https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/10087

Asphalt Concrete Ltd v KCB Bank Kenya Ltd (Formerly Kenya Commercial Bank Ltd) (Civil Case E020 of 2024) [2026] KEHC 10087 (KLR) (16 June 2026) (Ruling) Neutral citation: [2026] KEHC 10087 (KLR) Republic of Kenya In the High Court at Machakos Civil Case E020 of 2024 EO Bitta, J June 16, 2026 Between Asphalt Concrete Limited Plaintiff and KCB Bank Kenya Limited (Formerly Kenya Commercial Bank Ltd) Defendant Ruling 1.The Applicant moved the court by way of a motion on notice dated 20th day of September 2024, in which it sought the following interlocutory orders.i.That the defendants, by themselves, their agents and/or servants, be restrained from selling, disposing of in any way, or interfering with land parcels LR 12715/11674 (Original number 12715/208/2) Athi River pending the hearing and determination of the application inter partes.ii.That the defendants, by themselves, their agents and/or servants, be restrained from selling, disposing of, or in any way interfering with land parcel LR 12715/11674 (Original number 12715/208/2) Athi River pending the hearing and determination of the suit.iii.The cost of the application is in the course 2.The application is premised on the following grounds. 3.The Applicant was extended a credit facility of kshs 352, 840, 238/- by the Respondent in the year 2015 to finalize the construction and operationalization of a shopping mall and a hotel on land parcels LR 12715/11674 (Original number 12715/208/2) and LR 12715/11673, Athi River. 4.That the credit facility for the construction of the mall was secured by a charge of the Applicant’s land parcel LR 12715/11674 (original number 12715/208/2), Athi River 5.The mall was duly constructed, and operations commenced thereon on 1st January 2016, and presently serves the greater Nairobi and Mavoko catchment area with a tenant component of 93 individuals and companies that operate therein. 6.That since 2015, the Applicant company has paid a total of KShs 427, 248,186/- in partial redemption of the credit facilities and continues to make monthly payments of KShs 6.2 million, and has made a proposal to enhance this to KShs 8.2 million per month with effect from 30th September 2024 7.That, despite that substantive financial outlay, on 12th September 2024, the Respondent served the Applicant by e-mail a notice under section 96(3) of the Land Act No.6 of 2012 that was backdated to 9th August 2024. 8.That the fraudulent backdating is intended to deny the Applicant the right to challenge the Respondent’s execution process. 9.That the Respondent has, before the expiry of 40 days from the date of service as set out in section 96 (2)(3) of the Land Act No.6 of 32012, started harassing the Applicant’s tenant at the suit premises, asking them to vacate the premises. 10.The Applicant is apprehensive that the backdating and the threat to invoke the charges power under the said section 96(2) 3 is intended to create room for the Respondent to sell the substantial property by way of private treaty. 11.That unless the Respondent is injuncted, the Applicant stands to suffer irreparable substantial loss of property valued in excess of Kenya shillings 3, 050, 000,000/- 12.That all other stakeholders, including the 93 tenants, over 18 employees, 11 service providers, and the general public, stand to suffer irreparably. 13.That the Applicant is still servicing the credit facility by monthly payments of KShs 6.2 million and will enhance that to KShs 8.2 million with effect from 30th October 2024. 14.The Plaintiff is willing to comply with the terms to ensure an expeditious determination of the suit. 15.The Respondent opposed the application by way of a replying affidavit sworn by Jeremiah Washiali on 26th June 2025. 16.The Respondent deposed that pursuant to a change of user, the Applicant became registered proprietor as lessee from the Government of Kenya for the piece of land known as land reference number 12715/13410 (original number 12715/11674). 17.Consequent to the change of user, the Applicant created a replacement charge over land reference number 12715/13410 (original number 12715/11674. Prior to the change of user, the legal charge dated 22nd February, 2017 was registered over property known as L.R No. 12715/11674 (original number 12717/208/2, Athi River. 18.The Applicant defaulted on its repayment obligations. 19.As a consequence, the Respondent issued it with a ninety-day statutory notice on 3rd May 2024 and the forty-day notice to sell under section 96 of the Land Act 2012 on 9th August 2024. 20.That the notices were served via registered post. 21.The Respondent noticed that the notices referred to a legal charge dated 22nd February 2017 over LR No. 12715/11674 (original number 12715/208/2) instead of the replacement legal charge dated 28th July 2023 over LR No. 12715/13410 (original number LR No. 12715/11674) following the change of user. 22.The Respondent averred that it corrected the anomaly in the statutory notices by issuing a fresh ninety-day statutory notice of sale dated 29th May 2025 pursuant to the replacement charge dated 28th July 2023 over LR No. 12715/13410 (original no. LR No. 12715/11674), which notice the Applicant has admitted receiving in its submissions. 23.The Respondent stated that the Applicant has not challenged the fresh statutory notice dated 29th May 2025. 