https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/4408

Sherali (Suing as Legal Representative of the Estate of Husein Sherali Jivraj alias Husein Sherali alias Huseinali Esmail Sherali Jivraj (Deceased)) v Kenya Deposit Insurance Corporation & 2 others (Environment and Land Case E120 of 2025) [2026] KEELC 4408 (KLR) (30 June 2026) (Ruling) Neutral citation: [2026] KEELC 4408 (KLR) Republic of Kenya In the Environment and Land Court at Mombasa Environment and Land Case E120 of 2025 A Ombwayo, J June 30, 2026 Between Imran Husseinali Sherali (Suing as Legal Representative of the Estate of Husein Sherali Jivraj alias Husein Sherali alias Huseinali Esmail Sherali Jivraj (Deceased)) Plaintiff and Kenya Deposit Insurance Corporation 1st Defendant Taz Freighters Limited & another & another & another & another 2nd Defendant Ruling 1.This ruling is in respect of the Plaintiff’s Notice of Motion application dated 27th October, 2025 which seeks the following orders:a.Spentb.That the Honourable Court be and is hereby pleased to grant leave to the Plaintiff to commence and institute this suit against the 3rd Defendant which is under liquidation.c.Costs of this application be borne by the Defendants. 2.The application was supported by the annexed affidavit of Imran HusseinAli Sherali sworn on 27th October, 2025. He deponed that he is the Plaintiff in this suit pursuant to letters of administration ad litem issued to him in Mombasa HCFP&A E035 of 2024 issued on 9th May, 2024. He deponed that the Defendants colluded to charge the suit property vide a charge instrument registered on 25th September, 2009 without the consent of the beneficiaries of the estate of Hussein Sherali Jivraj. The Plaintiff deponed that the suit property was charged as a security for a credit facility in the sum of Ksh 18,000,000/= advanced to the 1st Defendant in favour of the 3rd Defendant. 3.It was his deposition that he is mandated by Section 432 (2) of the Insolvency Act to seek leave of this Honourbale Court and the 3rd Defendant is under liquidation by the 4th Defendant as appointed by the Central Bank. He asked the court to grant the orders sought. 3.The 1st Defendant filed Grounds of Opposition dated 2nd April, 2026. It stated that the application is abuse of the Court process as it offends provisions of Section 56 (2) of the Kenya Deposit Insurance Act. It asked that the Notice of Motion application be dismissed with costs. 4.Tasneem Kasmani, the proprietor of the 2nd Defendant filed a Replying Affidavit sworn on 13th March, 2026. He deponed that the plaintiff’s application is fundamentally defective as the present suit was instituted prior to obtaining the requisite leave of court. He deponed that the application is an abuse of court process and asked that it be dismissed with costs. Plaintiff’s Submissions 5.Counsel for the Plaintiff filed submissions dated 7th April, 2026 and identified the following issues for determination:a.Whether the Plaintiff lacks capacity to maintain this suit?b.Whether the suit is barred under the provisions of Section 4 (1) (2) and 7 of the Limitations of Actions Act?c.Whether the Honourable Court has jurisdiction to hear and determine this suit?d.Whether the Plaintiff ought to be granted leave to institute and continue with this suit against the Defendants? 6.On the first issue, counsel submitted that the 1st defendant has not specified what defect in capacity the Plaintiff suffers from. On the second issue, counsel submitted that the legal provisions relied upon by the 1st Defendant do not come to his aid as; the dispute is not founded on any contract, the plaintiff has not raised any claim under the law of tort and the Plaintiff has not sought to recover the suit land from any of the Defendants in this suit. 7..On the third issue, counsel submitted that the Constitution and the Land Act distinctly provide for the jurisdiction of this court to hear and determine this dispute on the basis of facts and the issues therefrom. On the fourth issue, counsel asked the court to find merit in the application and grant the sought orders. Reliance was placed on the following cases: Sukari Industries Limited vs Wasonga [2026] KEHC 3091 (KLR), J.M.A vs R.G.O KEHC 4593 (KLR) and Coast Hauliers Limited vs Imperial Bank Limited (In Receivership) [2024] KEHC 10323 (KLR). 1st Defendant’s Submissions 8.Counsel filed submissions dated 15th April, 2026 and identified the following issues for determination:a.Whether the Plaintiff has capacity to maintain the suit?b.Whether the application offends Section 56 [2] of the Kenya Deposit Insurance Act? 9.On the first issue, counsel submitted that there is no evidence placed before the Court confirming the filing of the Grant of Probate meaning that the grant issued on 9th May, 2024 cannot be used to file and maintain this suit. 10.On the second issue, counsel submitted that courts consistently rule that lawsuits initiated without prior court sanction are invalid. Counsel relied on the cases of Murgor & Murgor Advocates vs Imperial Bank Limited [In receivership] & 2 others (2025) eKLR, Bougainville Estate Limited vs Kenya Deposit