Kamaru & another v Equity Bank Limited (Commercial Case E034 of 2025) [2026] KEHC 12730 (KLR) (23 July 2026) (Ruling)

REPUBLIC OF KENYA IN THE HIGH COURT OF KENYA AT KIAMBU COMMERCIAL DIVISION HCCOMM. NO.E034 OF 2025 LIBERATTA NJERI KAMARU …………………1STPLAINTIFF/APPLICANT CATHERINE NDUTA MBUGUA ………………2NDPLAINTIFF/APPLICANT VERSUS EQUITY BANK LIMITED ……………………DEFENDANT/RESPONDENT RULING (On the Plaintiffs/Applicants’ Notice of Motion Application dated 21st December 2025) INTRODUCTION 1. Before this Honourable Court for consideration is the Plaintiffs/ Applicants’ Notice of Motion dated 21st December, 2025. 2. The Applicant seeks the following orders:- a. Spent. b. Spent. c. THAT pending the hearing and determination of this Application, this Honourable Court be pleased to issue orders restraining the Respondent its workers, agents or anyone acting on its behalf from listing the Applicants in the Credit Reference Bureaus on account of the purported HCCOMM.NO.E034 OF 2025 RULING - Page 1 of 20 loan balance. d. THAT pending the hearing and determination of this Suit, this Honourable court be pleased to issue orders restraining the Respondents by itself, its employees, servants and/or agents from attaching, auctioning, selling, transferring, re-advertising or in any other manner interfering with the Applicant’s properties known as TITTLE NO. THIKA MUNICIPALITY BLOCK 40/22, SITUATED IN KAMUTHI BUFFALO HILLS ESTATE AREA, THIKA DISTRICT, KIAMBU COUNTY. e. THAT pending the hearing and determination of this suit filled herewith, this Honourable Court be pleased to issue orders restraining the Respondent, its workers, agents or anyone acting on its behalf from listing the Applicants in the Credit Reference Bureau on account of the purported loan balance. f. THAT this Honourable Court be pleased to issue any other orders it may deem just, fit and expedient to award in the interest of justice. g. THAT the Cost of this Application be provided for. 3. The dispute herein arises from a lending relationship between the 1 st Applicant and the Respondent. The suit property was charged in favour of the Respondent as security for the lending facility. The Applicants acknowledge having been advanced a credit facility in the HCCOMM.NO.E034 OF 2025 RULING - Page 2 of 20 sum of Kshs.84,000,000 pursuant to a Letter of Offer dated 22 nd October 2015. According to the Respondent, the facility was repayable by way of 120 monthly instalments of Kshs.1,679,427, comprising both principal and interest. 4. The Applicants aver that they duly serviced the facility until they encountered financial difficulties, whereupon they sought a review of the repayment terms and proposed a settlement plan to the Respondent. They contend that the Respondent did not respond to their proposal and that, while awaiting such response, they came across a Notification of Sale dated 11th November 2025 issued by Upstate Kenya Auctioneers. It is their case that they were never served with the statutory notices contemplated under Sections 90 and 96 of the Land Act and that the Respondent failed to disclose a current forced sale valuation of the charged property. 5. The Respondent, on its part, contends that the loan account fell into arrears as early as 2017. It states that a demand letter was issued on 27th February 2017, followed by a ninety-day statutory notice dated 3rd October 2017 and a forty-day notice to sell dated 26th July 2018. The Respondent further avers that the Auctioneer issued a forty-five-day Redemption Notice together with a Notification of Sale dated 11th November 2025. It also places reliance on a valuation report prepared by Gimco Limited dated 9th December 2025 and a statement of account indicating an outstanding balance of Kshs.54,810,765.49 as at February 2026, together with accruing interest. 6. In the Plaint filed contemporaneously with the application, the HCCOMM.NO.E034 OF 2025 RULING - Page 3 of 20 Applicants seek, inter alia, declarations that the Notification of Sale and the intended sale of the suit property are unlawful; a permanent injunction restraining the sale or transfer of the suit property; orders relating to their listing with the Credit Reference Bureau; reversal of debits other than loan interest; general damages; costs of the suit and interest. 7. The Respondent filed a Statement of Defence denying the Applicants' assertion that they faithfully serviced the loan facility and maintaining that it fully complied with the applicable statutory requirements preceding the intended exercise of its statutory power of sale. 8. On 10th March 2026, this Honourable Court directed that the Notice of Motion be canvassed by way of written submissions and granted both parties leave to file such further affidavit evidence as they deemed necessary. 