https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/9060

Mutai v Kenya Commercial Bank Ltd (Civil Case E021 of 2024) [2026] KEHC 9060 (KLR) (26 June 2026) (Judgment) Neutral citation: [2026] KEHC 9060 (KLR) Republic of Kenya In the High Court at Eldoret Civil Case E021 of 2024 RN Nyakundi, J June 26, 2026 Between Emmanuel Kipchirchir Mutai Plaintiff and Kenya Commercial Bank Ltd Respondent Judgment 1.This matter is based on the plaint filed by the Plaintiff against the Defendant Bank in which the following remedies were prayed for:a.An order of the Honorable Court be and is hereby issued extending the period within which the Plaintiff has to redeem the Charge and Further Charge over L. R. No. Eldoret Municipality Block7/327 and restraining implementation of Statutory Notice dated 14th June 2024 and Notice to Sell dated 13th June 2024, and any consequential actions for auction or sale thereon, for an initial period of six (6) months from the date of the Order of extension herein, reviewable for cause;b.A permanent injunction be and is hereby issued restraining the Defendant, its servants or agents, advocates or auctioneers or any other person acting for and/or on its behalf whosoever, from doing the following acts or any of them, that is to say from conducting the public auction slated for 28th August 2024 or in any other way howsoever, whether by public auction, private treaty or howsoever, in exercise of Statutory Power of Sale under any such notices issued over the property known as L. R. No. Eldoret Municipality Block7/327, until expiry of periods of extension for any sale issued by the Honourable Courtc.Any other Order the Honourable Court shall deem fit to grant in the interests of justice under Section 104(2) of the Land Act, No. 6 of 2012. 2.This claim against the Defendant Bank is based on material evidence as contextualized in the supporting affidavit to relayed out in the oral testimony admitted in evidence on the 16th December 2025. For purposes of this decision, the following averments formed the backbone of the oral evidence in Court together with the annexed documentary evidence to support the remedies being sought by the Plaintiff against the Defendant Bank:a.I am the Plaintiff herein, conversant with facts in issue and thus competent to swear this affidavit.2b.I am the registered proprietor of the property known as Eldoret Municipality Block7/327 subject matter of the present proceedings. Now produced as annexure EKM-1 is a copy of the little.c.To facilitate performance of the development of the property, I sought to borrow from the Defendant. This purpose of the borrowing was fully and duly disclosed to the Defendant, and it was at all times agreed that all proceeds from the rent collected would be utilized to offset the mortgage facility until full settlement of the loan and discharge of the suit property. Now produced as annexure EKM-2 is a copy of the Letter of Offer, fully acknowledging that the loan was for development of a commercial building on Eldoret Municipality Block7/327.d.As security for the sought financing, therefore for performance of the Contract, I executed a Charge and a Further Charge in favour of the Defendant over the suit property Eldoret Municipality Block7/327. Now produced as annexureEKM-3 is a copy of the Charge.e.In accordance with the said instruments I was advanced the aggregate sum of Kshs.196,425,919.00. Despite the difficult economic circumstances, I have repaid Kshs.125, 295, 475.47, leaving a balance of Kshs. 252,618,694.76. now produced and marked as annexure EKM-4 is a copy of the Mortgage account Statement showing balances.f.Timeous settlement of the loan has however been hampered by delays in full occupancy of the commercial premises, and nonpayment by tenants, leading to late or part payments of the loan installments.g.Due to delays in loan repayments, as a result of delayed full occupancy of the premises default in tenant payments, the Defendant through its agents Phillips International Auctioneers on 14th June 2024 issued a Statutory Notice incepting the exercise its Statutory Power of Sale over the suit property. Now produced and marked as annexure EKM-5 is a copy of the Notice.h.I confirm that I have at all times informed and updated the Defendant on efforts in place on payments and the difficulties I am experiencing and even made part payment of the installments culmination in the discussions of June 2024 where the Defendant rejected my proposal to restructure the facility. Now jointly produced and marked as annexure EKM-6 are copies of correspondences.i.However, the Defendant in extreme mala fides, notwithstanding our previous discussions and the part payment, through its agents Messrs Phillips International Auctioneers proceeded advertise the suit property for public auction slated on 28thAugust 2024. The advertisement was carried in the Daily Nation Newspaper of August 5th 2024 and August 12th 2024. Now produced and marked as annexure EKM-7 are excerpts of the Newspaper,j.I am now advised by my advocates on record that the conduct of the Defendant above was in egregious breach of its statutory obligations under the Central Bank of Kenya Prudential Guidelines 2013, made under section 33(4) of the Banking Act (Chapter 488 of the Laws of Kenya), and attendant legislation on Consumer Protection, Article 46 of the Constitution of Kenya and provisions of the Consumer Protection Act, No. 46 of 2012, which enjoin Financial Institutions, including the Defendant to all times when dealing with consumer issues to address them with fairness and with equity.k.To the extent that the obligations to be fair and to act with equity are statutorily underpinned as above, there was and is a legitimate expectation to me that the Defendant shall at all times including in dealing with the matter of redemption of the Charge act fairly and with equity.l.The Defendant has however acted in egregious breach of this statutory obligation, and in doing so egregiously violated my legitimate expectation, in the following respects: i. While with full knowledge that the loan was to be serviced from rent collected from the tenancy of the building and having been explained to the delay in payment, thereby reasonably necessitating adjustment of time for payment and redemption of Charge, proceeding to take steps to defeat redemption of Charge by instructing auctioneers to advertise the property and trigger the sale process. ii. Generally taking steps and schemes in utter bad faith to defeat my right of redemption of the Charge.m.I have been advised by my advocates on record which advice I truly believe that under provisions of section 103(1)(a) and (4) and 104(2)(b) of the Land Act, No.6of 2012, the Honourable Court has jurisdiction