https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/8402

East African Development Bank v Jaffer & 2 others (Civil Case 153 of 2003) [2026] KEHC 8402 (KLR) (9 June 2026) (Judgment) Neutral citation: [2026] KEHC 8402 (KLR) Republic of Kenya In the High Court at Mombasa Civil Case 153 of 2003 DKN Magare, J June 9, 2026 Between East African Development Bank Plaintiff and Mutjaba Jaffer 1st Defendant Minoj Shah 2nd Defendant Sachin Amritlal Purshottam bhimji Devan & Reena Amritlal Devan (Sued as the administrators of the Estate of Amritlal Purshottam bhimji Devani alias Amritlal Purshottam Devani Alias Amritlal Devani - Deceased) 3rd Defendant Judgment 1.The Plaintiff is established by a treaty establishing and re-enacting the East African Development Bank 1980. 2.The first and second defendants are male adult Kenyans while Sachin Amritlal Purshottam Bhimji Devani and Reena Amritlal Devani are the Administrators of the estate of Amritlal Purshottam Bhimji Devani alias Amritlal Purshottam Devani alias Amritlal Devani (deceased), who had hitherto been sued as a third defendant. They were joined to the suit by the order of this court made on 2.04.2025. 3.The plaintiffs pleaded that by a loan agreement dated 1.10.1998, made between the Plaintiff and Kenya Bus Services (Mombasa) Limited (herein referred to as the debtor) the Plaintiff agreed to extend to Kenya Bus Services (Mombasa) Limited a loan in various currencies equivalent to Special Drawing Rights SDR 1,600,000 only on condition that the Defendants gave their personal guarantees in a form and substance acceptable to the Plaintiff to secure the Company's obligations. 4.Further, they averred that by a written guarantee dated 1.10.1998, the Defendants agreed to guarantee the obligations of Kenya Bus Services (Mombasa) Limited in consideration of the Plaintiff entering into the loan agreement. 5.It was averred that by dint of By Section 2.01 of the written guarantee the Defendants, irrevocably, absolutely and unconditionally guaranteed as primary obligor and not merely as surety the due and punctual payment of the loan with interest, commission, commitment fees and all other charges thereon as the same shall become due and payable by the Company to East African Development Bank under the terms of the loan agreement and receipt by the Defendants or each of them of the Plaintiff's demand. 6.They maintained that further and as security pursuant to the financial accommodation to the debtor, the debtor agreed to charge its property and/or assets by a debenture registered on 24th November 1998, part of which property was Mombasa Block 1/315. 7.Subsequently, the Company (Kenya Bus Services (Mombasa) Limited) defaulted in the repayment of both the principal and interest and the amount due and outstanding on the Company's account with the Plaintiff as at 28.02.2008 was US $ 3,578,413.92. The said amount continues to attract interest at the rate of 12% per annum on the principal amount and at 6% on the arrears from 1.03.2003, until payment in full. 8.They stated that as at 1.03.2009, the Plaintiff's claim against the Defendants subsequent to the sale of the security property Mombasa/Block/1/315 was US $ 9,961,114.91. 9.On 10.04.2001, the Plaintiff appointed Abdul Samji and Harish Shah as Receivers/Managers over all property and assets charged pursuant to the debenture in favour of the Plaintiff, which was inclusive of all that property known as Mombasa/Block/1/315 as further in respect of the loan to the debtor herein. 10.The Plaintiff through the said Receivers & Managers sold the security property Mombasa/Block/1/315 to Portside CFS Limited on or about 2006 for a net sum of Kshs. 38,000,000/= and proceeds thereof were credited to the debtor's account with the Plaintiff. 11.The Plaintiff's claimed a sum of US $ 9,961,114.91 plus interest thereon at the rate of 12% per annum from 1.03.2003 until payment in full and a further 6% as the penalty. The said amount is made up as follows, due as at 1.03.2009:a.Principal amount US $ 9,532,167.37b.Interest US $ 428,947.53Total US $ 9,961,114.91 12.The Plaintiff prayed for the following:a.US $ 9,961,114.91b.Interest on 1 above at the rate of 12% per annum from 1st March 2003/2009 until payment in full.c.Costs of the suit. 13.The Defendants entered appearance on 8.8.2003 and filed defence on 29.8.03. There were interlocutory applications. On 2.07.2010, the parties recorded a consent to amend the plaint before Azangalala J, as he then was. The matter then proceeded for an application to strike out the suit. Ruling was delivered on 20/12/2016, reported as East African Development Bank Limited v Mujtaba Jaffer & 2 others [2016] KEHC 42 (KLR), P.J.O. Otieno J allowed the application in the following terms:29.I am bound by the decision, that a document prepared by an unqualified person is void for all purposes. I take the expression ‘void for all purposes’ to mean void for every intention to rely on it including an attempt at recovery of money advance and secured by it.30.Having come to the conclusion that the guaranteed agreement was a document as defined under section 34 (1)g, Advocates Act, and having found that it is void for all purposes, and the suit herein being grounded on the document so found, it follows that there is no suit that merits being sustained to be heard on the merits. I say that there is no magic in hearing on merits where it is obvious that there is no suit to justify employment of court time.31.The upshot is that the application dated 2/5/2015 is merited, I allow it and order that the plaintiff’s plaint dated 2/7/2013, as amended, be and is hereby struck out with costs to the defendants. 14.The matter gave rise to Mombasa CACA No. 33 of 2017. In a decision dealing with the appeal, which is reported as East African Development Bank Limited v Mujtaba Jaffer & 2 others [2021] KECA 459 (KLR), the court of appeal [W. Karanja, Asike-Makhandia & Gatembu, JJ.A)] found as follows:28.We agree, therefore, with counsel for the appellant that the finding by the learned Judge that the guarantee was not drawn by an advocate was arrived at without evaluating and appreciating all the evidence that had been placed before him. It was not a clear case for striking out. The result is that in reaching his decision, the learned Judge failed to take into account considerations of which he should have taken account of. We are therefore entitled to interfere with the exercise of discretion by the learned Judge. See Mbogo vs Shah [1968] E.A. 93.29.Given that the finding or presumption by the learned Judge that the guarantee was not drawn by an advocate was the fulcrum on which the decision to strike out the suit was founded, and given also the conclusion we have reached in that regard, it is unnecessary to consider the secondary questions on which counsel addressed us as to whether a guarantee may be prepared by an unqualified person; whether the learned Judge misinterpreted the principles set by the Supreme Court of Kenya in National Bank of Kenya Limited vs. Anaj Warehousing Limited (above) and whether the Judge ought to have followed the decision of the Supreme Court of England in Patel vs Mirza (above).30.In conclusion therefore, we allow the appeal. We hereby set aside the ruling and orders given on 20th December 2016. We substitute therefor an order dismissing the respondents’ application dated 26th May 2015 with costs to the appellant. 15.There were various interlocutory applications before Hon. P.J.O. Otieno J and Njoki Mwangi J. The matter was then placed begore me as a fresh matter on 20.02.2023. I gave directions that the matter was to be fixed for hearing on 14 and 21 of March 2023 in Mombasa physically. 16.After hearing the parties, the court was transferred to Nyeri. Parties sought and were granted authority by the Chief Justice for the court to go back to Mombasa to hear this matter given the age of the matter. Evidence 17.The proceedings concern a claim by the plaintiff, the East African Development Bank (EADB), against the defendants based on personal guarantees issued in support of a loan advanced to Kenya Bus Services (Mombasa) Ltd. PW1 was Rugambra Cyrial John Pesha, who was a Former Legal Counsel of the plaintiff. He testified that he participated in the negotiation and preparation of the loan and security documentation. The loan agreement provided financing equivalent to SDR 1,600,000, which is approximately Ksh 126,750,000. He stated that the borrower was Kenya Bus Services (Mombasa) Ltd, while the defendants executed personal guarantees. 18.He stated that a guarantee creates an obligation to pay liabilities arising from another agreement. The loan was secured by a debenture, charges over assets, and other securities. The applicable law under both the loan agreement and guarantee was Kenyan law. He acknowledged that the guarantee did not expressly state an interest rate and that he was not aware of any requirement that the interest rate be disclosed in the guarantee. Further he had no knowledge of the statement of account. 19.He stated that the plaintiff used standard documentation, sometimes adapted by external counsel. He confirmed that the defendants signed the guarantees as principal debtors and that plaintiff relied on external advocates, including Anjarwalla & Khanna, for registration of securities. He acknowledged that he was not admitted to practise law in Kenya during the relevant period. 20.PW2 was Justus Kiragu, a Principal Investment Officer of the plaintiff. He testified that the plaintiff is governed by a treaty and charter requiring it to finance commercially and technically viable projects. Thus the loan was intended to finance acquisition of buses and workshop equipment. He stated that the approved loan amount was SDR 1,600,000, equivalent to approximately Ksh. 126,750,000. He explained that the loan was disbursed in USD and other currencies as required by suppliers. He admitted, however that the plaintiff did not produce a formal statement of account. He also could not provide records relating to recoveries, advertisements, auction processes, receiver expenses, and proceeds from debenture assets. 21.He stated that some disbursements exceeded the equivalent Kenya shilling figure appearing in the agreement because of currency fluctuations and project costs. 22.He stated that Kenya Bus Services defaulted and receivers were appointed. Further that the charged property known as Mombasa Block 1/315 was sold for approximately Kshs 44.9 million. The guarantors remained liable under the guarantee agreement as primary obligators. 23.During re-examination, he maintained that the loan was denominated in foreign currency equivalent to SDR 1,600,000 and that the guarantee covered the outstanding balance after enforcement against the borrower. 24.After close of the plaintiff’s case, the second defendant, Manoj Jayantilal Shah, a Director and Guarantor testified as DW1. He stated that he was a director and shareholder of Kenya Bus Services (Mombasa) Ltd. He testified that he signed both the loan agreement and guarantee. It was his evidence that the defendants executed personal guarantees as security for the loan. 25.It was his evidence that Mohamed Jaffer, although chairman, was excluded from the guarantee requirement. Thereafter, the company experienced serious problems with buses supplied by CMC, leading to operational difficulties. 26.Many of the buses became grounded due to mechanical defects. He maintained that the guarantee was prepared by an unqualified person. It was his position that the plaintiff failed to account fully for proceeds recovered from securities and receivership. Further he stated that the plaintiff had not demonstrated all credits, recoveries, valuation expenses, receiver costs, and sale proceeds. It was his evidence that the company received the loan facility. 27.He maintained that rreceivers were appointed following default but they did not challenge the receivership in court. Further, he stated that the company never sued over the sale of the charged property. 