9. The Applicants filed their written submissions dated 8th April 2026. The Respondent relied on the Replying Affidavit of Mary Katoni sworn on 9th March 2026, the Supplementary Affidavit sworn on 20th April 2026, and its written submissions dated 20th April 2026. THE APPLICANTS’ CASE 10. The Application is supported by the affidavit of Liberatta Njeri Kamaru, sworn on her own behalf and with the authority of the 2 nd Applicant. She deposes that the Applicants obtained a credit facility in the sum of Kshs.84,000,000 from the Respondent, secured by a HCCOMM.NO.E034 OF 2025 RULING - Page 4 of 20 charge over the suit property. She avers that the Applicants serviced the facility and had "never in any way defaulted" in the repayment thereof. 11. Notwithstanding the foregoing assertion, the deponent states that the Applicants subsequently approached the Respondent seeking a review of the repayment terms on account of their inability to continue servicing the facility at the agreed instalments. In support thereof, she annexes a letter dated 21st March 2024, which refers to an earlier auctioneer's notice dated 12th March 2024 and proposes a full and final settlement of the facility in the sum of Kshs.20,000,000 against an acknowledged outstanding balance of Kshs.57,369,609.97. 12. Under the said proposal, the Applicants offered to pay Kshs.2,000,000 within thirty days of approval and to raise the balance of Kshs. 18,000,000 through the sale of L.R. No.Juja/Kalimoni Block 25/32 together with the suit property. The proposal further stated that, should any deficit remain, a portion of the suit property would be sold to offset the outstanding loan balance. 13. The Applicants contend that the Respondent did not respond to the said proposal. They further aver that the Notification of Sale dated 11 th November 2025 came as a surprise, as they had neither received a demand nor the requisite statutory notices. It is their case that the amount allegedly due remained unknown to them and that the Respondent thereby denied them a fair opportunity to redeem the charged property. HCCOMM.NO.E034 OF 2025 RULING - Page 5 of 20 14. In their written submissions, the Applicants contend that the threshold for the grant of an interlocutory injunction has been satisfied. It is submitted that the Respondent's alleged failure to serve the statutory notices prescribed under Sections 90 and 96 of the Land Act, coupled with its alleged failure to disclose a current Forced Sale Valuation, constitutes a violation of the Applicants' statutory and equitable rights. 15. It is further submitted that once a Chargor asserts non-receipt of the requisite statutory notices, the evidential burden shifts to the Chargee to demonstrate that the notices were duly issued and served. It is contended that, in the absence of proper service, the Respondent's statutory power of sale had not crystallised, rendering the intended exercise thereof unlawful. 16. On the question of irreparable harm, counsel submits that the suit property constitutes the Applicants' matrimonial home into which substantial time and financial resources have been invested. It is argued that its sale would occasion eviction of the Applicants and their family and that an award of damages ought not to be regarded as an automatic substitute for the protection of a legal right. 17. On the balance of convenience, reliance is placed on Chebii Kipkoech –vs- Barnabas Tuitoek Bargoria & Another [2019]eKLR on the proposition that greater prejudice would be occasioned to the Applicants were the suit property to be sold before the determination of the suit. The Applicants thus urge this Court to preserve the suit HCCOMM.NO.E034 OF 2025 RULING - Page 6 of 20 property by granting the orders sought and to award the costs of the Application pursuant to Section 27 of the Civil Procedure Act. THE RESPONDENT’S CASE 18. The Application is opposed through the Replying Affidavit and Supplementary Affidavit sworn by Mary Katoni, the Respondent's Credit Manager. She deposes that the suit property was initially charged to the Respondent under a Third Party Charge dated 22 nd September 2011 to secure a facility of Kshs.24,000,000. She further avers that, by a Letter of Offer dated 22nd October 2015, the Respondent extended to the 1st Applicant a further credit facility in the sum of Kshs.84,000,000. 