https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/6649

Casement Industries Ltd v Attorney General & 7 others (Civil Suit 175 of 2009) [2026] KEHC 6649 (KLR) (Commercial and Tax) (14 May 2026) (Judgment) Neutral citation: [2026] KEHC 6649 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Commercial Courts) Commercial and Tax Civil Suit 175 of 2009 PM Mulwa, J May 14, 2026 Between Casement Industries Ltd Plaintiff and The Hon. Attorney General 1st Defendant National Industrial Credit Bank Ltd 2nd Defendant Kenya Commercial Bank Ltd 3rd Defendant Aziz Mohamed Pirak Baruch 4th Defendant Charles Bosire 5th Defendant Esther Muboka Bosire 6th Defendant Vincent Joseph Kambo 7th Defendant Theresa Kambo Gikonyo 8th Defendant Judgment 1.The Plaintiff, Casement Industries Ltd, instituted the present suit against the Defendants by the plaint dated 21st August 2008 and amended on 17th April 2023 seeking judgment to be entered against the Defendants for:i.A permanent injunction restraining the 4th to 8th Defendants from interfering with, alienating, leasing, selling or otherwise dealing with L.R Nos. 3734/1141 and 3734/1143.ii.Orders prohibiting any further registration, transfer or other dealings in respect of the suit properties pending determination of the dispute.iii.Declarations that the titles issued over L.R Nos. 3734/1141 and 3734/1143 were fraudulent, irregular, null and void, together with orders for cancellation thereof.iv.Orders compelling the Defendants to surrender the impugned title documents for cancellation and to execute all necessary documents to facilitate re-transfer and re-registration of the properties in favour of the Plaintiff.v.Mesne profits, costs of the suit, interest and any other relief the Court deemed fit to grant. 2.The Plaintiff’s case was that the original parcel known as L.R No. 3734/750 had been charged to the 2nd and 3rd Defendants under a pari passu arrangement following loan facilities advanced to David Kamau Gakuru and the Plaintiff company. The Plaintiff contended that upon subdivision of the mother title into L.R Nos. 3734/1140, 1141, 1142 and 1143, it had been agreed that L.R No. 3734/1143 would secure the Plaintiff’s borrowing from the 3rd Defendant while L.R No. 3734/1141 would secure borrowings due to the 2nd Defendant 3.The Plaintiff further pleaded that although subdivision approval had been granted, final approvals had not been issued because drainage and sewer conditions imposed by the Commissioner of Lands and the City Council had not been complied with. It was therefore the Plaintiff’s position that the resultant titles were irregularly and fraudulently issued. 4.The Plaintiff alleged that despite the outstanding indebtedness having been settled through sale proceeds from L.R No. 3734/1140 and other payments, the 2nd Defendant unlawfully exercised its statutory power of sale and transferred L.R Nos. 3734/1141 and 3734/1143 to the 4th, 5th and 6th Defendants, with L.R No. 3734/1143 eventually being transferred to the 7th and 8th Defendants. The Plaintiff attributed fraud, collusion and illegality to the Defendants and challenged the validity of the charges and transfers. 5.The 1st Defendant filed a statement of defence dated 17th October 2008 denying the Plaintiff’s claim and putting the Plaintiff to strict proof thereof. It further intimated that it would raise preliminary objections challenging the competency of the suit on grounds of non-compliance with section 13A (1) of the Government Proceedings Act and limitation under section 3(1) of the Public Authorities Limitation Act. The 1st Defendant denied the allegations of fraud attributed to the Commissioner of Lands in the issuance of titles over L.R Nos. 3734/1141 and 3734/1143 and prayed that the suit be dismissed with costs. 6.The 2nd Defendant, NIC Bank Limited, filed a defence denying the Plaintiff’s claim and maintained that the suit property had not been charged by the Plaintiff but by one David Kamau Gakuru in his personal capacity to secure financial facilities advanced to him by the bank. It averred that upon default by the chargor, it lawfully exercised its statutory power of sale and transferred the suit properties to the 4th, 5th and 6th Defendants. 