Khetia Priti Harilal v Middle East Bank of Kenya Limited

**REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA AT NAIROBI** **MILIMANI LAW COURTS** **THE CIVIL APPELLATE DIVISION** ***(Coram: A. C. Mrima, J.)*** **CIVIL APPEAL NO. E948 OF 2025** ***-between-*** **KHETIA PRITI HARILAL.……………...………...……...APPLICANT/APPELLANT** ***-versus-*** **MIDDLE EAST BANK OF KENYA LIMITED….……………………..RESPONDENT** **RULING** **Background:** 1. The application subject of this ruling stems from a judgment entered in favour of the Respondent, *Middle East Bank Kenya Limited*, in *Nairobi [Milimani] Commercial Courts Civil Suit No. 3810 of 2015* against *Prekashvik Limited, Chetan Dhirajlal Barot*, and *Nita Mukeshkumar Barot* [hereinafter referred to as ‘***the suit’***]. 2. In execution of the decree in the suit, the Respondent proclaimed household goods situated in the matrimonial home shared by the Appellant/Applicant herein, *Khetia Priti Harilal*, and the second judgment debtor, *Chetan Dhirajlal Barot*. Consequently, the Applicant instituted objection proceedings on 1st April 2025, claiming independent ownership of the proclaimed goods. In its ruling of 11th September 2025, trial Court, dismissed the objection thus permitting the execution to proceed. 3. It was that ruling that prompted the instant application which was disposed of by way of written submissions. **The Application:** 1. The Applicant moved this Court by way of a Notice of Motion dated 11th September 2025. He sought the following orders: 2. *Spent.* 3. *A stay of execution of the ruling and consequential orders of the Honourable William Lopokoiyit, Senior Resident Magistrate, delivered on September 11, 2025, in Milimani Commercial Courts, Civil Suit No. 3810 of 2015 be granted pending the hearing and final determination of the appeal.* 4. *The costs of this application be provided for.* 5. The application was grounded on the assertion that the Applicant’s Memorandum of Appeal raised substantive grounds, among them that the learned magistrate failed to apply the correct legal principles concerning matrimonial property. It was contended that the application was brought without unreasonable delay and that the Appellant would suffer substantial loss if the stay is not granted, as the proclaimed goods are personal belongings within her matrimonial home that cannot be easily replaced or quantified. 6. In her supporting affidavit sworn on the very day as the application, the Applicant deponed that she single-handedly acquired the proclaimed goods and had provided the trial Court with a lease agreement and deposit slips to prove her independent financial standing. She expressed apprehension that the Respondent would proceed to execute the decree by selling the household goods, an act that would disrupt her family life, cause irreparable harm, and render the intended appeal meaningless as the property is not of such a nature that she can be compensated by monetary damages. *The Submissions* 1. In her written submissions dated 3rd December 2025, it was submitted on behalf of the Applicant that the three conjunctive conditions for a stay of execution pending appeal, as stipulated under Order 42 Rule 6(2) of the Civil Procedure Rules and succinctly stated in the case of *Kenya Shell Ltd -vs- Kibiru & Another* [1986] KLR 410, had been met. It was the Applicant’s case that substantial loss had been demonstrated. Relying on the precedent in *James Wangalwa & Another -vs- Agnes Naliaka Cheseto* [2012] eKLR, the Applicant argued that execution before the appeal is heard would create a state of affairs that would irreparably negate her essential core as a successful party, thereby defeating the very purpose of the appellate process. 2. On the condition of delay, the Applicant submitted that the motion was filed expeditiously on the exact same day the impugned ruling was delivered, a position that aligned with the principles set out in *Jaber Mohsen Ali & Another -vs- Priscillah Boit & Another [*2012] eKLR. 3. Addressing the requirement for security, she asserted that since she was a third-party objector and not the primary judgment debtor, imposing a condition to deposit security would constitute an unjust burden that obstructed access to appellate justice. The Applicant drew support from the case of *Arun C Sharma -vs- Ashana Raikundalia t/a Raikundalia & Co Advocates* [2014] eKLR and *Equity Bank Ltd -vs- Taiga Adams Company Ltd* [2006] eKLR to maintain that the condition for security is discretionary and should not be so onerous as to punish an applicant. 4. The Applicant further submitted that stay should be granted in the interest of justice to ensure the appeal is not rendered nugatory. To that end, she referred the court to the longstanding case of *Butt -vs- Rent Restriction Tribunal* (1982) KLR 417. **The Respondent’s case:** 1. *Middle East Bank Kenya Limited* opposed the application through Grounds of Opposition dated 26th September 2025. It averred that the application was incompetent, misconceived, and an abuse of the Court process, as the intended appeal against the dismissal of objection proceedings does not affect the valid 2015 judgment and decree. 