28.DW2 was Atiq Saifuddin Anjarwalla, Advocate who acted for the borrower. He testified that the plaintiff supplied the initial drafts of the loan agreement, debenture, charge, and guarantee. His firm reviewed, commented on, and amended drafts to protect the client's interests. The final documents were a combination of the plaintiff's drafts and the amendments proposed by the firm's advocates. He maintained that the security documents originated from the plaintiff and that by merely amending a document does not make the advocate the drawer of the document. The guarantees were voluntarily signed by the defendants in his presence. He disputed suggestions that his firm drew the guarantee from scratch. Submissions 29Parties filed submissions. The plaintiff filed submissions in reply dated 14.02.2026. It is 109 paragraphs long. They submitted that the advancement was not US $ 1,600,000 or Ksh 126,750,200/=. It was on the contrary that the advancement was SDR 1,600,000/=, which is said to be a composite currency inclusive of US dollars. The conversion rate is stated to be SDR1 = Shs. 79.202 = 1.33154. The amount was thus US $ 2,130,464/=. They submitted the currency or currencies of the loan to mean the currency of disbursement of the loan. They deny that the currency of the loan was US $ or Ksh. 30.They averred that Anjalwala Abdulhusein and Company Advocates did not draw the security documents. Reliance on Robert Muriithi’s document is inadmissible. They placed reliance on the case of Makanda v Osita [2025] KEHC 8510 (KLR), where WM Musyoka J, held as follows:The witness statement, which the court admitted on 17th January 2023, was not adopted by the appellant as his evidence. He did not produce it as an exhibit. The expunging of the said witness statement was absolutely of no consequence. The witness statement was not evidence. It was not adopted by its maker, nor produced by him as evidence. The maker gave sworn oral testimony. That oral sworn statement overrode any unsworn witness statement. Even if that witness statement were to remain in place, it would be useless, in view of the oral sworn statement of the appellant. In any case, the Small Claims Court Act and the Small Claims Court Rules do not provide for the filing of witness statements in the first place. 31.They submitted that in any case, the affidavit of Robert Muriirthi was sworn in response to an application dated 26.05.2015. Reliance was placed on the case of Mutai & 9 others v Attorney General [2019] KECA 125 (KLR), where the court of appeal [J Mohammed & HM Okwengu, JJA] held as follows:It is evident from the above that affidavit evidence is provided for on the same pedestal as oral evidence, and that the learned Judge had the discretion to direct that the hearing of the petition proceeds by way of oral evidence if he deemed it necessary to do so. The parties sought to proceed by way of affidavit evidence, and the learned Judge having not exercised the discretion to direct the parties to proceed by way of oral evidence, or to call any of the deponents of the affidavits for cross-examination, he had no reason to disparage the affidavit evidence. 32.They submitted that the affidavit of Robert Muriithi is his sole evidence and not an inadmissible evidence. They averred that the security was not drafted by the plaintiff as evidenced by a letter dated 20.08.1998. Reliance was placed on Black’s Law Dictionary 6th Edition, page 494, where drawing means the act of the drawer creating a draft. Reliance was placed on the case of Green V Hoyle [1976]2 all ER 633. 33.They submitted that the defendants are obligated by their obligations under a guarantee dated 1.10.1998. By the said guarantee, the defendants are said to assume responsibility of the debt due. Reliance was placed on the case of Karuri Civil Engineering (K) Limited v Equity Bank Limited [2019] KECA 866 (KLR), where the court of appeal stated as follows:24.At the risk of over-simplification, guarantees fall into two broad categories. The traditional guarantee or surety on one hand, and “on demand” guarantee on the other. “On demand” guarantees are also known as performance guarantees, performance bonds or demand bonds. (See Vossloh AG v Alpha Trains (UK) Limited [2011] 2 All ER (Comm) 307 at [24]– [28]). “On demand” guarantee is distinguishable from the traditional guarantee as liability is primary not secondary and payment by the guarantor is to be made in response to demand and is not dependent whether there has been a default under the principal contract. In the instant appeal, the performance bond in issue is a demand guarantee bond in which the respondent Bank’s liability is primary and independent of any liability for non-performance of the contract by the appellant. 34.They further relied on clause 2.01 of the guarantee. A demand letter for US $ 3,578,413.98 was due as at 1.03.2003. They averred that their obligations are secondary and cannot be sustained. They have primary obligation. In Standard Chartered Financial Services Limited v Manchester Outfitters (Suiting Division) Limited Now Called King Woolen Mills Limited & 2 others [2025] KESC 68 (KLR), the supreme court [MK Ibrahim, SC Wanjala, N Ndungu, I Lenaola & W Ouko, SCJJ] held as follows:The five cases outlined in the above paragraph, alongside other decisions of superior courts, demonstrate that a continuing security cannot be assumed. Its application depends squarely on the facts, the construction of the terms contained in the security documents, and the intention of the parties. This is based on the principle that courts cannot rewrite contracts for parties who, on the other hand, are bound by the terms of their contract. It follows, therefore, that a bank cannot enforce a contract beyond the terms of the security. The courts, for their part, will not imply continuing security where the terms are ambiguous or the security is silent. 35.They argued that the loan was disbursed in US $ hence excess amount was not disbursed. They averred that the amount has not been paid to date. The guarantee is therefore a continuing security and the plaintiff had a primary obligation to pay the debt. 36.They denied to have negligently handled the company’s accounts. Reliance was placed on section 6.01(j) of the loan agreement. They stated that nevertheless, no waiver shall affect recovery pursuant to section 5.04(a). Reliance was placed on section 176 of the Evidence Act showing that entry in the banker’s books is prima facie evidence of such entry. The said section provided as follows:Subject to the provisions of this Chapter of this Act, a copy of any entry in a banker’s book shall in all legal proceedings be received as prima facie evidence of such entry, and of the matters, transaction and accounts therein recorded. 37.They stated that exhibit 3 is a true reflection of accounts. They also referred to a South African case of Senekal v Trust Bank of Africa Ltd 1978(3) SA 375 (A). 38.Their reliance was given to the case of Ecobank Kenya Limited v Liberty Graphics Kenya Limited & 3 others [2021] KEHC 7691 (KLR), where Majanja stated as follows:14.As the Defendant’s did not produce any other statements of accounts to counter those of the Bank or fault any entries in the statement, I find that the statement for account for account number CA 01-xxxxxxxx for the period between 1st September 2009 and 30th September 2010 is a true reflection of the Company’s indebtedness. The statement supports that the Banks pleading in the plaint that the Company was indebted to it for the sum of KES. 1,650,627.40 as at 15th October 2009. 39.They argue that price for the property was Ksh. 44,920,003.72. The said matter was also dealt with in HCCC 127 of 2005. The amount that the facilities were advanced were in accordance with the plaintiff’s charter. Reliance was placed in the case of Galaxy Paints Company Ltd v Falcon Guards Ltd [2000] KECA 215 (KLR), where the court of appeal [JE Gicheru, AB Shah & SEO Bosire, JJA] held as follows:It is trite law, and the provisions of O.XIV of the Civil Procedure Rules, are clear that issues for determination in a suit generally flow from the pleadings, and unless pleadings are amended in accordance with the provisions of the Civil Procedure Rules, the trial court, by dint of the provisions of O.XX rule 4 of the aforesaid Rules, may only pronounce judgment on the issues arising from the pleadings or such issue as the parties have framed for the court's determination. 40.They further submitted that interest was not unconscionable. They averred that the court should not rewrite the contract between the parties. They relied on the case of National Bank of Kenya Ltd v Pipeplastic Samkolit (K) Ltd & another [2001] KECA 362 (KLR) [Tunoi, Shah & Keiwua JJ A] as follows: -A Court of law cannot re-write a contract between the parties. The parties are bound by the terms of their contract, unless coercion, fraud or undue influence are pleaded and proved. There was not the remotest suggestion of coercion, fraud or undue influence in regard to the terms of the charge. 41.Further reliance was made on the case of Dhiman v Shah [2025] KECA 1264 (KLR) where the court dealing with 36% interest compounded quarterly was found unconscionable. The court also stated as follows:67.The second aspect - substantive unconscionability — focuses on the terms themselves: whether they are harsh, oppressive, manifestly unjust, or unreasonably favoring one side.68.Courts typically require at least some measure of both elements before declaring a contract unconscionable. The goal is never to rewrite bad bargains by parties, but to ensure that contracts are not used as instruments of injustice. 42.They submitted that section 44A of the Banking Act does not apply to the plaintiff. They relied on section 9(3) of the treaty establishing the East African Community, which provides as follows:Upon the entry into force of this Treaty, the East African Development Bank established by the Treaty Amending and Re-enacting the Charter of the East African Development Bank, 1980 and the Lake Victoria Fisheries Organisation established by the Convention (Final Act) for the Establishment of the Lake Victoria Fisheries Organisation, 1994 and surviving institutions of the former East African Community shall be deemed to be institutions of the Community and shall be designated and function as such. 43.The defendant filed supplementary submissions dated 13.03.2026, in which it was submitted that the plaintiff was introducing submissions on matters not used to fill evidentiary gaps. The first angle was use of an affidavit of Robert Muriithi. They relied on the case of Avenue Car Hire & Another v Slipha Wanjiru Muthegu Civil Appeal No. 302 of 1997 where it was held that submissions are not a mode of receiving evidence. 44.They further relied on the case of Daniel Toroitich Arap Moi vs. Mwangi Stephen Muriithi & Another [2014] eKLR:“Submissions cannot take the place of evidence. The 1st respondent had failed to prove his claim by evidence. What appeared in submissions could not come to his aid. Such a course only militates against the law and we are unable to countenance it. Submissions are generally parties’ “marketing language”, each side endeavouring to convince the court that its case is the better one. Submissions, we reiterate, do not constitute evidence at all. Indeed there are many cases decided without hearing submissions but based only on evidence presented.” 45.They submitted that the statement of Robert Muriithi forms part of evidence as PW1-PW2 were cross examined on the same. Reliance was placed on the case of Kenneth Nyaga Mwige v Austin Kiguta & 2 others [2015] KECA 334 (KLR), where the court of appeal [Visram, Mwilu, & Otieno-Odek, JJ.A]held as follows:First, when the document is filed, the document though on file does not become part of the judicial record. Second, when the documents are tendered or produced in evidence as an exhibit by either party and the court admits the documents in evidence, it becomes part of the judicial record of the case and constitutes evidence; mere admission of a document in evidence does not amount to its proof; admission of a document in evidence as an exhibit should not be confused with proof of the document. Third, the document becomes proved, not proved or disproved when the court applies its judicial mind to determine the relevance and veracity of the contents – this is at the final hearing of the case. When the court is called upon to examine the admissibility of a document, it concentrates only on the document. When called upon to form a judicial opinion whether a document has been proved or disproved or not proved, the Court would look not at the document alone but it would take into consideration all facts and evidence on record. 