Chege Wainaina v National Land Commission & Kenya National Highways Authority

**REPUBLIC OF KENYA** **IN THE ENVIRONMENT & LAND COURT AT NAIROBI** **ELC E172 OF 2024** **CHEGE WAINAINA - PLAINTIFF** **VS** **NATIONAL LAND COMMISSION - 2ND DEFENDANT** **KENYA NATIONAL HIGHWAYS** **AUTHORITY - 2ND DEFENDANT** **JUDGEMENT** **Introduction and background** 1. Vide the Plaint dated 29/4/2024, the Plaintiff filed suit against the defendants seeking the following orders; 1. An order restraining the defendants their officers servants agent or anyone acting on the respondents behalf from taking possession or entering encroaching trespassing working on constructing using acquiring or in any manner interfering with part or whole parcel of land known as Dagoreti/Kinoo/4732 [suit land] belonging to the applicant without clearing the balance of the award for the said land and the developments thereon all totaling to a sum of Kshs 34,453,665/- 2. An order compelling the defendants to release the sum of Kshs 34,453,665/-, being the balance of the award for the parcel of land known as Dagoreti/Kinoo/4732, together with interest at commercial rates until payment in full. 3. The 1st defendant be restrained from acquiring the suit property until payment of the award and settlement of this matter in full. 4. General and exemplary damages for oppressive conduct by the defendants for not promptly making a settlement of the balance of the award. 5. Lost earnings since the building was earmarked for demolition [ years 2019 todate] in the sum of Kshs 35,389,000/- together with other accruing sums of lost earnings until payment in full 6. Interest at commercial bank rates. 2. The Plaintiff avers that the 1st Defendant acquired the suit land on behalf of the 2nd Defendant for the purpose of constructing the James Gichuru Junction-Rironi Junction Road project. On 23 July 2020, the 1st Defendant awarded the Plaintiff Kshs 128,492,580/- as compensation for a 0.0205-hectare portion of the suit land arising from compulsory acquisition. Subsequently, the 1st Defendant made partial payments to the Plaintiff totalling Kshs 94,038,915/-, thereby settling part of the award and leaving a balance of Kshs 34,453,665/-. 3. The premises comprise residential and commercial units generating a monthly income of Kshs 823,000/-, which ceased following demolition notices issued by the defendants, prompting tenants to vacate. The plaintiff has suffered and continues to suffer losses amounting to Kshs 35,389,000/-, which continue to accrue until full payment is received. 4. The 1st Defendant admits to acquiring the suit land on behalf of the 2nd Defendant for the expansion of the James Gichuru-Rironi Road project, together with other properties along that section of the road, in accordance with the procedures set out in Part VIII of the Land Act, 2012. An award of Kshs 128,492,580/- was duly accepted by the plaintiff following the conclusion of inquiries, of which a portion, amounting to Kshs 94,038,915/-, has been paid. The remaining balance of Kshs 34,453,665/- is still due from the acquiring entity, the 2nd Defendant. 5. Regarding the alleged loss of income, the 1st Defendant denies the claim and demands strict proof from the plaintiff. 6. The 2nd Defendant also admits that, acting within its statutory mandate, it issued a letter of award on 23 July 2020, awarding the plaintiff Kshs 128,492,580/- for the 0.0205-hectare parcel acquired for the expansion of the James Gichuru-Rironi Road. A portion of this sum has been paid, leaving a balance of Kshs 34,453,665/-. 7. Regarding the claim for loss of income or consequential damages, the 2nd Defendant denies liability and contends that compensation for compulsory acquisition is governed by Article 40(3) of the Constitution and the Land Act, which provide for just compensation based on the value of the land and its improvements. These provisions do not cover speculative or consequential losses. Furthermore, there was no agreement or undertaking to compensate for alleged lost income or halted development arising from payment delays; the Defendant demands strict proof of such claims. The compulsory acquisition process was lawful, transparent, and in accordance with applicable statutes and regulations. 8. Additionally, it was averred that the delay in remitting the balance of the award is due to statutory and budgetary processes under the Public Finance Management Act, 2012, and not to any willful or oppressive conduct by the 2nd Defendant. **The evidence adduced at the hearing** 1. At the hearing, the plaintiff, as PW1, led evidence that he is the registered owner of the property. He received an award of Kshs 94,038,915/- on 21 October 2020, with the remaining balance of Kshs 34,453,665/- still outstanding. 2. Upon request, he was advised by the 2nd Defendant that the remaining balance would be paid once funds are available. 