19. The Respondent contends that the Applicants subsequently defaulted in servicing the facility, prompting the issuance of a demand letter dated 27th February 2017. It further relies on a ninety-day statutory notice dated 3rd October 2017, a forty-day notice to sell dated 26th July 2018, and the Auctioneer's forty-five-day Redemption Notice and Notification of Sale dated 11th November 2025. Copies of the said notices, together with the corresponding postal documentation, were annexed to the Replying and Supplementary Affidavits. 20. The Respondent further avers that the terms of the facility were varied by a Letter of Offer dated 11th January 2023, while the existing legal charge over the suit property remained part of the securities securing the facility. It maintains that the Applicants remained in default HCCOMM.NO.E034 OF 2025 RULING - Page 7 of 20 notwithstanding the variation and that the instructions issued to Upstate Kenya Auctioneers on 7th November 2025 constituted a lawful step towards the recovery of the outstanding debt. 21. Through the Supplementary Affidavit, the Respondent corrected the description of two annexures and formally produced the forty-day notice to sell together with the corresponding certificate of postage, the forty-five-day Redemption Notice and Notification of Sale, the ninety- day Statutory Notice, and the related postal documentation. The Respondent also produced a Valuation Report prepared by Gimco Limited dated 9th December 2025, which assessed the market value of the suit property at Kshs.80,000,000 and its Forced Sale Value at Kshs.60,000,000. 22. The Respondent further relies on a statement of account covering the period between 4th February 2016 and 11th February 2026, which reflects an outstanding balance of Kshs.54,810,765.49. It is the Respondent's position that, despite having been accorded ample indulgence, the Applicants neither regularised the loan account nor settled the outstanding arrears. 23. In its written submissions, the Respondent submits that the Applicants have failed to establish a prima facie case warranting the grant of an interlocutory injunction. Counsel argues that the statutory notices together with proof of postage have been placed before the Court; that the indebtedness remains outstanding; and that the Applicants' own correspondence acknowledges the outstanding balance while proposing the sale of the charged properties in settlement of the debt. HCCOMM.NO.E034 OF 2025 RULING - Page 8 of 20 It is further submitted that a request for restructuring or settlement of the facility neither suspends the contractual obligations of the borrower nor extinguishes the Respondent's statutory power of sale. 24. On the issue of irreparable harm, it is submitted that the suit property was voluntarily offered as security for the facility and is therefore a commodity with an ascertainable monetary value. It is also contended that any loss ultimately established at trial would be capable of being adequately compensated by an award of damages. 25. With regard to the balance of convenience, reliance is placed on Pius Kipchirchir Kogo –vs- Frank Kimeli Tenai [2018] KEELC 2424 (KLR) and it is submitted that the grant of an injunction would impede the Respondent's efforts to recover the outstanding debt while interest continues to accrue, thereby exposing the security to the risk of being overtaken by the growing indebtedness. The Respondent accordingly urges the Court to dismiss the Notice of Motion with costs. ANALYSIS AND DETERMINATION 26. Having considered the pleadings, the affidavit evidence on record, and the rival submissions of the parties, the issues that arise for determination are: i) Whether the Applicants have satisfied the legal threshold for the grant of interlocutory injunctive relief. ii) Who should bear the costs of Notice of Motion application. HCCOMM.NO.E034 OF 2025 RULING - Page 9 of 20 i)Whether the Applicants have satisfied the threshold for the grant of an interlocutory injunction 27. The jurisdiction of this Court to grant interlocutory injunctions is anchored in Order 40 of the Civil Procedure Rules. The object of such relief is to preserve the subject matter of litigation pending the determination of the dispute. However, the remedy is discretionary and must be exercised judicially, upon consideration of established principles. 