Insurance Corporation [Suing in their capacity as Receiver Managers of Imperial Bank Limited [In receivership & 3 others Civil Application No 34 of 2021 KECA 132 KLR and Donald Earle Smith & Another vs Kenya Deposit Insurance Corporation (as receiver of Chase Bank Limited) & another [22] eKLR. 11.Counsel submitted that the dominant issue in the Plaintiff’s case is the charge and the court lacks jurisdiction. Counsel asked the court to dismiss the application and strike out the suit with costs. Reliance was placed on the cases of Owners of the Motor Vessel “Lillian S vs Caltex Oil (Kenya) Ltd (1989) KECA 48 (KLR), Samuel Kamau Macharia vs Kenya Commercial Bank & 2 others (2017) eKLR and Smith & Another vs Kenya Deposit Corporation [As receiver of Chase Bank Ltd] & Another Civil Appeal No e022 of 2022 [2025] KECA 294 eKLR. 2nd Defendant’s Submissions 12.Counsel for the 2nd Defendant filed submissions dated 10th April, 2026. It was counsel’s submission that the Plaintiff’s suit goes against the provisions of Section 56 (2) of the Kenya Deposit Insurance Act Cap 487C Laws of Kenya. 13.Counsel submitted that the filing of a suit against a company under liquidation cannot precede the application for leave or sanction of court. Counsel submitted that leave must be sought first and where the same is not done, even if the application for leave is filed together with the suit, that suit is a nullity in law and must be dismissed with costs. Counsel relied on the following cases: Charity Wangui Ngumo vs Chase Bank Limited (In Receivership) & Antique Actions Agencies [2018] eKLR, Donald Smith Earle vs Central Bank of Kenya & Another; Imperial Bank Limited (Interested Party) [2019] eKLR, Kuza Farms and 14.Allied Limited vs Dubai Bank Kenya Limited (In Liquidatiion) [2017] KEELC 366 (KLR) and David Wabweni Wafula vs Peter Wafula Khaemba & 2 others [2018] eKLR. Analysis And Determination 15.The issue for determination is whether this court should grant leave to the Plaintiff to commence and institute this suit against the 3rd Defendant which is under liquidation. It is the Plaintiff’s contention that he is mandated by Section 432 (2) of the Insolvency Act to seek leave of this Honourbale Court as the 3rd Defendant is under liquidation by the 4th Defendant. 16.The Plaintiff contends that that the Defendants colluded to charge the suit property vide a charge instrument registered on 25th September, 2009 without the consent of the beneficiaries of the estate of Hussein Sherali Jivraj. The Plaintiff informed the court that the suit property was charged as a security for a credit facility in the sum of Ksh 18,000,000 advanced to the 1st Defendant in favour of the 3rd Defendant. 17.The 1st Defendant on the other hand contends that the dominant issue in the Plaintiff’s case is the charge and the court lacks jurisdiction. In the case of Joel Kyatha Mbaluka t/a Mbaluka & Associates Advocates vs Daniel Ochieng Ogola t/a Ogola Okello & Co Advocates [2019] eKLR, the Court of Appeal held as follows:“We reiterate the position taken in Co-operative Bank of Kenya Limited v Patrick Kangethe Njuguna (supra), that in construing whether the ELC had jurisdiction in a matter, the consideration must be the dominant issue in the dispute and whether that issue relates to the environment and the use and occupation of, and title to, land…[Emphasis mine] 18.In determining the predominant issue in the case herein, the Court will look at the Plaint dated 27th October, 2025. The Plaintiff at paragraph 11 states as follows: “Despite being soundly advised, the 3rd Defendant entered into a deliberate fraudulent scheme which with the 1st and 2nd Defendant which resulted to a fraudulent and unlawful charging of the suit property as security for a credit facility of Ksh 18,000,000/- to the detriment of the estate of the late Mr, Hussein Sherali Jivraj via a charge registered on 25th September, 2009.” (sic) The Plaintiff goes on to list the particulars of unlawfulness and fraud by the 1st, 2nd and 3rd Defendants. The Plaintiff is seeking the following orders from this court vide the Plaint dated 27th October 2025:a.A declaration that that the charging of all that property known as Mombasa Block I/409 vide the instrument of charge registered on 25th September 2009 was illegal and fraudulent.b.An award of general damages for fraud and illegal charging of all that property known as Mombasa Block I/409.c.An award of aggravated damages.d.Interest on (b) and (c) above from 25th September, 2009 until payment in full.e.Cost of the suit.f.Any further or other relief this court may deem just and fair to grant. 19.This court finds that the predominant issue in this case is the process of how the charge registered on 25th September, 2009 was acquired which falls within the purview of the High Court. Consequently, this court issues the following orders:a.The Notice of Motion application dated 27th October, 2025 is hereby struck out with costs.b.The Plaint dated 27th October, 2025 is hereby struck out with no orders as to costs. SIGNED BY/FOR:THE JUDICIARY OF KENYAHON. JUSTICE ANTONY O.OMBWAYOMOMBASA ENVIRONMENT AND LAND COURT