https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/11711

Kamwele & another (t/a Kamwele Timber & General Supplies) v Kenya Industrial Estate Ltd (Commercial Case E002 of 2026) [2026] KEHC 11711 (KLR) (29 July 2026) (Ruling) Neutral citation: [2026] KEHC 11711 (KLR) Republic of Kenya In the High Court at Makueni Commercial Case E002 of 2026 JN Onyiego, J July 29, 2026 Between Joel Mutuku Kamwele 1st Plaintiff Shadrack Kamwele Mutuku 2nd Plaintiff t/a Kamwele Timber & General Supplies and Kenya Industrial Estate Ltd Defendant Ruling 1.The application before me for determination is the one dated 19/01/2026 filed under Certificate of Urgency. It is brought under Order 40 Rule 1(a), 2 & 4(1), Order 51 Rule 1 & 3 of the Civil Procedure Rules, Sections 98 of the Land Act, Rule 15(d) of the Auctioneer Rules and all other enabling provisions of the law. It seeks the following orders;a.Spent.b.Spent.c.That this Honorable Court be pleased to issue a temporary injunction restraining the Defendant/ Respondent, its agents, employees and/or assigns or any of them from attaching, dealing, selling, disposing or otherwise interfering with parcel of land Title No. Makueni/Unoa/765 pending the hearing and determination of the suit herein.d.That the costs of this application be borne by the Defendant/Respondent. 2.The application is supported by the grounds on its face and the 1st Applicant’s Affidavit sworn on the same day. He deposed that he is the registered owner of Land Parcel Makueni/Unoa/765 (suit land) as per the Certificate of Title marked JKM 1. That, the 2nd Applicant is his son who approached the Respondent for a loan of Kenyan Shillings Four Million Shillings Only (4,000,000/=) and charged the suit land as security for the loan. The loan agreement is marked JMK 2. 3.That, it was agreed that the loan facility was to be off set at monthly installments of Kenyan Shillings One Hundred and one Thousand, Four Hundred and Fifty-Five (Kshs. 101,455/=) at an interest rate of 10% Per Annum and the 2nd Applicant was to service the said loan. That, he was shocked when, on 15/01/2026, the Respondent via Kenya Shield Auctioneers served them, via registered post, with a letter dated 06/01/2026 for sale of the suit land by public auction on 21/01/2026. Copies of the letter and advertisement are marked JMK 3(a) & (b) respectively. That, the Respondent had not served either of them with any notices prior to that. 4.That, according to information from his advocates, the Respondent never served them with the Rectification Notice and Notice of Intention to Sell as provided for in the Land Act. That they also failed to serve the Redemption Notice as provided for in the Auctioneers Rules thus making the intended sale null and void. That, unless the orders sought are granted, the suit land will be sold and the suit herein rendered nugatory. 5.That, the application is made in good faith and will not occasion any prejudice to the Respondent. That, he has built on the suit land and conducts his business therein hence stands to suffer great loss and irreparable harm if the suit land is sold as it is his only source of livelihood. Photographs of the business and land are marked JMK 4. 6.The application is opposed through the Replying Affidavit of Charity Ndeke sworn on 26/01/2026. She deposed that she is the Respondent’s Manager, Legal Services and is duly authorized and competent to swear the affidavit. 7.That the 2nd Plaintiff applied for a loan from the Defendant via a Loan Application Form dated 06/09/2022 and the 1st Plaintiff was his guarantor. That, both Plaintiffs provided their address as P.O Bo 286-90300 Wote and both of them duly signed the Application Form marked C-1. 8.That, consequently, the Defendant advanced a loan of Kenyan Shillings Four Million (4,000,000/=) which was secured by the suit land as per the 1st Legal Charge executed by the 1st Plaintiff. The Charge and Certificate of Official Search are marked C2A &B respectively. That, the 1st Plaintiff executed a Deed of Guarantee dated 09/12/2022 (C-3) confirming his liability as a guarantor. 9.That, the 2nd Plaintiff defaulted on the loan repayment leading to the account falling into arrears and as of December 2025, the same was outstanding at Kshs. 3,564,110.31/= as per the copy of loan statement marked C-4. That, contrary to the Plaintiffs’ allegations, the Defendant complied with all statutory requirements regarding service of notices. 