https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/12378

**REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA** **AT NAKURU** **HCCC NO. E022 OF 2026** G & G ENTERPRISES LIMITED ............... PLAINTIFF/APPLICANT VERSUS KCB BANK KENYA LIMITED ….. 1ST DEFENDANT/RESPONDENT PHILLIPS INTERNATIONAL AUCTIONEERS ........................ 2ND DEFENDANT/RESPONDENT **RULING** [1] Before this Court for determination is a Notice of Motion dated 28th May 2026 filed by the Plaintiff/Applicant, G & G Enterprises Limited, brought under Sections 82(3) and 90 of the Land Act, 2012, Sections 1A, 1B, and 3A of the Civil Procedure Act, and Order 40 Rules 1(a), 2(1)(2), and 4(1)(2) of the Civil Procedure Rules, 2010. [2] The Applicant seeks the following orders; 1. ***Spent.*** 2. ***Spent.*** 3. ***THAT pending the hearing of the main suit herein this Honourable Court be pleased to issue an Order of Temporary Injunction restraining the Defendants either by themselves, authorized agents, and/or assigns from in any way dealing with, disposing of, selling or otherwise interfering with the properties title numbers:*** ***Kiambogo/KiambogoBlock2/1136(Mwariki);*** ***Nyandarua/Milangine/443;*** ***Dundori/LanetBlock6/619,620,621,622,623,624,625,626,627,628,629,630,631,632,633,634,635&636;*** ***Naivasha/MwichiringiriBlock1/5279,5280,5281,5282,5283,5284,5285,5286,5287,5288&5289;*** ***Naivasha/MwichiringiriBlock1/6513,6514,6515,6516&6517(ArimiALimuru);*** ***Naivasha/Mwichiringiri Block 1/5264;*** ***Naivasha Mwichingiri Block 1/5386.*** 1. ***THAT such further and/or other orders be made as the court may deem fit and expedient.*** 2. ***THAT the costs of this Application be in the cause.*** [3] The application is supported by the affidavit of Geoffrey Wainaina Chege, the sole director of the Applicant, sworn on 28th May 2026, and the Applicant's written Submissions filed on 22nd July 2026. [4] The 1st Defendant/Respondent has opposed the application through a replying affidavit sworn by **Mogan Bushuru Mukabi**, the Credit Admin of the 1st Defendant, on 7th July 2026, and filed written submissions dated 22nd July 2026. The 2nd Defendant did not file any response. [5] The Applicant's case, as presented in the Notice of Motion, the supporting affidavit, and the written submissions, is founded on three principal grounds. [6] First, the Applicant contends that the 1st Defendant irregularly and unlawfully honoured Bank Guarantee No. MD2002300001C for KES 6,000,000/- after its expiry on 10th November 2024, without seeking its renewal or obtaining instructions from the Applicant. The Applicant argues that this amounted to an illegality that created a disputed debit on the loan account. The Applicant relies on the principle that a bank guarantee is a strict contract, and a bank's mandate to make payment is strictly limited to the duration and terms specified within the four corners of the guarantee instrument. Once the validity period expires, the bank's liability under the guarantee ceases entirely. The Applicant cites the Court of Appeal decision in ***Kenindia Assurance Company Limited v First National Finance Bank Limited [2008] KECA 91 (KLR)*** , where the court emphasized that the terms of a bank guarantee are to be construed strictly, and a bank has no legal authority to pay an expired guarantee. [7] Second, the Applicant contends that the 1st Defendant failed to comply with the mandatory provisions of Sections 90 and 96 of the Land Act, 2012. Specifically, the Applicant argues that the 1st Defendant failed to serve a 90-day notice of default under Section 90 of the Land Act, 2012, and failed to serve a copy of the notice of intention to sell on the guarantors and their spouses as required by Section 96(3) of the Land Act, 2012. The Applicant relies on ***John Kiprgut Kurgat t/a Jophik Enterprises v Guaranty Trust Bank (Kenya) Ltd & another [2020] eKLR,*** where the Court of Appeal held that failure to serve statutory notices on spouses and guarantors is a fatal procedural defect that nullifies the entire foreclosure process. The Applicant also cites the recent High Court decision in ***James Maina Githinji v KCB Bank Kenya Limited & Phillips International Auctioneers [2026] eKLR,*** where the Court held that the provisions of Section 96(3) of the Land Act are mandatory and couched in imperative terms. [8] Third, the Applicant contends that the 1st Defendant failed to conduct a recent valuation of the suit properties as required by Section 97 of the Land Act, 2012. The Applicant argues that Section 97(2) requires a valuation to be conducted not more than twelve months before the date of the sale, and that the 1st Defendant's failure to comply with this provision renders the intended sale invalid. The Applicant relies on ***Kesom Freight International Limited & 2 others v Guaranty Trust Bank (Kenya) Limited [2023] eKLR***, where the High Court held that a forced sale of charged property cannot proceed in the absence of a current valuation report. [9] The 1st Defendant's case, as presented in the replying affidavit and written submissions, comprehensively responds to each of the Applicant's allegations. [10] On the issue of the bank guarantee, the 1st Defendant contends that the Applicant's assertion that it honoured an expired guarantee is false and baseless. The 1st Defendant has provided evidence that Guarantee No. MD2002300001C