https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/12479

 **REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA AT NAIROBI** **COMMERCIAL AND TAX DIVISION** **CASE NUMBER: HCCOMM/E121/2024** **ANDREW KANYI GACHII…………..………………………………………….APPLICANT** **-VERSUS-** **ABSA BANK KENYA PLC…………………………...…………………..1ST RESPONDENT** **REGENT AUCTIONEERS ……………………………………………..2ND RESPONDENT** **RULING** **INTRODUCTION AND BACKGROUND** 1. The Applicant has moved this Court by way of Notice of Motion dated 11th March, 2024 brought pursuant to Order 40 Rules 1 & 2 (2), 3, 4, 8 and 10 of the Civil Procedure Rules and Section 3A, 1A and 1B of the Civil Procedure Act, Sections 90,96 and 97 of the Land Act and all other enabling provisions of the law. 2. The Application seeks the following orders: - 3. *Spent* 4. *Pending the hearing and determination of this Application inter-partes, an interim injunction be and is hereby issued restraining Respondent by itself, its assigns, agents, servants and/or any other person whosoever acting on the Respondent’s behalf from selling, alienating, disposing of, auctioning and/or otherwise exercising the Respondent’s statutory power of sale pursuant to the statutory notice dated 22nd December, 2022, and 31st October, 2023, over the Plaintiff/ Applicant’s property****Land Reference Title Number LR No. 12948/43 and Nairobi Block 97/1839 (hereinafter, “the Suit Properties”).*** 5. *Pending the hearing and determination of the Suit herein, an interim injunction be and is hereby issued restraining Respondent by itself, its assigns, agents, servants and/or any other person whosoever acting on the Respondent’s behalf from selling, alienating, disposing of, auctioning and/or otherwise exercising the Respondent’s statutory power of sale pursuant to the statutory notices dated 22nd December, 2022, and 31st October over the Plaintiff/ Applicant’s property Land Reference No. 30036/2(IR NO. 190140)* 6. *The Honourable Court does grant such other or further orders as it deems fit in the interest of justice, expediency and good order.* 7. *The costs of this Application be provided for* 8. The application is supported by the Affidavit of Andrew Kanyi Gachii, the Applicant herein sworn on 11th March, 2024 and a further affidavit dated 27th May, 2025. 9. The Applicant deposes that he obtained a loan facility from the 1st Respondent secured by charges over L.R. No. 12948/43 and Nairobi Block 97/1839, but subsequently defaulted in repayment due to financial hardship occasioned by the COVID-19 pandemic. 10. He contends that despite regularizing the loan arrears, the 1st Respondent unlawfully issued statutory notices and instructed the 2nd Respondent to realize the securities without complying with the mandatory provisions of the Land Act, including the requirement for a proper valuation of the charged properties. 11. The Applicant further avers that the suit properties include his family's residence and that, unless the orders sought are granted, the Respondents will proceed with the sale of the properties, thereby occasioning him and his family irreparable loss. 12. In his further affidavit, the Applicant maintains that Nairobi Block 97/1839 has since been sold by public auction at a manifestly low price, well below its forced sale value, and relies on a valuation report to demonstrate that the property was sold at a gross undervalue. 13. The application is opposed through the Replying Affidavit of Samuel Njuguna sworn on 15th April, 2024 on behalf of the 1st Respondent. 14. The Respondent avers that the Applicant was advanced financial facilities amounting to Kshs. 80,000,000, secured by charges over L.R. No. 12948/43 and Nairobi Block 97/1839, and that the Applicant persistently defaulted in servicing the loan despite repeated indulgence by the Bank. 15. It is contended that all the requisite statutory notices, including the statutory notice, redemption notice and notification of sale, were duly issued in compliance with the Land Act before the Bank exercised its statutory power of sale. 16. The Respondent further maintains that valid valuations of the charged properties were conducted prior to the auction and that Nairobi Block 97/1839 was sold at Kshs. 40,000,000/= a price above its forced sale value of Kshs. 36,000,000, thereby refuting the Applicant's allegation that the property was sold at a gross undervalue. The Respondent therefore contends that the Applicant has failed to establish a prima facie case or demonstrate irreparable harm, urging the Court to dismiss the application with costs. 17. It is important to highlight the proceedings before the Court in the lead up to this Ruling: 18. When this application was placed before Justice Visram on 12rtgh March 2024, he gave orders that the application be served and parties do return for hearing on 21st March, 2024. In the meantime, a temporary stay was granted for a period of 14 days on condition that the Applicant paid to the 1st Respondent the sum of Kshs 3 million on account of the outstanding loan facility prior to the scheduled auction failing which the stay shall automatically lapse. 19. On 21st March, 2024, the Court was on recess and the matter was mentioned on 3rd April 2024 when it was noted that the applicant did not comply with the orders granted earlier with the consequence that the sale proceeded with one of the properties. Property 12948/43 had not been sold. The Respondent was asked to file and serve its reply within 7 days. Status quo was to be maintained by consent of the parties pending the hearing on 18th April 2024. 20. On 18th April, 2024, the Plaintiff was granted 7 days to file and serve a further affidavit in response. Status quo was still to be maintained by consent of the parties. Mention for further directions was ordered on 17 June 2024. 21. 