go backwards and begin interrogating the correctness of status of the debt prior to 26/06/2007 or dig into how that figure was arrived at. 4. It is also clear that, contrary to **Ms. Odwa’s** assertions, clause (5) of the letter dated 26/06/2007, though not so well drafted, constituted a default clause. Since the Plaintiff has not made any prayer in the Plaint seeking that the agreement contained in the letter be declared void and/or be nullified by the Court as being unconscionable or illegal, I have to construe it literally as drafted, otherwise I will be re-writing the contract. 5. Now, the Plaintiff claims that he has subsequent to the agreement above, that is, from 26/06/2007, paid to the Defendant an aggregate amount of Kshs 14,855,000/-, which is in excess of the sum Kshs 10,756,972/- that he was required to pay under the agreement. In attempting to demonstrate the payments he claims to have made, he has relied on what I would refer to as a “home-made” computation authored by himself. Although he has attached copies of some deposit slips and has also pointed out that some of the payments he made are captured in the loan statement on record, I note that a number of the payments he claims to have made are not supported by any evidence. Some of the deposit slips he has produced are also eligible and thus incapable of being read through. Had the Plaintiff clearly indicated what payments are supported by evidence and which payments are not, this Court may have been able to make a definite determination on the accuracy of the “home-made” computation. Without such cross-referencing, it will be an arduous task for this Court to try to unravel the status of payments made. 6. The Defendant, too, has not made this Court’s work easier since although the settlement agreement commenced from 26/06/2007, the statements it supplied commences only from 6/03/2012 with a balance of Kshs 15,635,001.40 brought forward yet no explanation has been given on how and where that figure emanated from. The Defendant has also very loudly avoided giving to the Court the exact figure of how much it has received from the Plaintiff since the agreement was entered into on 26/06/2007. Probably the Defendant, not having possession of its own complete statements, does not know. Needless to restate, the Defendant’s explanation for the “missing” portions of the statements is that the Defendant changed its banking systems and for this reason it has been difficult for it to retrieve the complete statements. Despite these missing portions of the statements however, the Defendant still claims that as at 17/11/2015, the date of its 40 days statutory notice, the arrears stood at Kshs 7,658,191/-. It is to be then noted that the amount that the Defendant seeks in the Counterclaim is Kshs 12,442,777.77 as at 3/08/2021, the date of the Counterclaim, which means that between 2025 and 2021, the debt had increased by about Kshs 4,784,586.77. In the absence of the portions of the statements for the period 26/06/2007 – 3/08/2021, like for the Plaintiff’s figures, I am equally unable to ascertain the correctness of the figures bandied around by the Defendant as its witness **DW1**, could not even mention to the Court what interest rates and penalties were being applied, and on what basis or authority. 7. What the above therefore means is that the Plaintiff has failed to prove to the Court the correctness of the high figures he claims to have paid to the Defendant in settlement of the loan arrears since 26/06/2007, the date of the agreement, and also his allegation that he has overpaid the debt by Kshs 4,098,028/-. The Defendant, too, has failed to prove to the Court the correctness of the low figures it claims to have received from the Plaintiff since the agreement of 26/06/2007 in settlement of the alleged loan arrears. As the parties both allege different figures, theirs is a stalemate and a situation of “he said, she said”. 8. Litigants must always recall that the burden of demonstrating or proving what they allege in Court remains with them. A Court of law cannot make determinations on the basis of speculation, particularly in a case of this nature where substantial amounts of money are involved. Both claims therefore fail in this case. 9. For the above reasons, determination of the remaining issues does not now arise as they all flow from a determination of which party owes the other, which determination the parties have both failed to present sufficient material to enable the Court rule upon. **Final Orders** 1. In view of the above findings, I render Judgment in terms of the orders and/or declarations as follows: 2. The Defendant’s option of the right to the exercise of its statutory sale was extinguished by virtue of the Defendant’s action of filing the Counterclaim seeking Judgment for the sum of Kshs 12,442,777.77 being the alleged loan outstanding balance due from the Plaintiff as **Section 90** of the **Land Act** does not allow pursuit of both remedies simultaneously. 3. Both the main suit filed by the Plaintiff seeking Judgment for a sum of Kshs 4,098,028/-, and the Counterclaim filed by the Defendant seeking Judgment for the sum of Kshs 12,442,777.77 are dismissed. 4. If the Defendant is yet to release to the Plaintiff any of the titles for the suit properties and discharges to the charges as directed in the order made in this matter on 29/05/2017, then the Defendant shall do so within a period of thirty (30) days from the date hereof. In the event that any title has been lost in the possession of the Defendant as alleged, the Defendant is directed to take immediate steps to apply for, as its own cost, a duplicate thereof to be supplied to the Plaintiff. 5. Both rival claims having been dismissed, the amount of Kshs 9,000,000/- paid by the Plaintiff into the escrow account opened at the Defendant bank in the joint names of the Advocates on record in accordance with the consent letter dated 21/12/2016 adopted in this matter, the said amount, together with all the interest accrued thereon as directed in the Ruling dated 17/11/2023 shall be equally shared between the Plaintiff and the Defendant. For this purpose, the Defendant shall within a period of 30 days from the date hereof release to the Plaintiff its share thereof together with proof of the amount held in the account and a clear computation of the share so disbursed to the Plaintiff. 6. Both rival claims having been dismissed, each party shall bear its own costs of the suit. **DELIVERED, DATED AND SIGNED AT ELDORET THIS 22ND DAY OF MAY 2026** **……………..……..** **WANANDA JOHN R. ANURO** **JUDGE** **Delivered in the presence of:** | | | | --- | --- | | **Ms. Odwa for the Plaintiff** | | | **Mr. Mwangi Kangu for the Defendant** | | | **Court Assistant: Rodgers Tshombe** | |