46.They agreed with the plaintiff that the security documents were drawn by the plaintiff’s secretariat. Therefore, reviewing a document does not transform a client, a reviewer, to a drawer. They submitted that the amount was in Kenya shillings for Ksh. 126,750,200/= converted at Ksh. 79.202 per SDR. They submitted that it was incumbent upon the plaintiff to show the amount disbursed, repayments or recovery from sale of securities, interest applied and computation of the alleged outstanding amount. 47.They submitted that there is no statement produced to show amount drawn. They relied on the cases of National Bank of Kenya Limited v Ikinya & another [2023] KEHC 21071 (KLR), Kenya Commercial Bank Limited v James Kuria Njine [2002] KEHC 1274 (KLR), Bunnex (Nig) Ltd v Ivory Merchant Bank Ltd [2004 – 2006] 13 N.B.L.R. (Part III) 262, Akanmu V. Co-Operative Bank Plc (2005) Jelr 35483 (Ca), Oceanic Bank International Plc V Brokenn Agro Allied Industries Ltd (2008) JELR 49420 (CA). 48.The defendant posited that a sum of US $ 2,026,500 was released beyond the amount guaranteed. The amount did not purchase the 23 Sanayi buses but rather purchased 24 BMC buses valued at US $ 2,026,500. They submitted that the court cannot re-write the contract between the parties. They submitted that having unilaterally varied terms the sums were not guaranteed. Reliance was placed on the Nigerian case of African Continental Bank Limited v Khalil and another (1967-1975) 2 NBLR. 49.Further they submitted that the principal security realization was opaque. That is the floating debenture, legal charge for land parcel number 315 block 1 on Zanzibar Road in Kilindini industrial area, Mombasa, fixed debenture on 23 Sanayi 45-seater buses jointly owned by the company and the plaintiff and personal guarantees of the three sponsors. The particulars of disposal were not given. They also stated that the duty to act in good faith is sacrosanct. Reliance was placed on the case of Mbuthia v Jimba Credit Finance Corporation & another [1988] KECA 116 (KLR), where the court of appeal [Platt, Apaloo JJA & Masime Ag JA] held as follows:So the duty cast on a chargee by section 77(1) that in the exercise of his power of sale, he shall act in good faith and have regard to the interests of the chargor is no more than a codification of the equitable principles articulated in Halsbury and Coote on Mortgages and assented to by equity Judges.In Fisher and Lightwood on Mortgages it was said:-“A sale made at fraudulent undervalue will be set aside. But the Court will not set aside a sale merely on the ground that it is disadvantageous, unless the price is so low as to be in itself evidence of fraud.” 50.They submitted that property that was valued at Ksh. 140,000,000/= in 1998 was sold at Ksh. 38,000,000/= in a vague and opaque process. They submitted that the exercise of statutory power of sale was vague. They submitted that the court has discretion to rule on the current issue placing reliance on the case of Odd Jobs –vs- Mubia [1970] EA 476. 51.Regarding Banking Act, they averred that since the plaintiff avers it is not a bank, what then is the framework for enforcing a loan in Kenya. They averred that the averments was that the plaintiff was approbating and reprobating. The bank describes itself as a bank in article 1. They submitted that in spite of claiming up to US $. 10,000,000, there are no records. They submitted that the claim is speculative. 52.The defendant filed submissions dated 10.12.2025. They started with a prelude from the decision in the case of Scholastica Nyaguthii Muturi v Housing Finance Co. of Kenya Ltd & another [2017] KEHC 7830 (KLR), where E. K. O. Ogola J, held as follows:It is clear that the bank herein merely treated the plaintiff as a cash cow, which it milked to the extent of even denying the calf the milk. It can never be justified in any society, that one borrows Shs. 3,000,000/= pays 18,000,000/= and the bank still is not satisfied. 53.They submitted that the loan agreement referenced three currencies, that is Ksh. SDR and US $. The facility is governed by Kenyan law. The issue of personal guarantees was the last form under section 3.04(a) of the letter of offer. The amount in the letter of offer was US $ 1,600,340.90. The security was sold and a manager appointed for a sound company. A sum of Ksh .9,961,114.91 is now sought. 54.The issue of unqualified person drawing the facility was addressed, that the matter was referred by the court of appeal to determine who drew the securities. It was stated that an unqualified person is, by dint of section 34 of the Advocates Act prohibited from either directly or indirectly taking or preparing security. The securities were said to be drawn by the plaintiff’s secretariat. Cyril John Pesha was not an advocate of the High Court of Kenya. Anjarwalla were not the advocate for the plaintiff at the time. 55.The documents were said to be done by an advocate not qualified to practice law in Kenya. Reliance was placed on the case of National Bank of Kenya versus Wilson Ndolo Ayah Civil appeal No. 119 of 2002. They also relied on the decision by the court of appeal in East African Development Bank Limited v Mujtaba Jaffer & 2 others [supra]in reserving the decision of justice Otieno’s ruling, where they held as follows:22.On our part, we consider that, whether the guarantee agreement was prepared by Mr. Pesha, or by the Secretariat of the Bank or by the firm of Anjarwalla and Abdulhussein & Company Advocates is a question of fact. It is evident, and plain for anyone to see from the guarantee agreement itself, that it is indicated at page 4 thereof, “Drawn by: The Secretariat, East African Development Bank…Kampala, Uganda.” Indeed, the Bank in paragraph 11 of its reply to amended Defence reproduced above appears to have acknowledged as much when it pleaded, “the Plaintiff avers that the said guarantee prepared by its secretariat was enforceable within Kenya…”. It is perhaps the reason the learned Judge appears to have proceeded on the basis that it was a foregone conclusion that the guarantee was prepared by Mr. Pesha. In that regard, the Judge expressed:“This court as a state organ is bound to observe the rule of law which is the bastion of democracy and the well-being of every civilized society. The law forbids an unqualified person, which Mr. Pesha is conceded to have been by the confirmation of the Law Society of Kenya, from preparing the document he did prepare. He was therefore not qualified to act in preparation in drawing a document which it was the preserve of an advocate in Kenya to prepare. Now that he did so, he contravened the law and that cannot be blessed or countenanced by this court.”23.The learned Judge does not appear to have considered it necessary to interrogate the claims in the affidavits filed in opposition to the application to the effect that the documents were prepared by the said firm of advocates. Indeed, the only issue the Judge identified and addressed in his ruling, namely “whether the guarantee is a document the law dictates must be prepared by an advocate as defined in law and if so the effect of such a document not being prepared by an advocate” does not appear to have left room for an inquiry as to who drew the documents. 56.They averred that the doubt that the court of appeal had was addressed by DW2. They submitted that the defendants were discharged form obligations in view of the variation of the contract. In any case the plaintiff’s conduct was abrasive and discharged the defendants. They submitted that the guarantees impose a secondary obligation. They averred that what was guaranteed was 23 new Sanayi buses 45- Seater buses, but the amount was diverted to buy 24 BMC buses valued at US $ 2,026,500, and not Sanayi buses. The amount was above the loan amount exceeding Ksh 116,610,000/= by Ksh. 43,483,5000/=. The amount disbursed for BMC buses was Ksh 126,750,000/=. There was no money left for workshop agreement under the loan agreement. PW2, a banker indicated that amounts above loan agreement require a separate agreement. The new agreement required fresh appraisal, new company resolutions and fresh securities. Reliance was placed on the case of Co-Operative Bank Of Kenya Ltd V Washington Otieno Ogindo [2012] KECA 179 (KLR), where the court of appeal [R.S.C. Omolo, E.M. Githinji and P.N. Waki] held as follows:We think that even if that was so, the respondent ought to have been made aware of the extension; as we have seen from the quotation from HALSBURY’S LAWS of England, when such a radical variation of the terms of the contract are being contemplated the guarantor ought to consent to them whether he is or is not prejudiced by them. As we have seen from the evidence of the respondent, he thought extensions or indulgences could only be extended to the principal debtor during the validity of the twelve month period 57.Further reliance was placed on the Halsbury’s laws of England volume 20(1) para 324 page 210 were it states as follows:copy 58.They averred that there is no facility to secure 23 Sanayi buses and the BMC buses were not secured by the loan agreement. A sum of Ksh. 160,093,500/= was for 24 BMC buses and was not guaranteed by the defendants. On equipment they averred that the same was for Ksh. 10,140,000/= while the amount paid was Ksh. 10,058,824/=. The invoice settled was for US $ 10,501,944. There was no explanation for non-contractual and unusual actions. 59.They also took issue with how the plaintiff handled the fiduciary duty in relation to the company account and its charter which required them to conform to the best banking practices. 60.They submitted that there are no accounts on how the accounts were handled, that is from opening account to the outstanding amounts. The document filed is not a statement of account. The same handwritten note is subject to review. The same runs from 2005 to 2009 and does not capture the loan from 1998. Where does one then turn to interrogate amounts by the Plaintiff as amended? They averred that it is not even clear whether the account is SDR, US $ or Ksh account. 61.They averred that failure to produced verifiable and certified loan statements of account is fatal to the case, and discharges the defendants from any obligations as the same cannot be based on speculation or imagined amount. Reliance was based on the case of Kenya Commercial Bank Limited v James Kuria Njine [supra] where the court held as follows:I am afraid, I cannot agree. Without that statement which is marked as exhibit "ASK 2" in the affidavit of the plaintiff, there would be nothing to support the plaintiff’s pleading that at the commencement of the suit the defendant was indebted to it in the sum of Kshs.2,776,698.90. That figure would be no better that any figure plucked from the air above the Commercial Court here in Nairobi. The admissibility or otherwise of that statement is therefore crucial to the success or failure of the application for summary judgment. Counsel for the plaintiff was of the view that the statement constituted entries in a book of account regularly kept in the course of business and was therefore admissible under Section 37 of the Evidence Act which reads-“ 37.Entries in books of account regularly kept in the course of business are admissible whenever they refer to a matter into which the court has to inquire, but such statements shall not alone be sufficient evidence to charge any person with liability." 