24.It is the Respondent’s position that the Applicant’s reliance on the earlier statutory notices to secure an injunction is moot or overtaken by events and that the Applicant’s challenge is not premised on fresh statutory notices issued by the Respondent. 25.The court directed that the application be canvassed by way of written submissions, and both parties complied with the said directions. 26.The Applicant submitted that it had established a prima facie case as evidenced by the affidavit of Dickson Wahome Njoroge, sworn on 20th September 2024. 27.It is the Applicant’s submission that to date it has paid the sum of KShs 427,248,186 by monthly instalments of KShs 6.2 million. 28.The Applicant submitted that, regrettably, during the Covid-19 pandemic, it was unable to raise the agreed amount and that, despite that challenge, it has continued to make remittances as evidenced by the annexed documents. 29.The Applicant submitted that the Respondent issued a demand for the sum of KShs 129,724,790/- in May 2024 and that, in response, the Applicant proposed to have the monthly repayment amount increase from KShs 6.2 million to 8.2 million with effect from September 2025, as evidenced by the annexure marked DWN-4. 30.The Applicant submitted that the Respondent, instead of responding to the proposal, proceeded to dispatch a back-dated statutory notice on the Applicant that was emailed on 12th September 2024, but backdated to 9th August 2024, that was after expiry of the 40 days, which would be illegal and a fraudulent scheme to exercise its charge power of sale without giving the Applicant time to redeem itself. 31.The Applicant submits that the position is further bolstered by the Respondent’s actions of having proceeded to issue a subsequent notice on 29th May 2025 after it became evident that the earlier notice was, in fact, backdated, and if that were not so, the Respondent would have had no reason to re-issue the notice. 32.On the issue of irreparable loss not compensable by an award of damages, it is the Applicant’s submission that its properties are valued at KHS 3,050,000,000/- 33.The Applicant submits that it has made numerous adjustments to the land, such as infrastructural developments, which are integral to its operations and business growth. 34.The Applicant submits that an award of damages may not be accurately quantifiable in that scenario; the risk of the Applicant losing its livelihood, along with the livelihoods of its employees, cannot be easily measured or compensated. 35.The Applicant submits that no amount of damage will suffice to cover the extent of the loss that will be suffered by the Applicant. 36.The Applicant submitted that the balance of convenience favours the Applicant. 37.The Applicant relied on the decisions in Giella vs Cassman Brown 1973 EA 358, Mrao vs First American Bank of Kenya Limited & 2 others (2003) eKLR as cited in Hartebeest Camp and Guest House Ltd v Bemuda Holdings Limited & another (2015) eKLR, Nguruman Limited vs Bonde Nielsen & 2 Others (2014) eKLR, Paul Gitonga Wanjau vs Gathuthi Tea Factory Company Ltd & 2 Others (2016) eKLR to support its submissions. 38.The Respondent in opposition submitted that it corrected the slight anomaly in the statutory notices by issuing a fresh ninety-day statutory notice of sale dated 29th May 2025 pursuant to the replacement charge dated 28th July 2023 over LR No. 12715/13410 (Original No. L.R. No. 12715/11674), which the Applicant has admitted receipt of. 39.The Respondent submitted that the Applicant has not challenged the fresh statutory notice dated 29th May 2025; it has not contended that the Notice to sell issued after expiry of the fresh statutory notice was defective or illegal. 40.The Respondent submits that the Applicant, after being served with the replying affidavit, did not file a supplementary or further affidavit to challenge the correct fresh notices issued pursuant to the replacement charge. 41.The Respondent submits that the Applicant’s reliance on the earlier statutory notices to secure an injunction is moot or overtaken by events. 42.The Respondent submits that the Applicant’s challenge is not premised on the fresh statutory notices issued by the Respondent and that the Respondent’s exercise of the statutory power of sale is premised on the fresh notices issued by it. 43.The Respondent submitted that the Applicant has not met the threshold for the grant of the injunction sought in the application. 44.The Respondent submitted that the Applicant’s allegation of fraud was neither particularized nor strictly proved as required in law. 45.The Respondent submitted that the Applicant has not denied its indebtedness to the Respondent. 46.The Respondent submitted that it has reasonably accommodated the Applicant, but that the Applicant has deliberately defaulted in its obligations, and that the Applicant has brought the present application to defeat the Respondent’s right to exercise its statutory power of sale over the suit property. 47.It is the Respondent’s submission that the Applicant has failed to prove that it has any right that has been threatened or infringed by the Respondent’s exercise of its statutory power of sale; consequently, the Applicant has not established a prima facie case with likelihood of success. 48.On irreparable injury, it is the Respondent’s submission that there is no risk of the Applicant suffering irreparable injury in the event the injunction sought is not granted. 