[2021] KEHC 6079 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT GARISSA

CIVIL SUIT NO. 4 OF 2019

FIRST COMMUNITY BANK.................................................................PLAINTIFF

VERSUS

READY CONSULTANCY LIMITED.........................................1ST DEFENDANT

MOHAMED ISSA DUCALE.....................................................2ND DEFENDANT

MOHAMED HASSAN ALI.......................................................3RD DEFENDANT

COUNTY GOVERNMENT OF GARISSA..............................4TH DEFENDANT

JUDGEMENT

1. On the 30th of April 2019 the Plaintiff, First Community Bank filed suit against the 4 Defendants namely; Ready Consultancy Limited, Mohamed Issa Ducale, Mohamed Hassan Ali and the County Government of Garissa.

2. The Plaintiff’s claim arises from an agreement dated 9th June, 2014, where the Plaintiff offered to advance working capital loan to 1st Defendant to the tune of Kshs.26,000,000/-. The 1st Defendant was to pay back the sum of Kshs.28,180,000/- which sum was to be repaid within a period of six (6) months.

3. In the plaint the Plaintiff claims that the loan facility was secured by registration of several motor vehicles in the joint names of the Plaintiff, 1st, 2nd, and 3rd Defendants; a letter dated 21st May, 2014 where the 4th Defendant undertook that proceeds of the contract known as Tender No. C99/T/124/13-14 between the 1st Defendant and 4th Defendant shall be paid through the 1st Defendant’s account held at the Plaintiff’s bank as a further security; guarantees and indemnity by the 2nd and 3rd defendants and a charge against property known as CIS/MARA/LEMEK/2519.

4. Summary judgement was entered against all the 4 Defendants on the 3rd of June 2019 following an application by the Plaintiff dated the 29th of April 2019. The said Judgement was however set aside on the application of 1st to 3rd Defendants on the 29th of January 2020 who claimed of having not been served with the summons to enter appearance. The 4th Defendant has so far not entered appearance nor filed a defence.

5. Following the court’s ruling of 29th January 2020, the 1st to 3rd Defendants filed their joint statement of defence and their witness summons and the matter was set for hearing.

6. On the date set for hearing no counsel nor the 1st to 3rd Defendants appeared. The Plaintiff was represented and called one witness.

7. The Plaintiff’s witness Mr. Mohamed Adan Mohamed, a manager in the Remedial Unit of the Plaintiff informed the court that on the 9th of June 2014 an offer letter was issued to the 1st Defendant and acceptance received on the 10th of June 2014 where the Plaintiff offered to advance to the 1st Defendant a working capital of Kshs.26,000,000/- and the said amount was to be repaid within 6 months as a total sum of Kshs.28,180,000/-.

Further he informed the court that the following securities were offered

- Guarantees/indemnity by the 2nd and 3rd Defendants.

- A charge was registered against property CIS/MARA/LEMEK/2519.

- Motor vehicle log books were held by the Plaintiff; and

- An undertaking/assignment by the 4th Defendant that proceeds of the agreement of Tender No. C99/T/124/13-14 between the 1st and 4th Defendant shall be paid into the 1st Defendant’s account held by the Plaintiff.

8. Further the witness informed the court that after expiry of 6 months the 1st Defendant asked for a further extension of 6 months which was granted on the 4th of February 2015 and that is when the property CIS/MARA/LEMEK/2519 was charged. Further after the 1st defendant failed to honour its obligation, attempts to auction property CIS/MARA/LEMEK/2519 have not borne any fruit twice as the bids have both times been below reserve price.

9. On the 8th of March 2017 the Plaintiff wrote to the 4th Defendant to honour its undertaking which it has failed so to do.

As for the vehicles the plaintiff has no physical possession of the same and does not known where the same are.

10. The Plaintiff seeks for judgement jointly and severally for the sum of Kshs 28,180,000; interest at commercial rate and costs.

11. Whereas the 1st to 3rd Defendants were in court and filed their defence and witness statement the 4th Defendant’s presence has not been seen.

12. The court has perused the record and therein is a copy of summons to enter appearance bearing the stamp of the Office of the County Secretary, the date on the stamp is not legible nor is there a signature of the recipient.

13. In a relying affidavit dated 15th September 2019, one Jackson Mutinda states as follows

“on the 30th of April 2019 I proceeded to the County of Garissa and served the officer authorized to receive court process who acknowledged service by stamping on my copies.”

14. It was expected that the said process server would state the name of the officer he served and the said officer would have endorsed on original copy of the summons alongside the stamp.

Order 5 rule 15 provides that:

“(1) The serving officer in all cases in which summons has been served under any of the foregoing rules of this order shall swear an affidavit and annex or cause to be annexed to the original summons an affidavit of service stating the time when and the manner in which summons was served and the name and the address of the person (if any) identifying the person served and witnessing the delivery and tender of summons. The affidavit of service shall be in Form No. 4 of Appendix A with such variations as circumstances may require.”

15. Clearly the requirement of the said order as quoted above have not been met for the 4th Defendant and the court has no means of satisfying itself whether an authorized officer was indeed served.

16. Secondly Order 10 rule 8 states:

“Judgement in default against government –

No judgement in default of appearance or pleading upon may be entered against the government without leave of the court and any application of leave shall be served not later than seven days before the return day.”

17. From the above analysis the court is not satisfied that proper service was effected against the 4th Defendant. Secondly leave ought to have been obtained in order to pave way for judgement against the 4th Defendant as Government at the county level, the court declines to enter judgement against the 4th Defendant.

18. Having stated the above and the Plaintiff having proved its case in the absence of the 1st to 3rd Defendant and the court being satisfied that their counsel was served, judgment is thus entered against the 1st, 2nd and 3rd Defendant jointly and severally, together with interest and costs as prayed.

DATED, DELIVERED AND SIGNED AT GARISSA THIS 10TH DAY OF JUNE, 2021.

……………….………………

ALI-ARONI

JUDGE