62.They submitted that the plaintiff’s advocates did not have a statement having payment of Ksh 38,000,000/=. There was no account of the 23 buses and other motor vehicles sold, sale of land valued at Ksh 140,000,000/=, amounts recovered from receivership and motor vehicles in joint ownership with the company. A sum of Ksh 1,704,640/= was said to have been recovered in an alleged competitive auction but no evidence of such auction was shown. They submitted that with no report and no statement of account, neither the court nor the defendants will know what was realized under the debenture. They relied, in my earlier decision in National Bank of Kenya Limited v Ikinya & another [2023] KEHC 21071 (KLR), where this court held as follows:The duty is on the Plaintiff to prove that some debt and the extent of such debt is due and owing. 63.It was submitted that the plaintiff was mute as to what happened to the company when the receiver resigned in 2006. They alluded to evidence of PW2, who raised issues of fraud in his testimony. They averred that the plaintiff procured a consent through a bribe of Ksh 500,000/= as costs of obtaining consent. It is contrary to public policy to overlook acts of illegality, fraud and negligence. It was their case that secondary obligations does not impose a duty to pay exorbitant amounts. The plaintiff is said to have been imprudent and should not be rewarded with a judgment. 64.They submitted that the facilities were in accordance with the bank’s own charters, that is clause 13. It was averred that the charter does not allow the plaintiff to advance working capital to private companies. They averred that the question was raised by Anjarwalla on 31.08.1998. PW1 also confirmed that they only lent to projects. 65.They averred that DW1 confirmed that 24 BMC buses were not good for business and the loan was not granted for them. 66.They averred that there was no evidence that the defendants were indebted to the plaintiff. The plaintiff had obligations to pay outstanding amounts. There were no verifiable accounts or company accounts. Failure to produce accounts was said to be fatal. They submitted that personal statements are not enough to prove indebtedness. Reliance was placed on the case of E.P. Communications Limited v East Africa Courier Services Limited [2019] KEHC 1298 (KLR), where Gikonyo J, held as follows:16]Only entries in books of account regularly kept in the course of business are admissible whenever they refer to a matter into which the court has to inquire, but such statements alone are not sufficient evidence to hold a person liable. Personal statements authored by the Appellant is not sufficient evidence to prove liability especially considering the supporting documentation relied on is invoices and LPOs without the evidence of delivery of the goods. The appellant failed to prove on a balance of probability the extent to which the respondent was liable. 67.Further reliance was placed on the case of Unnex (Nig) Ltd v Ivory Merchant Bank Ltd [2004 – 2006] 13 N.B.L.R. (Part III) 262 based on which it was submitted that the Plaintiff had the obligation to pay the outstanding amount. 68.They submitted that the basis of issuance of a demand letter for amounts, 9 times of the amounts alleged to have been advanced was not laid. The defendants sought that the lenders should not be allowed to cloud lending with mystery, impunity and diplomatic immunity, with a view of crippling hard-working Kenyans. The duty to prove the debt was on the plaintiff under Section 107 of the Evidence Act, which the plaintiff failed to discharge. Reliance was placed on the case of …….. 69.They maintained that the court should act on hard evidence and not sympathy. They relied on the case of E.P. Communications Limited v East Africa Courier Services Limited [supra], where the court held as follows:13….The Appellant may have supplied the goods, but courts of law act on hard evidence not sympathy or speculation. In the absence of a delivery note or evidence of receipt of the goods, it becomes doubtful whether the goods were delivered. 70.They averred that the interest claimed was unconscionable. They submitted that PW2 was at pains to confirm that the interest rate applied to all currencies. They averred that a prudent bank cannot insist that interest does not vary from one currency to another. Reliance was placed on the case of Finejet Limited Five Forty Aviation Limited [2012] KEHC 3019 (KLR), where J. B. Havelock held as follows:As I understand it, local commercial banks do quote differing rates of interest for borrowing in local currency or in a currency off-shore. Kenyans can borrow from local banks in US dollars but such borrowing always tends to be at a lower rate for US dollars than for Kenya Shillings. It seems to me that the fairest way that I can find in fixing the interest rate in this matter is to direct that the judgement amount do attract a rate of interest that a local commercial bank would charge a customer for borrowing in US dollars at the date of my entering judgement being 14 February 2012. 71.They submitted that the loan advance was pleaded to have ambiguity with 12% interest and 6% penalty not shown to arise. They averred that the interest averred clogged the equity of redemption. They submitted that nothing separates the plaintiff from shylocks. Reliance was placed on the case of Mbobu & another v Hypac Investments Limited & another [2025] KEHC 16564 (KLR), where MA Otieno, J, held as follows:The Court of Appeal in dealing with a substantially similar situation in the case of in the case of Dhiman v Shah [2025] KECA 1264 (KLR), found an unconscionable and disproportionate interest clause that was to result in a repayment of an amount exceeding Kshs. 69 billion from a principal loan of Kshs. 4,000,000/-, The Court stated that:This sum arises from the application of an annual interest rate of 36% compounded quarterly over a period of nearly three decades – the terms included in the parties’ agreement. It is not in question that this astronomical figure exceeding Kshs. 69 billion on a principal sum of Kshs. 4 million is a disproportionate escalation; it is not merely commercially unreasonable; it is, in the eyes of equity and good conscience, oppressive and unconscionable. As demonstrated above, courts in Kenya have consistently held that where the terms of a loan agreement result in punitive or extortionate financial consequences — particularly through excessive compounding over long durations — they may be struck down or moderated. This is because equity abhors oppression and refuses to enforce contractual provisions that shock the conscience of the court. In the present case, the sheer disparity between the original loan and the amount which would now be due evidences a contract whose enforcement, without judicial intervention, would undermine principles of fairness, good faith, and proportionality. We, therefore, find the contract between the parties void for unconscionability.” 72.It was averred that the reliefs sought are unconscionable and offend the in duplum rule. Reliance was placed on the case of LTI Kisii Safari Inns Ltd & 2 others v Deutsche Investitions-Und Enwicklungsgellschaft (‘Deg’) & others [2011] KECA 1 (KLR), where the court of appeal held as follows:52]This is also an equitable doctrine. There are at least three prerequisites to the application of a doctrine, firstly, that the bargain must be oppressive to the extent that the very terms of the bargain reveals conduct which shocks the conscience of the court. Secondly, that the victim must have been suffering from certain types of bargaining weakness, and, thirdly, the stronger party must have acted unconscionably in the sense of having knowingly taken advantage of the victim to the extent that behavour of the stronger party is morally reprehensible. 73.It was averred that conduct which shocks the conscience of the court can be seen from an annualized 91.5% interest rate. The defendants prayed for the dismissal of the suit against them. 74.The plaintiff filed submissions dated 28.10.2025. They relied on the amended plaint dated 5.08.2010. They submitted that the defendants filed an amended defence dated 23.08.2010 where they admitted that a loan agreement was made between the plaintiff and the Kenya Bus Service Mombasa Limited ("the company") and that the plaintiff agreed to take the personal guarantees of the defendants, a first legal charge over the principal company's property known as Mombasa Island/Block 1/315 (the charged property) as well as a floating debenture over the company's entire movable assets. The defendants further alleged that the guarantee entered was unenforceable, invalid and void as it was not prepared by an advocate in Kenya. 75.They submitted that the plaintiff received the following security from the defendant, that is:a.A first floating debenture on all the assets, both present and future, of the company;b.A first legal charge on all the fixed assets of the company comprised in the grant of lease over the charged property;c.A fixed debenture charge on 23 SANAYI 45-seater buses jointly owned by the company and the plaintiff, insured against riot, theft and fire and the plaintiff's interest to be expressed thereon; andd.By personal guarantees of the sponsors, namely Mujtaba Jaffer, Manoj Shah and Amritlal Shah in form and substance acceptable to EADB. 76.They continued that the plaintiff filed a reply to the amended defence dated 13.02.2013, denying that the guarantee is unenforceable within Kenya and that the guarantee does not fall under section 34 of the Advocates Act. 77.It was their case that Cyril Pesha and Justa Kiragu testified on behalf of the plaintiff on 27.06.2023 and 28.07.2023 respectively. The plaintiff closed its case on 28.07.2023. The 3rd defendant was substituted and testimony concluded on 27.08.2025. The plaintiff identified a hodgepodge of issues as follows:a.Whether the defendants executed a guarantee in favour of the plaintiff.b.Whether the guarantee document is one of the documents required to be prepared by an advocate under section 34 of the Advocates Act.c.Whether the defendants were legally bound by the guarantee and to what extent.d.Whether the amount guaranteed by the defendants was paid in full or at all by the Kenya Bus Services (Mombasa) Limited.e.Whether the defendants are until today, jointly and severally liable to the plaintiff for the outstanding amount of the loan plus interest, penalties and other costs due from Kenya Bus Services (Mombasa) Limited to the plaintiff under the loan agreement.f.Whether the charge over Mombasa Block 1/315 is void.g.Whether the assets comprised in Mombasa Block 1/315 were sold in accordance with a professional valuation. 78.They then handled each of the 7 issues seriatim. The first question was whether the defendants executed a guarantee in favour of the plaintiff. They submitted that clause 3.01 of the loan agreement provided for SDR 1,600,000. There was in clause 3.04(a), personal guarantees of the sponsors, that is, Mujtaba Jaffer, Manoj, Shah, And Amritral Shah (deceased). A guarantee was executed on 1.10.1998. They submitted that a guarantee is not one of the documents required to be prepared by an advocate under section 34(1) of the Advocates Act. The said section provides as follows:(1)No unqualified person shall, either directly or indirectly, take instructions or draw or prepare any document or instrumenta.relating to the conveyancing of property; orb.for, or in relation to, the formation of any limited liability company, whether private or public; orc.for, or in relation to, an agreement of partnership or the dissolution thereof; ord.for the purpose of filing or opposing a grant of probate or letters of administration; ore.for which a fee is prescribed by any order made by the Chief Justice under section 44; orf.relating to any other legal proceedings; nor shall any such person accept or receive, directly or indirectly, any fee, gain or reward for the taking of any such instruction or for the drawing or preparation of any such document or instrument:Provided that this subsection shall not apply to-i.any public officer drawing or preparing documents or instruments in the course of his duty; orii.any person employed by an advocate and acting within the scope of that employment; oriii.any person employed merely to engross any document or instrument. 