for demonstrated grounds: to issue an extension of the period of compliance with a Statutory Notice under section 90 of the Land Act.n.I have further been advised by my advocates on record which advice I truly believe that by section 103(4) of the Land Act, No. 6 of 2012, an applicant does not need to demonstrate breaches on the part of the Defendant, or demonstrate a prima facie case, the Honourable Court can grant the relief without determining the existence or absence of any breaches and or apportioning culpability.o.Accordingly, come before the Honourable Court, mea culpa, invoking the Honourable Court's legal discretion under section 103(1)(a) and: (4) and 104(2)(b) of the Land Act, No. 6 of 2012, for extension of the period for me to redeem the Charge for a limited period. I intend to utilize this period to dispose of another property L.R.7830/170 Nandi Hills which proceeds shall fully satisfy the due loan, in order to redeem and secure discharge of the Charge.p.I further intend to utilize the extension period to secure alternative means of settling the outstanding loan. Efforts so far to settle by alternative means have been derailed by the prevailing hard economic times, an aftermath of the COVID-19Pandemic on the economy and the prevailing recession.q.I am desirous and is keen to redeem the Charge, and therefore seek an extension of time to enable redemption.r.The Defendant shall suffer no prejudice if an extension were granted as sought, that is not compensable by costs and interest; the Defendant holds the only Charge over the suit property and the value of the suit property is far superior to the outstanding loan amount. The Defendant is accordingly fully secured.s.If the Defendant's agents proceeded to dispose of my property as incepted, I shall suffer egregiously, and my right to redeem the Charge shall be permanently foreclosed.t.For the foregoing reasons and grounds, I earnestly entreat and implore the Honourable Court for an exercise of judicial discretion for an extension to enable settlement. I have come to the Honourable Court in good faith and with full disclosure and I am committed to perform my obligations under the Charge. I have10 disclosed the circumstances that cause delay in performance, and now only seek the extension to regularize.u.I truly believe that I meet the threshold for invocation of the Honourable Court's discretion under section 103(1)(a) and (4) and 104(2)(b) of the Land Act, No. 6 of 2012 for the extension of time for compliance.v.I truly believe that it shall be in the interests of justice to allow me the extension under the law as sought in the application filed herewith. 3.The Plaintiff further placed reliance in the Certificate of Lease marked as Exhibit 1 being referenced Eldoret Municipality Block7/327, the instrument used as security for the loan advanced by the Defendant Bank. In addition, the Plaintiff also presented in evidence Exhibit 2 being a letter of offer on enhancement of banking facilities dated facilities dated 4th August 2018 in which he was advanced Ksh 160,000,000 and the terms of the facility were herein under set out as follows: Facility Mortgage Facility Approved Limit Kshs 196,425,919/= Purpose Kshs 36,425,919/= to complete construction of commercial property on Title No. Eldoret Municipality Block7/327 (The “project”) and to amalgamate with the existing Mortgage Facility currently outstanding at Kshs 160,000,000/= Pricing (p.a) 13% (being CBR* currently at 9% per annum plus a variable margin of not more than 4%) for the time being.Interest shall accrue from day to day and will be calculated on the basis of 366/365 day year. Tenure Repayment 17 years, which period is exclusive of a moratorium of Four (4) months on the principal from the date of first draw down.To be repaid in monthly installments of Kshs 2,533,367/= each.(Inclusive of Kshs 350/= Ledger Fees, Kshs 68,750/= Mortgage Protection Insurance (MPI) and Kshs 72,785/= House Owners, Comprehensive Insurance (HOCI). 4.The Plaintiff further told this Court that vide Corrigendum letter dated 5th March 2019 made reference to the letter of offer dated 14th August 2018 in which the following terms were spelt out:"We refer to your Mortgage Facilities of Kshs. 196,425,919/= advanced vide our Letter of Offer dated 14th August, 2018; of which Kshs.36, 425,919/= was to complete construction of commercial property on Title No. Eldoret Municipality Block7/327 and to amalgamate with an existing Mortgage Facility outstanding at Kshs.160,000,000/= (hereinafter referred to as "the Existing Letter of Offer"), and to your request to extend the moratorium period on your Facility. We advise that the Bank has acceded to your request and hereby extends the moratorium period on the principal payment by a further four (4) months up to June, 2019. Interest on drawn funds shall continue to be serviced monthly. This approval is subject to the condition that rental income from the property be channeled through an account with the Bank. This shall be included in the tenancy agreements. Save as herein expressly varied, all the other terms and conditions of the Existing Letter of Offer remain unchanged and shall continue to apply. Kindly indicate your acceptance of the above terms and conditions by signing and returning to us this letter accepting the terms herein." 5.In the same breadth, the Plaintiff placed reliance on documentary evidence being a legal charge over Eldoret Municipality Block7/327 to secure the loan facilities with the Defendant Bank dated 26/1/2017 for Ksh 160,000,000 (Kenya Shillings One Hundred and Sixty Million Only. The covenants of the legal charge are well laid down in the instrument constituting repayment schedule, interest chargeable, secured obligations, covenants by the Chargor, Events of default, banks remedies, statutory power of sale, charger not to part with possession, further advances, right of consolidation, applicant of rent monies, bank’s right to remove furniture or chattels, security not to confer on bank any right in equity to any furniture or chattels, application of monies, indemnity, bank not liable to account as mortgagee in possession, representation and warranties, no right to further advances, exercise of rights, right to debit chargor’s account, currency conversion, notices, discharge, advances to a third party, etc. As part of the obligations the Plaintiff also annexed his bank statements covering the period under review marked as Exhibit 4. 