https://new.kenyalaw.org/akn/ke/judgment/kemc/2026/550

**REPUBLIC OF KENYA** **IN THE CHIEF MAGISTRATE’S COURT AT BUNGOMA** **ELC CASE NO. 49 OF 2019** **FORMELY HC NO. 9/2019** **HAGAI WANJALA MUNIALO………………………………...PLAINTIFF** **=VERSUS=** **KENYA INDUSTRIAL ESTATE……………………….…….DEFENDANT** **JUDGMENT** By Plaint dated 0/11/2016, the Plaintiff sued the Defendant for orders that; 1. A permanent injunction restraining the Defendant, their agents, and/or servants from selling, transferring his parcel of land known a BUNGOMA/TONGAREN/2690. 2. Accounts be taken between the Plaintiff and the Defendant. 3. Interest of (a) and (b) above. 4. Any other relief the Honourable Court may deem fit and just to grant. The genesis of this suit was a loan which the Plaintiff was advanced by the Defendant in the year 2010 amounting to Kshs200,000/=. The same was secured by a charge over the suit properly to with Bungoma/Tongaren/2690. The Plaintiff subsequently pumped the said amount into a petrol station business known as Muvumilivu Filing Station at Tongaren market which unfortunately got burnt down in a fire accident. Further on, the Plaintiff got involved in a Road Traffic Accident along Kitale- Eldoret road on 6/8/2013 where he sustained injuries. Due to the above, we incurred loss and damage which caused him to apparently fall into arrears. He explained that by the time the Defendant instructed Keysian Auctioneers a demand notice for Kshs121,689/2, he had already repaid Ksh126,000/= leaving a balance of Kshs84,000/= only. Subsequently, the Defendant instructed Rhemat Auctioneers on 6/9/2016 to serve him with a notification of sale of the suit property for nonpayment of Kshs304,227/2. He contended that the purported sale should not be allowed to take place until accounts are taken to determine the true state of affairs and the matter settled to the satisfaction of the court otherwise he will suffer irreparable loss and damage. The Defendant filed a defence statement dated 21/12/2016 denying the claim. It averred that the loan they advanced to the Plaintiff on 8/6/2011 of Kshs 200,000/= was payable in twenty four (24) months. In monthly instalments of Kshs10,250/2 per month (comprising both the principal and interest thereof). It admitted that the suit property was indeed used to secure the loan through a charged that was registered over the same. It averred further, that interest applicable was 15% variable per annum at their sole discretion. But it denied knowledge that the Plaintiff Petrol Station was burnt down or that he was involved in a Road Traffic Accident as alleged. It added that even if that was the case, the same could not be invoked as an excuse to fail to hand over his contractual obligation on repayment of the loan. Further to the above, it contended that the Plaintiff defaulted on the loan repayments and was duly notified of the same by way of notices which were served on him severally. That by 25/2/2013, he was in arrears of Kshs111,133/2 and their statutory power of sale had crystalized, they serve the Plaintiff with a notice in writing giving him three (3) months to comply and remedy the default. That upon instructing Keysian Auctioneers vide letter dated 11/11/2013, the said Auctioneers issued a forty five (45) days notification of sale dated 15/11/2013 for outstanding sum of Kshs121,689/2. That subsequently, the suit properly was advertised for sale through a daily newspaper of 10/1/2014 and the auction of the same was conducted on 7/2/2014 but it was unsuccessful due to low bidding prices. That thereafter, on 2/7/2016, a forty (40) days’ notice and on 28/8/2016 a forty five (45) days’ redemption Notice were issued to the Plaintiff by Rhemat Auctioneer but he failed to honour his repayment obligations in order to redeem the suit properly. On taking of accounts, the Defendant averred that the same is unnecessary because they have availed the loan statement which is a true reflection of the status of the loan and the arrears thereof. That as at 1/12/2016, the Plaintiff was in loan arrears of Kshs357,460/= and that the Plaintiff was well aware of the same and also that its right to exercise its statutory power of sale had accrued. It prayed for dismissal of the suit with costs. **Trial of the case** Both parties called evidence in their respective cases. In the Plaintiff’s case, he testified and adopted his statement dated 30/11/2026 and list of documents of even dates. He maintained his evidence that his petrol station got burnt down causing him loss and damage and that he was later involved in a Road Traffic Accident. On cross examination, he explained that he reported the accident to the police and even took out a police abstract. He admitted that as per the abstract he reported the same in the year 2012 but added that he remained ill due to the same for two months. He contended that their agreement was that in case of damage of his business by fire, the insurance would pay the loan due. He explained that he reported the fire to the Defendant. He averred further on cross examination that the loan was to run for three years. He denied service upon him of the notification of sale dated 6/9/2016. He stated that he learned of the sale of the suit property from the Newspaper advertisement. He contended that the balance on the loan was Kshs80,000/= only when the petrol station got burned down. He admitted that he was never notified that the loan had stopped Kshs357,460/=. He denied being notified of the alleged fire