17th June 2024 happened to be Eid Ul Adha which was declared a public holiday in Kenya and the Court did not sit. The matter was brought up on 15th June 2024 when it was note3d that the Affidavit had still not been filed. This led to postponement of the matter to 31st October 2024 when it was noted that the Plaintiff had still not complied by filing the further affidavit. The matter was listed for Mention for further directions on 31st October 2024. The interim orders were discharged owing to non-compliance and non-attendance by the Plaintiff. The matter was adjourned to 4th February 2025 when it came up on 31st October 2024. 22. On 4th February, 2025 the Court gave directions for the parties to proceed by way of written submissions. The applicant was granted 2 days to file and serve its written submissions. Upon receipt of service, the Respondent was granted 14 days to file and serve its written submissions in reply. Highlighting of submissions was scheduled for 28th May 2025. 23. The Applicant did not file their written submissions despite another chance offered to them on 28th May 2025 to file the same. That position has obtained though the Applicant filed a further affidavit sworn on 27th May 2025. **APPLICANT’S SUBMISSIONS** 1. I have taken the liberty to indicate the above record as there are no submissions on record as filed by the Applicant despite the extensions listed in the preceding paragraph. **RESPONDENTS’ SUBMISSIONS** 1. The Respondents submitted that the Applicant had failed to satisfy the well-established principles for the grant of an interlocutory injunction as enunciated in **Giella v Cassman Brown & Co. Ltd [1973] EA 358** and reaffirmed in **Nguruman Limited v Jan Bonde Nielsen & 2 Others [2014] eKLR.** It was argued that the Applicant had not established a prima facie case within the meaning of **Mrao Ltd v First American Bank of Kenya Ltd & 2 Others [2003] eKLR**, as he admitted being indebted to the 1st Respondent and had persistently defaulted in servicing the loan facility, thereby entitling the Respondent to exercise its statutory power of sale. 2. The Respondent further contended that all the mandatory statutory notices were duly served upon the Applicant and that valid valuations of the charged properties were conducted before the auction, with Nairobi Block 97/1839 being sold above its forced sale value, thus disproving the allegation that the property had been sold at a gross undervalue. 3. Relying on **Maithya v Housing Finance Co. of Kenya & Another [2003] 1 EA 133**and**Andrew M. Wanjohi v Equity Building Society Ltd & Another [2006] eKLR**, the Respondent submitted that once property is offered as security, it becomes a commodity for sale and any loss occasioned by its realization is compensable by damages. 4. Accordingly, it was urged that the Applicant had failed to demonstrate irreparable harm or that the balance of convenience favoured the grant of an injunction, and the Court was invited to dismiss the application with costs. **ISSUE FOR DETERMINATION** 1. Having perused the Application, Affidavits and the Respondent’s submissions, this court finds one issue for determination: Whether the Applicant has satisfied the legal threshold for the grant of an interlocutory injunction restraining the Respondents from exercising the statutory power of sale over the charged properties pending the hearing and determination of the suit. **ANALYSIS AND DETERMINATION** 1. The principles governing the grant of interlocutory injunctions are well settled. In **Giella v Cassman Brown & Co. Ltd [1973] EA 358**, the Court held that an applicant must establish a prima facie case with a probability of success, demonstrate that he stands to suffer irreparable injury incapable of compensation by an award of damages, and where the court is in doubt, the application should be determined on a balance of convenience. 2. These principles were reaffirmed in the case of **Nguruman Limited Vs Jan Bonde Nielsen & 2 Others (2014) eKLR**, the Court of Appeal further explained that: - ***“...these are the three pillars on which rest 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...”*** 1. The first point of order for this court is thus to establish whether the applicant has established a prima facie case. A prima facie case was defined in **Mrao Ltd v First American Bank of Kenya Ltd & 2 Others [2003] KLR 125** as: ***“A prima facie case in a civil application includes but is not confined to a genuine and arguable case. It is a case 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 as to call for an explanation or rebuttal.”*** 1. Applying the foregoing principles to the present case, it is not disputed that the Applicant obtained financial facilities from the 1st Respondent secured by the suit properties and subsequently defaulted in repayment. The Applicant attributes the default to financial hardship occasioned by the COVID-19 pandemic. 2. Upon such default, the Respondent became entitled to exercise its statutory power of sale, subject to compliance with the Land Act. 3. The Respondent submitted to the Court to resonate with the sentiments of the learned judge in the cases of **Maithya v Housing Finance Co. of Kenya & Another [2003] 1 EA 133** and **Andrew M. Wanjohi v Equity Building Society Ltd & Another [2006] eKLR**, where it was determined that once property is offered as security, it becomes a commodity for sale and any loss occasioned by its realization is compensable by damages. 