https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2147

Khaddy Limited v Naftali & 2 others (Employment and Labour Relations Cause E061 of 2025 & Employment and Labour Relations Appeal E062 of 2025 (Consolidated)) [2026] KEELRC 2147 (KLR) (17 July 2026) (Ruling) Neutral citation: [2026] KEELRC 2147 (KLR) Republic of Kenya In the Employment and Labour Relations Court at Machakos Employment and Labour Relations Cause E061 of 2025 & Employment and Labour Relations Appeal E062 of 2025 (Consolidated) JW Keli, J July 17, 2026 Between Khaddy Limited Appellant and Chris Wanyonyi Naftali 1st Respondent Daniel Esieba 2nd Respondent and Alphonse Nzioka Mbuvi Interested Party Ruling 1.The Appellant/Applicant vide a Notice of Motion dated 15th March 2025 brought under the provisions of Sections 1A, 1B, 3 and 3A of the Civil Procedure Act Cap 21 of the Laws of Kenya; Order 40 Rules 1, 2 and 3, Order 42 Rule 6, Order 22 Rules 22 and 51, and Order 51 of the Civil Procedure Rules 2010; Rules 19 and 32 of the Employment and Labour Relations Court (Procedure) Rules 2024; Rule 14 of the Auctioneers Rules 1997 under the Auctioneers Act No. 5 of 1996; Sections 93, 108 and 109 of the National Police Service Act No. 11A of 2011; and Article 159(2)(d) of the Constitution of Kenya 2010, sought the following orders:-a.Spentb.Spentc.Spentd.The Interested Party, Alphonse Nzioka Mbuvi, be directed to disclose to this Honourable Court the present location and custody of motor vehicle KCY 435Y within 24 hours of service of this order, and that he be personally served with this order forthwith.e.This Honourable Court be pleased to issue a Mandatory Injunction directing the Officer Commanding Mawe Mbili Police Post and/or the Inspector General of Police forthwith to locate, secure, and produce motor vehicle KCY 435Y (2018 JAC Lorry, Chassis No. LJ11RVCE4K1302320) before this Court or deliver it into the custody of the Appellant/Applicant or its authorised agents, pending the hearing and determination of this application.f.The Chamber Summons filed by Alphonse Nzioka Mbuvi through F.M. Ratemo & Company Advocates in these proceedings seeking joinder and surrender of motor vehicle KCY 435Y be stayed pending the hearing and determination of this application, and any orders granted therein be suspended forthwith.g.The purported public auction of motor vehicle KCY 435Y conducted by Racecourse Auctioneers on 12th March 2026 at Cyka Storage Yard, and the Certificate of Sale dated 12th March 2026 issued by Peter Mwaniki Kimwele for Racecourse Auctioneers in favour of Alphonse Nzioka Mbuvi, be declared null and void and of no legal effect whatsoever, on the grounds that the auction was conducted:i.While a stay application and objector proceedings under order 22 rule 51 of the civil procedure rules 2010 were pending and active before the court at mavoko;ii.In defiance of the supervisory jurisdiction of this court over the execution proceedings; andiii.In circumstances amounting to abuse of the process of court and bad faith.h.The Officer Commanding Mawe Mbili Police Post be directed to file an affidavit before this Honourable Court within 48 hours of service of this order, setting out:(a)the date and time motor vehicle KCY 435Y left Mawe Mbili Police Post;(b)the authority — whether written or oral — upon which it was released;(c)the identity of the person or persons to whom it was released; and(d)whether OB No. 02/13/03/2026 was made in respect of the vehicle and the full text of that entry.i.Racecourse Auctioneers and Peter Mwaniki Kimwele be directed to show cause why they should not be committed for contempt of court for:(a)removing or causing the removal of motor vehicle KCY 435Y from Mawe Mbili Police Post after service of the Court Order issued on 13th March 2026 by Hon. Lady Justice J.W. Keli directing the immediate release of the vehicle to the Appellant/Applicant; and(b)facilitating the continued detention and/or removal of the said vehicle in knowing defiance of the said order.j.The Inspector General of Police be directed to cause a full investigation into the circumstances under which motor vehicle KCY 435Y was removed from Mawe Mbili Police Post contrary to OB No. 02/13/03/2026 and contrary to the Court Order of 13th March 2026, and to file a report before