3. Without leading any evidence in support of the demolition notices or markings, the witness testified that part of the premises comprises rental and commercial spaces generating an income of Kshs 823,000/- per month. This income was lost after the second defendant issued demolition notices or markings, which caused tenants to vacate. The witness further stated that he reported a total income loss of Kshs 35,389,000/-, resulting from these notices. 4. He stated that a valuation conducted on 28 May 2018 was commissioned to facilitate negotiations concerning the acquisition of the suit property. Without leading evidence, he asserted that the valuation report was served upon the 2nd Defendant. 5. Without producing primary evidence regarding the tenants in the building, the tenancy agreements, and the rent payable, the witness indicated that these details would be included in the valuation report dated 28/5/2018. He directed the court's attention to a rental schedule on page 81 of the plaintiffs' trial bundle. He also acknowledged that he had not submitted any evidence of termination notices issued by the tenants. He further stated that he had no evidence of any demand made to the 2nd Defendant for payment of loss of income or any consequential loss. Notably, his letter dated 8/4/201 addressed to the 2nd Defendant did not contain any claim for loss of income, as his primary concern was the balance of the award. He clarified that Kshs 35,389,000/- was intended to cover loss of rental income from 2019 until full payment is made. 6. During cross-examination, the witness stated that the building comprises four floors, serving both residential and commercial purposes, and extends over Plot Numbers 4732 and 4733. Both plots belong to the witness. He observed that demolishing one part would affect the other. To date, the building has not been demolished because the full award has not been paid. Regarding partial payment of the compensation award, the witness stated that the law does not permit it, emphasising that the principle is based on just and prompt compensation. 7. PW2 – Peter Kanyungo stated that he is a professional valuer and that he was instructed by PW1 to prepare a valuation report dated 28 May 2018. 8. He indicated that the valuation report concerns parcels Nos 4732 and 4733 and was prepared for compulsory acquisition. He clarified that no further valuations were carried out after 2020. On pages 61-62 of the report, he stated that he sourced the rental values from PW1. He also confirmed that he personally inspected the property and used the client's rental figures. 9. DW1 – Isabel Njeru testified that she is employed by the 1st Defendant’s office as the Principal Valuation and Taxation Officer. 10. The 1st Defendant initiated the compulsory acquisition process on behalf of the 2nd Defendant for the construction of the James Gichuru-Rironi Road. The Plaintiff accepted the final award, and a portion was disbursed to the Plaintiff, leaving an outstanding balance of Kshs 34,453,665/-. 11. Regarding the delay in settling the remaining balance of the award, the witness informed the court that such remittance delays are customary. The witness also stated that, once the funds are received from the 2nd Defendant, the payments will be made accordingly. Furthermore, the witness emphasised that the obligation to fulfil the award lies with the acquiring entity, which in this case is the 2nd Defendant, not the 1st Defendant. 12. DW2 - Dr Anthony Kusimba stated that he is the Senior Surveyor in the 2nd Defendant's office and, therefore, is authorised and competent to testify on the 2nd Defendant's behalf. He relied on his witness statement dated 20/11/25 for his evidence in chief and produced the documents marked DEX Nos 1-4. 13. The 2nd Defendant is constituted under the Kenya Roads Act and is responsible for developing, rehabilitating, managing, and maintaining national trunk roads, including the project in question. The proposal to acquire 0.0205 hectares of the suit property was publicly announced in the Kenya Gazette Nos. 2532 and 6961, dated 16 March 2018 and 13 July 2018. 14. Subsequently, the 1st Defendant issued an award on 23 July 2020, awarding the plaintiff Kshs 128,492,580/-. A portion of the award was settled, leaving an outstanding balance of Kshs 34,453,665.50, attributable to budgetary constraints rather than to malice or bad faith on the part of the 2nd Defendant. 15. With regard to the Plaintiff's claim for loss of income, the witnesses indicated that the claim lacks evidentiary support and, in any event, that the Plaintiff has not presented any evidence to the court to substantiate it. The 2nd Defendant is yet to assume possession of the suit property. Furthermore, the 2nd Defendant has not issued any notice of eviction to the Plaintiff's tenants, as the 2nd Defendant has not yet received full payment. Additionally, the premises have not been marked for demolition. **The written submissions** 1. At the close of the hearing, the parties filed their written submissions which I have read and considered in the judgment. **Analysis and determination** 1. Upon considering the pleadings, the evidence adduced at the hearing, the written submissions, and all the material placed before the court, the issues that come before the court for determination are; 1. Whether the defendants should be compelled to release the sum of Kshs 34,453,665/- being the balance of the award to the Plaintiff. 