[2012] KEHC 1283 (KLR)
The court found that the objector, Diamond Trust Bank Ltd, had a valid and registered mortgage interest over the attached motor vehicle KAX 744P, jointly owning the vehicle with the defendant until the loan is recovered. The objector's interest takes priority over the plaintiff's claim as decree holder. The court...
Source-derived case information.
- Citation
- [2012] KEHC 1283 (KLR)
- Parties
- Plaintiff: Agro Chemicals & Food Company Ltd; Defendant: W. G. Chihi & Company Ltd; Objector: Diamond Trust Bank Ltd
- Court
- High Court
- Court Station
- High Court at Kisumu
- Jurisdiction
- Kenya
- Case Number
- Civil Suit 73 of 2004
- Procedural Posture
- Civil Suit / Ruling on Objector Application Regarding Attachment and Sale of Motor Vehicle
- Outcome
- Objector application partially allowed; sale of attached vehicle ordered with proceeds to satisfy objector's mortgage first, balance to decree holder.
- Legal Topics
- Execution of Decree, Objector Proceedings, Priority of Creditors, Mortgage Enforcement
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Agro Chemicals & Food Company Ltd
Plaintiff
W. G. Chihi & Company Ltd
Defendant
Diamond Trust Bank Ltd
Objector
Procedural Posture
Civil Suit / Ruling on Objector Application Regarding Attachment and Sale of Motor Vehicle
Legal Issues
- 1 Whether the objector (Diamond Trust Bank Ltd) has a valid legal interest in the attached motor vehicle KAX 744P by virtue of a mortgage.
- 2 Whether the attachment and sale of the motor vehicle should proceed in light of the objector's interest.
- 3 How the proceeds of sale should be distributed between the objector and the decree holder.
Ratio Decidendi
The court found that the objector, Diamond Trust Bank Ltd, had a valid and registered mortgage interest over the attached motor vehicle KAX 744P, jointly owning the vehicle with the defendant until the loan is recovered. The objector's interest takes priority over the plaintiff's claim as decree holder. The court held that the failure to exhibit the outstanding loan amount does not defeat the objector's priority, as this is a matter between the objector and the defendant. Accordingly, the court ordered the sale of the vehicle by public auction, with the proceeds to be applied first to satisfy the objector's mortgage, and any balance to be paid to the plaintiff to satisfy the decree.
Court Disposition
Objector application partially allowed; sale of attached vehicle ordered with proceeds to satisfy objector's mortgage first, balance to decree holder.
Orders
- The motor vehicle registration number KAX 744P attached by Keysian Auctioneers shall be sold within fourteen (14) days by public auction.
- Proceeds of the sale shall first satisfy the objector's mortgage, with any balance paid to the decree holder.
Full Case Text
Judgment text and source record
33 paragraphs
REPUBLIC OF KENYA
High Court at Kisumu
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AGRO CHEMICALS & FOOD COMPANY LTD …......................PLAINTIFF
VERSUS
W. G. CHIHI & COMPANY LTD …...........................................DEFENDANT
AND
DIAMOND TRUST BANK LTD …..............................................OBJECTOR
RULING
The objector application dated 26th October 2011 prays that there be stay of attachment levied by Keysian Auctioneers on 7th October 20112 in execution of the decree and that the attachment of motor vehicle Registration number K A X 744 P be lifted. The application is supported by the affidavits of one Elizabeth Wanjiku Hinga sworn on 26th October 2012.
The objector contends that it has a debenture over the suit motor vehicle. In support of this they have attached a copy of the log book which shows the registered owners to be the objector / applicant as well as the defendant. They further attached the certificate of Registration of a mortgage as well as the particulars of the mortgage .
What can be gleaned from the annextures above is that the defendant took a mortgage of Kshs. 500,000 from the defendant sometimes in May 2010 and it offered the motor vehicle K A X 744 P and K A Y 872 U as securities.
The plaintiff on the other hand has argued that whereas this would be true the objector / applicant has not shown the outstanding loan due to the applicant from the defendant. According to the plaintiff failure to exhibit this could mean as well that the defendant has cleared the loan and therefore the vehicle was free.
Having listen to the parties oral submission and the affidavit evidence presented,it is not in dispute that the defendant is indebted to the plaintiff and that execution process has commence.
It is not also indispute that motor vehicle registration number KAX 744P is mortgage to the objector.
What is therefore the right of the objector? Its right is that by law it jointly owns the vehicle together with the defendant till it recovers its loan. The objector have a first priority over any other creditor who is owed by the defendant.
The contention therefore that the objector ought to have exhibited the amount due to it by the defended is a matter between the parties and not necessarily to be intruded by the plaintiff.
Order 22 Rule 55 however provides that:-
“Any court executing a decree may order that any property attached by it and liable to sale or such portion thereof as may seem necessary to satisfy the decree, shall be sold and that the proceeds of such sale or a sufficient position thereof, shall be paid to the party entitled under the decree to receive the same”.
In light of the above portion of the law and in light of the decree against the defendant which has been pending I do make the following order:-
(a)The motor vehicle registration number K A X 744 P which was attached by Keysian Auctioneers be sold within the next fourteen (14) days from the date herein vide public auction and the proceeds thereof be paid first to satisfy the objectors mortgage and the balance thereof if any to satisfy the decree holder herein.
(b)Each party be at liberty to apply.
(c )The costs of this application shall be born by the defendant.
Dated, signed and delivered at Kisumu this 24th day of October 2012.
H.K. CHEMITEI JUDGE
In the presence of:
Asunah for the plaintiff
Otieno for Chache for the defendant
HKC/aao