for KES 6,000,000/- was issued on 14th October 2021 and was extended by the 1st Defendant on instructions of the Plaintiff through letters dated 4th November 2022 and 14th February 2023. The 1st Defendant has further provided evidence that Nation Media Group PLC made a written demand on 2nd March 2023. At the time the demand was made, Guarantee No. MD1709500016C remained valid up to and including 14th February 2024, and Guarantee No. MD2002300001C remained valid up to and including 10th November 2023. The 1st Defendant submits that upon receipt of the written demand dated 2nd March 2023, it became contractually bound under the terms of the guarantees to honour the demand, the same having been made during the subsistence of the guarantees and in accordance with their express terms. [11] On the issue of statutory notices, the 1st Defendant has provided comprehensive documentary evidence of service, including a 90-day statutory notice dated 19th February 2025, a 40-day notice to sell dated 22nd January 2026, a 45-day redemption notice dated 11th March 2026, certificates of postage dated 26th February 2025 and 1st January 2026, a certificate of service dated 21st March 2026, and payment receipts for certificates of postage. The 1st Defendant submits that the notices were served upon the Plaintiff/Applicant, the registered proprietors of the charged parcels of land, and the guarantors through their respective postal addresses contained in the letters of offer, the charges, and guarantee and indemnity agreements freely executed by them. The 1st Defendant further submits that the notices were also served via registered post, email, and WhatsApp. [12] On the issue of valuation, the 1st Defendant has provided six valuation reports from Acumen Valuers Limited covering all the charged properties. The 1st Defendant submits that it conducted valuations of the charged parcels of land in compliance with Section 97 of the Land Act, 2012. [13] The sole issue for determination is whether the Applicant has satisfied the conditions for the grant of a temporary injunction as established in ***Giella v Cassman Brown [1973] EA 358***. The three conditions are: whether the Applicant has established a prima facie case with a probability of success; whether the Applicant will suffer irreparable injury if the injunction is not granted; and whether the balance of convenience tilts in favour of granting the injunction. [14] The definition of a prima facie case was settled by the Court of Appeal in ***Mrao Limited v First American Bank of Kenya Limited & 2 Others [2003] KECA 175 (KLR)*** , where the court held as follows: ***"A prima facie case in a civil case includes a case in which on the material presented to the court a tribunal properly directing itself would conclude that there exists a right which has apparently been infringed by the opposite party as to call for an explanation or rebuttal from the latter. A prima facie case is more than an arguable case. It is not sufficient to raise issues but the evidence must show an infringement of a right, and the probability of success of the applicant’s case upon trial. That is clearly a standard, which is higher than an arguable case.”*** [15] I will now consider each of the three grounds advanced by the Applicant to determine whether they establish a prima facie case. [16] The Applicant contends that the 1st Defendant unlawfully honoured Bank Guarantee No. MD2002300001C after its expiry on 10th November 2024. However, the 1st Defendant's evidence, which I find credible and uncontroverted, establishes a different timeline. The guarantee was issued on 14th October 2021 and was extended on 4th November 2022 and 14th February 2023. Nation Media Group PLC made a written demand on 2nd March 2023, and at the time of the demand, both guarantees were valid and subsisting. The Applicant has not provided any evidence to contradict the 1st Defendant's evidence regarding the date of the demand. The Applicant's Supporting Affidavit simply asserts that the guarantee was paid after expiry, without addressing the critical fact that the demand was made during the subsistence of the guarantee. [17] I am guided by the principles governing bank guarantees. In ***Kenindia Assurance Company Limited v First National Finance Bank Limited [2008] KECA 91 (KLR)*** , the Court of Appeal examined the question of when a bank's obligation lapses in respect of a guarantee it has to honour. The Court affirmed that a bank can only honour a guarantee during its lifespan as long as at the time the demand was made there was a valid guarantee. The Court held as follows: ***"It is in evidence that the respondent advised the appellant of the default by the principal debtor by a letter dated 28th June 1997. The letter of demand is dated 18th August 1997 and was received by the appellant on the same day. The expiry date of the guarantee was 27th August 1997. It is our view that as at the date the demand was made the guarantee had not expired and was therefore still valid."