[2023] KEHC 26984 (KLR)

Langat v Bank of Africa Kenya Limited & another (Civil Suit E007 of 2022) [2023] KEHC 26984 (KLR) (14 December 2023) (Ruling)

Neutral citation: [2023] KEHC 26984 (KLR)

Republic of Kenya

In the High Court at Kericho

Civil Suit E007 of 2022

JK Sergon, J

December 14, 2023

Between

Charles Kipngéno Langat

Plaintiff

and

Bank of Africa Kenya Limited

1st Defendant

Philips International Auctioneers

2nd Defendant

Ruling

1. The Plaintiff/Applicant herein filed a Notice of Motion dated 18th October, 2022 under certificate seeking for the following orders:1. Spent.2. Spent.3. That a mandatory injunctive order do issue restraining the 1st and 2nd defendants/respondents through their employees, agents, servants, workers, or any other person whomsoever from auctioning, selling, disposing and transferring the subject matter of this application pending the hearing and determination of this application. (sic)4. Costs of the application.

2. The Application is supported by the grounds laid out on its face and the facts stated in the affidavit of Charles Kipngéno Langat, the applicant herein who deponed that on or about the year 2012 and 2016, he obtained two loan facilities from the 1st defendant/respondent herein and charged his properties describes as LR NO. 631/1668 (IR 67070) and Kericho Municipality Block 4/457 & 4/458, Tabsview Apartments as security for the loan secured. That he obtained the sum of Kshs. 22,500,000/= and Kshs. 65,850,000/= respectively over the said properties, totaling to Kshs. 88,350,000/= and that the said properties included a matrimonial property and a real estate building.

3. He further deponed that he used the proceeds received from the Apartments buildings to faithfully service the loan in accordance with the contract until on or about 9th June, 2020 when the building on Kericho Municipality Block 4/457 & 4/458 collapsed due to heavy rainfall in the area, leaving the apartments fully vacant without rental income. That consequently, he engaged an insurance company known as ICEA LION GROUP which he had insured the said property with for indemnification for the losses suffered in order to commence immediate repair of the property and continue earning rental income and additionally, he sought the 1st Respondent’s indulgence as he awaited adequate compensation from ICEA LION GROUP. Further that he engaged the services of a property assessment investigator and property valuers who upon thorough assessment and verification, established that all repairs to the property and/or indemnity would be in the sum of Kshs. 32,076,740/= but the said insurer denied liability and declined to pay his claim which necessitated him to refer the matter to Arbitration to demand the said sum from the insurer.

4. That nevertheless, he continued to repay the loan facility by making payments of over Kshs. 200,000/=monthly and although the 1st Respondent alleges that his outstanding debt stood at Kshs. 48,984,722. 60/=, the said 1st Respondent declined to issue him with the correct statement of account detailing the alleged outstanding loan vis-à-vis the amount repaid over the years. That the 1st Respondent had only issued him with statements of account for the year 2022 and not from the year 2012. That subsequently, he sold off all his work machineries, tractors and/or caterpillar rollers to offset the outstanding debt to a tune of Kshs. 13,535,086/= on diverse dates from 1st January, 2022 to 5th October, 2022, however, the 1st respondent proceeded to instruct the 2nd respondent to auction the aforementioned properties in recovering the outstanding debt allegedly owed. That the said 2nd respondent then posted the intended auction in a public newspaper dated 3rd October, 2022 but the said auction was being conducted in contravention of the law hence the same should not be allowed to proceed as scheduled.

5. That the 2nd respondent had failed to issue and personally serve him with both the 45 days Redemption notice and Notice of Sale of Property as the registered owner of both properties and as per the law. That the said 2nd respondent intended to unlawfully auction his assets through improper service of the 45 days redemption notice and Notice of property sale by only serving a 45 days Redemption Notice and Notification of Sale in respect of LR No. 631/1668 (IR 67070) at his advocate’s offices instead of serving them upon him. Further that the said 2nd respondent failed to issue both the 45 days redemption notice and the notification of sale of property in respect of the other property described as Kericho Municipality Block 4/457 & 4/458.