6.The Defendant on the other hand opposed the narrative being painted by the Plaintiff by placing reliance on the evidence of Joseph Remedial Recovery Manager of the Bank who in his evidence relied on his witness statement dated 10th November 2025 in which he stated as follows on oath:a.I am the Recovery Manager at KCB Bank, the Defendant herein and familiar with the facts relating to this claim and as contained in the records maintained by the Defendant, and thus competent and duly authorized to make this statement.b.That the Plaintiff approached the bank to borrow a loan facility and vide letter of offers dated14th December 2016 and Enhancement offer Letter dated 14th August 2018 the Defendant granted an aggregate sum of Kenya Shillings One Hundred and Ninety Six Million Four Hundred and Twenty Five Thousand Nine Hundred and Nineteen (Kshs.196,425,919/=) to the Plaintiff wherein the loan was for the purpose of financing the construction of commercial premises/building on L.R. No. Eldoret Municipality Block7/327 whereby as at 6th November 2025, the date of the latest statement of account herein the total outstanding debt stands at Kenya Shillings Two Hundred and Eighty Five Million Seven Hundred and Fifty One Thousand One Hundred and two and ninety nine cents (Kshs. 285,751,102.99).c.That vide a Charge dated 26th January, 2017 and Further Charge dated 2nd February, 2022, the loan facilities were secured over L.R. No. Eldoret Municipality Block7/327held in the names of the Plaintiff wherein the perfection of the securities were duly conducted.d.It was agreed that the payment of the advanced loan would be paid in monthly instalments of Kenya Shillings Two Million Hundred and Thirty-Three Thousand Five Hundred and Sixty-Seven only (Kshs. 2,533,567/=). However, the Plaintiff herein has openly admitted to the existence of the loan and the default thereof.e.That having defaulted the loan, the Defendant was forced to issue the Plaintiff with a Demand Notice on 15th September, 2022 and a statutory notice as per the provisions of Section 90(3) of the Land Act to which the Plaintiff failed to adhere.f.That as a result of the failure to redeem default, the Defendant instructed Philips International Auctioneers on 26th June 2024 to issue and serve requisite notices upon the Plaintiff in bid to exercise its statutory power of sale.g.The Defendant instructed Pro Land Realtors Limited to conduct valuation of the suit property title no. Eldoret Municipality Block7/327, Sagaas Center Building along Nandi Road Eldoret town whereby they issued a report dated 5th June 2024.h.That Philips International Auctioneers proceeded to serve a 45 days redemption notice and a notification of sale upon the Applicant on 14th June, 2024 notifying him that the total sum then outstanding totalled to Kshs. 248,537,388 as at 31st May, 2024.i.That the redemption notice and the notification of sale were duly served upon the Plaintiff as per the letter confirming service and the certificate of service thereof.j.That by then, the Plaintiff had already defaulted in repaying his credit facility for a period of over 2 years of issuance of the demand notice before the defendant instructed the auctioneers to proceed with the sale of the property.k.I further wish to state that in bid to stop the then impending statutory power of sale, the Plaintiff vide an application dated 27th August, 2024 sought a temporary order of injunction restraining the Defendant from conducting the then impending public auction over the suit property L.R. No. Eldoret Municipality Block7/327. The Plaintiff also sought for orders to extend the period within which the Plaintiff was to redeem the charge over the suit property.l.The court entertained the Application and vide a Ruling dated 4th December, 2024, the Court dismissed the Plaintiff's Application dated 27th August 2024, for failing to meet the requisite threshold for granting of injunctive orders. Further, it was the terms of the ruling that the Defendant be at liberty to exercise its statutory power of sale under the provisions of the Land Act by issuing fresh compliance notices.m.In a bid to comply with the terms of the ruling as to service of fresh compliance notices to realize the property, the defendant issued the Plaintiff with a statutory notice under section90(1) (2) (3) (e) of the Land Act dated 14th January 2025 and later issued the Plaintiff with40 days Chargee statutory demand notice dated 16th April 2025.n.The Plaintiff having failed to make good the arrears owed to the bank, which keeps accumulating day by day. The Defendant yet again instructed Philips International Auctioneers to proceed and issue the requisite notices in bid to realize the suit property in line with statutory power of sale.o.The Defendant also instructed Icon Valuers Limited to conduct a new valuation of the suit property and they issued a report of the same.p.That Philips International Auctioneers issued the Plaintiff with a 45 days Redemption Notice and Notification of sale dated 1st July, 2025. The intended sale of the suit property by public auction was gazetted vide the Daily Nation of 25th August 2025 and 8th September,2025.q.That I wish to note, the Plaintiff's made several proposals to the bank directly or in the instant suit to either sell an alternative property or obtain a 3rd party facility to clear the outstanding amount. However, the proposals remain speculative and not made in good faith as no amount has ever been paid nor has the bank ever been involved as required by law in any discussion over the property to which they hold security interest over. Therefore, the proposals provided are not sufficient basis to restrain the Defendant from exercising their statutory rights.r.Lastly, I wish to state that the defendant holds a valid a charge over the suit property and has demonstrated compliance with statutory requirements in the exercise of its power of sale. The Plaintiff's indebtedness and default is not disputed which has persisted for a considerable period despite being afforded several moratoriums and ample opportunity to regularize the loan account hence the instant suit is a mere ploy to delay the Defendant's right to exercise its lawful statutory power of sale and same ought to be dismissed with costs to the defendant. That is all I wish to state. 