*** [18] The critical question is not when payment was processed, but when the demand was received. The guarantee's expiry date is the deadline for making a demand, not the deadline for processing payment. This is consistent with the Uniform Rules for Demand Guarantees (URDG 758), which govern these guarantees. The 1st Defendant became contractually bound upon receipt of the compliant demand on 2nd March 2023. The fact that payment may have been processed after the expiry date does not render the payment unlawful. I therefore find that the Applicant's argument on the expired guarantee is factually incorrect and legally untenable, and this ground does not establish a prima facie case. [19] The Applicant contends that the 1st Defendant failed to serve the mandatory statutory notices under Sections 90 and 96 of the Land Act, 2012. However, the 1st Defendant has provided comprehensive documentary evidence of service, including a 90-day statutory notice dated 19th February 2025, a 40-day notice to sell dated 22nd January 2026, a 45-day redemption notice dated 11th March 2026, certificates of postage dated 26th February 2025 and 1st January 2026, a certificate of service dated 21st March 2026, and payment receipts for certificates of postage. The 1st Defendant has also provided evidence of service on the guarantors via registered post, email, and WhatsApp. [20] The Applicant has not provided any evidence to rebut the 1st Defendant's documentary proof of service. The 1st Defendant's evidence on service is credible, detailed, and unchallenged. In ***John Kiprgut Kurgat t/a Jophik Enterprises v Guaranty Trust Bank (Kenya) Ltd & another [2020] eKLR***, the Court of Appeal held that failure to serve statutory notices on spouses and guarantors is a fatal procedural defect. However, in the present case, the 1st Defendant has provided sufficient evidence of service. I find that this ground either does not establish a prima facie case. [21] Regarding the certificate of postage, this Court is guided by the decision in ***Hellen Jane Achieng' Odegi v Kenya Commercial Bank (ELC No. 867 of 2015)***, where the Court held as follows: ***"I have perused through the Defendant's supporting documents. The Statutory Notice, Notice to Sell, Letter of Offer, and Charge instrument all contain the Plaintiff's address as 16982 – 00100 Nairobi. It is the same address as the one on the Certificate of Postage. The Plaintiff does not dispute this address at all. In my considered view, the Certificate of Postage is sufficient proof of posting and I am satisfied that the notice was properly dispatched to the Plaintiff's last known address and therefore service was properly effected."*** [22] Similarly, in ***Wanjiru v HFC Limited & 2 Others (Commercial Case E050 of 2025) [2025] KEHC 17783 (KLR)***, Lady Justice Mong'are held as follows: ***"I have gone through the pleadings and the submissions. It is admittedly clear that the Plaintiff is indebted to the Bank as evidenced by the Loan Statement and the Plaintiff's own letter requesting for a restructure of the loan. The Bank has stated that it has issued and served the requisite statutory notices upon the Plaintiff and this is evidenced by the Certificates of Postage which is prima facie proof that the said notices were served and received by the Plaintiff."*** [23] The Applicant contends that the 1st Defendant failed to conduct a recent valuation of the suit properties as required by Section 97 of the Land Act, 2012. However, the 1st Defendant has provided six valuation reports from Acumen Valuers Limited covering all the charged properties. Section 97 of the Land Act, 2012 requires that a valuation be conducted not more than twelve months before the date of the sale. The 1st Defendant has provided evidence that valuations were conducted and reports prepared. The Applicant has not provided any evidence to suggest that the valuations were defective, outdated, or otherwise non-compliant with the law. The Applicant's claim is a bare assertion without any supporting evidence. I find that this ground also does not establish a prima facie case. [24] Having carefully considered all three grounds advanced by the Applicant, I am not satisfied that the Applicant has established a prima facie case with a probability of success. The Applicant's claims are factually disputed by the 1st Defendant's documentary evidence. The Applicant has not provided any credible evidence to rebut the 1st Defendant's case. The bank guarantee argument is weak and appears to be a red herring. The allegations of non-service and failure to conduct valuations are directly contradicted by the 1st Defendant's evidence. I find and hold that the Applicant has failed to satisfy the first limb of the Giella v Cassman Brown test. [25] The second limb requires the Applicant to demonstrate that it will suffer irreparable injury that cannot be adequately compensated by an award of damages. The Applicant argues that the suit properties represent the livelihood of the Plaintiff and its guarantors, and that their loss would be irreversible. However, I am guided by the well-established principle that where property is charged as security for a commercial loan, it becomes a commodity for sale, and its loss is compensable by way of damages. [26] The Court of Appeal in ***Nguruman Limited v Jan Bonde Nielsen & 2 Others [2014] KECA 165 (KLR)*** held as follows: ***"On the second factor, that the applicant must establish that he 'might otherwise' suffer irreparable injury which cannot be adequately remedied by damages in the absence of an injunction, is a threshold requirement and the burden is on the applicant to demonstrate, prima facie, the nature and extent of the injury. Speculative injury will not do; there must be more than an unfounded fear or apprehension on the part of the applicant. The equitable remedy of temporary injunction is issued solely to prevent grave and irreparable injury; that is injury that is actual, substantial and demonstrable; injury that cannot 'adequately' be compensated by an award of damages. An injury is irreparable where there is no standard by which their amount can be measured with reasonable accuracy or the injury or harm is such a nature that monetary compensation of whatever amount, will never be adequate remedy."