7.The 2nd Defendant further pleaded that David Kamau Gakuru, who was a director of the Plaintiff company, had in previous proceedings personally claimed ownership of the suit properties or alleged that they had been transferred to Tende Drive Villas Limited, but had never asserted that the properties belonged to the Plaintiff. Consequently, it contended that the Plaintiff lacked locus standi and had no proprietary interest in the suit properties. 8.Further, it was the 2nd Defendant’s case that the subdivision of L.R No. 3734/750 into four parcels was undertaken with the consent of both the 2nd and 3rd Defendants and that their interests were duly noted against the resultant titles. According to the 2nd Defendant, parcels L.R Nos. 3734/1141 and 3734/1143 remained charged until realization through the exercise of its statutory power of sale, a position which it maintained had previously been upheld by the Court of Appeal in Civil Appeal No. 84 of 2001. 9.The 2nd Defendant denied all allegations of fraud, illegality and irregularity in the realization and transfer process and asserted that it acted lawfully in enforcing the securities. It further denied that the Plaintiff had any equity of redemption, contending that the Plaintiff had never charged the property to the bank. 10.The 2nd Defendant also referred to several previous suits and applications involving the chargor, Tende Drive Villas Limited and the parties herein over the same subject matter, including HCCC No. 1650 of 2000, Civil Appeal No. 84 of 2001 and HCCC No. 283 of 2006 which was subsequently withdrawn. It maintained that the present suit disclosed no reasonable cause of action and constituted an abuse of the court process. 11.The 3rd Defendant filed a statement of defence dated 23rd September 2008 denying the Plaintiff’s claim save for the descriptive averments relating to the parties. It contended that the facility of Kshs. 1.5 million had been advanced to David Kamau Gakuru and not the Plaintiff and that the same was secured by a charge over L.R No. 3734/750, thereby disputing the Plaintiff’s locus standi. 12.The 3rd Defendant further admitted that following subdivision of L.R No. 3734/750 into L.R Nos. 3734/1140, 1141, 1142 and 1143, partial discharges were executed in respect of L.R Nos. 3734/1140 and 1142, but maintained that L.R Nos. 3734/1141 and 3734/1143 remained charged in favour of the 2nd and 3rd Defendants. It denied knowledge of the alleged sale of L.R No. 3734/1140 and the alleged repayment of the loan and maintained that it could not discharge L.R No. 3734/1143 while the loan remained outstanding. 13.The 3rd Defendant denied the allegations of fraud, collusion, illegality and breach of the Plaintiff’s equity of redemption and further contended that Nairobi HCCC No. 283 of 2006 involving the same parties and subject matter had previously been withdrawn. It therefore pleaded that the present suit was res judicata, misconceived and an abuse of the court process. 14.The 5th and 6th Defendants filed a statement of defence dated 25th August 2010 denying the Plaintiff’s claim save for the descriptive averments relating to their identities and address for service. They maintained that they were the lawful proprietors of L.R No. 3734/1143 having acquired the same from the 2nd Defendant pursuant to a sale agreement and transfer. 15.The 5th and 6th Defendants further averred that they were innocent purchasers for value without notice of any encumbrances or third-party claims affecting the suit property. They denied the allegations of fraud and collusion and contended that the suit was frivolous, vexatious and disclosed no reasonable cause of action against them since the Plaintiff had no proprietary or equitable interest in the suit property. They consequently prayed for dismissal of the suit with costs. 16.The 7th and 8th Defendant were struck out from the proceedings. The evidence 17.At the hearing, Pw1 - David Kamau Gakuru, testified that he was a director of the Plaintiff company and that the subdivision of L.R No. 3734/750 into the four resultant parcels was undertaken with the consent of both banks and approval of the City Council and Ministry of Lands. 18.He maintained that proceeds from the sale of plot number 1140 were intended to offset the KCB facility and that plot number 1143 was thereafter to be transferred and discharged. He further testified that the requisite sewer and drainage wayleaves had not been excised before issuance of titles and that the resultant titles were therefore fraudulently issued. 