this Honourable Court within seven (7) days of service of this order.k.The auctioneer's fee notes — being the Fee Note on Attachment dated 4th March 2026 for Kshs. 214,640/-, the Fee Note on Proclamation dated 11th December 2025 in respect of MCELRC E067 of 2022 for Kshs. 246,540/-, and the Fee Note on Proclamation dated 11th December 2025 in respect of MCELRC E066 of 2022 for Kshs. 162,770/- — be referred to the Deputy Registrar for taxation, and Racecourse Auctioneers be directed to file lawful and fully particularised bills in compliance with the Auctioneers Rules 1997 within 14 days of the direction to do so.l.The Appellant/Applicant be awarded the costs of towing motor vehicle KCY 435Y to Mawe Mbili Police Post in the sum of Kshs. 25,000/- (Invoice No. 420, M.W. Karumbi Breakdown & Cranes Services) and the further sum of Kshs. 21,050/- paid on 13th March 2026 to Moses Wanyoike Karumbi and Hussein Adhon for towing-related recovery services, such costs being directly attributable to the unlawful conduct of Racecourse Auctioneers.m.The costs of this application be borne by the 3rd Respondent/Interested Party.n.Such further or other orders be made as this Honourable Court may deem just and expedient in the circumstances. 2.The Application was supported by an affidavit of Claus Katami sworn on 15th March 2025. 3.Further, the Appellant/Applicant vide a Notice of Motion dated 14th April 2025 brought under the provisions of Section 3A of the Civil Procedure Act, Cap 21; Section 12 of the Employment and Labour Relations Court Act, 2011; Article 159 of the Constitution of Kenya, 2010; Order 51 Rules 1 and 3 of the Civil Procedure Rules, 2010; and the inherent jurisdiction of this Honourable Court, sought the following orders:-a.Spentb.This Honourable Court be pleased to direct the Directorate of Criminal Investigations (DCI) to:i.immediately trace motor vehicle Registration Number KCY 435Y (2018 JAC Lorry, Chassis Number LJ11RVCE4K1302320);ii.seize and secure the said motor vehicle wherever found;iii.produce it before this Honourable Court or deliver it to the nearest police station within fourteen (14) days and file a compliance report.c.Any person found in possession of the vehicle who fails to produce it within the timelines set by this Court be cited for contempt.d.The Officer Commanding Mawe Mbili Police Post do file an affidavit within forty-eight (48) hours explaining:i.how the vehicle left police custody;ii.who authorised the release or removal;iii.its last known location.e.ending compliance with the orders sought, there be a status quo order restraining any person from transferring, selling, disposing of, encumbering, or in any manner dealing with motor vehicle KCY 435Y.f.Racecourse Auctioneers, their agents, servants, and the purported auctioneer Peter Mwaniki Kimwele do show cause why they should not be cited for contempt of court for conducting a sale during the pendency of proceedings and in the face of subsisting court processes.g.The purported sale of motor vehicle KCY 435Y conducted on 12th March 2026 at Cyka Storage Yard be declared unlawful, irregular, and a nullity, having been conducted during the pendency of active court proceedings and without leave of this Honourable Court.h.The costs of this application be in the cause.i.This Honourable Court be at liberty to grant such further or alternative relief as it deems just and expedient. 4.Grounds of the applicationsa.On 4th March 2026, Racecourse Auctioneers seized motor vehicle KCY 435Y. The Applicant immediately filed an urgent application seeking release and stay of execution.b.The Applicant had already paid Kshs. 600,000/- toward the decretal sum, exceeding the 50% conditional stay threshold of Kshs. 546,812/-. Good faith was not in question.c.On 12th March 2026, while the application was pending before this Court, Racecourse Auctioneers conducted an auction at Cyka Storage Yard. The auctioneer, Peter Mwaniki Kimwele, issued a Certificate of Sale to one Alphonse Nzioka Mbuvi for Kshs. 720,000/-. No leave of Court was sought or obtained.d.On 13th March 2026, this Court ordered the vehicle released to the Applicant. The order carries a penal notice. It was not a suggestion.e.On the same day, the Interested Party's advocates from Nakuru filed a Chamber Summons