79.They averred that the said guarantee was actually drawn by an advocate. The advocate was Anjarwala & Adulhussein & Company Advocates. They recapped the discussion with Ms. Sonal Sejpal of Anjarwala and Adulhussein & Company Advocates. The documents were forwarded by Cyril Pesha advocate for review. They urged the court to find that a negative inference should be made in relation to the failure to call Ms. Sonal Sejpal. Reliance was placed on the case of Bukenya & Amp; Others v. Uganda [1972] EA 549). 80Further reliance was placed on the decision in East African Development Bank Limited v Mujtaba Jaffer & 2 others [2021] KECA 459 (KLR), where the court of appeal [W. Karanja, Asike-Makhandia & Gatembu, JJ.A)] held as follows on the question that was before them earlier in this case’s life.27.Based on the correspondence, to which the learned Judge made absolutely no reference, it seems to us that the critical question, who prepared the security documents, was not one that could be conclusively answered by mere reference to the security documents themselves. In our view, those documents raised questions whether the statement on the face of the security documents that they were drawn by the secretariat should have been taken at face value. With respect, the presumption or finding by the learned Judge that the documents were prepared by Mr. Pesha, being the basis on which the Bank’s suit was struck out, was not well founded. As Madan JA cautioned in D.T. Dobie & Company (Kenya) Ltd vs. Muchina (above) the power to strike out should be exercised only after the court has considered all the facts. Clearly, the learned Judge in this case did not consider all the facts placed before him. 81.They concluded that the security was drawn by a qualified person. They urged the court to find that the guarantee dated 1.10.1998 was drawn by an advocate and therefore valid. 82.The second issue addressed was whether the defendants were legally bound by the guarantee and to what extent. They submitted that the defendants were legally bound to pay all the monies owed by the company in event of default. Reliance was placed on Chitty on Contracts, Volume 1, General Principles, 31st edition at paragraph 1-036, which states as follows:“A concomitant of the doctrine of freedom of contract is the binding force of contracts, a force which the French Civil Code compares to the binding force of the law itself and which has been recognized by the European Court of Justice as a ‘general principle of civil law.’ English law has also long recognized this principle, which suits the needs of commerce as well as the expectations of parties to contract more generally.” 83.Further reliance was placed on the Law of Guarantees, Geraldine Andrews and Richard Millet, 5th edition at paragraph 6-001 which states:“A contract of guarantee is an accessory contract, by which the surety undertakes to ensure that the principal performs the primary obligation. It has been described as a contract to indemnify the creditor upon the happening of a contingency, namely the default of the principal to perform the principal obligation. The surety is therefore under an obligation which is dependent upon the default of the principal and does not arise until that point.” 84.It was submitted that the defendants absolutely and irrevocably guaranteed as primary obligators the due and punctual payment of loans with interest, commitment fees, commissions and all together charges are all the same and due. This was a continuing guarantee until payment in full. The second defendant is said to have admitted payment of 16 equal consecutive quarterly payments. The company defaulted both the principal and interest and the plaintiff decided to realize the securities. 85.A demand was made of US $ 3,578,413.98 but the company failed to pay. They asserted that the defendants were responsible for all payments. 86.The third issue addressed was whether the amount guaranteed by the defendants was paid in full or at all by the Kenya Bus Services (Mombasa) Limited. They averred that the agreement was for modernization by buying new 23 Sanayi Buses at a cost of Ksh. 116,610,000/=, and workshop equipment for Ksh. 10,140,000/= making a total of Ksh. 126,750,000/=. The second defendant is said to have admitted that the purpose was for buying new 23 Sanayi Buses. A sum of US $ 2,026,500 was disbursed on 17.12.1998 to settle invoices with CMC motors for supply of the buses. A sum of Ksh. 10,058,824/= was sent to the company’s supplier SNM Electronics for invoice 00656 dated 20.11.1998 for spare parts. They produced exhibit 2 showing payment. It was his case that the debt to CMC motors was settled because the buses were delivered. The repayment was not done. They averred that there was a statement of account in exhibit 3 at page 11 showing US $ 9,9,61,114.91 was outstanding as at 1.03.2009. The amount is not disputed but only on the securities. 87.On interest a sum of US $ 9,9,61,114.91 attracted 12% interest and 6% per annum as penalty. The said amount is thus due from 1.03.2003 with 12% interest and 6% interest. This portion is incorrect as the pleadings state otherwise. 88.The fourth question was whether the charge over Mombasa Block 1/315 is void. They submitted that the consent of the Kenya Ports Authority was not obtained for the charge. They continued that the lessor was Kenya Ports Authority. The consent was obtained as per page 33 and 34 of the bundle dated 19.09.2022. They stated that the property was sold at Ksh. 44,920,003.73 and the head lessor paid. The defendant thus failed to prove that the head lessor’s consent fee was not paid. 89.They raised issue whether the assets comprised in Mombasa Block 1/315 were sold in accordance with a professional valuation. The loan as at 6.4.2001 was US $ 2,607,490.34. The said amount was not paid. The plaintiffs then appointed receivers. The property was sold in 2006 at Ksh 44,920,003.72. The manager had a valuation conducted by Pannell Kerr Forester (PKF). All the buses were sold as scrap. The mount was not enough to settle the amount owed. 90.The issue that had been identified was whether the defendants are until today, jointly and severally liable to the plaintiff for the outstanding amount of the loan plus interest, penalties and other costs due from Kenya Bus Services (Mombasa) Limited to the plaintiff under the loan agreement was amended to read as whether the plaintiff has a right to exercise any of the remedies in the loan agreement. 91.They submitted that the guarantee was admitted to have been signed by all of them after execution of the loan agreement. They submitted that the securities included the guarantee. They submitted that a secured can exercise all remedies at his disposal. Reliance was placed on the decision of China and South Sea Bank Ltd v Tan Soon Gin (alias George Tan)[1990] 1 A.C. 536, where an appeal from the appeal from the Court of Appeal of Hong Kong, the Privy Council [Lord Keith of Kinkel, Lord Templeman, Lord Ackner, Lord Oliver of Aylmerton and Lord Goff of Chieveley] held as follows:The creditor had three sources of payment. The creditor could sue the debtor, sell the mortgage security or sue the surety. 92.They submitted that the above position was reiterated in the case of Barclays Bank of Kenya Ltd v Kepha Nyabera & 191 others [2013] KECA 349 (KLR), where court of appeal [Makhandia, Otieno-Odek & Kantai, JJ.A.)] held as follows:44.Counsel for the 1st respondent urged this Court to note that the appellant had other immovable properties secured by the charge. It was argued that if the garnishee order is satisfied, the appellant can recover the sum from the immovable properties which are secured. The general rule is that a secured creditor is not obliged to resort to his security. He can claim repayment by the debtor personally and leave the security alone. He can sell the charged securities or set off or combine accounts. All these remedies could be exercised at any time or times simultaneously or contemporaneously or successively or not at all. This was so held in China and South Sea Bank Ltd V. Tan Soon Gin (alias George Tan) 1990 1 AC 536-545. We agree with this holding and hold that the appellant Bank is not obliged to abandon its set-off rights and realize the security over the immovable properties. 93.They concluded that the plaintiff had a choice of what remedy to choose. They denied being negligent as they sold the 23 buses as scrap metal, for Ksh 1,704,650/= subject to the auctioneer’s commission and Ksh. 44,920,003.73 for the land. They then came for the guarantors. 94.They denied massive thefts and pilferages. They submitted that the second defendant’s testimony was that the buses had mechanical problems and were grounded in 2001. They averred that the guarantee was called as a last resort. They prayed for the amount of US $ 9,961,114.91, together with interest from 1.03.2009. They also prayed for costs. Analysis 95.The matter has been in court, since 7.7.2003. The matter has been, surprisingly active all through. The matter is evidence of what the constitution now covers under Article 159 9(2) (b) of the Constitution, which provides as follows:In exercising judicial authority, the courts and tribunals shall be guided by the following principles-(a)….;(b)Justice shall not be delayed. 96.The subject matter itself arose over 31 years ago, that is on 1.10.1998. The matter has been handled by a record 11 judges and three Court of Appeal judges. There are only two issues arising from the pleadings, that is:a.Whether the defendants are liable to the plaintiff for the sums claimed.b.Whether the plaintiff proved their case. 97.The first issue arises from the defence, where they posited that they are not liable to pay the sums claimed. The second issue arises from the plaintiff’s claim for a sum of us $ 9,961,114.91, vide an amended plaint dated 8.10.2025. The amendment only introduced the new third defendant. The effective plaint before then was the amended plaint dated 5.08.20210. The original plaint was dated 2.07.2003. 99.The burden of proof at all times on the matter, lay with the party that positively alleged. Both parties have expanded their pleadings in a way that they have invited the court that some questions were left to the court. The question of determining an unpleaded issues was settled in une cause célèbre, Odd Jobs vs. Mubia (1974) EA 476, which the same Court followed in the latter case of Eastern Africa in Vyas Industries v Diocese of Meru [1976] eKLR. It was stated as follows:With respect to the learned Judge, that issue does not flow from the pleadings. However, that notwithstanding, a court may base a decision on an unpleaded issue where, as here, it appears from the course followed at the trial, that the issue has been left to the court for decision. 100.However, the standard position is that parties are bound by their pleadings. This was addressed in the case of Migore v South Nyanza Sugar Co Ltd [2018] KEHC 5465 (KLR), where A C Mrima, J, stated as follows:11.It is by now well settled by precedent that parties are bound by their pleadings and that evidence which tends to be at variance with the pleadings is for rejection. Pleadings are the bedrock upon which all the proceedings derive from. It hence follows that any evidence adduced in a matter must be in consonance with the pleadings. Any evidence, however strong, that tends to be at variance with the pleadings must be disregarded. That settled position was re-affirmed by the Court of Appeal in the case of Independent Electoral and Boundaries Commission & Ano. vs. Stephen Mutinda Mule & 3 others (2014) eKLR which cited with approval the decision of the Supreme Court of Nigeria in Adetoun Oladeji (NIG) vs. Nigeria Breweries PLC SC 91/2002 where Adereji, JSC expressed himself thus on the importance and place of pleadings: -…..it is now trite principle in law that parties are bound by their pleadings and that any evidence led by any of the parties which does not support the averments in the pleadings, or put in another way, which is at variance with the averments of the pleadings goes to no issue and must be disregarded………In fact, that parties are not allowed to depart from their pleadings is on the authorities basic as this enables parties to prepare their evidence on the issues as joined and avoid any surprises by which no opportunity is given to the other party to meet the new situation. 