19.During cross-examination, Pw1 admitted that L.R No. 3734/750 was originally registered in his name personally and that there had been previous proceedings involving the same property. He further admitted taking an additional loan facility of Kshs. 4.6 million from NIC which he failed to repay. 20.Dw1 - Christine Wahome, testified on behalf of NIC Bank. She confirmed that NIC advanced a loan facility of Kshs. 7 million secured over L.R No. 3734/750 and later advanced a further facility of Kshs. 4.6 million. She testified that following default, statutory notices were issued and the suit properties sold in exercise of the bank’s statutory power of sale. 21.Dw1 further testified that plots 1141 and 1143 remained charged to both KCB and NIC while plots 1140 and 1142 had been discharged. She denied any fraud or illegality and maintained that all approvals had been obtained prior to issuance of titles. 22.Dw2 - Elizabeth Mwaura Maina of KCB, testified that there was no claim by KCB against NIC and urged dismissal of the suit against the 3rd Defendant. Submissions 23.In its written submissions, the Plaintiff reiterated that it sought injunctive, declaratory and consequential reliefs in respect of L.R Nos. 3734/1141 and 3734/1143, including cancellation of the impugned titles and restoration of the properties to it. 24.The Plaintiff submitted that the evidence on record established that the original property, L.R No. 3734/750, belonged to David Kamau Gakuru and had been charged to both NIC Bank and KCB under a pari passu arrangement. According to the Plaintiff, following subdivision of the property into four plots, it was agreed that L.R No. 3734/1143 would secure the Plaintiff’s borrowing from KCB while L.R No. 3734/1141 would secure the borrowing by David Kamau Gakuru from NIC. 25.The Plaintiff argued that after payment of Kshs. 5 million towards discharge of the securities and a further Kshs. 20 million allegedly received by the 2nd Defendant, the outstanding indebtedness had effectively been cleared. It was submitted that the 2nd Defendant breached the pari passu agreement by failing to share the proceeds with the 3rd Defendant, failing to discharge L.R No. 3734/1143 and unlawfully proceeding with the sale of the suit properties. 26.The Plaintiff further submitted that the subdivision and transfer process was irregular and unlawful because titles were issued before compliance with planning conditions relating to drainage, sewer lines and road reserves. It contended that L.R No. 3734/1141 included drainage infrastructure while L.R No. 3734/1143 encroached on a road reserve, and that the Commissioner of Lands unlawfully issued titles notwithstanding the absence of final subdivision approvals. 27.It was also submitted that no replacement charges were registered against the subdivided plots after discharge of the mother title and that the properties were therefore sold without valid securities in place. The Plaintiff relied on Dinah Achieng Okello v Housing Finance Co. of Kenya [2015] eKLR for the proposition that failure to register charges rendered any claim of interest over land untenable. 28.The Plaintiff further contended that the Defendants failed to issue the statutory notices required under sections 90 and 96 of the Land Act prior to sale of the properties and relied on Mbuthia v Jimba Credit [1988] eKLR and Elizabeth Wambui Njuguna v Housing Finance Co. of Kenya Ltd [2006] eKLR to submit that failure to serve statutory notices rendered the sale unlawful. 29.On the issue of res judicata, the Plaintiff submitted that the question had previously been determined by the Court upon dismissal of a preliminary objection raised by the 2nd and 3rd Defendants and that the issue could not therefore be reopened. 30.Ultimately, the Plaintiff submitted that the Defendants acted fraudulently, negligently and in breach of both statutory and contractual obligations in disposing of the suit properties. It urged the Court to find that it had proved its case on a balance of probabilities and to grant the prayers sought in the amended Plaint. 31.In its written submissions, the 2nd Defendant contended that the Plaintiff’s suit was devoid of merit, founded on a misapprehension of fact and law, and constituted an abuse of the court process. 