2. Whether the Plaintiff is entitled to the loss of income in the building. 3. Costs of the suit. **The balance of the award** 1. It is undisputed that the compulsory acquisition process was initiated by the 1st Defendant on behalf of the 2nd Defendant. The purpose of this compulsory acquisition was to facilitate the expansion of the James Gichuru - Rironi Road, which required the compulsory acquisition of several parcels of land along the route, including the land in question. 2. It is not in dispute that the Plaintiff is the registered owner of the suit land. Equally, a company related to him owns the adjacent property, parcel 4733. The Plaintiff led evidence that a four-storey building stands across the two parcels, so the demolition of one will affect the other. 3. A section of 0.0205 hectares of the subject land was acquired, and the Plaintiff accepted an award of Kshs 128,492,580/-. Of the total amount, a deposit of Kshs 94038,915/- was paid, leaving an outstanding balance of Kshs 34,453,665/-. 4. The 1st and 2nd defendants have acknowledged the outstanding award, subject to receipt of funds from either the 2nd defendant or the National Treasury. It was contended that full settlement will occur once the necessary funds are available. The 2nd defendant confirmed that it has not yet taken possession of the acquired portion due to the outstanding award. 5. The provisions of Article 40(3)(b)(i) provide that where land is being compulsorily acquired, one of the core requirements is that the purpose must be for a public purpose or in the public interest, and that the acquisition is carried out in accordance with the Constitution and any Act of Parliament that requires prompt payment in full of just compensation to the owner of the land. 6. Section 111(1) of the Land Act states that prompt payment shall be made to all the persons whose interests in the land have been determined. 7. The importance of prompt payment is underscored by Section 111(2) of the Land Act, which requires the acquiring body to deposit compensation funds with the commission, together with survey and registration fees and any other associated costs, before the acquisition commences. In my considered view, this definition establishes the time criterion, specifically the reasonable time test. In this context, payment must be made within a reasonable timeframe, given the circumstances of the acquisition. The second criterion sets the absolute outer limit: payment should not be delayed beyond one year from the date the National Land Commission (NLC) assumes possession. The monies deposited with the NLC are held in trust pending payment of the compensation. 8. The Constitution therefore imposes three fundamental criteria for payments under compulsory acquisition, namely: payments must be prompt; payments must be in full; and compensation must be just. 9. Section 115 of the Land Act provides the mechanism on payment of compensation as follows; “After notice of an award has been served on all the persons determined to be interested in the land, the Commission shall, promptly pay compensation in accordance with the award to the persons entitled thereunder, except in a case where—(a)there is no person competent to receive payment; or(b)the person entitled does not consent to receive the amount awarded; or(c)there is a dispute as to the right of the persons entitled to receive the compensation or as to the shares in which the compensation is to be paid.(2)In any of the cases referred to in paragraphs [(a)](https://kenyalaw.org/akn/ke/act/2012/6/eng%402025-11-04#part_VIII__sec_115__subsec_1__para_a), [(b)](https://kenyalaw.org/akn/ke/act/2012/6/eng%402025-11-04#part_VIII__sec_115__subsec_1__para_b) and [(c)](https://kenyalaw.org/akn/ke/act/2012/6/eng%402025-11-04#part_VIII__sec_115__subsec_1__para_c) of subsection [(1)](https://kenyalaw.org/akn/ke/act/2012/6/eng%402025-11-04#part_VIII__sec_115__subsec_1), the Commission may at any time pay the amount of the compensation into a special compensation account held by the Commission, notifying any persons interested accordingly.(3)If the compensation payable in any of the cases referred to in paragraphs [(a)](https://kenyalaw.org/akn/ke/act/2012/6/eng%402025-11-04#part_VIII__sec_115__subsec_1__para_a), [(b)](https://kenyalaw.org/akn/ke/act/2012/6/eng%402025-11-04#part_VIII__sec_115__subsec_1__para_b) and [(c)](https://kenyalaw.org/akn/ke/act/2012/6/eng%402025-11-04#part_VIII__sec_115__subsec_1__para_c) of subsection [(1)](https://kenyalaw.org/akn/ke/act/2012/6/eng%402025-11-04#part_VIII__sec_115__subsec_1), is in the form of an alternative land, the Commission may hold the title to such land in trust for the beneficiaries. 