accident at the Plaintiff’s petrol station. He contended that in spite of that, the Plaintiff had a duty to repay the loan in full. He explained that all their loans are insured and added that had the said accident been brought to their attention, they could have informed their insurer to assess it and make their own independent decision concerning compensation. He further stated that they have filed a loan statement and so there is no need of taking accounts. On cross examination, he stated that notices are normally hand delivered to clients but was unaware of the ones they served has the Plaintiff’s signature. He added that before any auction is conducted, the properties to be sold have to be valued and report prepared. He clarified that the loan was for two years as per the agreement which parties signed. In re-examination, he admitted that the notices served do not bear the Plaintiff’s signature but added that the redemption notice dated 28/8/2016 was received by the Plaintiff’s wife one Caroline. That upon receiving the notices, the Plaintiff gave a commitment letter dated 13/7/2012 to repay the loan but again defaulted on the same. **Issues for determination** From the summary of facts setout above, matters for determination in this case are; 1. Whether the plaintiff’s defaulting on his loan was excusable or not. 2. Whether the defendant served all the requisite notices upon the plaintiff before they elected to sale the charged property in order to recover the loan arrears if any. 3. Whether the reliefs sought herein are warranted and should be issued. 4. Who should bear costs of this suit ? **The issue of default and whether the Plaintiff should be excused for it if at all.** The issue of default was admitted by the Plaintiff. He blamed the default on occurrence of an accidental fire at his petrol station and also a road accident he was allegedly involved. As per his evidence, the alleged fire occurred in the year 2012 while the accident occurred subsequently on 6/8/2013. He explained that he used the loan money to start the petrol station that unfortunately got burnt thereby occasioning him a huge loss. On record is a police abstract dated 13/4/2012. The abstract was about a fire that burnt down his petrol station destroying his petrol pump with 1342 litres of fuel. He also produced a medical report dated 16/1/2014 confirming that he was indeed involved in the road accident on 6/8/2013. The contention by the Defendant is that the above matters were never brought to their attention. Further to that, they maintained that in spite of the same, the Plaintiff still had a duty to repay the loan in full. Because of that denial, it was the duty of the Plaintiff to prove that he subsequently notified them of those occurrences. It is trite that he who alleges, must prove per section 107- 109 of the Evidence Act. It has variously been held that the said duty remains so even where the case is not defended or where evidence is not called in the defence case- see **Chelule & 237 others v Keduwo & 7 others [2026] KEELC 3196 (KLR)** and **Mbau v Equity Bank(K) Limited & 2 others [2026] KEHC 2457 (KLR**. In the latter case, the court held that; ***“14. In making this determination, I am guided by the fact that the standard of proof in civil cases is on a balance of probability and that the burden of proof is on the party alleging the existence of a fact which he wants the Court to believe. This is anchored in section 107 (1) and (2) of the Evidence Act which provides that:*** ***“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” and that “When a person is bound to prove the existence of any fact the burden of proof lies on that person.”*** Indeed, as proof of notice of the said facts, the Plaintiff produced a letter dated 24/8/2015 which specified that his petrol pump got burned down in a fire and that he was also involved in the said accident. But this came after he was served with a statutory Notice upon default. But notwithstanding all that, the court agrees with the defendant that said occurrences did not excuse him from his loan obligations. Perhaps, they could only afford him a re-structuring of the same subject to the Defendant’s approval. But, in his letter dated 24/8/2015 -which was served upon the Defendant at their Kimilili Branch as per his oral evidence -he never asked for any such restructuring. Surprisingly, he indicated that he wanted a top up loan of Kshs 500,000/= because he was now in a better position to do “better business and repay the normal loan.” He also requested for waiver of interest and costs of valuation of the charged property in apparent anticipation of the intended sale. Ostensibly, the Plaintiff is pleading hardship on his part and in so doing, he is trying to ask the court to rewrite the loan contract for parties. # It is trite that it is not the duty of the court to rewrite contracts for parties- see *Wanyama v Malava Financial Services Association [2024] KEELRC 1014 (KLR)* and *Karani & another v Kabibi & another (Environment and Land Appeal E040 of 2023) [2026] KEELC 3031 (KLR) (20 May 2026) (Judgment). In the latter case, it was held on this legal position thus;* ***“d. The starting point must be that parties are ordinarily bound by the terms of contracts that they voluntarily entered into. This principle was restated by the Court of Appeal in National Bank of Kenya Ltd versus Pipeplastic Samkolit (K) Ltd & Another, CA No. 95 of 1999, where the Court held that:*** ***“A court of law cannot rewrite 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.”