https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/5301

 **REPUBLIC OF KENYA** **IN THE ENVIRONMENT AND LAND COURT OF KENYA AT NYERI** **ELC CASE NO. 21 OF 2022** **ERINPET ENTERPRISES LIMITED …………………………PLAINTIFF** **-VERSUS-** **EQUITY BANK (KENYA) LIMITED ………………...1ST DEFENDANT** **PHILLIPS INTERNATIONAL AUCTIONEERS. ...2ND DEFENDANT** **PETER NGOCHI MWANGI ……………………….3RD DEFENDANT** **RULING** 1. The Plaintiff initially sued the 1st and 3rd Defendants in respect of a loan secured by the property owned by the Plaintiff, that is, Karatina/Township/Block 1/428. 2. The land was later sold at auction while this matter was pending, necessitating an amendment to the Plaint to include the 2nd Defendant. 3. When the matter was listed before me, I asked counsel for the parties whether this Court had jurisdiction to handle it, given that it involved a charge. Counsel for the Defendants were of the view that this Court had no jurisdiction to handle the matter. 4. A look at the amended Plaint dated 6th October 2023 shows that the plaintiff sought, among other prayers: 5. **A declaration that the sale of the suit property is unlawful, illegal, invalid, null and void, and directing the Land Registrar, Nyeri County, to register back the plaintiff as the owner of the suit property.** 6. **In the alternative, the defendants be directed to pay the plaintiff damages for the loss of the suit property,** 7. **costs, and interest of the suit.** 8. From the amended Plaint, the cause of action, as outlined in paragraphs 4 to 16, originates from the default in payment of a loan facility amounting to Kshs.26,000,000/- utilised for the acquisition of the suit property, namely Karatina/Township/Block 1/420. The 1st Defendant consented to finance the purchase. The transaction was registered on 10th July, and the property was subsequently offered to the 1st Defendant as security for the loan obtained. 9. From the foregoing, the question this Court has to decide, looking at the pleadings, is whether the ELC has jurisdiction to handle the matter. 10. Under settled jurisprudence of the Superior Courts, disputes concerning charged land fall within the civil and commercial jurisdiction of the High Court, not the ELC. Section 2 of the Land Act defines a charge as an interest in land securing the payment of money or money’s worth, or the fulfilment of any condition. It includes a sub-charge and the instrument creating a charge, including informal or customary charges. 11. Upon creation of a charge over a property, either party—the chargor (borrower) or the chargee (lender)—acquires rights and obligations in relation to the property. 12. Section 80 of the Land Act provides that a charge over land shall operate solely as security and shall not constitute a transfer of interests or rights in land. This security feature confers on the lender rights or remedies under the charge in the event of the borrower's default. 13. Under Sections 90-96 of the Act, the lender has a range of options to pursue when faced with default. Given the nature of this transaction, several courts have been called upon to interpret whether the Environment and Land Court (ELC) or the High Court possesses jurisdiction over matters related to interests in charged property. 14. The Court of Appeal, in landmark cases such as **Co-operative Bank of Kenya Limited v Njuguna & 5 others [2017] KECA 79 (KLR)** and **Bank of Africa Kenya Limited & another v TSS Investment Limited & 2 others (Civil Appeal E055 of 2022) [2024] KECA 410 (KLR),** has clarified that the mandate of the Environment and Land Court (ELC) is strictly confined to disputes pertaining to the title, use, occupation, and protection of land. A mortgage or charge constitutes a financial transaction and a *"disposition of security,'* rather than a matter concerning land use. 15. The central issue in such cases is the debt or loan agreement; the land serves merely as security for the debt. Consequently, if a borrower defaults and a financial institution seeks to auction the collateral, any legal action to halt the foreclosure or contest the loan balances must be instituted in the High Court. The ELC lacks jurisdiction to adjudicate financial accounting matters, interest rates, or the enforcement of commercial securities. The ELC should assume jurisdiction only if the primary issue shifts from the loan itself to a substantive land dispute. For instance, if a challenge is made to the fundamental validity of the title deed—such as alleging fraudulent acquisition or forgery before its use as collateral—the ELC may hear the dispute regarding the title. Conversely, matters concerning the loan amount, statutory notices, or the auction process must be filed in the High Court. 16. From the pleadings, what we have is a commercial matter - the recovery of a loan secured by a charged property. If the processes for realising the security were muddled, the matter should still be handled in the High Court rather than the ELC. 17. Having guided myself and bound by the decision in **Owners of the Motor Vessel “Lillian S" v Caltex Oil (Kenya) Ltd [1989] KECA 48 (KLR)**: ***"Jurisdiction is everything. Without it, a court has no power to make one more step. Where a court has no jurisdiction, there is no basis for the continuation of proceedings pending evidence. A court of law downs its tools in respect of the matter before it the moment it holds the opinion that it is without jurisdiction."*** 1. I down tools. The Plaintiff's suit is struck out with costs. **Dated, signed, and delivered electronically in Nyeri on this 6th day of August, 2026.** **E. K. MAKORI** **JUDGE** **In the Presence of:** **Ms Wangare for the 1st and 2nd Defendants** **Mr Muu for the 3rd Defendant.** **In the Absence of:** **The Plaintiff**