7.The Defendant also in its quest to controvert the evidence by the Plaintiff placed on record a series of documentary evidence which included the Legal Charge over the property registered in the name of the Plaintiff which has already been alluded to in the case analysis presented to this Court by the Plaintiff, the affidavit of marriage giving rise to spousal consent by one Janet Kipkogei Kiprop dated 20th January 2017 and registered on 26th January 2017, the enhancement of banking facilities letter which was also produced by the Plaintiff, the moratorium on mortgage facility dated 23rd August 2021, the second further charge dated 2nd February 2022 in respect of Eldoret Municipality Block7/327, a second further charge on the same property dated 2nd February 2022, 40 days charge statutory notice dated 15th September 2022 pursuant to Section 92(2) (3) of the Land Act, the arrears on mortgage facility authored by the Plaintiff and shared with the bank dated 8th November 2022 and a further correspondence from the Bank to the Plaintiff dated 24th November 2022 in which in context stated as follows:We write further to the meeting held at our offices on 26th October 2022 and your letter dated 8th November 2022As per our discussion, you were to make a lumpsum payment and thereafter make a proposal of the remaining arrears and the monthly installment. However, your proposal letter has not captured the information discussed instead the same is now proposing to make one off payment on or before 15th January 2023 with no concrete proof of the source of this payment. In addition, the proposed monthly installment of Kes. 2 million will not be sufficient to pay the interest and principal. In view of the above, your request has been declined and recovery action will proceed to the next stage unless and until the arrears are paid in full. Meanwhile, the Loan continues to attract interest at the rate of 13% per annum and additional 10% on arrears per annum. 8.In so far as by the evidence by the Defendant Bank is concerned, it is on record that on 26th January 2023 the Plaintiff wrote a letter to the Senior Recovery Manager whose details in summation are as follows:"I refer to the above matter and my letter dated 28th November, 2022 in which I committed to pay a sum ofKsh.10,000,000.00 towards settlement of arrears on my mortgage. In my said letter, I committed to pay on or before 15th January, 2023.Regrettably, I was unable to make the payment as agreed due to unavoidable circumstances. The prospective purchaser who was meant to pay a lump sum amount was out of the country for the better part of December, 2022 and only arrived back into the country yesterday. I am making a follow-up on the payment and as soon as I receive the payment I will remit as agreed. I also wish to notify you that I recently signed Kisii University as one of my tenants, and they have taken the entire space on the 7th Floor and they have already made a payment for it. I have also let out additional space to the same institution on the 8th Floor (roof terrace). Kisii University has also shown interest in taking up the entire space on the 6th Floor which they promised to sign up by March, 2023. This will boost my rent collection to above K.Shs. 3,000,000.00 which will be enough to take care of my monthly repayments of K.Shs. 2,800,000.00, up from the current payment of K.Shs. 2,200,000.00 only per month towards repayment of the loan until March, 2023 which I had requested in my previous letters dated 8th November, 2022 and 28th November, 2022.wish to inform your office that I have been able to pay an amount of K.Shs. 2,200,000.00 per month for the last 3 months as I had earlier requested in my previous letter. Attached herein are copies of the lease agreements." 9.It was further the evidence by the Defendant Bank that on 14th January 2025 a statutory demand notice pursuant to Section 90 (1), (2) & (2) of the Land Act 2012 was issued in respect of charge over title No. Eldoret Municipality Block7/327 indicative of amount of arrears being Ksh 63,229,163.83 against a total outstanding debt of Ksh 266,252,099.91. similarly, the Defendant Bank also on 16th April 2025 issued another notice on the 40 days statutory demand notice pursuant to Section 96(2) (3) of the Land Act. That was followed with a valuation report from Icon Valuers Limited dated 5th June 2025. It is on that basis that Phillips International Auctioneers issued a 45 days redemption notice dated 1st day of July 2025 for purposes of Public Notice that the property in question will be due for sale if the Plaintiff does not comply with the Redemption Notice. The evidence so far presented before this Court by the Defendant Bank is that the redemption notice was not complied with and the same necessitated notification of sale of immovable property which has been the subject matter of this litigation dated 16th September 2025 therefore in compliance with the law the property was advertised in the Daily Nation for purposes of inviting bids to purchase the property as advertised by the Auctioneer. 10.The respective Legal Counsels filed their written submissions on the law as to whether the Plaintiff is the one who must carry the day in discharging the burden of proof or his evidence has been controverted by the Defendant through evidential material to deconstruct his case in so far as the applicable law is concerned. In the discussion below, the legal perspectives from each legal Counsel shall mirror appropriately in buttressing the decision of this Court. Decision 11.The evidence by the Plaintiff would be tested within the conditions laid down in the Evidence Act under Section 107(1), 108, 109 and 112 with regard to the threshold to be met on a balance of probabilities. At the end of the day, the Court should try to take the course that will result in establishing whether the Plaintiff’s case grouped under the heading whether he has discharged the covenants as agreed upon with the Defendant Bank in the various instruments reduced into writing and which remained binding unless otherwise varied or set aside by the same parties. 12.This brings me to assert this point before I proceed any further that this dispute concerns the legal rights of a Mortgagee being the Defendant Bank seeking to exercise its statutory power of sale under the Land Act of 2012. This issue as evidence was laid bare before this Court touches on an area of law that has its own clearly defined principles leading to special rules that have evolved governing this question of restraining a Mortgagee power of sale against registered owner of the security charged to the Bank for the monies borrowed carrying a heavy obligation of repayments when due and owing. 