6. He further deponed that the Auctioneers Rules 1997 provided that it was imperative that before an immovable asset was auctioned by an auctioneer, both the statutory 45 days redemption notice and notification of sale of property must be served upon the chargor personally or through his registered address and not through an advocate who is not a party to the contract. That being that the notices with respect to Kericho Municipality Block 4/457 & 458 had not been served upon him at all, the said property stood a risk of being auctioned unlawfully and additionally both properties were at a risk of being auctioned at a throw away prices since the respondents’ valuation reports greatly undervalued the properties yet the true value of the said properties combined was in excess of Kshs 125,000,000/=.

7. That being that the properties value is three times more than the loan with LR NO. 631/1668 (IR 67070) being valued at Kshs. 30,000,000/= while Kericho Municipality Block 4/457 & 458, Tabsview Apartments being valued at Kshs. 90,000,000/=, the applicant stands to suffer massive and irreparable losses and damages should the auction proceed as planned. That LR NO. 631/1668 (IR 67070) is his matrimonial home and was facing a risk of being unlawfully sold off to settle an outstanding debt which one property was enough to settle, hence it was fraudulent for the 1st respondent to sell two properties at a throw away price yet the Apartment building was enough security for the outstanding loan.

8. That he continues to service the loan to the greatest extent despite the tough economic times and loss of income thus he urged the court to rescue his assets by according him a chance to recover his assured insurance pay out and comfortably settle the debt. That together with his spouse, they had sacrificed a lot over the years to establish their matrimonial and real estate business hence it was unfair for the said properties to be auctioned without due process and at a throw away price. That he was anxious of the said properties being sold and transferred hence he urged the court to intervene and restrain the respondents from doing so. That he was surprised at the 1st respondent’s drastic actions despite having several meetings at its offices in Westlands where one of its officials promised to suspend the issuing of the 45 days redemption notice in order to allow the applicant recover his insurance pay and settle the debt.

9. That the 1st respondent was also aware that the applicant was recovering a legitimate and due payment owed by the company as the applicant had won the road works tender form but nonetheless, the said 1st respondent was in a hurry to dispose off his properties. Further that the 1st respondent was privy to all structural audit conducted and reports prepared on the collapsed building hence the intended auction was aimed at defrauding the applicant.

10. That he had filed the instant application without unreasonable delay thus he prayed that the orders sought in the said application be granted to protect his proprietary interest and rights as per article 40 of the Constitution and that he shall be greatly prejudiced if the orders sought were not granted.

11. In retort, the 1st Respondent through its Replying Affidavit dated 28th July, 2023, sworn by Felix Muhati, the Senior Recovery Officer in the Credit division of the 1st Respondent opposed the Applicant’s application and deponed that in the year 2012, the 1st Respondent at the request of Chaglano Enterprises Limited and Green Highway Service Station Limited, the entities associated with the Applicant herein, advanced the said entities banking facilities to a tune of Kshs. 22,500,000/= which banking facility was secured through a third-party charge over LR NO. 631/1668 registered in the Applicant’s name. That in the year 2016, Chaglano Enterprises Limited sought further facilities which were advanced to it to a tune of Kshs. 65,850,000/= and the said facility was secured through properties Kericho Municipality Block 4/457 & 4/458 also registered in the Applicant’s name. That the borrower was expected to repay the facilities in monthly instalments as per the various letters of offer until payment in full, however, in breach of the said terms, the Applicant fell into arrears necessitating the 1st Respondent to set in motion the recovery process. That as at 12th July, 2023, the total outstanding amount in respect of the two facilities stood at Kshs. 26,486,990. 20/= and Kshs 26,789,426. 49/= respectively.