*** Since the misfortune which befell him had nothing to do with the Defendant and who he has not been shown to have breached any of their obligations under the contract, the court would find that the Plaintiff’s default was inexcusable. He was, and still is obligated to perform his part of the bargain in terms of the repayments of the loan due in full. **The issue of statutory notice** The issue of service of statutory notice upon the Plaintiff is disputed. Service of a statutory notice is legal requirement under Section 90 of Land Act Cap 280 Laws of Kenya. The provision provides for remedies of a charge upon default by the charger of any of his obligations or to pay the interest or any other periodic payment or any part thereof or in performance of any implied or express terms under the contract. In case of any such default, the chargee is under a duty to issue a notice to the chargor in writing, requiring him to pay the money owing or to perform and observe the covenants which he may have breached. The said notice must confirm to the matters specified under sub-Section (2) thereof. It must specify; 1. ***The nature and extent of default by the charger.*** 2. ***The amount that he must pay to rectify the default and the time being not less than three months.*** 3. ***The thing the charger must do or desist from doing so as to rectify the default and the time being not less than two months.*** 4. ***The consequences of failing to rectify the default within the specified time limits.*** 5. ***The right of the chargor in respect of certain remedies to apply to the court for relief against those remedies.*** In the case of ***Kariuki v Family Bank Limited & another [2025] KEHC 689 (KLR****),* the court must be satisfied through evidence not only about service of the notices but also that they comply with the provisions of section 90 and 96 of the Land Act informing the charger of matters specified above**.** From the case of ***Mbau v Equity Bank(K) Limited & 2 others [2026] KEHC 2457 (KLR***), it can be seen that the statutory power of sale only accrues upon service of proper notices upon the charger. On the same the court held thus; **”*24. A chargee’s statutory power of sale generally accrues when a default occurs and the chargee has complied with the notice requirements under sections 90 and 96 of the Land Act. The Plaintiff’s default and indebtedness to the Bank is admitted in his pleadings and evidence.”*** Amongst the Plaintiff’s From the case oflisted documents is the statutory notice dated 15/11/2013 and a Redemption Notice dated 16/8/2016. Thus, service of the same was not disputed. However, the correct date of the statutory notice served upon him is 11/3/2013 and not 15/11/2013. This is as per the Defendant’s list of documents dated 28/7/2022. But the validity of that statutory notice is dependent upon its conformity with Section 90(2) of the Land Act. Upon careful perusal of that notice, the court has found it to deficient or wanting in from one important requirement. That requirement is failure to specify in the notice that the Plaintiff had a right to apply to the court for relief against their intention to exercise their statutory power of sale. This is a requirement under Section 90(2) (v) thereof. The failure on the part of the Defendant rendered the aid notice null and void ab initio. Consequently, the court must come to the aid and protect the Plaintiff and invalidate the intended sale of the charged property by granting of the remedies sought. In the upshot, there is merit in the prayers made by the Plaintiff and the same are granted in terms of (a) and (c). Regarding prayer (b) Defendant is under a duty to provide information to the Plaintiff on the status of his loan account under Article 35(i) (b) of the Constitution of Kenya, 2010, the Court failed to find merit in the same. This is because it was not shown that the Defendant declined to provide that information. Secondly, there is a loan statement on record which could guide him on amount due and how the same was applied. He cannot therefore complain that, he was never furnished with sufficient information on the loan account. That request is therefore unmerited and is dismissed. **Costs** It is trite that costs are discretionary but ordinarily follow the event- see **Palm Dream Homes Limited & 2 Others -v- Nyokabi (Environment and Planning Civil Case E004 of 2024) [2026] KEEL 5273 (KLR) (21 July 2026) (Ruling) and Harun Mutwiri – Nairobi City County Government (2018) eKLR.** In those cases, the re-affirmed that a successful party is typically entitled to costs unless there are compelling reasons to deny the same. Therefore, based on the result of this case, costs of this suit will be awarded to the plaintiff who has largely succeeded in this case. In the upshot, this suit is disposed of in favour of the plaintiff as hereunder; 1. A mandatory injunction be and is hereby issued restraining the Defendant, their agents, and or servants from selling and transferring the plaintiff’s parcel of land known as BUNGOMA/ TONGAREN/2690 without issuing proper and compliant statutory notices. 2. Costs of this suit are awarded to the plaintiff. **Hon. Ruth B. N. Maloba** **SPM** **Delivered, dated and signed in open court on this 20th day of August 2026.** In the presence of; C/Asst- Ms. Jacinta Plaintiff- N/A for Otsiula Defendanr- N/A for Mr. Muthomi **Hon. Ruth B.N. Maloba** **SPM**