13.It is also true that the mortgage instruments is the one which the Mortgagee herein the Defendant Bank derives its rights, duties and obligations and it is to this instrument that the Court must first look to ascertain the rights of the Defendant Bank over the mortgaged property in question. In the case at bar, the mortgage instrument dated 26th January 2017 as expressly conferred the power of sale on the Defendant Bank as a Mortgagee. This power has also been preserved by the restructured debts agreements one dated 4th August 2018, the corrigendum to the letter of offer dated 14th August 2028 addressed to the Plaintiff dated 15th March 2018, the request for moratorium by the Plaintiff for 6 months on the mortgage facility which was received at the Defendant Bank on 19th August 2021 and a further moratorium mortgage facility dated 23rd August 2021 addressed to the Plaintiff by the Defendant Bank’s Principal Legal Counsel, there was also the 2nd further charge instrument dated 2nd February 2022. It is also on record by way of evidence from both the Plaintiff and the Defendant Bank documentary annextures that this power of sale is specified to be exercisable in the event of certain specified defaults on part of the Plaintiff. There is no dispute from the admitted evidence that such defaults that are specified as effective to trigger the power of sale have occurred as stated in the 40 days Chargee Statutory Demand Notice pursuant to Section 296(2) (3) of the Land Act. This was follows by the Notice of Arrears on mortgage facility dated 8th November 2022 from the Defendant Bank addressed to the Plaintiff which was later to be followed by another notice of the same kind dated 26th January 2023. It is therefore beyond question that the Defendant bank issued instructions to Philips International Auctioneers to issue the necessary notices of proclamation and sale so that the Defendant Bank can exercise its right to exercise its power of sale in respect of the mortgage property referenced as L.R. NO. Eldoret Municipality Block7/327 by virtue of the mortgage instrument and the general principles governing such contracts. This is what the Court said in Colson v Williams L. J. 1889, vol. 58, 539 at page 540:“Where a mortgagee under ordinary circumstances thinks it necessary-and, as long as he is not prohibited by the terms of his contract, he is the sole judge of what is necessary to realise his security, he can do so without hesitation. If there is a notice to be given he must give it; if some conditions are to be observed they must be observed; but as regards the time when he shall realise his security he is the sole arbiter and no one can interfere with him. He may even do it from bad motive….. The court has nothing to do with the motives of a mortgagee. If he, from whatever motive, deems it right to realise his security, although he may be guilty of spite, although he may even look forward with complaisance or satisfaction to the ruin of his debtor, still, if he chooses to exercise his power, he can do so; but whether he acts from good or bad motive, whether he acts merely as a man of business deserving to realise his security, or whether he acts from some other or any of the reasons which may influence the human mind, he is equally bound to remember that there is an equity of redemption behind him and, and that being so, he cannot do that which would otherwise be possible, and in many circumstances easy. A mortgagee to whom is owed a sum of money on security of land cannot offer the land to a purchaser merely for that which could cover his principal, interests and costs independently of the value of the property. If there is a margin which can be reasonably obtained he must remember that there is the mortgagor or possibly a second mortgage claiming through him or possibly other persons having charges who are entitled to be considered. But so long as he exercises the power fairly in that view, so long as he does that which he fairly can do to realise a fair price, he is, in my judgment entirely free." 14.In the same legal trajectory Learned Authors in Halsbury’s Laws of England, 3rd Edn., Vol. 27 at paragraph 301:“The mortgage will not be restrained from exercising his power of sale because the amount due is in dispute, or because the mortgagor has commenced a redemption action, or because the mortgagor objects to the manner in which the sale is being arranged. He will be restrained, however, if the mortgagor pays the amount claimed into Court, that is, the amount which the mortgagee swears to be due to him, unless on the terms of the mortgage, the claim is excessive.” 15.I have considered the documents filed for and against the dispute in this mortgage contract but I am of the firm view that the contract between the Plaintiff and the Defendant Bank was and is well secured by the charge documents dated 26th January 2017 followed by a corrigendum dated 5th March 2019, request of moratorium for six months on mortgage facility granted to the Plaintiff and another similar moratorium dated 13th August 2021. This same facility was so renegotiated and a further second charge dated 2nd February 2022 was also signed as between the parties. These instruments spelled out the terms and conditions which both the Plaintiff and the Defendant Bank was obliged to adhere to during the existence of their relationship. The said contract the rate of interest was certainly agreed upon in the whole transaction between the borrower and the lender. As at the close of the Plaintiff’s case there was no concrete proposal on how to settle the mortgage debt apart from the prayer in the plaint for this Court to exercise discretion to enlarge time for him to redeem the mortgage property. The law on this area of redemption of the securities offered to the bank to secure loan amount and other overdrafts is now well settled as signaled in the comparative case of Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161 on the exercising of the Mortgagee power of sale as provided for in the provisions in the Land Act of 2012; Thus:“A general rule has long been established, in relation to applications to restrain the exercise by a mortgagee of powers given by a mortgage and in particular the exercise of a power of sale, that such an injunction will not be granted unless the amount of the mortgage debt, if this be not in dispute, be paid or unless, if the amount be disputed the amount claimed by the mortgagee be paid into court.”''In my opinion, the authorities which I have been able to examine establish that for the purposes of the application the general rule to which I have referred, nothing short of actual payment is regarded as efficient to extinguish a mortgage debt. If the debt has not been actually paid, the Court will not, at any rate as a general rule, interfere to deprive the mortgagee of the benefit of his security, except upon terms that an equivalent I safeguard is provided to him by means of the plaintiff bringing in an amount sufficient to meet what is claimed by the mortgagee to be due. . . The benefit of having a security for a debt would be greatly diminished if the fact that a debtor has raised claim for damages against the mortgagee were allowed to prevent any enforcement of the security until after the litigation of those claims had been completed." 