10.He averred that the 3 months’ Statutory Notice dated 15/03/2024 was served on both Plaintiffs via Registered Mail on 21/03/2024 and hand delivery effected on 12/04/2024 receipt of which was acknowledged by Shadrack Kamwele Mutuku on his own behalf and on behalf of the 1st Plaintiff. The Notice, Postage Receipt and Hand Delivery Book are marked C-5A-C respectively. 11.That, following continued default, a 40-day Notice of Intention to Sell dated 27/03/2025 under Section 96 of the Land Act was issued. That, the Notice was posted on 06/05/2025 and hand delivered to Shadrack Kamwele Mutuku on 09/04/2025. The Notice, Postage Receipt and Hand Delivery Book are marked C-6A-C respectively. 12.That, the service of these Notices at the Plaintiffs last known address and via hand delivery to the borrower is valid and sufficient service under Clause 38 of the Charge, Cause 13 of Deed of Guarantee and Section 90 of the Land Act. That the Respondent instructed Hillscape Limited Valuers to carry out valuation of the Plaintiffs’ land with a view of determining the value of the said property. The Valuation Report is marked C-7. 13.That, thereafter, the Defendant instructed Kenya Shield Auctioneers to sell the suit property by way of a public auction as per the copy of instructions marked C-8. That, the auctioneers proceeded to issue the 45 days Notification of Sale to the Applicant on 17/11/2025. The Notice dated 14/11/2025 and Postage Receipts are marked C-9A & B. That, from the foregoing, it is clear that the Plaintiff is seeking to disrupt the legal process of the Defendant exercising its statutory power of sale over the suit land at the behest of unknown persons. 14.That, the Plaintiffs’ claim that they were shocked by the notification of sale on 15/01/2026 is a misrepresentation of facts intended to mislead this court as they had been in receipt of statutory notices since April 2024. That, the Defendant’s right of sale has properly accrued and the scheduled action is legal, procedural and in accordance with the Auctioneers Rules and Land Act. 15.It was averred that the Plaintiffs have not demonstrated a prima facie case with a probability of success as they have not shown that they will suffer irreparable loss that cannot be compensated by damages as the property was offered as a commercial security for financial facility. That, the Plaintiffs have not fulfilled the conditions for the grant of the orders sought noting that neither the validity of the charge nor the outstanding amount is disputed. 16.In rejoinder, the 1st Applicant swore a Supplementary Affidavit on 30/03/2026 where he deposed that the loan facility advanced is not disputed but the Statutory Notices prescribed by law were not served. That, according to information from his advocate which he verily believes to be true, the Notices that were due to be served upon him were issued to the 2nd Plaintiff as his agent. That, there is no document on record to show that he ever instructed the 2nd Plaintiff as his agent with regards to service of any documents and especially for the loan. 17.That, Sections 90 and 96 of the Land Act provide that the notices shall be served amongst others, to the guarantor, and does not state that the guarantor shall be served through an agent but shall be served personally. 18.That, the Defendant did not serve him with the 3 months’ Notice as provided for by the law via postage as the address indicated in the annexture marked C5-A is P.O Box 286-90300, Sultan Hamud whilst the Defendant has confirmed via the annexture marked C-1 that the 1st Applicant’s address is 286-90300 Wote meaning that the Notice was sent to the wrong address. 19.That, the Defendant claims that he (1st Applicant) has not demonstrated a prima facie case and will not suffer loss that cannot be compensated by damages yet the Defendant wants to sell the suit land without following the law. 20.The application was canvassed through written submissions. 21.It was submitted that the Applicants have a prima facie case in that the Respondent has not adhered to the statutory requirements to be followed before its right of sale can accrue. That, the statutory power of sale kicks in upon default of an obligation to pay or perform a term under the contract for more than one month. That, the Respondent did not issue three essential notices which a lender should issue before exercising its statutory power of sale i.e. Notices under Sections 90 and 96 of the Land Act. 22.It was submitted that the Applicants will suffer irreparable harm unless the orders sought herein are granted. Reliance was placed on the Court of Appeal decision in Nguruman Ltd -vs- Jan Bonde Nielsen & 2 Others, CA No. 77 of 2012 for the submission that 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 nature that monetary compensation of whatever amount will never be adequate remedy. 