28. Order 40 Rule 1 of the Civil Procedure Rules permits the Court to grant a temporary injunction where it is demonstrated, by affidavit evidence or otherwise, that property in dispute is in danger of being wasted, damaged, alienated or wrongfully sold, or where such an order is necessary to preserve the subject matter pending determination of the suit. 29. The principles governing the grant of interlocutory injunctions were settled in the seminal decision of Giella –vs- Cassman Brown & Co. Ltd [1973] EA 358, where the Court held that an applicant seeking an interlocutory injunction must satisfy three conditions, namely, the establishment of a prima facie case with a probability of success; demonstration that unless the injunction is granted, the applicant is likely to suffer irreparable injury which would not adequately be compensated by an award of damages; and, where the Court is in doubt, determination of the application on a balance of convenience. 30. The Court stated as follows: “First, an Applicant must show a prima facie case with a HCCOMM.NO.E034 OF 2025 RULING - Page 10 of 20 probability of success. Secondly, an interlocutory injunction will not normally be granted unless the applicant might otherwise suffer irreparable injury which would not adequately be compensated by an award of damages. Thirdly, if the Court is in doubt, it will decide an application on the balance of convenience.” 31. The Court of Appeal in Nguruman Limited –vs-Jan Bonde Nielsen & 2 Others [2014] eKLR affirmed that the three requirements are separate, distinct and sequential hurdles, all of which must be satisfied before an interlocutory injunction can issue. 32. The first question for determination, therefore, is whether the Applicants have demonstrated a prima facie case warranting the protection sought. 33. In Mrao Ltd –vs- First American Bank of Kenya Ltd & 2 Others [2003] KLR 125, the Court of Appeal defined a prima facie case as one where, upon consideration of the material presented before 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. 34. The gravamen of the Applicants’ complaint is that the Respondent proceeded to exercise its Statutory Power of Sale without first serving the statutory notices required under Sections 90 and 96 of the Land Act. They contend that, in the absence of such notices, the Respondent’s statutory power of sale had not crystallised and the HCCOMM.NO.E034 OF 2025 RULING - Page 11 of 20 intended sale of the suit property was unlawful. 35. It is not disputed that the Applicants obtained a credit facility of Kshs. 84,000,000 from the Respondent and that the suit property was charged as security for the facility. The dispute therefore does not concern the existence of the lending relationship or the security, but rather whether the Respondent had complied with the statutory prerequisites before commencing the recovery process. 36. Section 90 of the Land Act requires a Chargee, upon default by a Chargor, to serve a notice specifying the nature and extent of the default, the amount required to remedy the default, the time within which the default ought to be rectified and the consequences of failure to comply. Section 96(2) further requires a Chargee to serve the requisite notice before exercising the power of sale. In addition, Section 97 imposes an obligation upon a Chargee to act in good faith and to obtain a forced sale valuation before sale. 37. The Applicants' principal complaint is that they were never served with the statutory notices contemplated under Sections 90 and 96 of the Land Act. Where non-service of statutory notices is alleged, the evidential burden rests upon the Chargee to demonstrate compliance with the statutory requirements. 38. In the present case, the Respondent has produced copies of the ninety-day statutory notice, the forty-day notice to sell, the Auctioneer's forty-five-day Redemption Notice and Notification of Sale together with HCCOMM.NO.E034 OF 2025 RULING - Page 12 of 20 certificates of postage and other postal documentation intended to demonstrate service. The Applicants, however, maintain that none of those notices were ever served upon them. 39. At this interlocutory stage, the Court is not called upon to make definitive findings on the efficacy of the alleged service. The question is whether the material before the Court discloses an arguable issue requiring determination at trial. In the Court's view, the competing positions regarding service of the statutory notices raise a genuine issue that cannot be conclusively resolved on affidavit evidence alone. 40. Accordingly, and without expressing any concluded view on the validity of the statutory notices or the Respondent's compliance with the Land Act, the Court is satisfied that the Applicants have established a prima facie case limited to the issue of compliance with the statutory notice requirements. 41. In the Court's view, the contest regarding service of the statutory notices raises an arguable issue deserving full ventilation at the hearing. Whether the notices were properly served and whether the Respondent's statutory power of sale had crystallised are matters that call for evidentiary interrogation. 