16.The Plaintiff in this case in accordance with Sections 90, 96 & 97 of the Land Act 2012 was duly served by the Defendant Bank with the necessary instruments dealing with the notice of default, notice of redemption and subsequently the publication in the Daily Media Print for a public auction to be held on 28th August 2024 for bidders to purchase LR No. Eldoret Municipality Block7/327. In law, the various covenants signed between the Plaintiff and the Defendant which include enhancement of banking facilities dated 4th August 2018 referenced as 1622002 which came with an approved limit of Kshs 196,425,919/= and the terms of repayment. That was not the end of the parties putting their intention into writing as evidenced by the corrigendum dated 5th March 2019 in reference to the letter of offer dated 14th August 2018. The terms of the corrigendum were that the Defendant Bank had acceded to the request made by the Plaintiff for mortgage facilities to complete the construction of the commercial property on the same title which also acted as security for the facility. The moratorium period of four months on the principal payment of the loan facilities essentially was agreed upon. There is also on record documentary evidence dated 23rd August 2021 by the Defendant Bank addressed to the Plaintiff titled as Moratorium on mortgage facility which was advanced by dint of a letter of offer dated 14th August 2018 with the following predominant clause; that the bank has acceded to the request by the Plaintiff by extending the moratorium period on the principal and interest payments on loan contract referenced as AA17044WXMVQ for a further six (6) months effective September 2021 to expire on 13th February 2022. That was not the end of this relationship for a second further charge dated 2nd day of February 2022 with various covenants to abide the agreement. 17.It is evident from the perspective of the Plaintiff that notwithstanding the documentary evidence from the Defendant Bank which has not been contested or controverted this Court should still issue the declarations as pleaded in the plaint dated 27th August 2024. In the realm of commercial law the High Courts of Kenya have established mortgage guiding principles as heavily anchored on the Land Act 2012 and Contract Law. The Key principles emphasize that a mortgage is strictly security for a debt. The borrowers who walk into banks, duly evaluated as to their suitability are finally advanced financial resources for one aspect of capital development or economic or social investments after endorsing the necessary legal instruments and upon receipt of the loan and default in payment cannot run to Court to seek permanent injunctions while they are in breach of their contractual obligations. The Land Act of 2012 is very clear that in the event of default statutory procedures in tandem with the law must be strictly followed to realize the loan advanced. What are the key guiding principles governing mortgagor/mortgagee contracts? First and foremost, security for repayments. This means a mortgage or a charge acts as security for a loan. It does not transfer property ownership to the Defendant Bank or the lender or any other financial institution duly licensed to lend money to borrowers. However, the instrument grants the Defendant Bank, financial institutions or even Saccos the statutory power of sale in the event of default. Secondly, as can be seen from the evidential material in this case, there is recognition of freedom of contract as between the parties. In such scenarios there is a cautionary principle that Courts will not interfere with negotiated interest rates or repayment terms unless there is fraud, illegality and gross unconscionability proven on preponderance of evidence by the Claimant or Plaintiff as provided for under Section 107(1), 108, 109 and 112 of the Evidence Act of Kenya. The banks and other financial institutions who are in the money business must explain in plain language how the charges and penalties have come to be loaded to the loan account of their respective customers. Thirdly, the doctrine of equity is of great importance in such contracts between a mortgagor and mortgagee. How do this doctrine apply? Equity here means equalization or levelling down the ground of operations so that the power relations between the bank and their respective borrowers cannot be used for the denial of justice. Therefore, equity is the same as preventing the defendant banks and other financial institutions from acting unconscionably literally contrary to conscience in circumstances otherwise where the common law or Kenyan law would have allowed that to be done. In the layman’s language it can be said to interfering to protect some underlying rights of the victim either because of a contract with the shyster, or because the shyster has control over some property which is rightfully theirs or because one may feel that the actions of the shyster may affect the victim in the future in some way or the other. (See the Principles of Equity and Contracts Shaswata Dutta, National University of Judicial Science). 18.This Court must however appreciate that equity has one legal trajectory and on the other hand contract law has its own distinct trajectory. The essence of a fiduciary relationship by contrast is one party to a contract exercises power on behalf of another and pledges himself or herself or itself in the case of institutions like banks to act in the best interests of the other. That is the very reason why fiduciary relationship has a component of trust and not self interest at its core. In the case of Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR in which Mason J said:“… it is the contractual foundation which is all important because it is the contract that regulates the basic rights and liabilities of the parties. The fiduciary relationship, if it is to exist at all, must accommodate itself to the terms of the contract so that it is consistent with, and conforms to, them. The fiduciary relationship cannot be superimposed upon the contract in such a way as to alter the operation which the contract was intended to have according to its true construction.” 