23.Reference was made to Order 40 Rule 1 of the Civil Procedure Rules for the submission that the purpose of interlocutory injunction is to preserve the status quo until a final decision is made. It was contended that if the orders sought are not granted, the Respondent will sell the suit land at a throw away price which the Applicants will not be able to recover. 24.It was submitted that the Applicants have demonstrated that the balance of convenience lies in allowing the application and reliance placed on the case of Pius Kipchirchir Kogo -vs-Frank Kimeli Tenai (2018) eKLR for the submission that; the meaning of balance of convenience is that if an injunction is not granted and the suit is ultimately decided in favor of the Plaintiffs, the inconvenience caused to the Plaintiff would be greater than that which would be caused to the Defendants if an injunction is granted but the suit is ultimately dismissed. 25.It was submitted that the debt is not in dispute as the Applicants admitted that the 2nd Applicant defaulted on the loan. Reliance was placed on Nairobi Civil Suit 605 of 2005: Elijah Kipng’eno Arap Bii -vs- Kenya Commercial Bank Ltd for the submission that the court should not interfere with the legal process of recovery where a debt is admitted. 26.It was submitted that the Respondent has meticulously followed the three-notice requirement mandated by law and that contrary to the Applicants’ claims of non- service, the Notices were served through Hand Delivery and Registered Post. Further reliance was placed on Mrao Ltd -vs-First American Bank of Kenya Ltd KLR 125 for the submission that a mortgagee will not be restrained from exercising the power of sale unless the mortgagor pays the amount claimed into court. 27.It was submitted that the suit property was offered as commercial security for a financial facility and is used for business purposes as a Poultry Centre and Workshop. That, its value is quantifiable through valuation reports hence any alleged loss can be adequately compensated by damages. That, the balance of convenience favors the Respondent as a financial institution seeking to recover public funds. 28.That the Applicants have enjoyed the facility of Kshs. 4,000,000/= but have failed to make significant repayments for an extended period. 29.Having looked at the application, response and rival submissions, the only issue for determination is whether the application is merited. 30.The factors to consider in determining an application for interlocutory injunction were enunciated in the locus classicus case of Giella -vs- Cassman Brown (1973) EA 358 as; prima facie case with probability of success, irreparable injury that cannot be compensated by award of damages and balance of convenience where the court is in doubt. 31.In this case, the loan facility advanced to the 2nd Applicant is not disputed. The bone of contention is that the notices prescribed by law were not served upon the 1st Applicant and as such, the Respondent’s Statutory power of sale has not accrued. 32.Section 90(1) of the Land Act (the Act) provides that where a Chargor is in default of any obligation and continues to be in default for one month, the Chargee may serve on the Chargor a Notice in writing to pay the money owing or to perform and observe the agreement as the case may be. Section 90(2) of the Act requires the said Notice to adequately inform the recipient of the following matters-(a)the nature and extent of the default by the chargor;(b)if the default consists of the non-payment of any money due under the charge, the amount that must be paid to rectify the default and the time, being not less than three months, by the end of which the payment in default must have been completed; (emphasis mine).(c)if the default consists of the failure to perform or observe any covenant, express or implied, in the charge, the thing the chargor must do or desist from doing so as to rectify the default and the time, being not less than two months, by the end of which the default must have been rectified;(d)the consequence that if the default is not rectified within the time specified in the notice, the chargee will proceed to exercise any of the remedies referred to in this section in accordance with the procedures provided for in this sub-part; and(e)the right of the chargor in respect of certain remedies to apply to the court for relief against those remedies. 