101.In the case of Malawi Railways Ltd vs Nyasulu [1998] MWSC 3, Malawi Supreme Court of Appeal stated as doth when the learned judges cited with approval an article by Sir Jack Jacob entitled The Present Importance of Pleadings published in [1960] Current Legal Problems at p 174 whereof the learned author posited that:As the parties are adversaries, it is left to each one of them to formulate his case in his own way subject to the basic rules of pleadings …….for the sake of certainty and finality; each party is bound by his own pleadings and cannot be allowed to raise a different fresh case without due amendment properly made. Each party thus knows the case he has to meet and cannot be taken by surprise at the trial. The court itself is as bound by the pleadings of the parties as they are themselves. It is no part of the duty court to enter upon any inquiry into the case before it other than to adjudicate upon the specific matters in dispute which the parties themselves have raised by the pleadings. Indeed, the court would be acting contrary to its own character and nature if it were to pronounce any claim or defence not made by the parties. To do so would be to enter upon the realm of speculation. Moreover in such event, the parties themselves, or at any rate one of them might well feel aggrieved; for a decision given on a claim or defence not made or raised by or against a party is equivalent to not hearing him at all and thus be a denial of justice….In the adversarial system of litigation therefore, it is the parties themselves who set the agenda for the trial by their pleadings and neither party can complain if the agenda is strictly adhered to. In such an agenda, there is no room for an item called Any Other Business in the sense that points other than those specific may be raised without notice. 102.In respect to the essence of pleadings, the Supreme Court of Kenya in its ruling on inter alia scrutiny in the case of Raila Amolo Odinga & Another vs. IEBC & 2 others (2017) eKLR found and held as follows in an election petition:58.In the case of Arikala Narasa Reddy v Venkata Ram Reddy Reddygari & anr, Civil Appeal Nos 5710-5711 of 2012; [2014] 2 SCR the Supreme Court of India held that [paragraph 8]:….52.Further, the court went on and observed that:“In absence of pleadings, evidence if any, produced by the parties, cannot be considered. It is also a settled legal proposition that no party should be permitted to travel beyond its pleadings and parties are bound to take all necessary and material facts in support of the case set up by them. Pleadings ensure that each side is fully alive to the questions that are likely to be raised and they may have an opportunity of placing the relevant evidence before the court for its consideration. The issues arise only when a material proposition of fact or law is affirmed by one party and denied by the other party. Therefore, it is neither desirable nor permissible for a court to frame an issue not arising on the pleadings. The court cannot exercise discretion of ordering recounting of ballots just to enable the election petitioner to indulge in a roving inquiry with a view to fish material for dealing the election to be void. The order of recounting can be passed only if the petitioner sets out his case with precision supported by averments of material facts. 103.The first and most critical issue is whether the plaintiff proved their case on a balance of probabilities. The burden of proof is set out in section 107-109 of the evidence act, which places the burden on whoever alleges:107.(1)Whoever desires any court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts must prove that those facts exist.(2)When a person is bound to prove the existence of any fact it is said that the burden of proof lies on that person.108.The burden of proof in a suit or proceeding lies on that person who would fail if no evidence at all were given on either side.109.The burden of proof as to any particular fact lies on the person who wishes the court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie on any particular person.” 104.This is not a criminal trial. It is a civil trial in which the court must find for one party or the other on the balance of probabilities. The question as to what amounts to proof on a balance of probabilities was discussed by Kimaru, J in William Kabogo Gitau vs. George Thuo & 2 Others [2010] 1 KLR 526 as follows:“In ordinary civil cases, a case may be determined in favour of a party who persuades the court that the allegations he has pleaded in his case are more likely than not to be what took place. In percentage terms, a party who is able to establish his case to a percentage of 51% as opposed to 49% of the opposing party is said to have established his case on a balance of probabilities. He has established that it is probable than not that the allegations that he made occurred.” 105.This was further enunciated in the case of Palace Investments Limited v Geoffrey Kariuki Mwenda & Dollar Auctions [2015] KECA 616 (KLR), where the Court of Appeal [J Karanja, GG Okwengu, CM Kariuki, JJA] stated as follows:The burden of proof is placed upon the appellant and is to be discharged on a balance of probabilities. Denning J. in Miller –vs- Minister of Pensions [1947] 2 ALL ER 372 discussing the burden of proof had this to say:-“That degree is well settled. It must carry a reasonable degree of probability, but not so high as is required in a criminal case. If the evidence is such that the tribunal can say: ‘We think it more probable than not’, the burden is discharged, but, if the probabilities are equal, it is not. Thus, proof on a balance or preponderance of probabilities means a win, however narrow. A draw is not enough. So, in any case in which the tribunal cannot decide one way or the other which evidence to accept, where both parties’ explanations are equally (un)convincing, the party bearing the burden of proof will lose, because the requisite standard will not have been attained.” 106.The plaintiff indicated that a sum of SDR 1,600,000 was extended to Kenya Bus Services (Mombasa) Limited on 1.10.1998. There is no pleading on how the amount relate to US $ 3,578,413.92 allegedly outstanding as at 28.02.2003. The amount was amended to read US $ 9,961,114.91. There was evidence that payments were made and Ksh. 1,704,650/= and Ksh. 44,920,003.73/= was paid. There is no evidence as to the amount applied in respect to this. The plaintiff cannot, in a liquidated demand just throw figures to the court. First, the principal amount was SDR 1,600,000. There is no indication as to when the SDR loan was converted to a US $ account. To make matters worse, the sum of US $ 3,578,413.92 was allegedly outstanding as at 28.02.2003. There is no indication or documentation as to how the loan amount ballooned to US $ 9,961,114.91 in 6 years. 107.In dealing with special damages or liquated demand, specificity of pleadings and documentation is key. In the case of David Bagine V Martin Bundi [1997] KECA 54 (KLR), the Court of Appeal [E. Gicheru, A.B. Shah and G. S. Pall], posited as follows:“It has been held time and again by this Court that special damages must be pleaded and strictly proved. We refer to the remarks by this Court in the case of Mariam Maghema Ali v. Jackson M. Nyambu t/a Sisera Store, Civil Appeal No. 5 of 1990 (unreported) and Idi Ayub Sahbani v. City Council of Nairobi (1982-88) IKAR 681 at page 684: "....special damages in addition to being pleaded, must be strictly proved as was stated by Lord Goddard C.J. in Bonham Carter vs. Hyde Park Hotel Limited [1948] 64 TLR 177 thus:“Plaintiffs must understand that if they bring actions for damages it is for them to prove damage, it is not enough to write down the particulars and, so to speak, throw them at the head of the court, saying, 'this is what I have lost, I ask you to give me these damages.' They have to prove it" 108.It was the plaintiff’s solemn duty to prove that a sum of SDR 1,600,000 was incurred as per the contract and how much was paid and then arrive at a balance due. There needs to be a proper statement. I was invited to use plaintiff’s exhibit 3 as the evidence of indebtedness. The plaintiff invited the defendant to disprove the same. The defendant has no duty to do so, unless the plaintiff shows that the amount is due. This was addressed in the case of Raghbir Singh Chatte v National Bank of Kenya Limited [1996] KECA 99 (KLR), where the Court of Appeal Akiwumi, J. A, stated thus:The words of Jessel M.R. on this issue are the following:When a party in any pleading denied an allegation of fact in the previous pleading of the opposite party, he must not do so evasively, but answer the point of substance. Thus, if it be alleged that he received a certain sum of money, it shall not be sufficient to deny that he received that particular amount, but he must deny that he received that sum, or any part thereof, or else set out how much he received. And so, when a matter of fact is alleged with divers circumstances, it shall not be sufficient to deny it as alleged along those circumstances, but fair and substantial answer must be given.” 109.The court in the above case continued as follows:In the subsequent appeal to this court, it was held that a mere denial is not a sufficient defence in the type of action that had been brought against the defendant. In the judgment of this court delivered by Platt, J. A. as he then was, it is clearly stated as follows:“First of all a mere denial is not a sufficient defence in this type of case there must be some reason why the defendant does not owe the money. Either there was no contract or it was not carried out and failed. It could also be that payment had been made and could be proved. It is not sufficient therefore simply to deny liability without some reason given.”Thus is Maguga General Stores this court authoritatively enunciated the principle that in an action for a debt or liquidated demand a mere denial or general traverse will not do for all purposes. Applying the same principle a defence in an action of that type that is a mere general traverse cannot be and is not a sufficient defence and also discloses no reasonable defence for the purposes of 06 r 13(1)(a). 110.In Vivo Energy Kenya Limited (Initial Party Kenya Shell Limited) v George Karunji [2014] KEHC 3793 (KLR), F. Gikonyo J, held as follows:See the case of ERF KENYA LIMITED v BUSTRACK LIMITED & ANOTHER [2005] eKLR where the High Court quoted with approval the decision in MAGUNGA GENERAL STORES v PEPCO DISTRIBUTORS LTD [1987] 2 KAR 89 that mere denial is not sufficient defence. L. Njagi, J. stated as follows:“It is to be remembered that the plaintiff has demonstrated clearly the amount of money owed per month. The defendants merely deny owing that money. They don’t deny the existence of the contract for the supply of vehicle spare parts, nor that these were supplied. Their denial is therefore a general one which does not specifically traverse the allegations of fact in the statement of claim. In Magunga General Stores V. Pepco Distributors Ltd [1987] 2 KAR 89, where the defendant used such generalized denial, Platt, J.A., said-“First of all a mere denial is not a sufficient defence in this type of case. There must be some reason why the defendant does not owe the money. Either there was no contract or it was not carried out and failed. It could also be that payment had been made and could be proved. It is not sufficient therefore simply to deny liability without some reason given.” [Emphasis ours](8)A more recent decision (30th March, 2014) in Equitorial Commercial Bank Ltd V Jodam Engineering Works Limited & 2 Others [2014] eKLR, Justice Kasango held that;“Although in the above two cases there was admission by the Defendants of the claim against them, either through correspondence or in the Defence, the ratio established by the two cases is that mere, general denial without reason is not sufficient defence” 111.Liquidated claim must be clearly documented and proved. It is not enough to leave the same to conjecture or surmises. In the case of Odera t/a AJ Odera & Associates v Machira t/a Machira & Co Advocates [2013] KECA 208 (KLR), the court of appeal [EM Githinji, RN Nambuye & MK Koome, JJA] stated as follows:Lastly, the case of City Printing Works Kenya Limited versus Baclly (1977) KLR85 wherein the predecessor of this court, the Court of Appeal for Eastern Africa made observations inter alia at page 86 that:-in an application for summary Judgment, the court weighs the balance of probability carefully as well as taking into account the bonafides of the parties in particular in a case where the plaintiffs claim is for a liquidated demand supported by documentary evidence…” At page 87 the court went on:-“the general rule is that leave to defend should be given unconditionally unless there is good ground for thinking that forward are no more than a them and it must be more than mere suspicious…” Further that: - a defendant may successfully revisit an application if he can satisfy the master that he has a good defence to action on the merit.” 