4. This court is persuaded to adopt the same position and further places a reliance on the case of **Daniel Ndege Ndirangu v. Barclays Bank of Kenya Limited & Another Nakuru High Court Civil Suit no 8 of 2012 ‘B’**, where the court with reference to the case of **Sambai Kitur v Standard Chartered Bank & 2 others, Eld. HCCC. NO.50 of 2002** stated that: ***“It must also be noted that when a chargor lets loose its property to a chargee as security for a loan or any other commercial facility on the basis that, in the event of a default it be sold by a chargee, the damages are foreseeable. The security is henceforth a commodity for sale or possible sale without prior concurrence and consent of the charger. How can he, having defaulted to pay loan arrears prompting a charge to exercise its statutory power of sale, claim that he is likely to suffer loss and injury incapable of compensation by an award of damages? Such an argument is definitely misplaced and has no merit. It is immaterial that the property is a family residence, a fact well known to the Chargor at the time of offering it as security to the charge. The upshot of all these is that following the Giella principles, the loss of injury that the applicant stands to suffer should he succeed in this suit is capable of being compensated in damages adequately.”*** 1. The Applicant's complaint is that the Respondent failed to comply with Sections 90, 96 and 97 of the Land Act by issuing defective statutory notices and selling one of the charged properties at a gross undervalue. However, the material before the Court does not support those allegations. The Respondent has exhibited the requisite statutory notices and valuation reports demonstrating prima facie compliance with the law, while the Applicant's reliance on an alternative valuation merely raises contested factual issues that can only be determined at trial. 2. When the Applicant defaulted in servicing the loan facilities, 1st Respondent commenced the realization process. The Applicant was served with a three (3) months' statutory notice dated 22nd December, 2022 pursuant to Section 90 of the Land Act. Upon failure to remedy the default, the 1st Respondent issued a forty (40) days' Notice to Sell dated 31st October, 2023 under Section 96(2) of the Land Act. Thereafter, the Applicant was served with a forty-five (45) days' Redemption Notice dated 2nd January, 2024 and a Notification of Sale dated 12th January, 2024. 3. Prior to the auction, the Respondent commissioned valuation reports in compliance with Section 97 of the Land Act. Despite the issuance of the requisite notices, the Applicant failed to regularize the loan, culminating in the sale of Nairobi Block 97/1839 by public auction. 4. By exhibiting the requisite statutory notices and valuation reports, the Respondents have demonstrated, prima facie, compliance with the statutory requirements governing the exercise of its power of sale. The burden of proof, therefore, shifts to the Applicant to establish that the 1st Respondent failed to adhere to the mandatory provisions of the Land Act. In **Palmy Company Ltd v Consolidated Bank of Kenya Ltd [2014] eKLR**, the Court observed: ***"The onus of establishing on prima facie basis, that the Applicant's right has been infringed by the Defendant by failing to discharge the duty of care under section 97(1) of the Land Act lies on the Applicant... The court needs cogent evidence and material in order to say that prima facie, there has been an undervaluation of the suit property..."*** 1. In the present case, the Applicant has not placed before the Court cogent evidence demonstrating that the statutory notices were defective or that the valuation undertaken by the Respondent was so deficient as to amount to a breach of Sections 90, 96 or 97 of the Land Act. It is also apparent that the Applicant is in arrears and is indebted to the Respondent thus he has failed to demonstrate an apparent infringement of his legal rights capable of constituting a prima facie case with a probability of success. 2. The court in **Maithya vs Housing Finance Co. of Kenya &Ano. [2003] 1 EA 133** stated: ***“Those who come to equity must do equity. Failure to service the loan or to pay the lender or to pay into court what had been admitted took the Applicant outside the realm of exercise of the court’s discretion.”*** 1. Having so found, the Court need not consider the remaining limbs of irreparable harm and the balance of convenience, as the Court of Appeal in **Nguruman Limited case** (supra) made it clear that the conditions for the grant of an injunction are sequential. 2. Even if the Court were to consider the remaining limbs, it would still find that they do not favour the Applicant. The charged properties were voluntarily offered as security for the loan facilities, and any loss arising from their realization is capable of compensation by an award of damages should the Applicant ultimately succeed. Moreover, the balance of convenience favours the 1st Respondent, whose statutory right to realize the securities has crystallized following the Applicant's admitted default. 3. The court in **Polypipes Limited 4 others v Bank of Baroda (Kenya) Limited & Another [2018] eKLR** while referencing the case of **Joseph Okoth Waudi Vs National Bank of Kenya [2006] eKLR** stated that:- ***“I find the power of sale arises in favour of a chargee when the charge money has become due and the Court of law will not restrain a chargee from exercising its statutory power of or because the chargor has begun a redemption action or because he objects to the manner in which the sale is being arranged.”*** 1. Accordingly, the Court finds that the Applicant has failed to satisfy the legal threshold for the grant of an interlocutory injunction. **DISPOSITION** 1. The Notice of Motion dated 11th March, 2024 is without merit and is hereby dismissed. 2. Costs are awarded to the 1st Respondent. **DATED, SIGNED AND DELIVERED AT NAIROBI THIS 30th DAY OF JULY 2026.** **MURUNGA, J** *Delivered on virtual platform in the presence of:* *Korir h/b Kiplagat for the Applicant* *Mbira h/b Kimiti for the Respondent* *Kevin Babu - Court Assistant*