seeking to stay the release order.; and upon visiting Mawe Mbili Police Post where the motor vehicle had been towed to, the Appellant/Applicant could not trace the motor vehicle. Police officers could not account for it. The Appellant/Applicant considers the Respondent’s actions as a coordinated effort to strip the Applicant of its property.f.NTSA records still reflect Khaddy Limited as the registered owner. No transfer has been effected.g.The Appellant/Applicant argues that the purported sale is a nullity as the sale was conducted during the pendency of proceedings in violation of the sub judice rule and the Auctioneers were aware of the pending appeal and the pending application.h.Motor vehicle KCY 435Y is the Applicant's sole delivery vehicle which sustains the company's logistics operations, its employees, and over one hundred dependent households.i.Ordinary civil enforcement has failed with the vehicle moving beyond traceable channels. Only the DCI possesses the investigative machinery to locate and recover it.j.The Appellant/Applicant seeks the orders set out above as there are indications of criminal conduct, namely disobedience of a lawful court order contrary to Section 134 of the Penal Code; obstruction of justice contrary to Section 132 of the Penal Code; and possible fraudulent disposal of property subject to court proceedings. They take the position that the authority of the Court is at stake, and it must make a statement that court orders ought to be obeyed. The Responses 5.The application was opposed by the Respondent through his Replying Affidavit dated 4th June 2026. The Respondent argued that the application is incompetent and ought to be struck out because it was filed in an appeal submitted out of time, without leave, and without any extension of time having been granted for filing the appeal. Although it is admitted that the Appellant/Applicant filed an application for leave to file the appeal out of time dated 17th December 2025, the Respondent states that this was abandoned without obtaining leave. He further states that the judgment was delivered on 28th August 2025 in the presence of counsel for the Appellant/Applicant, but they only filed the appeal in December 2025 after proceedings to execute the judgment had commenced. Due to the Appellant/Applicant’s failure to satisfy the judgment and decree dated 28th August 2025, the Respondent had no option but to lawfully initiate execution proceedings against the appellant in order to obtain the benefits of his judgment. The Respondent admits that he appointed auctioneers to issue warrants of attachment and carry out the execution against the Appellant/Applicant. 6.The Respondent states that in January 2026, the Appellant/Applicant was granted a conditional stay but failed to comply with the same by paying the Respondent Kshs. 350,000/ within 10 days of the stay order. According to the Appellant/Applicant, the orders of stay of execution therefore lapsed, and he was entitled to proceed with execution. On 4th March 2026, the auctioneers extended the warrants of attachment and seized the appellant's motor vehicle/lorry in lawful execution of the judgment of the subordinate court which still remained unsatisfied. 7.It is stated that during court proceedings on 13th March 2025, the court was notified by the Respondent’s advocate on record that the subject motor vehicle had already been sold on 12th March 2025 to the interested party in lawful execution of the judgment and decree. The proceeds of sale were transferred to the Respondent after the sale, and the Respondent states that he has already used the amount he realised, hence he is not in a position to refund it to the interested party. 8.On the issue of the purported disappearance of the motor vehicle from Mawe Mbili Police Post, it is the Respondent’s case that upon attachment of the motor vehicle by the auctioneers, the applicant who was aware that attachment was being effected in satisfaction of a court order reported that the motor vehicle had been stolen at Mawe Mbili Police Station. The same was recovered and detained at the police station. Once the same was sold, it was released to the interested party. 