https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/10449

Insta-Pumps Engineering Limited v Consolidated Bank of Kenya Limited & another (Commercial Case E177 of 2026) [2026] KEHC 10449 (KLR) (Commercial and Tax) (2 July 2026) (Ruling) Neutral citation: [2026] KEHC 10449 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Commercial Courts) Commercial and Tax Commercial Case E177 of 2026 MO Ado, J July 2, 2026 Between Insta-Pumps Engineering Limited Plaintiff and Consolidated Bank of Kenya Limited 1st Defendant Garth Day Year Auctioneers 2nd Defendant Ruling Introduction 1.The Plaintiff, Insta-Pumps Engineering Limited, commenced this suit and contemporaneously filed a Notice of Motion dated 24 March 2026 seeking interlocutory orders to restrain the Defendants from exercising the statutory power of sale over Title No. Nairobi/Block 110/674 (Marurui Area) pending the hearing and determination of the suit. 2.The Plaintiff also seeks orders compelling the 1st Defendant to render a true and accurate statement of account in respect of the loan facility and for an independent valuation of the charged property. 3.The application is supported by the affidavit dated 24 March 2026 by Purity Wanjiru Gichere, a director of the Plaintiff. She depones that by a Letter of Offer dated 10 March 2023, the 1st Defendant advanced the Plaintiff banking facilities amounting to Kshs. 65,000,000.00. The facilities were secured by, among others, a legal charge over Title No. Nairobi/Block 110/674, a movable property security over motor vehicle registration number KDP 837Z (Isuzu FRR90 Water Bowser), personal guarantees executed by the Plaintiff's directors and a corporate guarantee by Wellfield Logistics Limited. 4.The Applicant fell into default, prompting the 1st Respondent to commence realization of the securities. The motor vehicle was subsequently sold by auction, and the Bank has now issued statutory notices, culminating to the 45-day redemption notice dated 18 February 2026, seeking to realize the charged property. 5.The Applicant has, by the present application, challenged the proposed realization by the bank of the charged security, contending that the arrears which formed the basis of the statutory notices were subsequent to the issuance of the statutory notices, cleared through payments and application of proceeds from the sale of the motor vehicle. 6.The Applicant’s case therefore is that any statutory notice founded on those arrears thereby became spent and incapable of supporting the subsequent realization process. The Applicant consequently asserts that a fresh statutory notice ought to have been issued before the initiation of the current sale process. 7.The Respondents, on the other hand, vide the affidavit of Jacinta Omina sworn on 8 April 2026, contend that the Applicant admittedly remains substantially indebted to the Bank and that all statutory requirements under the Land Act were duly complied with before commencement of the intended sale. 8.It is the Respondents’ case that the Plaintiff has failed to satisfy the threshold for the grant of an interlocutory injunction, and that its allegation that the facility has been fully settled is unsupported by any documentary evidence and is directly contradicted by the Bank's certified statement of account. 9.Citing, among others, Mrao Limited v First American Bank of Kenya Limited & 2 Others [2003] eKLR and ABSA Bank Kenya PLC v Owour (Civil Appeal E174 of 2024) [2025] KEHC 4692 (KLR), the Respondents argued that a mere dispute as to the amount outstanding cannot be a basis to restrain a chargee from exercising its statutory power of sale. Analysis and Determination 10.I have carefully considered the pleadings and submissions on record. This application falls for determination under the principles set out in Giella v Cassman Brown & Co. Ltd [1973] EA 358, namely:i.Whether the Applicant has established a prima facie case with a probability of success;ii.Whether irreparable injury would result absent the injunction; andiii.Where the Court is in doubt, where the balance of convenience lies. 11.On whether a prima facie case has been established, the Court of Appeal in Mrao Ltd v First American Bank of Kenya Ltd & 2 Others (supra) defined a prima facie case as one which demonstrates an apparent infringement of a right calling for rebuttal from the opposite party. 12.In the present case, the Applicant raises several grievances, including allegations concerning the valuation and sale of Motor Vehicle KDP 837Z, disputes concerning accounts, and alleged non-compliance with the statutory realization process. 