33.If the Chargor fails to comply with the above notice, the lender should issue a second notice under Section 96 of the Act as follows;(1)Where a chargor is in default of the obligations under a charge and remains in default at the expiry of the time provided for the rectification of that default in the notice served on the chargor under section 90(1), a chargee may exercise the power to sell the charged land.(2)Before exercising the power to sell the charged land, the chargee shall serve on the chargor a notice to sell in the prescribed form and shall not proceed to complete any contract for the sale of the charged land until at least forty days have elapsed from the date of the service of that notice to sell. (emphasis mine)(3)A copy of the notice to sell served in accordance with subsection (2) shall be served on-(a)the Commission, if the charged land is public land;(b)the holder of the land out of which the lease has been granted, if the charged land is a lease;(c)a spouse of the chargor who had given the consent;(d)any lessee and sublessee of the charged land or of any buildings on the charged land;(e)any person who is a co-owner with the chargor;(f)any other chargee of money secured by a charge on the charged land of whom the chargee proposing to exercise the power of sale has actual notice;(g)any guarantor of the money advanced under the charge;(h)any other person known to have a right to enter on and use the land or the natural resources in, on, or under the charged land by affixing a notice at the property; and(i)any other persons as may be prescribed by regulations, and shall be posted in a prominent place at or as near as may be to the charged land. 34.The Respondent exhibited the Notice (C-5A) dated 15/03/2024 under Section 90 of the Act and the same is addressed to the 2nd Applicant through Post Office Box 286-90300 Sultan Hamud. The address given by the 2nd Applicant in the Letter of Offer is ‘P.O Box 286 Makueni 90300’ and the address indicated in the statement of legal fees dated 29/11/2022 is ‘P.O Box 286-90300 Wote’. It is noteworthy that Sultan Hamud and Wote are two different destinations hence raising the question as to whether the notice went to the intended destination. The delivery book shows that the said Notice was served to both Applicants on 12/04/2024 but the execution section shows that it was signed by one person. 35.The Notice under Section 96 of the Act is dated 27/03/2025 (C-6A) and is addressed to the 2nd Applicant through ‘P.O Box 286-90300 Wote’ and the delivery book (C-6C) shows that it was delivered to both Applicants and the 3rd guarantor known as Eunice Kamwele on 09/04/2025. However, the execution section appears to have been signed by one person. In the case of Charter House Investments Ltd -vs- Simon K. Sang and others, Civil Appeal No. 315 of 2004, the Court of Appeal held that;“Injunction is an equitable and discretionary remedy, given when the subject matter of the case before the Court requires protection and maintenance of the status quo. The award of a temporary injunction by Courts of equity has never been regarded as a matter right, even where irreparable injury is likely to result to the applicant. It is a matter of sound judicial discretion, in the exercise of which the Court balances the conveniences of the parties and possible injuries to them and to third parties.” 36.Without delving into the merits of the main trial and after looking at the exhibited notices vis-a vis the requirements under Sections 90 and 96 of the Act, it is my considered view that the Applicants have demonstrated a prima facie case requiring that the suit property be preserved until the full trial is concluded. 37.Further, the Applicants deposed that the suit property is their source of livelihood hence my view that even if its value can be quantified, the loss of livelihood in the intervening period may not be adequately remedied by award of damages. 38.In my view, the application has merit and the same is allowed as prayed on condition that the Applicants deposit the amount due and owing in a joint interest earning account held in the names of both parties’ counsel within 45 days. DATED, SIGNED AND DELIVERED VIRTUALLY THIS 29TH DAY OF JULY 2026................................J. N. ONYIEGOJUDGE