9.On his part, the interested party filed a Replying Affidavit sworn on 4th May 2026, in which he reiterated the Respondent’s challenge to the court’s jurisdiction on the grounds that no valid appeal has been filed, as the memorandum of appeal was submitted after the statutory 30-day period had lapsed. Additionally, the application dated 17th December 2025, seeking to extend the time within which to file the appeal, was abandoned. The interested party contends that, in the absence of an appeal, the three pending applications are made in a vacuum, and the Court lacks the jurisdiction to grant any of the orders sought in the Motions dated 4th March 2026, 15th March 2026, and 14th April 2026. 10.The Interested Party explains that execution of the Subordinate Court's decree has already been concluded since the Appellant/Applicant’s motor vehicle number KCY 435Y was sold to him at a public auction conducted on 12th March 2026 for Kshs. 720,000/=. While the Interested Party admits that the Subordinate Court issued conditional stay orders on 15th December 2025 and this court issued similar orders on 6th January 2026, he emphasizes that the Appellant/Applicant failed to meet the conditions of both orders, causing them to lapse, and the auction to be lawfully conducted. He clarifies that the public auction was conducted on 12th March 2026 and proprietary rights in the vehicle vested in the Interested Party, while further ex-parte stay orders were obtained by the Applicant from the Court on 13th March 2026. 11.On the issue of the purported disappearance of the subject motor vehicle from the police station, the Interested Party confirms that he presented the Certificate of Sale and all supporting documentation, on 13th March 2026, to the Officer Commanding (OCS) Mawe Mbili Police Post who upon verification of the same confirmed that there was no entry in the Occurrence Book (OB) or any lawful court order justifying the vehicle's continued detention and he released it to THE Interested Party. He classifies the Appellant/Applicant’s claims as malicious falsehoods and blatant lies intended to mislead the Court. 12.The Interested Party maintains that he is a bona fide purchaser for valuable consideration of the subject motor vehicle without notice, who lawfully acquired the same at a public auction. He notes that no evidence has been provided by the Appellant/Applicant to demonstrate the timelines within which they allegedly paid the court-ordered security as per the conditional stay orders, which indicates that they failed to comply. 13.In response to the averments made by the Respondent and Interested Party, the Appellant/Applicant filed a supplementary affidavit dated 8th May 2026. Decision 14.The application was canvassed by way of written submissions. The parties complied, and highlighted their case on 5th June 2026. The applicant was represented by Mr Mulama Advocate, the Respondent by Mr Otieno Advocate and the interested party by Mr Ratemo Advocate . The issues for determination are as follows:-a.Whether the Court has jurisdiction to entertain the present applications;b.Whether the court should grant the orders sought. Whether the Court has jurisdiction to entertain the present applications 15.The court's jurisdiction to hear the applications before it has been challenged by both the Respondent and Interested Party on the grounds that there is no competent appeal before the court. It cannot be denied that once an issue of jurisdiction is raised, it must be addressed first. This was affirmed in the well-known case of Owners of Motor Vessel ‘Lillian S’ v Caltex Oil (Kenya) Limited [1989] KLR 1, where Hon. Nyarangi JA stated as follows: -“Jurisdiction is everything. Without it, a court has no power to make one more step. Where a court has no jurisdiction, there would be no basis for a continuation of proceedings…” 16.It is not in dispute that the subordinate court delivered its final judgment in this matter on 28th August 2025. 17.On timelines for filing an appeal from the subordinate court, Rule 12 of the Employment and Labour Relations Court (Procedure) Rules 2024 provides that:-"Time for filing appeals(1)Where a written law provides for an appeal to the Court, an appellant shall file a memorandum of appeal with the Court within the time specified under that written law.