112.The defence was that the guarantee was invalid, was not invoked properly and that there is no proof of the amounts due. The defence posited that SDR 1,600,000 was to be disbursed as follows:a.Ksh 116,610,000/= to buy Sanayi Buses.b.Ksh 10,140,000/= to fund acquisition of workshop equipment 113.There were no Sanayi buses bought. The debt was very specific to Sanayi buses. If the company wished to change and the plaintiff wished to fund the 24 new buses other than Sanayi buses, they needed to amend the securities to cover them. In the case of Pius Kimaiyo Langat v the Kenya Commercial Bank of Kenya Ltd [2017] e KLR the Court of Appeal restated its decision in William Muthee Muthami v Bank of Baroda [2014] e KLR to the effect that:“In the law of contract, the aggrieved party to an agreement must, in addition, prove that there was offer, acceptance and consideration. It is only when those three elements are available that an innocent party can bring a claim against the in breach.” 114.The Court proceeded to state:“Lord Clarke, in RTS Flexible Systems Ltd v Molkerei ??Aloi Muller GM BH [2010] I WLR 753 at [45], [2010] UK SC 14 put it this way:“The general principles are not in doubt. Whether there was binding contract between the parties and if so, upon what terms depends upon what they have agreed. It depends not upon their subjective state of mind, but upon a consideration of what was communicated between them by words or conduct, and whether that leads objectively to a conclusion that they intended to create legal relations and had agreed upon all the terms which they regarded or the law requires as essential for the formation of legally binding relations. Even if certain terms of economic or other significance have not been finalized, an objective appraisal of their words and conduct may lead to the conclusion that they did not intend agreement of such terms to be a precondition to a concluded and legally binding agreement.”(Emphasis added). 115.Furthermore, the elements of a contract are set out in Halsbury’s Laws of England 4th (ed.) Re-Issue Vol. 9(1) paragraph 603 at page 340 as follows:“To constitute a valid contract (1) there must be two or more separate and definite parties to the contract; (2) those parties must be in agreement, that is, there must be consensus on specific matters (often referred to in the older authorities as ‘consensus ad idem’); (3) those parties must intend to create legal relations in the sense that the promises of each side are to be enforceable simply because they are contractual promises; (4) the promises of each party must be supported by consideration or by some other factor which the law considers sufficient. Generally speaking, the law does not enforce a bare promise.” 116.Second was the sum of Ksh 10,140,000/= to fund acquisition of workshop equipment. However, it was indicated to have bought spare parts. This was not what was agreed and guaranteed. It may have benefited the company but was not covered by the guarantee. Unfortunately, I agree with the Plaintiff on what a guarantee is, when they quoted as follows:“A contract of guarantee is an accessory contract, by which the surety undertakes to ensure that the principal performs the primary obligation. It has been described as a contract to indemnify the creditor upon the happening of a contingency, namely the default of the principal to perform the principal obligation. The surety is therefore under an obligation which is dependent upon the default of the principal and does not arise until that point." 117.The principal obligation was purchase of Sanayi buses. If the company and the bank bought to her things other than Sanayi buses, the court cannot amend the contract to fit them. The guarantee was contingent on the two events, that is:a.Purchase of Sanayi busesb.Fund acquisition of workshop equipment 118.The two events upon which the contract for guarantee was based did not happen. This was addressed succinctly in the case of National Bank of Kenya Ltd v Pipeplastic Samkolit (K) Ltd & another [2001] KECA 362 (KLR) [Tunoi, Shah & Keiwua JJ A] as follows: -A Court of law cannot re-write a contract between the parties. The parties are bound by the terms of their contract, unless coercion, fraud or undue influence are pleaded and proved. There was not the remotest suggestion of coercion, fraud or undue influence in regard to the terms of the charge.As was stated by Shah JA in the case of Fina Bank Limited vs Spares & Industries Limited (Civil Appeal No 51 of 2000) (unreported):“It is clear beyond peradventure that save for those special cases where equity might be prepared to relieve a party from a bad bargain, it is ordinarily no part of equity’s function to allow a party to escape from a bad bargain. 119.Can this court presume that the guarantee for funding the purchase of Sanayi buses and to fund acquisition of workshop equipment is covered under the purchase of spare parts and BMC buses? The court may think that the agreement was oppressive to the plaintiff. However, it is not its business to correct the same. 120.I find and hold that the variation without the consent and variation of guarantee meant that the event did not occur and the guarantors are not covered with the guarantee. It may well be that the company agreed to vary the contract to cover buses and spare parts other than purchase of Sanayi buses and funding acquisition of workshop equipment. The company and the plaintiff are bound. However, the variation does not cover the guarantors. They are only liable upon happening of a specific event, that is, the purchase of Sanayi Buses and funding acquisition of workshop equipment. The two events did not occur, therefore the defendants are not liable to settle the guarantees. The guarantee itself provides as such:copy 121.I agree with the defence that 24 BMC buses were not covered under the guarantee. The dispute related to the fiduciary duty that is outside the remit of the guarantee in the absence of the company itself or a derivative suit on behalf of the company. In the case of Moi v Muriithi & another [2014] KECA 642 (KLR), the court of appeal [JW Mwera, DK Musinga & W Ouko, JJA] held as follows:On whether she had jurisdiction to consider the alleged breach under Section 75, deprivation of property, we answer that in the affirmative. The 1st respondent had claimed that the appellant sold properties of the three companies he was a co-shareholder in. We have no doubt that the Companies Act provides that a shareholder has property in the shares that entitles him/her to vote at meetings, elect officers/directors and the rest. But a shareholder has no ownership or right to the properties held by the company – a legal entity, separate and distinct from its shareholders. (see Salmon vs Salmon [1895-9] AII ER 33). The 1st respondent fell in such a category. He could thus not sue or petition about loss of properties of limited liability companies where he allegedly held shares. But he could sue claiming that his property in the form of shares had been put to risk. Therefore in our view, the 1st respondent could invoke the powers donated by Section 75 “---without prejudice to any other action with respect to the same matter which is lawfully available.” (Section 84 above). The 1st respondent could have filed a derivative action under the Companies Act but he chose the petition way. We do not fault him for this and the High Court was in order to consider that claim. 122.This was further addressed in the case of Juletabi African Adventure Limited & another v Christopher Michael Lockley [2017] KECA 118 (KLR), where the court of appeal [Visram, Karanja & Koome, JJ.A)] stated as follows”Therefore, the suit was in the nature of a derivative suit hence the respondent ought to have sought leave before instituting the same. In that regard reliance was placed on Amin Akberali Manji & 2 others vs. Altaf Abdulrasul Dadani & Another [2015] eKLR wherein this Court quoted with approval the sentiments of Jenkins L.J in Edwards vs. Halliwell [1950] ALL ER 1064 that:-“The rule in Foss-v-Harbottle, as I understand it, comes to no more than this. First, the proper Plaintiff in an action in respect of a wrong alleged to be done to a company or association of persons is prima facie the company or the association of persons itself. Secondly, where the alleged wrong is a transaction which might be made binding on the company or association and on all its members by a simple majority of the members, no individual member of the company is allowed to maintain an action in respect of that matter for the simple reason that if a mere majority of the members of the company or association is in favour of what has been done, then cadit quaestio; or if the simple majority challenges the transaction, there is no valid reason why the company should not sue.”Accordingly, by failing to seek leave the respondent lacked locus standi of instituting the suit. 123.This was also addressed in the case of Amin Akberali Manji & 2 others v Altaf Abdulrasul Dadani & another [2015] KECA 356 (KLR), where the court of appeal [Waki, G.B.M. Kariuki & Ouko, JJ.A.)] posited as follows:41.Secondly, on the question whether the suit was a derivative one, we find it was. The company was in the peculiar and unique position of having only two members who were equal in power and glory in relation to the company. There was no majority or minority shareholder. The two shareholders/directors had reached a stalemate until one left the directorship as the other migrated to Canada while the company was sinking into extinction. Proof of a stalemate in the boardroom was that there are no resolutions of the Board exhibited in the record on the matters complained of. On the face of it, the property of the company was disappearing or being taken over by a third party but the company was doing nothing about it. Did any of all this fit anywhere in the exceptions to the rule in Foss vs.Harbottle? The trial court found it did and we think it was right. From earlier learning on the principles which both counsel broadly agree on except for their application, we think the following exceptions, which we take from the Rai case and Gower, would easily justify a derivative suit in this matter:-i.There is an exception to the rule where what has been done amounts to fraud and the wrongdoers are themselves in control of the company.ii.Where it is alleged that the personal rights of the plaintiff shareholder have been or are about to be infringed.iii.Any other case where the interests of justice require that the general rule, requiring suit by the company, should be disregarded.” 124.In view of the foregoing, I decline to deal with questions of mismanagement, breach of fiduciary duty among others, which are properly within the remit of the company or a derivative suit which has not been filed. Odd Jobs –vs- Mubia [1970] EA 476 cannot be used to introduce claims beyond the pleadings of the parties and into other realms far beyond what was contemplated by the parties themselves. This also applies to the invitation by the plaintiff to travel beyond pleadings. 