*** [27] The Court of Appeal in **John Nduati Kariuki t/a Johester Merchants v National Bank of Kenya Ltd (Civil Appl 306 of 2005)** observed as follows: ***"We do not think, as argued before us, that Section 52 of the Transfer of Property Act applies since the securities involved in this matter are registered under the Registered Land Act which Act excludes the application of the former under Section 164. Secondly section 77 (3) of the Registered Land Act provides for damages where the chargee irregularly exercises the power of sale and an injunction would not normally lie where damages are sufficient."*** [28] The Applicant voluntarily offered the suit properties as security for the loan facilities. The Applicant has not disputed its indebtedness to the bank. The loss is monetarily quantifiable and can be compensated by damages if the sale is later found to be irregular. I find and hold that the Applicant has failed to satisfy the second limb of the Giella v Cassman Brown test. [29] The third limb requires the Court to weigh the convenience of both parties. The balance of convenience tilts in favour of the 1st Defendant for several reasons. [30] First, the Applicant has not disputed its indebtedness to the bank. The Applicant's Supporting Affidavit and submissions do not deny that it owes the bank money. Second, the Applicant has not offered to settle the debt or demonstrated any ability to do so. This suggests that the application is a delaying tactic rather than a genuine attempt to resolve the dispute. Third, the Applicant failed to disclose material facts to the Court when obtaining the ex parte orders. Specifically, the Applicant failed to disclose that the 1st Defendant had served all the requisite statutory notices and that the 1st Defendant had conducted valuations of the suit properties. Fourth, the Applicant obtained orders on a premise of material non-disclosure and concealment of material facts. An injunction is an equitable remedy, and a party seeking equity must come with clean hands. The Latin maxim applies: he who comes to equity must come with clean hands (*qui venit ad aequitatem manibus mundis veniat*). [31] In ***Kenya Commercial Bank Limited v Chief Land Registrar & 2 Others [2014] eKLR***, the court held that a party who obtains orders through material non-disclosure is undeserving of equitable relief. [32] The Court in ***Terracraft (K) Limited and Another v KCB Bank Kenya Limited (Civil Case No. E104 of 2020)*** observed as follows: ***"The Plaintiffs have not denied that they are indebted to the Bank. If anything, prayer (d) of the motion under consideration taken together with the correspondence between the parties show that the Plaintiffs require indulgence to repay the debt. Since the charge is valid and the obligation to make payment on demand still stands, granting an injunction pending the hearing and determination of the suit would result in devaluation of the security relative to the debt which continues to accrue interest."*** [33] Similarly, in ***Palker Enterprises Limited & Another v Co-operative Bank of Kenya (Commercial Case E090 of 2025) [2025] KEHC 17220 (KLR),*** the Court held that: ***"On the balance of convenience, the 2nd Plaintiff is in admitted default. The Respondent, as a financial institution, continues to suffer prejudice due to non-performance of the facilities. The balance of convenience therefore tilts in favour of allowing the Respondent to exercise its statutory power of sale, provided the statutory procedures have been complied with."*** [34] Fifth, the Applicant's application appears to be an attempt to abuse the court process. The Applicant is using litigation to delay a lawful sale. I find and hold that the balance of convenience does not tilt in favour of the Applicant. The balance of convenience overwhelmingly favours the 1st Defendant. [35] Before concluding, I must address the issue of material non-disclosure raised by the 1st Defendant. The 1st Defendant has submitted that the Applicant obtained ex parte orders by failing to disclose material facts, including the service of all statutory notices and the conduct of valuations. I have carefully reviewed the pleadings and submissions. I am satisfied that the Applicant did indeed fail to disclose these material facts. This is a serious matter that goes to the root of the Applicant's entitlement to equitable relief. The Applicant's failure to make full disclosure of material facts is a ground for discharging the orders already granted and for refusing to grant the orders sought. [36] In the upshot, the Notice of Motion dated 28th May 2026 be and is hereby dismissed with costs to the 1st Defendant. **Dated, signed, and delivered at Nakuru this 29th day of July, 2026.** **J. K. SERGON** **JUDGE** **In the presence of:** Rutoh C/A Chebon for the Defendant Mburu for Plaintiff