2. The Respondent asserted that the Appellant had failed to satisfy the mandatory conditions for the grant of stay under Order 42 Rule 6(2) of the Civil Procedure Rules, for failing to demonstrate substantial loss, delay in bringing the application, and failure to furnish security for the due performance of the decree. *The Submissions* 1. In the written submissions dated 30th March 2026, the Respondent submitted that the conditions for a stay of execution are conjunctive and must be met simultaneously. To that end, it referred this Court to the case of *Barasa -vs- Nambale* [2025] KEHC 4986 (KLR) and *Mukundi -vs- Francis & another* [2023] KEHC 24443 (KLR). 2. The Respondent submitted that substantial loss is a strict legal threshold and not a rhetorical concept. Drawing from the case of *James Wangalwa & Another -vs- Agnes Naliaka Cheseto* [2012] KEHC 1094 (KLR) it was its case that the Appellant had provided no inventory, demonstrated no unique sentimental value, and produced no valuation for the attached goods, leaving the Court with bare assertions. It was its position that ordinary household goods are compensable in damages, and as a licensed banking institution, the Respondent has the financial capacity to restitute the Appellant should the appeal succeed. 3. Regarding security, the Respondent submitted that Order 42 Rule 6(2) is couched in mandatory terms. Relying on *Mutuku -vs- Kiamba* [2024] KEHC 5330 (KLR), it was argued that the provision of security is key to obtaining stay orders. The Respondent contended that the Appellant’s failure to offer any form of security, or even propose a mechanism for compliance, left the 12-year-old decretal sum at risk and indicated bad faith. **Analysis and Determination:** 1. Having carefully considered the application, the supporting affidavit, the grounds of opposition, and the rival written submissions, the primary issue for determination is whether the Applicant has satisfied the mandatory conditions for the grant of a stay of execution under Order 42 Rule 6(2) of the Civil Procedure Rules. 2. The jurisdiction of this Court to grant a stay of execution pending appeal is anchored under Order 42 Rule 6(2) of the Civil Procedure Rules. In Civil Application Nai No. 6 of 1979, *Butt -vs- Rent Restriction Tribunal [1979] eKLR*, the Court of Appeal crystallized the conditions for grant of stay as hereunder; 1. *The power of the court to grant or refuse an application for a stay of execution is discretionary; and the discretion should be exercised in such a way as not to prevent an appeal.* 2. *Secondly, the general principle in granting or refusing a stay is, if there is no other overwhelming hindrance, a stay must be granted so that an appeal may not be rendered nugatory should the appeal court reverse the judge’s discretion.* 3. *Thirdly, a judge should not refuse a stay if there are good grounds for granting it merely because, in his opinion, a better remedy may become available to the applicant at the end of the proceedings.* 4. *Finally, the Court in exercising its discretion whether to grant or refuse an application for stay will consider the special circumstances and its unique requirements. The court in exercising its powers under Order XLI Rule 4(2) (b) of the Civil Procedure Rules, can order security upon application by either party or on its own motion. Failure to put security of costs as ordered will cause the order for stay of execution to lapse.* 3. This Court will now consider the foregoing requirements in turn. 4. On the first limb concerning delay, it is common ground that the impugned ruling was delivered on 11th September 2025, and the instant application was filed under a Certificate of Urgency on the same date. The Applicant unequivocally acted with the utmost promptitude. Therefore, the application was made without unreasonable delay. 5. The second parameter requires the demonstration of substantial loss. In ***Andrew Kiplagat Chemaringo -vs- Paul Kipkorir Kibet*** [2017] KECA 240 (KLR) the Court of Appeal in discussing what constitutes a nugatory appeal discussed substantial loss in the following way; *[13] On nugatory aspect, as this Court said in Reliance Bank Ltd vs Norlake Investments Ltd [2002] I EA 227, the factors which could render an appeal nugatory has to be considered within the circumstances of each particular case and that in doing so, the Court was bound to consider the conflicting claims of both side. In the circumstances of that particular case, the Court said at page 237 paragraph e:* ***… To refuse to grant an order of stay to the applicant would cause to it such hardships as would be out of proportion to any suffering the respondent might undergo while waiting for the applicants appeal to be heard and determined.”*** *In Mukuma vs Abuoga [1988] KLR 645, this Court held inter alia:* ***… The discretion of the Court of Appeal under Rule 5 (2) (b) of the Court of Appeal Rules is at large but the issue of substantial loss is the cornerstone of both jurisdictions. Substantial loss is what has to be prevented by preserving the status quo because such loss would render it nugatory.*** 1. The Respondent submitted that the execution involves ordinary household goods capable of being compensated in damages, and that as a banking institution, it has the capacity to restitute the Applicant. However, the Applicant’s grievance is rooted in her status as a third-party objector claiming independent ownership of distinct household items within her matrimonial home. While the Respondent correctly notes that the lawful process of execution does not inherently equate to substantial loss, the unique character of this dispute must be appreciated. The Applicant asserted she is not the primary judgment debtor, but rather a spouse facing the attachment of her personal, independently acquired effects to settle her husband’s liabilities. 