125.This court, not being the last court in the land will still deal with other issues as earlier identified. 126.The document at item 6 (page 11) of the plaintiff’s supplementary list of documents, does not meet the standards set in section 177 of the Evidence Act. The said section sets out prerequisite for bankers books as follows:(1)A copy of an entry in a banker’s book shall not be received in evidence under section 176 of this Act unless it be first proved that-(a)the book was, at the time of making the entry, one of the ordinary books of the bank; and(b)the book is in the custody and control of the bank; and(c)the entry was made in the usual and ordinary course of banking business; and(d)the copy has been examined with the original entry, and is correct.(2)Such proof may be given by an officer of the bank, or, in the case of the proof required under paragraph (d) of subsection (1), by the person who has performed the examination, and may be given either orally or by an affidavit sworn before a commissioner for oaths or a person authorized to take affidavits. 127.section 176 of the Evidence Act provides as follows regarding bankers’ books:Subject to the provisions of this Chapter of this Act, a copy of any entry in a banker’s book shall in all legal proceedings be received as prima facie evidence of such entry, and of the matters, transaction and accounts. 128.The last part meant that the same is examined and certified as a true copy of the original either by an officer of the bank or a commissioner of oath or through an affidavit. None of the requirements of section 177(d) were met, thus the said document is not a proper document. The document itself indicates that it is subject to review. The review has not been provided. The document does not purport to be kept in the ordinary cause of the business of the bank. 129.I therefore find and hold that the said document is not a banker’s book. It cannot be used to show indebtedness. 130.There is no iota of evidence on record showing the bank statement and the account from 1.12.1998 to date of such date as the claim arose, that is on 7.7.2003, when the suit was filed. The allegation that defendant owed a sum of US $ 3,578,413.92 at 28.02.2008 was not proved. In absence of statements between 1.12.1998 and 6.1.2005, the court cannot find the case to have been proved. The figures from 6.1.2005 and 1.03.2009 are plucked from the air. They have no legs to stand on. 131.There were letters related to draw down of SDR 1,599,938, that is Ksh. 10,058,824 from account 31605 with SMN Electronics and Ksh. 121,680,000 (SDR 1,477,773.28) with CMC motors. There are letters indicting that Kenya Bus Services (Mombasa Limited) requested for this. However, the buses paid for are different from the buses guaranteed. This was bought for the numbers (24 instead of 23) and the make, CMC instead of Sanayi. 132.There was a dispute on whether or not the guarantees were drawn by an advocate. They were finally handled by Rugambra Cyril John Pesha, an advocate of the High Court of Tanzania, admitted on 1.12.1987. He had a valid practicing certificate in Tanzania on 11.2.1998. The counterpart was the firm of Anjarwalla and Abdulhusein & Company Advocates. From the correspondences, the advocate dealing in Kenya was Sonal Sejpal. She did not testify. I am reluctant to find that the same was made by an unqualified person. This is because of the paucity of evidence around the guarantee. I am fortified by section 3(4) of the Evidence Act, which provides as follows:A fact is not proved when it is neither proved nor disproved. 133.However, the guarantees remained inchoate for two reasons. There was no disbursement to cover the amounts guaranteed. The plaintiff is a bank and could have several loans including to purchase the vehicles from CMC. I cannot thus read the disbursements to relate to purchase of Sanayi buses. Without a statement it is impossible to know how much of the amounts for office equipment were paid for the sale of the security. At least the security was a higher amount by far than 10,058,000/= for purchase of office equipment. The court cannot conclude by estimating amounts due. The same must be strictly proved. This did not happen. 134The last issue that I don’t find necessary to determine since the parties didn’t leave the same to the court, was whether the third defendant as administrators could be liable for personal guarantees. 135.The plaintiff and defendant made a lot of emphasis on the documents related to qualification and non-qualification of persons who drew documents. As much as the court could have ruled one way or another, the Supreme Court foreclosed this matter in National Bank of Kenya Ltd v Anaj Warehousing Ltd [2015] KESC 4 (KLR), where they [M Mutunga, CJ & P, PK Tunoi, MK Ibrahim, JB Ojwang & SC Wanjala, SCJJ] held as follows:Precedent (such as that in Ndolo Ayah), as we have clarified in the foregoing paragraph, is to be perceived, in general, as the “announced rule”; but in the quest for justice in the context of a particular case such as the final appeal now before this Court. there is a basis for departing therefrom. This principle of judicialism, in common law practice, is well depicted by Professor Melvin Aron Eisenberg in his scholarly work, The Nature of the Common Law (Cambridge, Mass: Harvard University Press, 1988) [at p. 63]:Because the courts normally use announced rules as their starting points, as a practical matter the deciding court is likely to have a limited number of salient choices in dealing with a precedent. It can accept and apply the announced rule; it can determine that on close inspection the announced rule is not relevant; or it can use a minimalist or result-centred technique to reformulate or radically reconstruct the announced rule, and then apply or distinguish the rule it so establishes”.68.The facts of this case, and its clear merits, lead us to a finding and the proper direction in law, that, no instrument or document of conveyance becomes invalid under Section 34(1)(a) of the Advocates Act, only by dint of its having been prepared by an advocate who at the time was not holding a current practising certificate. The contrary effect is that documents prepared by other categories of unqualified persons, such as non-advocates, or advocates whose names have been struck off the roll of advocates, shall be void for all purposes.69.While securing the rights of the client whose agreement has been formalised by an advocate not holding a current practising certificate, we would clarify that such advocate’s obligations under the law remain unaffected. Such advocate remains liable in any applicable criminal or civil proceedings, as well as any disciplinary proceedings to which he or she may be subject. 136.Therefore, having been drawn in Kampala by an advocate of the High Court of Tanzania, and the same was prepared and perfected by Sonal Sejpal, an advocate of the High Court of Kenya, there is no point discussing the statement and the affidavit of Robert Muriithi. 137.The net effect was that the guarantee did not come into effect for failure of two principal reasons for its being. Secondly, there is no evidence of the current amount due under the guarantee. Thirdly the amount looks like it is only made up of interest rate. The disbursement was originally SDR 1,600,000. This was equivalent to Ksh. 126,723,200 or US $ 2,130,464. 138.A demand of US $ 2,607,490.34 was made on 6.04.2001. This meant there was then default. This meant that on the basis of the in deplume rule, the plaintiff could not demand more than US $ 5,214,980.68. It is unclear whether the sums were paid and how much was due. Definitely, a sum of US $ 9,961,114.91 could not be due. The specific amount was not proved. In the case of East African Development Bank v Dari Limited & 5 others [2024] KEHC 3281 (KLR), the court posited as follows:In that ruling, I observed that the borrowers had expressed the desire to pay but for the actions of the Lender. And that, due to the In duplum rule, which is a cardinal rule in matters borrowing, it was not clear what was the amount payable. Whether it was the sum of US$ 15 plus interest in terms of the decree from the UK Court or US$ 28m claimed by the Lender or the amount under the charge plus interest restricted to section 44A of the Banking Act.7.After making the foregoing observations, the Court quipped: -“The Court is alive to the fact that a lender is not to be barred from recovering its outlay and/or realize its security in a case of default. However, the question is, what happens where the borrower says he is ready to pay but for the actions of the lender? That the equity of redemption is being stifled by the lender? Since the right of the lender is money and not security that is an issue to be interrogated. 139.On the issue of the induplum rule it is clear that the Banking Act in Section 44A places limit on interest recovered on defaulted loans as follows:“(1)An institution shall be limited in what it may recover from a debtor with respect to a non-performing loan to the maximum amount under subsection (2).(2)The maximum amount referred to in subsection (1) is the sum of the following-(a)the principal owing when the loan becomes nonperforming;(b)interest, in accordance with the contract between the debtor and the institution, not exceeding the principal owing when the loan becomes non-performing; and(c)expenses incurred in the recovery of any amounts owed by the debtor.(3)If a loan becomes non-performing and then the debtor resumes payments on the loan and then the loan becomes non-performing again, the limitation under paragraphs (a) and (b) of subsection (1) shall be determined with respect to the time the loan last became non-performing.(4)This section shall not apply to limit any interest under a court order accruing after the order is made.” 140.This leaves the issue of costs, which is governed by Section 27 of the Civil Procedure Act, which provides as follows:(1)Subject to such conditions and limitations as may be prescribed, and to the provisions of any law for the time being in force, the costs of and incidental to all suits shall be in the discretion of the court or judge, and the court or judge shall have full power to determine by whom and out of what property and to what extent such costs are to be paid, and to give all necessary directions for the purposes aforesaid; and the fact that the court or judge has no jurisdiction to try the suit shall be no bar to the exercise of those powers: Provided that the costs of any action, cause or other matter or issue shall follow the event unless the court or judge shall for good reason otherwise order.(2)The court or judge may give interest on costs at any rate not exceeding fourteen per cent per annum, and such interest shall be added to the costs and shall be recoverable as such. 141.Costs are generally discretionary. However, the discretion is not arbitrary. The Court of Appeal in the case of Farah Awad Gullet v CMC Motors Group Limited [2018] KECA 158 (KLR) had this to say:It is our finding that the position in law is that costs are at the discretion of the court seized up of the matter with the usual caveat being that such discretion should be exercised judiciously meaning without caprice or whim and on sound reasoning secondly that a court can only withhold costs either partially or wholly from a successful party for good cause to be shown. 142.The defendants defended for a claim suit inter alia, US $ 9,961,114.91. They are entitled to costs. The defendants will thus have costs to be taxed or agreed. Determination 143.In the circumstances, I make the following orders:a.The suit lacks merit and is hereby dismissed.b.14 days right of appeal.c.30 days stay of execution on costs.d.File is closed. DELIVERED, DATED AND SIGNED AT NYERI THIS 9TH DAY OF JUNE THE YEAR OF OUR LORD TWO THOUSAND AND TWENTY-SIX. JUDGMENT DELIVERED THROUGH MICROSOFT TEAMS ONLINE PLATFORM.KIZITO MAGAREJUDGEIn the presence of; -Mr. Kiragu Kimani SC for the PlaintiffMr. Luseno for the DefendantCourt Assistant – Martin