32.The 2nd Defendant submitted that in 1994, it advanced financial facilities to David Kamau Gakuru secured by a legal charge over L.R No. 3734/750 and that, following subdivision of the property into L.R Nos. 3734/1140, 1141, 1142 and 1143, the charges of both the 2nd and 3rd Defendants were duly noted against the resultant titles. It further stated that while parcels 1140 and 1142 were partially discharged, parcels 1141 and 1143 remained charged to both banks. 33.According to the 2nd Defendant, upon default in repayment by the chargor, it lawfully exercised its statutory power of sale over the charged properties and sold L.R No. 3734/1143 through a private treaty to a third-party purchaser who subsequently became the registered proprietor. 34.The 2nd Defendant denied the Plaintiff’s allegations of fraud, breach of the pari passu arrangement and non-compliance with statutory requirements. It maintained that the charges over the suit properties were valid and enforceable, that the Plaintiff was neither the registered proprietor nor the chargor, and that the sale was conducted lawfully and in accordance with the applicable law. 35.The 2nd Defendant further submitted that the present suit amounted to a collateral attack on previous judicial determinations concerning the same subject matter and urged the Court to dismiss the suit for being devoid of merit both in fact and in law. 36.The 3rd Defendant submitted that the Plaintiff sought injunctive, declaratory and cancellation orders in respect of L.R Nos. 3734/1141 and 3734/1143, including orders restraining dealings with the properties and cancellation of the titles issued to the 4th, 5th and 6th Defendants. 37.It stated that it filed a statement of defence together with witness statements and documentary evidence, maintaining that the suit ought to be dismissed with costs. 38.The 3rd Defendant summarized the evidence of Pw1, David Gakuru Kamau, who testified that he was both a director of the Plaintiff and the chargor of the original property, L.R No. 3734/750. Pw1 stated that the Plaintiff had obtained an overdraft facility from the 3rd Defendant while he separately obtained a facility from the 2nd Defendant, both facilities being secured under a pari passu arrangement over the same property. 39.According to the 3rd Defendant, Pw1 admitted that the original property was subdivided into four portions, namely L.R Nos. 3734/1140, 1141, 1142 and 1143, and that two of the plots were subsequently sold by the 2nd Defendant to the 4th, 5th and 6th Defendants. Pw1 nevertheless maintained that the sales were irregular and fraudulent because the subdivision conditions had allegedly not been complied with. 40.The 3rd Defendant further relied on the evidence of Dw1, who testified that the Plaintiff had unsuccessfully instituted numerous previous suits and applications seeking to restrain realization of the charged properties, including Milimani HCCC No. 1650 of 2000, Civil Appeal No. 84 of 2001, HCCC No. 92 of 2003, HCCC No. 127 of 2005 and Civil Suit No. 283 of 2006. 41.The 3rd Defendant submitted that the Plaintiff was neither the registered proprietor nor the chargor of the suit properties and that the claim was therefore misconceived. It maintained that financial accommodation amounting to Kshs. 15 million and a further Kshs. 7 million had been advanced to David Kamau Gakuru under the pari passu arrangement with the 2nd Defendant. 42.The 3rd Defendant further submitted that default in repayment was not disputed and that the 2nd Defendant lawfully exercised its statutory power of sale over the charged properties. It contended that neither the Plaintiff nor David Kamau Gakuru had demonstrated that the loans had been fully repaid before L.R No. 3734/1143 and L.R No. 3734/1141 were sold. It also maintained that no evidence of fraud or collusion had been produced against the Defendants. 43.Ultimately, the 3rd Defendant urged the Court to dismiss the suit with costs, contending that the Plaintiff had failed to establish any legal basis for the reliefs sought. 44.In their written submissions, the 5th and 6th Defendants contended that David Kamau Gakuru was the original registered owner of L.R No. 3734/750 and that the property had been lawfully charged to the 2nd and 3rd Defendants. They submitted that upon subdivision of the mother title into L.R Nos. 3734/1140, 1141, 1142 and 1143, the chargor defaulted in repayment, whereupon the 2nd Defendant validly exercised its statutory power of sale and transferred L.R No. 3734/1141 to the 5th and 6th Defendants and L.R No. 3734/1143 to the 4th Defendant. 