49.The Respondent submits that the Applicant has not shown the threatened irreparable injury it may suffer; in any event, the Applicant will not suffer any harm that cannot be compensated by way of damages in the event the injunction is not granted. 50.The Respondent submitted that the Applicants' tenants and employees are not privy to the loan agreement between the parties. 51.The Respondent submitted that the Applicant offered the suit property as security for the banking facilities on its own accord and further that the Applicant vide the legal charge at clauses 7 and 8 thereof covenanted that in the event of default on repayment of the loan advanced to it, the Respondent may sell the suit property to recover the outstanding loan amount. 52.The Respondent submitted that, considering that the Applicant offered the suit property as security for banking facilities advanced to it, the same has an ascertainable value, and the Applicant can always be compensated by damages at any time, the sale of the suit property does not occasion any irreparable injury to the Applicant. 53.The Respondent relied on the provisions of section 99(4) of the Land Act, which provides for payment of damages in the event of improper or irregular exercise of the power of sale. 54.The Respondent submitted that the balance of convenience does not tilt in favour of the Applicant. 55.The Respondent submitted that, given that the Applicant did not show the existence of a prima facie case and the fact that there would be no irreparable harm suffered in the event the Respondent proceeds with the sale of the suit property, the court should not consider the balance of convenience. 56.The Respondent submitted that, noting the terms of the loan agreement between the parties, the accommodation extended to the Applicant, the interest and penalties that continue to accrue, the balance of convenience tilts in favour of the Respondent. 57.The Respondent relied on the decisions of the court in Giella vs Cassman Brown & Co Ltd (1973) EA 358, The Court of Appeal decision in Nguruman Limited vs Jan Bonde Nielsen & 2 others (2014) KECA 606 (KLR), the Court of Appeal decision in Mrao Limited vs First American Bank of Kenya Limited & 2 Others ( Civil Appeal 39 of 2002) (2003) KECA 175 (KLR), the Court of Appeal decision in Vijay Morjala vs Nansingh Madhusingh Darbar & another (2000) KECA 223 (KLR), The Court of Appeal decision in Kamau vs Nandi ( civil Appeal 342 of 2010) (2013) KECA 423 (KLR) The Court of Appeal decision in Anita Chelagat O’donovan & 2 others vs Fredrick Kwame Kumah & 2 others (2017) KECA 202 (KLR), Palmy Company Limited vs Consolidated Bank of Kenya ( Civil Suit 527 of 2013) (2014) kehc 4811(KLR) (CIV) and Andrew Muriuki Wanjohi v Equity Building Society Ltd & 2 others (2006) KEHC 2727 (KLR) in support of its case. 58.I have considered the application, the supporting and replying affidavits to the application, together with the rival written submissions on the same. 59.The issues falling for determination is whether the Applicant has satisfied the well-established principles for the grant of an interlocutory injunction as set out in Giella v Cassman Brown & Co. Ltd, namely: whether the Applicant has established a prima facie case with a probability of success; whether it stands to suffer irreparable injury incapable of compensation by an award of damages; and, if the court is in doubt, where the balance of convenience lies. 60.The principles governing the grant of interlocutory injunctions are settled in Giella v Cassman Brown & Co. Ltd (1973) EA 358 and were restated by the Court of Appeal in Nguruman Limited v Jan Bonde Nielsen & 2 Others [2014] eKLR, where the Court emphasized that the conditions are to be considered sequentially and the failure to establish a prima facie case is sufficient to dispose of the application. 61.The sequential application of those principles was emphasized by the Court of Appeal in Nguruman Limited v Jan Bonde Nielsen & 2 Others, where the Court stated that the three conditions are separate, distinct, and logical hurdles to be surmounted sequentially. 62.There is no dispute that the Applicant obtained financial facilities from the Respondent secured by a charge over the suit property. 63.It is equally not disputed that the Applicant fell into arrears in the repayment of the facility. 64.Indeed, while the Applicant has emphasized that it has made substantial repayments amounting to KShs. 427,248,186/= and continues to make monthly remittances, it has not denied the existence of the outstanding indebtedness. 65.The Applicant's case is principally founded on the allegation that the Respondent issued and served a notice under section 96 of the Land Act dated 9th August 2024, but transmitted by email on 12th September 2024, thereby allegedly backdating the notice and denying the Applicant the statutory redemption period. 66.The Respondent, however, has explained that following a change of user and the registration of a replacement charge over L.R. No. 12715/13410 (Original No. 12715/11674), it discovered that the earlier statutory notices referred to the previous charge instrument. 67.Consequently, it issued fresh statutory notices dated 29th May 2025 pursuant to the replacement charge. 68.The Respondent has further submitted that the Applicant has acknowledged receipt of the fresh notices and has not mounted any challenge against them. 69.The Court notes that the injunctive relief sought in the application is predicated entirely upon the alleged defects in the notices issued in 2024. 