42. Accordingly, and without making any conclusive determination on the legality of the notices, the Court is satisfied that the Applicants have established a prima facie case, limited to the issue of compliance with the statutory notice requirements under the Land Act. HCCOMM.NO.E034 OF 2025 RULING - Page 13 of 20 43. Having found that the Applicants have established a prima facie case on the limited issue of whether the Respondent complied with the statutory notice requirements under Sections 90 and 96 of the Land Act, the Court must proceed to consider whether they have satisfied the remaining requirements for the grant of an interlocutory injunction. As was observed in Nguruman Limited –vs- Jan Bonde Nielsen & 2 Others [2014] eKLR, the three principles set out in Giella –vs- Cassman Brown & Co. Ltd are separate, distinct and sequential hurdles, all of which must be satisfied before an interlocutory injunction can issue. Accordingly, the Court now turns to consider whether the Applicants have demonstrated that they are likely to suffer irreparable harm incapable of compensation by an award of damages and, if necessary, where the balance of convenience lies. 44. The second limb of the test in Giella –vs- Cassman Brown & Co. Ltd requires an applicant to demonstrate that, unless the injunction is granted, he or she is likely to suffer injury incapable of adequate compensation by an award of damages. It is insufficient merely to allege that loss will be occasioned; rather, the applicant must establish that the anticipated injury is of such a character that monetary compensation would not constitute an adequate remedy. 45. The Applicants contend that the suit property constitutes their matrimonial home and that its sale would occasion displacement and loss incapable of adequate compensation by damages. While the Court readily acknowledges the significance of a matrimonial home, that consideration, standing alone, does not satisfy the threshold of irreparable injury. The Applicants have not placed before the Court any HCCOMM.NO.E034 OF 2025 RULING - Page 14 of 20 evidence of exceptional circumstances demonstrating that an award of damages would be inadequate. Beyond the bare assertion that the property serves as their matrimonial residence, no evidence has been adduced regarding the nature of their occupation, any unique or irreplaceable attributes of the property, or any other special circumstances capable of taking this matter outside the ordinary principles governing charged property. 46. It is not in dispute that the suit property was voluntarily offered as security for a commercial lending facility. The legal consequence of such an arrangement is well settled: a Chargor who creates a charge does so in contemplation of the possibility that, upon default and subject to compliance with the law, the Chargee may lawfully realise the security. In those circumstances, the property assumes a commercial character, notwithstanding that it may also serve as the Chargor's matrimonial home. 47. Consequently, the mere fact that the suit property is occupied by the Applicants as their matrimonial home does not, without more, establish irreparable injury. In the absence of evidence disclosing exceptional circumstances that would render damages an inadequate remedy, the Court is unable to conclude that the Applicants have satisfied the second limb of the Giella test. 48. This position finds support in Andrew Muriuki Wanjohi –vs- Equity Building Society Ltd [2006] eKLR, where the Court held that a chargor who voluntarily offers property as security cannot ordinarily HCCOMM.NO.E034 OF 2025 RULING - Page 15 of 20 contend that its loss is incapable of compensation by damages, the property having been assigned a quantifiable monetary value. 49. The Court observed:- “Whenever the applicant offered the suit property as security, he was fully conscious of the fact that if the borrower did not meet his obligations, the suit property could be sold off. Therefore, in the event that it later became necessary for the suit property to be sold off, by the Chargee, the Chargor could not be heard to complain that his loss was incapable of being compensated in damages.” 50. In the present matter, the Respondent has exhibited a valuation report demonstrating that the suit property has an ascertainable market value and forced sale value. The Applicants have not placed before Court any evidence demonstrating that the Respondent would be unable to satisfy a monetary decree should the Applicants ultimately succeed at trial. Accordingly, the Applicants have not established that they stand to suffer irreparable harm that cannot adequately be compensated by damages. 