19.The contract between parties which is the foundation of fiduciary relationship and the instruments so endorsed to govern that relationship ordinarily becomes the starting point for identifying the scope of that fiduciary relationship. In this context such was the substratum in which various agreements were negotiated and entered into between the Plaintiff and the Defendant Bank. There are notable cases in Kenya in which the Courts have come out strongly on some of these critical issues on contracts entered into between the borrower and the defendant bank or institutions within the dimension of contract law and fiduciary relationships."Unilateral Rate Increases: In Michael Gitere & another v Kenya Commercial Bank Limited [2018], the High Court ruled that banks cannot unilaterally or arbitrarily vary agreed interest rates and monthly repayment terms without legally justifiable contractual provisions or prior notification to the borrower.Excessive Charges and Penalties: In Francis Joseph Kamau Ichatha v Housing Finance Company of Kenya [2014], the court ruled that financial institutions cannot levy "penalty interests" or "default charges" if those specific levies are not expressly stipulated in the original charge or mortgage document.Dispute on Loan Amounts: In Onyango v SBM (Kenya) Limited [2022], the court reinforced that a dispute over the exact amount owed does not automatically warrant stopping the lender from exercising its statutory power of sale.Discharge of Mortgage: In Mosioma v Housing Finance Co. of Kenya Ltd [2021], the court issued a permanent injunction against a bank dealing with a property after it was established that the chargor had fully repaid the loan amount." 20.The law on Mortgagor/Mortgagee envisions that the debt for which the charge was given has been paid of satisfied in whole or in part otherwise that undertaking by the borrower once there is default the statutory power of sale sets in to realize the security so that he can realize the monies or loan advanced to the borrower. In the case of Cooperative Bank of Kenya vs Patrick Kangethe [2017] KECA it held that by definition a charge is an interest in land securing the payment of money or money’s worth or the fulfillment of any condition as provided under Section 2 of the Land Act as such it gives rise to a relationship where one person acquires rights over the land over another as security in exchange for money or money’s worth. 21.It is deducible from the documentary evidence that the Plaintiff was served with the necessary notices within the provisions of the Land Act 2012. That kind of service is provided for under Section 3(5) of the Interpretation and General Provisions Act which states as follows:“Where any written law authorizes or requires a document to be served by post, whether the expression "serve" or "give" or "send" or any other expression is used, then, unless a contrary intention appears, the service shall be deemed to be effected by properly addressing to the last known postal address of the person to be served, prepaying and posting, by registered post, a letter containing the document, and, unless the contrary is proved, to have been effected at the time at which the letter would have been delivered in the ordinary course of the post." 22.This new comparative jurisprudence hinges on the facts of this case as between the Plaintiff and the defendant Bank as demonstrated herein below: Swiss Bank Corporation vs Lloyds Bank Ltd [1982] A.C 584 is quite instructive. Thus:“An equitable charge may, it is said, take the form either of an equitable mortgage or of an equitable charge not by way of mortgage. An equitable mortgage is created when the legal owner of the property constituting the security enters into some instrument or does some act which, though insufficient to confer a legal estate or title in the subject matter upon the mortgagee, nevertheless demonstrates a binding intention to create a security in favour of the mortgagee, or in other words evidences a contract to do so: see Fisher and Lightwood's Law of Mortgage, 9th ed. (1977), p. 13. An equitable charge which is not an equitable mortgage is said to be created when property is expressly or constructively made liable, or specially appropriated, to the discharge of a debt or some other obligation, and confers on the chargee a right of realisation by judicial process, that is to say, by the appointment of a receiver or an order for sale: see Fisher and Lightwood, p. 14.” 23.Similarly, the Court in Downsview Nominees Ltd v First City Corporation [1993] AC 295 instructive. At page 312 Lord Templeman stated: -“Several centuries ago equity evolved principles for the enforcement of mortgages and the protection of borrowers. The most basic principles were, first, that a mortgage is security for the repayment of a debt and, secondly, that a security for repayment of a debt is only a mortgage. From these principles flowed two rules, first, that powers conferred on a mortgagee must be exercised in good faith for the purpose of obtaining repayment and secondly that, subject to the first rule, powers conferred on a mortgagee may be exercised although the consequences may be disadvantageous to the borrower. These principles and rules apply also to a receiver and manager appointed by the mortgagee.” 24.There is no dispute the mortgagee’s power of sale is part of the issue which became under scrutiny by the Plaintiff who in one way or another from his testimony it is implicit that there was bad faith in the process of advertising the property given the various negotiations and moratorium instruments issued by the Defendant Bank. This case which am placing reliance on is foundational in the common law jurisdiction which is the forerunner for our domestic jurisprudence grounded in the contract of mortgagor/mortgagee. The case of Forbes and Forbes v Miller’s Liquor Store (Dist) Limited highlighted the meaning of equity of redemption in the following language:“The term “equity of redemption” is a term belonging to what Australian lawyers term “the old system”, as distinct from the Torrens system of registration of titles to land. The old system included the relevant statute law, the common law and the relevant principles of equity as they affected interests in land. Under the common law, a mortgagee became the owner of the property. Equity, however, allowed the mortgagor, upon repayment of all monies due under the mortgage, to redeem the property and regain ownership of it. The mortgagor was therefore said to have, an “equity of redemption”. Where the mortgagee sold the property, however, the mortgagor’s equity of redemption was extinguished. Under the Torrens system of registration, the mortgagor remained the legal owner of the property. The term “equity of redemption”, therefore, has a different implication under the Torrens system. It speaks to the mortgagor’s right to have the encumbrance to his title, created by the mortgage, removed. Some principles of the old system do, however, apply conveyancing practice under the Torrens system. An informative discourse on the differences between these systems of law with respect to mortgages, is set out in King Investment Solutions v Hussain [2005] NSWSC 1076 (27 October 2005) at paragraphs 45-82. The ROTA is modelled on the Torrens system of registration of titles to land.”