70.The Applicant has neither amended its application nor filed a supplementary affidavit challenging the validity, legality, or propriety of the fresh statutory notices issued on 29th May 2025. 71.As matters stand, the factual foundation upon which the application was brought has been substantially altered by subsequent events. 72.The purpose of an interlocutory injunction is to preserve rights that are under imminent threat. 73.Where the impugned act complained of has been superseded by subsequent lawful steps which remain unchallenged, the court cannot issue injunctive orders based on a dispute that has effectively become moot. 74.In the present case, even assuming that there were irregularities in the notices issued in 2024, the Respondent has since issued fresh notices pursuant to the replacement charge. 75.Those notices have not been impeached before this court. 76.The definition of a prima facie case is found in Mrao Ltd v First American Bank of Kenya Ltd & 2 Others, where the Court of Appeal stated:“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." 77.And in Paul Gitonga Wanjau v Gathuthi Tea Factory Co. Ltd & 2 Others, the Court reiterated that a prima facie case is more than an arguable case and must disclose infringement of a right calling for rebuttal. 78.In the present matter, the Applicant has not challenged the fresh statutory notices dated 29th May 2025, which form the basis of the Respondent's intended realization of the security. 79.Consequently, the complaint concerning the earlier notices has been overtaken by events. 80.In the absence of a challenge to the operative statutory notices, no infringement of the Applicant's legal rights has been demonstrated. Courts do not determine hypothetical or academic disputes. In Raila Odinga & Others v Independent Electoral and Boundaries Commission & 3 others, Supreme Court Application No.10 of 21017(Ruling delivered on December 11, 2018), the Supreme Court observed that courts should not determine issues that have become merely academic or overtaken by events. 81.Further, allegations of fraud are serious allegations that must not only be specifically pleaded but also strictly proved. 82.Beyond asserting that the notice was backdated, the Applicant has not placed before the court material capable of establishing fraud on the part of the Respondent. 83.The mere issuance of fresh notices, without more, cannot of itself constitute proof of fraud. 84.In the circumstances, I am unable to find that the Applicant has demonstrated a prima facie case with a probability of success. 85.The Applicant has admitted the existence of the debt and has not challenged the fresh statutory notices upon which the Respondent presently relies in exercising its statutory power of sale. 86.On the question of irreparable injury, the Applicant contends that the suit property is valued at approximately KShs. 3,050,000,000/= and houses a shopping mall with numerous tenants, employees, and service providers. 87.While the Court appreciates the commercial significance of the property, it remains a charged property voluntarily offered as security for the financial accommodation advanced by the Respondent. 88.The law is settled that once property is offered as security, it becomes a commodity for sale in the event of default. 89.Its value is ascertainable, and any loss arising from an unlawful sale is capable of compensation by damages. 90.Section 99(4) of the Land Act expressly provides that a person prejudiced by an unauthorized, improper, or irregular exercise of the statutory power of sale has a remedy in damages against the person exercising that power. 91.This statutory remedy further undermines the Applicant's contention that any injury likely to be suffered would be irreparable. 92.In Andrew Muriuki Wanjohi v Equity Building Society & 2 Others, the Court held:“Once property is offered as security for a loan, it becomes a commodity for sale, and there is no commodity for sale whose loss cannot be compensated by an award of damages." 93.Similarly, in Maithya v Housing Finance Co. of Kenya Ltd, the Court held that where a chargor voluntarily offers property as security, its loss is generally compensable in damages. 94.The Applicant has therefore not demonstrated that it would suffer injury incapable of compensation by an award of damages. 95.Having found that the Applicant has failed to establish both a prima facie case and irreparable injury, it is unnecessary to consider the balance of convenience. 96.Nonetheless, were I to do so, I would find that it tilts in favour of the Respondent. 97.The indebtedness remains outstanding, interest continues to accrue, and the Respondent is entitled to realize its security in accordance with the law. 98.Granting an injunction in the circumstances would have the effect of restraining the Respondent from exercising contractual and statutory rights notwithstanding the Applicant's admitted default. 99.Accordingly, I find that the Applicant has failed to satisfy the principles for the grant of an interlocutory injunction.I.I order that the Notice of Motion dated 20th September 2024 is hereby dismissed.II.The Applicant shall bear the costs of the application. DELIVERED, DATED, AND SIGNED AT MOMBASA THIS 16TH DAY OF JUNE 2026.EMMANUEL BITTAJUDGE OF THE HIGH COURTIn the presence of;C/A. NechesahMutiso for the PlaintiffOle Ntome for the Ntome