(2)Where an appeal is from a magistrate’s court or where no period of appeal is specified in the written law referred to in subrule (1), the appeal shall be filed within thirty days from the date the decision is delivered.” 18.I have seen the Memorandum of Appeal filed by the Appellant/Applicant which is dated 17th November 2025. The same was filed on 17th December 2025, more than three and a half months after the delivery of the judgment. It was therefore fled out of time. 19.While Rule 18 of the ELRC Rules 2024 provides for extension of time within which a party may file an appeal, the Appellant/Applicant did not make such an application prior to filing the Memorandum of Appeal. The apex Court in the case of Salat vs IEBC & 7 Others [2014] KESC 12 KLR had the following to say about an Appellant who acted similarly:“53.By filing an appeal out of time before seeking extension of time, and subsequently seeking the court to extend time and recognize such ‘an appeal’, is tantamount to moving the court to remedy an illegality. This, the court cannot do.54.To file an appeal out of time and seek the court to extend time is presumptive and in-appropriate. No appeal can be filed out of time without leave of the court. Such a filling renders the ‘document’ so filed a nullity and of no legal consequence. Consequently, this court will not accept a document filed out of time without leave of the court.” 20.While the court is cognizant that the Appellant/Applicant filed an application dated 17th December 2025 seeking extension of time, the same was not prosecuted, and the order for extension of time was not issued. As such, I find and hold that there is no competent appeal before the court, capable of supporting the Appellant/Applicant’s applications for interlocutory orders. 21.The Court in Scope Telematics International Sales Limited v Stoic Company Limited & another [2017] KECA 545 (KLR) held that the “The manner of initiating a suit cannot be termed as a mere case of technicality. It is the basis of jurisdiction. Obviously, in overlooking a statutory imperative and the above authorities, the learned Judge cannot be said to have exercised his discretion properly. There can be no other interpretation of Rule 2. The application should have been anchored on a suit. It was not about what prejudice the appellant or and 2nd respondent would suffer or what purpose the suit would have served. Discretion cannot be used to override a mandatory statutory provision. For these reasons, we are in agreement with the submissions of the appellant that the application was fatally and incurably defective.” 22.For the reason that there is no appeal that grounds the applications herein, the Court agrees that it lacks jurisdiction to entertain them and hereby downs its tools. Whether the court should grant the orders sought 23.Even if I had not found as above, I note that it is not disputed that motor vehicle KCY 435Y was attached on 4th March 2026 and sold on 12th March 2026, at which time there were no stay of execution orders that were in effect. The Appellant/Applicant, in his Supplementary Affidavit dated 8th May 2026 filed before this Court, admits that following the issuance of a conditional stay order by Hon. Justice Nzei on 6th January 2026, which required them to deposit security within 10 days, they only remitted Kshs. 300,000/- on 29th January 2026 and a further Kshs. 375,000/- via cheque on 4th March 2026. The orders of the learned Judge were self-executing; if they did not comply, the orders lapsed. 24.The attachment and sale of motor vehicle KCY 435Y was therefore performed in lawful execution of a decree of the subordinate court, and cannot be faulted. 25.In the upshot, the applications dated 14th April 2026; 15th March 2026; and any other pending applications in this suit are hereby dismissed. Further, the Memorandum of Appeal dated 17th November 2025 is struck out for being incompetent and bad in law. The decision to apply in the determination of Machakos Appeal No. 62 of 2025. To temper justice with mercy, I make no order as to costs in the applications. 26.The file is marked as closed. 27.It is so ordered. DATED, SIGNED, AND DELIVERED IN OPEN COURT AT MACHAKOS THIS 17TH DAY OF JULY, 2026.JEMIMAH KELI,JUDGEIn the presence of:Court Assistant: OtienoApplicant : -MulamaRespondent:-absentInterested party -Ratemo