“The mortgagee will not be restrained from exercising his power of sale because the mortgagor has commenced a redemption action or because he objects to the arrangement for sale or because the amount due is in dispute. But he will be restrained, if before there is a contract for sale or the mortgaged property the mortgagor pays into court, the amount claimed to be due, that is the amount the mortgagee swears to be due to him for principal, interest and costs. (See Fisher and Lightwood’s, Law of Mortgage). 25.In my own view and evaluation on the issue of this contract, this Court is being asked to rewrite the terms, warranties, covenants and other related agreements which are distinct from what the two parties had agreed, negotiated and finally inked their signatures as binder document. The Plaintiff in his evidence both orally and document ally has failed to discharge the burden of proof on a balance of probabilities that the loan amount as borrowed and further enhanced in the subsequent agreements was fully paid and settled in favor of the Defendant Bank. The Defendant Bank was under obligation and as per the law established in the Land Act 2012 to exercise its statutory power of sale as against the security offered by the Plaintiff which conditioned the loan agreements. 26.This Court’s responsibility is strictly to regulate the lender’s statutory power of sale under the Land Act specifically Sections 90-97 to ensure fair procedure, adequate notice and reasonable valuation to protect property owners from being disposed off without following the prescribed provisions of the Act. from the evidence on record and scrutinized by this Court no evidence has been availed by the Plaintiff that there were breaches of Sections 90-97 of the Land Act 2012. There was prove of service with completeness of what the law demands of the Defendant Bank. I therefore rely on the following case law to support the view I have taken on this matter:Valuation & Duty of Care: In Gitau v HFC & 5 others and Peter Ndungu Kimani v Equity Bank, the High Court ruled that selling a charged property significantly below its market or forced-sale value breaches Section 97 of the Land Act, which mandates chargees to obtain the best price reasonably obtainable.Notice Requirements: In Philip Musili Kyuma v Equity Bank Ltd and Kariuki v Family Bank Limited, the Court nullified statutory sales where the bank failed to properly serve mandatory notices (such as the 90-day demand notice, 40-day notice to sell, and 45-day redemption notice).Proof of Service: In Shem Mwaura Njoroge v Equity Bank, the Court upheld the bank's power of sale, noting that a valid temporary injunction cannot be granted if the bank proves it substantially complied with the Land Act's notification provisions and dispatched notices to all concerned parties. 27.The case at bar when evidence is applied to the facts and the law there is no legal harbor for proper anchorage of the Plaintiff’s case as against the Defendant Bank so that the prayers being sought can be appropriately granted in his favor as against the Defendant Bank. 28.This discussion on the dispute raised by the Plaintiff against the defendant bank cannot be complete without making a comment or so with regard to the prayer on permanent injunction which was strongly agitated for by the Plaintiff. The Plaintiff despite not denying that he borrowed the money as set out in the instruments and other documentary evidence failed to satisfy this Court that there were other exceptional grounds in which the Court should interpret so as to grant the remedy of a permanent injunction. What the Plaintiff is asking this Court to do is to grant a relief which prejudices and occasions injustice upon the defendant bank which is not the true features underlying the provisions of Sections 90-97 of the Land Act 2012. The overriding consideration is that there is a legitimate expectation from the defendant bank that the money so advanced in the form of a loan or overdraft facilities to the Plaintiff were to be paid in full together with interest as agreed in the various legal instruments negotiated and signed in the course of the formation of the contractual relationship. 29.It is now trite law in Kenya that Courts would generally not stop a lawful sale simply because the debt amount is disputed but will intervene if the process was illegal, unprocedural or fraudulent. In the case of Onyango v SBM (Kenya) Limited (Civil Case E021 of 2021) the Court emphasized that a mortgagor must generally tender the undisputed amount or pay it into Court to stop the bank from realizing its security. It must also be borne in mind that an injunction is a limited pause not a permanent bar of rights and fundamental freedoms of an individual or institution like in our case stopping the defendant bank from selling the property to secure its proceeds of the loan. I therefore regret legally so that this permanent injunction will cause irreparable harm to the defendant bank which cannot be compensated by monetary damages and such damages have not been undertaken or covenanted to by the Plaintiff. 30.For those reasons, I decline to restrain the mortgagee from exercising its statutory power of sale solely on the grounds that there is a dispute on the outstanding principal amount, or arrears, or there is issue of interest overcharge, which in this case was never proven as per the law established. The question I pose to the Plaintiff is whether in his evidence there is some exceptional circumstances demonstrated appropriately to strengthen the inclination of the Court to refrain the Defendant Bank from proceeding to auction the property so as to realize the money due and owing as stated in the various agreements? In my opinion, no such answer has been provided so as not to correctly exercise discretion in favor of the Defendant Bank. The course I take in this matter is in line with the following principles; that it is essential for the Plaintiff to offer to do equity and in doing so he must provide an offer to redeem the mortgage and pay the amount found to be due as documented by the defendant bank and this demands of him to evidentially demonstrate his capacity repaying both the principal, interest and any tariffs associated with the mortgage contract. There are no particulars to demonstrate there was something wrong about the lenders agreements and cumulatively it should be stopped from exercising its statutory power of sale. This primary analysis leads me to a conclusion that it is quite clear that the suit as filed is lost and the defendant bank carries the day in being granted leave to proceed and strictly follow the law in exercising its statutory power of sale de novo. The costs of this suit shall be loaded once more to the Plaintiff as against the defendant. It is so ordered. DATED AND DELIVERED AT ELDORET VIA CTS & EMAIL ON 26TH JUNE 2026.……………………….…………..R. NYAKUNDIJUDGE