45.The 5th and 6th Defendants further submitted that the present suit formed part of a long history of litigation initiated by David Kamau Gakuru through various entities, including Tende Drive Villas Limited and the Plaintiff company, in an attempt to challenge the sale and transfer of the suit properties. They relied on several previous decisions of the High Court and Court of Appeal in which applications for injunctions and challenges to the statutory sale had been dismissed. 46.They cited, inter alia, the decision of Khamoni, J in HCCC No. 1650 of 2000 where the Court held that the statutory power of sale had properly accrued following default in repayment of the Kshs. 4.6 million facility. They also relied on a Court of Appeal decision affirming that equitable relief could not issue in favour of a party undeserving by reason of his conduct. 47.The 5th and 6th Defendants additionally referred to HCCC No. 92 of 2003 in which the Court held that ownership of the suit properties could only be proved through title documents and not by correspondence, and to HCCOMM No. 127 of 2005 where Azangalala, J rejected allegations of fraud in the transfers. They further relied on the decision of Waweru, J granting eviction orders and finding that the Plaintiffs therein could adequately be compensated by damages. 48.The Defendants also relied on the ruling of Lessit, J striking out the 7th and 8th Defendants from the proceedings on the basis that previous decisions of the Court and Court of Appeal had conclusively determined that the transfers were irreversible and that any remedy available, if at all, lay in damages under section 60A of the Indian Transfer of Property Act. 49.Ultimately, the 5th and 6th Defendants submitted that the Plaintiff had no registrable or proprietary interest in the suit properties and that the allegations of fraud were in reality personal complaints by David Kamau Gakuru as the original chargor. They contended that the present suit was an abuse of the court process aimed at re-litigating issues that had repeatedly been determined by the courts and urged that the suit be dismissed with costs. Analysis and determination 50.Having considered the pleadings, evidence and submissions on record, the issues arising for determination are:a.Whether the Plaintiff established any proprietary or legal interest in the suit properties.b.Whether the exercise of the statutory power of sale by the 2nd Defendant was unlawful, fraudulent or irregular.c.Whether the Plaintiff is entitled to the reliefs sought Whether any proprietary or legal interest in the suit properties was established 51.It is common ground that the original property L.R No. 3734/750 was registered in the personal name of Pw1, David Kamau Gakuru. Pw1 expressly admitted during cross-examination that the property belonged to him personally. The evidence further showed that the charges securing the facilities advanced by the 2nd and 3rd Defendants were executed by Pw1 in his personal capacity and not by the Plaintiff company. 52.The Plaintiff did not produce any title document, transfer, charge instrument or other evidence demonstrating that it was at any time the registered proprietor of either L.R No. 3734/1141 or L.R No. 3734/1143. Further, Pw1 admitted that he obtained an additional facility of Kshs. 4.6 million from the 2nd Defendant which remained unpaid. That evidence substantially undermined the Plaintiff’s assertion that the indebtedness had been fully settled. 53.Under sections 24 and 25 of the Land Registration Act, proprietary rights vest in the registered proprietor. Equally, sections 107 to 109 of the Evidence Act place the burden of proof upon the party asserting a fact. The Plaintiff bore the burden of establishing its proprietary or equitable interest in the suit properties. 54.In the present case, no evidence was tendered demonstrating that the Plaintiff acquired ownership of the suit properties or that the securities created over the properties were extinguished. I am therefore not satisfied that the Plaintiff established any proprietary or equitable interest capable of defeating the interests of the registered proprietors or the rights of the chargees. Whether the 2nd Defendant’s exercise of the statutory power of sale was unlawful, fraudulent or irregular 55.The Plaintiff further alleged that the sale and transfer of the suit properties were tainted by fraud, collusion and illegality. The law is settled that allegations of fraud must not only be specifically pleaded but must also be strictly proved to a standard higher than a balance of probabilities though not beyond reasonable doubt. (See Kinyanjui Kamau v George Kamau [2015] eKLR). 