51. On the balance of convenience, the same would, in any event, favour the Respondent. The evidence before Court is that the outstanding indebtedness stood at Kshs.54,810,765.49 as at February 2026, with interest continuing to accrue. The Applicants have not demonstrated any current repayment arrangement, tendered payment of the outstanding sums, or proposed any alternative mechanism capable of HCCOMM.NO.E034 OF 2025 RULING - Page 16 of 20 preserving the Respondent’s interests pending determination of the suit. The Applicants' own correspondence dated 21st March 2024 acknowledges substantial indebtedness to the Respondent and proposes a negotiated settlement of the facility. Although that correspondence does not determine the issue of statutory compliance, it demonstrates that the existence of the debt is not genuinely disputed. The Applicants have neither demonstrated that they are servicing the facility nor proposed any interim arrangement capable of safeguarding the Respondent's interests pending the hearing of the suit. 52. The grant of an injunction would have the effect of restraining the Respondent from exercising its statutory remedies while the indebtedness continues to accrue. Conversely, declining the injunction does not leave the Applicants without recourse, as they remain entitled to pursue their substantive claim and seek appropriate remedies should they ultimately establish that the intended sale was unlawful. ii) Who should bear the costs of Notice of Motion application 53. Costs are governed by Section 27 of the Civil Procedure Act, which grants the Court discretion in determining by whom costs shall be paid. The general principle is that costs follow the event, though the Court retains discretion to depart from that principle for sufficient reason. 54. In Jasbir Singh Rai & 3 Others –vs- Tarlochan Singh Rai Estate & 4 Others [2014] eKLR, the Supreme Court affirmed that the award of costs is a matter within the discretion of the Court, which discretion HCCOMM.NO.E034 OF 2025 RULING - Page 17 of 20 must, however, be exercised judicially, judiciously, and upon consideration of the circumstances of each case. 55. Although the Applicants have established an arguable prima facie case on the issue of compliance with the statutory notice requirements, they have not satisfied the remaining requirements for the grant of an interlocutory injunction. The Application has therefore failed. In the circumstances, there is no basis to depart from the general principle that costs follow the event, and the Respondent is entitled to the costs of the Application. CONLCUSION 56. The Court is mindful of the circumstances confronting the Applicants and appreciates that the threatened realisation of charged property is a matter of considerable concern. The Court has found that the Applicants have established a prima facie case on the limited issue of compliance with the statutory notice requirements. However, an interlocutory injunction will only issue where all the requirements in Giella –vs- Cassman Brown & Co. Ltd have been satisfied. In the present case, the Applicants have failed to demonstrate that they are likely to suffer irreparable injury incapable of compensation by damages, and the balance of convenience favours the Respondent. 57. Accordingly, notwithstanding the existence of an arguable issue regarding service of the statutory notices, the Notice of Motion dated 21st December 2025 fails for want of satisfaction of the second and third limbs of the Giella test and is hereby dismissed with costs. HCCOMM.NO.E034 OF 2025 RULING - Page 18 of 20 58. In the premises, the Court makes the following orders:- a) The Notice of Motion dated 21st December 2025 is hereby dismissed with costs to the Defendant/Respondent. b) Any interim orders subsisting in this matter are hereby discharged and vacated forthwith. c) This matter shall be mentioned before the Judge/Deputy Registrar for pre-trial on a date to be fixed immediately after delivery of this Ruling. Orders accordingly. DATED, SIGNED, AND DELIVERED AT KIAMBU ON THIS 23RD DAY OF JULY 2026 ______________________________ BAHATI MWAMUYE MBS JUDGE In the Presence of: Counsel for the Plaintiffs/Applicants – Mr. Mark Otieno holding brief for Mr. Okatch Counsel for the Defendant/Respondent – MS. Kyumu holding brief for Mr. Mucheni Court Assistant – Mr. Martin HCCOMM.NO.E034 OF 2025 RULING - Page 19 of 20 HCCOMM.NO.E034 OF 2025 RULING - Page 20 of 20