13.As regards the motor vehicle, the material presented before the Court indicates that the vehicle was sold following valuation and public auction, and that the vehicle fetched Kshs. 5,100,000, said to be the highest bid received. The evidence placed before the Court does not, at this interlocutory stage, establish a clear prima facie case of sale at an undervalue sufficient to restrain realization of the land security. Mere dissatisfaction with the sale price cannot, without more, found an injunction. 14.Similarly, it is now settled, as correctly argued by the Respondents, that a dispute regarding the amount outstanding, or a request for accounts, does not by itself justify restraining a chargee from exercising its statutory power of sale. 15.However, the Court's view is that the Applicant's case cannot be reduced merely to a dispute over accounts. 16.In this case, the central complaint advanced by the Applicant is that the default upon which the original statutory process was founded was subsequently cured through payments made and proceeds realized from the motor vehicle. According to the Applicant, the statutory notice thereby became exhausted and could not lawfully be relied upon to support a sale process commenced many months later. 17.While the Respondents have set out the chronology of notices allegedly issued, including a statutory notice, notice to sell, redemption notice, and notification of sale, what remains unclear from the material presently before Court is whether the default that existed at the time of issuance of the original statutory notice remained continuously outstanding up to the commencement of the present sale process, or whether that default was cured and replaced by a distinct later default which would have necessitated fresh statutory notices under the Land Act. 18.That question is not frivolous. 19.The legal framework set under Sections 90 and 96 of the Land Act is intended to protect a chargor's equity of redemption. Where it is shown that a default has been remedied, as alleged in the present case, a serious question arises as to whether a chargee can indefinitely rely upon notices issued in respect of an earlier default. 20.Without making definitive findings at this interlocutory stage, the Court is satisfied that the Applicant has demonstrated an arguable and substantial question requiring determination at trial, that is, whether the statutory notices relied upon by the Respondents remained legally efficacious at the time the current realization process was commenced. 21.Accordingly, I find and hold that the issue discloses a prima facie case with a probability of success, warranting a full trial. 22.As to whether the Applicant will suffer irreparable harm if the injunctive orders are denied, it is asserted by the Applicant that the charged property forms part of its business operations. If the sale proceeds and the property is transferred to a third-party purchaser, the Applicant's equity of redemption will stand extinguished. 23.If it is ultimately determined that the sale process was founded upon invalid or spent statutory notices, the loss occasioned by completion of the sale would not be adequately remedied by damages alone. 24.I am therefore persuaded that the second limb of Giella has been satisfied. 25.Finally, the balance of convenience favours the grant of the interim orders sought. While the Court accepts that the debt has not been shown, at this stage, to have been fully extinguished, the Court is of the view that the preservation order ought to issue at this stage to allow the determination of the question concerning the validity and continued efficacy of the statutory notices. 26.If the sale is permitted to proceed and the Applicant ultimately succeeds, the substratum of the suit will have been lost. Conversely, if the property is preserved, the Respondents remain protected by the subsisting charge and their financial claims against the Applicant. 27.Accordingly, and for the foregoing reasons, the Court makes the following orders:i.A temporary injunction is hereby issued restraining the Defendants, whether by themselves, their agents, servants or auctioneers, from selling, transferring, disposing of or otherwise dealing with Title Number Nairobi/Block 110/674 Marurui Area pending the hearing and determination of this suit.ii.The 1st Defendant shall, within thirty (30) days, provide to the Applicant a complete and updated statement of account relating to the facility in issue.iii.The request for a court-directed independent valuation is deferred to the trial after full consideration of the evidence.iv.Costs of the application shall be in the cause. 28.It is so ordered. DATED, SIGNED, AND DELIVERED AT NAIROBI THIS 2ND DAY OF JULY 2026HON. MR. JUSTICE MOSES ADOJUDGE OF THE HIGH COURTIn the Presence of:Moses C/A.………………for the Applicant……………for the Respondent