56.The Plaintiff contended that titles were issued before compliance with planning conditions relating to sewer and drainage wayleaves. However, no official from the Ministry of Lands, the City Council or the relevant planning authority was called to confirm that approvals had not been granted or that the resultant titles were irregularly issued. 57.On the contrary, Dw1 testified that it was not possible for titles to issue without the requisite approvals and maintained that there was no evidence showing that the titles issued to the purchasers were fake, unlawful or irregular. Beyond the Plaintiff’s assertions, no documentary, expert or official evidence was produced to demonstrate fraud or illegality in the issuance of the titles. 58.The evidence on record further established that the suit properties were sold by the 2nd Defendant pursuant to the exercise of its statutory power of sale following default in repayment of the facilities advanced to Pw1. The Plaintiff did not produce evidence demonstrating that the statutory notices required by law were not issued or that the realization process was otherwise unlawful. 59.The Plaintiff argued that no valid replacement charges were registered over the subdivided plots and that the securities therefore became unenforceable. However, Dw1 testified that the interests of both banks were duly noted against the resultant titles and that whereas plots 1140 and 1142 were partially discharged, plots 1141 and 1143 remained encumbered. That evidence was not displaced. 60.Equally unpersuasive is the Plaintiff’s contention that the indebtedness had been fully settled. No statements of account, discharge instruments or other documentary proof demonstrating full repayment of the facilities were tendered before the Court. The burden of proof lay upon the Plaintiff pursuant to sections 107 and 109 of the Evidence Act. 61.It is trite law that once default occurs, a chargee’s statutory power of sale crystallizes. Once a statutory power of sale has arisen, the mortgagee is entitled to exercise it provided the requirements of the law are met. A court will not interfere with a chargee’s exercise of statutory power of sale merely because the chargor disputes the amount due see Mbuthia v Jimba Credit Finance Corporation & Another [1988] KLR 1. 62.The Plaintiff failed to demonstrate that the 2nd Defendant acted outside the law in exercising that right. 63.I therefore find that the allegations of fraud, collusion and illegality were not proved to the required standard. Whether the plaintiff is entitled to the reliefs sought 64.The 5th and 6th Defendants pleaded and proved that they acquired the suit properties following realization of the securities by the chargee. No evidence was tendered demonstrating fraud, collusion or illegality attributable to them in the acquisition of the properties. The law protects innocent purchasers for value without notice. 65.Further, the Plaintiff failed to establish any proprietary or equitable interest in the suit properties capable of defeating the rights of the registered proprietors or impeaching the transfers effected pursuant to the exercise of the statutory power of sale. 66.The Plaintiff equally failed to prove the allegations of fraud, illegality or procedural impropriety levelled against the Defendants. The evidence on record instead demonstrates that the suit properties were realized pursuant to securities lawfully created in favour of the 2nd and 3rd Defendants following default in repayment of the facilities advanced. 67.Ultimately, the Plaintiff failed to establish any legal or equitable basis upon which this Court can invalidate the realization process undertaken by the 2nd Defendant or impeach the titles presently held by the purchasers. 68.In the premises, I find that the Plaintiff failed to prove its case on a balance of probabilities. 69.Consequently, the Plaintiff’s suit is hereby dismissed with costs to the Defendants. JUDGMENT DELIVERED VIRTUALLY, DATED AND SIGNED AT NAIROBI THIS 14TH DAY OF MAY 2026.P.M. MULWAJUDGEIn the presence of:Mr. Muli h/b for Mr. Nzavi for PlaintiffMs. Wangari for 2nd DefendantMr. Kimani and Ms. Esha for 3rd DefendantMr. Karongo for 5th & 6th DefendantsCourt Assistant: Lispa