2. The auction of personal household items, which form the substratum of her daily matrimonial existence, would create a state of affairs that irreparably disrupts her core position, a loss that monetary damages cannot adequately remedy. Further, cardinal issues arise for consideration is the context of this matter including whether there were any agreements between the parties on their matrimonial properties, the relationship between the spouses, among others. This Court is thus satisfied that the Applicant has established that substantial loss would ensue if the stay is not granted. 3. The final condition pertains to the provision of security. In Civil Appeal (Application) 38 of 2013 ***Gatirau Peter Munya -vs- Dickson Mwenda Kithinji & 2 others*** *[*2014] eKLRthe Court of Appeal laid down the basis ordering for security. It observed; *…. The rationale for security for costs is to ensure firstly, that a party is not left without recompense for costs that might be awarded to him in the event that the unsuccessful party is unable to pay the same due to poverty; secondly, it ensures that a litigant who by reason of his financial ability is unable to pay costs of the litigation if he loses, is disabled from carrying on litigation indefinitely except on conditions that offer protection to the other party. In Noormohamed Abdulla -vs- Ranchhodbhal J. Patel & Another (1962) E.A. 448, it was held:-* *…. The order for security for costs in such a case is not directed towards enforcing payment of the costs as such, but is designed to ensure that a litigant who by reason of near insolvency is unable to pay the costs of the litigation when he loses, is disabled from carrying on the litigation indefinitely except upon terms and conditions which afford some measure of protection to the other parties.* 1. In ***Gianfranco Manenthi & another -vs- Africa Merchant Assurance Company Ltd*** [2019] eKLR the Court observed as follows; *… the applicant must show and meet the condition of payment of security for due performance of the decree. Under this condition a party who seeks the right of appeal from money decree of the lower court for an order of stay must satisfy this condition on security. In this regard, the security for due performance of the decree under order 42 rule 6(1) of the Civil Procedure Rules, it is trite that the winner of litigation should not be denied the opportunity to execute the degree in order to enjoy the fruits of his judgment in case the appeal fails.* 1. The Applicant argued that as an objector, she should not be condemned to deposit security as if she were the principal litigant. Conversely, the Respondent emphasized the mandatory nature of this requirement to protect a decree that has remained unsatisfied since 2015. 2. From the above authorities, a stay of execution fundamentally balances the right of an appellant to pursue an appeal against the right of a successful litigant to enjoy the fruits of their judgment. However, since the objector is not the primary litigant and asserts that her property rights have been unlawfully trampled upon, calling upon her to deposit security on behalf of a decree against another litigant, and in the unique circumstances of this matter, would occasion an injustice to her. To this Court, this is a case where the appeal ought to be expedited more so given that the Respondent still reserves other avenues of executing the decree against the judgment debtor. **Disposition:** 1. Flowing from the findings above, this Court finds that the Applicant has presented a meritorious case for the preservation of the *status quo* pending the hearing and determination of the appeal. Accordingly, the following final orders hereby issue: **[a] The Notice of Motion dated 11th September 2025, is hereby allowed to the extent that a stay of execution of the ruling and consequential orders delivered on 11th September 2025, in Nairobi [Milimani] Commercial Courts Civil Suit No. 3810 of 2015 is hereby granted pending the hearing and final determination of the appeal.** **[b] Since the appeal is against a ruling, the following directions and orders hereby issue: -** **[i] The appeal is hereby admitted for hearing by way of written submissions.** **[ii] The filing of a Record of Appeal is hereby dispensed with and the trial Court file be availed.** **[iii] The Appellant to file and serve written submissions on the main appeal within 14 days of this Order and the Respondent to file and serve counter-submissions within 14 days of service of the Appellant’s submissions.** **[c] The matter shall be fixed for highlighting of submissions on a date to issue.** **[d] The costs of this application shall abide the outcome of the appeal.** Orders accordingly. **DELIVERED**, **DATED** and **SIGNED** at **NAIROBI** this **9th** day of **September, 2026.** **A. C. MRIMA** **JUDGE** **Ruling virtually delivered in the presence of:** **Ms Miro,** LearnedCounsel for the Applicant. **Mr. Peter** for Mr. Wayamba,Learned Counsel for the Respondent. **Michael/Amina** –Court Assistants.