1. The preceding section specifies the stage at which the compensation is to be disbursed, namely after the notice of the award has been served upon the entitled individual and the parties have accepted the award. In instances where the parties are unavailable or there is a dispute concerning the land, the NLC may establish a special compensation account and deposit the funds therein, to be released subsequently to the rightful beneficiaries. 2. Section 117(1) of the Act provides, in substance, that where compensation has not been paid, NLC must, on or before taking possession, open a special account and pay interest on the outstanding award; “…at the base lending rate set by the Central Bank of Kenya and prevailing at that time from the time of taking possession until the time of payment.” 1. As set out above, interest runs from the date possession is taken and continues until payment in full. Accordingly, the landowner is entitled to the award plus statutory interest. In my view, interest here compensates for delayed payment but does not justify indefinite delay. 2. Section 2 of the Land Act defines prompt payment as thus; "prompt" means within a reasonable time of, and in any case not more than one year after, the taking of possession of the land by the Commission; 1. In the context of the law, therefore, a payment that is incomplete, or an award paid after an unreasonable delay, does not satisfy the provisions of Art 40 (3) of the Constitution regarding prompt payment in full of the just compensation. 2. In this case, it is not in dispute that part compensation was paid in 2020. The balance has been outstanding for more than 5 years. Although the NLC has not taken possession of the acquired portion, the Plaintiff has been deprived of the suit land without prompt compensation. I therefore find that the Plaintiff is entitled to the outstanding balance, with interest in any event. **Whether the Plaintiff is entitled to the loss of income in the building.** 1. The plaintiff asserts that, as a consequence of the defendant’s demolition notice, the tenants occupying the building on the suit land vacated the premises, resulting in a loss of Kshs 823,000/- per month, amounting to a total loss of Kshs 35,389,000/- to date. 2. The defendants have challenged the Plaintiffs' claim on the ground that it is not substantiated in any form or substance and have urged the court to dismiss it. 3. The court has thoroughly examined the evidence presented by the plaintiff. The plaintiff failed to provide any substantial evidence, including relevant details such as the tenancy agreements, tenant information, rent amounts, termination notices for the tenancies, and the reasons for vacating the premises, to substantiate the claim. As this is a claim for special damages, it must be expressly pleaded and rigorously proved. In the absence of any supporting evidence, the court finds it difficult to grant the relief sought. The claim is rejected. 4. In the case of Rookes vs Barnard (1964) 1 All ER 367, where the Court held that; “exemplary damages may be awarded in two classes of cases; first where there is oppressive, arbitrary or unconstitutional action by the servants of the government, and secondly, where the defendant's conduct was calculated to procure him some benefit, not necessarily financial, at the expense of the plaintiff.” 1. In the circumstances of this case, the court finds that the land has been acquired for public purposes, specifically the construction and/or extension of the public roadway. Consequently, I find no evidence of oppression or arbitrariness by the Respondents that would justify the award of exemplary damages. 2. In the end, the plaintiff's suit succeeds in part and I grant the following orders; 1. The defendants, their officers, servants, agents, or anyone acting on the respondents' behalf, be and are hereby restrained from taking possession of, entering, encroaching, trespassing, working on, constructing, using, acquiring, or in any manner interfering with any part or the whole parcel of land known as Dagoreti/Kinoo/4732 [suit land] belonging to the applicant, without clearing the balance of the award for the said land and the developments thereon, totalling Kshs 34,453,665/- 2. The defendants are hereby ordered to release the sum of Kshs 34,453,665/-, being the balance of the award for the parcel of land known as Dagoreti/Kinoo/4732, together with interest at 14% until payment in full within the next 90 days from the date of the judgment herein. 3. The 1st Defendant be restrained from vesting the suit property in the name of the 2nd Defendant until the award is settled in full. 4. The prayer for loss of earnings, general and exemplary damages is disallowed. 5. The costs shall be borne by the 2nd Defendant in favour of the Plaintiff. 3. It is so ordered **DELIVERED, DATED AND SIGNED AT NAIROBI THIS 9TH DAY OF SEPTEMBER 2026 VIA MICROSOFT TEAMS.** **J G KEMEI** **JUDGE** **Delivered virtually in the presence of:** 1. Mr. Maina HB for Mr. Chege Wainaina 2. N/A for the 1st Defendant 3. Mr Muhoro HB for Mr Ogembo for the 2nd Defendant 4. CA – Mr Amos