12. That on 19th October, 2021, the 1st Respondent pursuant to Section 90 (1) of the Land Act sent the Applicant a statutory demand notice in respect of the facility secured by LR NO. 631/1668 demanding for payment of a total of Kshs. 33,787,892. 70/=. Further that in respect of the facility secured by Kericho Municipality Block 4/457 & 4/458, the 1st Respondent sent out a statutory demand notice dated 7th October, 2021 demanding for payment of a total sum of Kshs. 33,341,243. 88/= and that the said statutory demand letters which were served to the Applicant through registered post to his last known address required him to remedy the default by repaying the outstanding amounts within 90 days.

13. He deponed that the Applicant having failed to honor the demand notices, the 1st Respondent issued a 40 days statutory demand dated 4th March, 2022 in respect of the two facilities pursuant to section 96 (2) of the Land Act but the Applicant still failed to pay the outstanding amount and consequently, the 1st Respondent instructed the Hillscape Valuers Limited to value the properties and a report prepared in compliance with Section 97 (2) of the Land Act. That subsequently, the 1st Respondent instructed the 2nd Respondent to issue the Applicant with a 40 days Notification of Sale dated 4th August, 2022 and a 45 days Redemption Notice which were duly served upon the Applicant personally but the said Applicant declined to accept service. That the suit property was then advertised for sale by auction vide a newspaper advertisement dated 3rd October, 2022 but before the properties could be sold on auction, the Applicant approached the court and obtained an order restraining the Respondents from disposing off the properties.

14. With regards to the allegation that the Applicant was not personally served with the notices of sale, the 1st responded reiterated that the said notices were served upon the Applicant personally and in as much as the said applicant declined to accept service of the notices, the said notices were pinned on the gate of the suit properties as confirmed by the Auctioneer’s affidavit of service dated 20th May, 2022.

15. He deponed that the valuation report annexed provided the correct market value of the suit property and although the Applicant alleged that the suit property was undervalued, he had not produced a valuation report to the contrary. Further, that there was no requirement under the law providing that a Chargor’s consent must be sought before valuation is conducted and that even if the said consent had been sought prior to the valuation, the same would not have changed the current market value of the property.

16. That the Applicant charged the matrimonial property with the understanding that the same risked being sold in the event of default hence his claim that it would be unfair to dispose the property could not hold waters. He further deponed that the said matrimonial property was valued before it was charged and treated as a commodity for sale in the event of default and therefore the Applicant’s averment that he stands to suffer irreparably were mere wishes.

17. He thus deponed that the Applicant’s Application had not met the threshold for grant of temporary injunction hence the said Applicant was underserving of the orders sought thus it ought to be dismissed with costs to the 1st Respondent.

18. Directions were given that the Application be canvassed by way of written submissions. Accordingly, the parties complied and filed their respective submissions which I shall summarize as follows:

19. The Plaintiff/Applicant in his written submissions dated 13th October, 2023 summarized the factual background of the matter before framing one issue for determination as to whether the Applicant had established a case that warranted the grant of Temporary injunctive orders at interlocutory stage.

20. The Applicant placed reliance on the case of Giella v Cassman Brown and Company Ltd (1973 EA) and Nguruman Limited v Jan Bonde Nielsen & 2 others CA No. 77 of 2012 [2014] eKLR, on the principles of granting interlocutory injunction to the effect that first a prima facie case with a probability of success must be showed, secondly that applicant will suffer irreparable injury, which would not adequately be compensated by an award of damages and thirdly that if the court is in doubt, it will decide an application on the balance of convenience.

21. With regard to the first limb as to whether the Plaintiff/Applicant had established a prima facie case with a probability of success, the Applicant relied on the definition of a prima facie case in Mrao Ltd v First American Bank of Kenya Ltd [2013] eKLR, to submit that the Plaintiff/Applicant had brought fourth a prima facie case whose facts should prove infringement by the 1st and 2nd Defendant/Respondents who intended to auction and sale the Plaintiff/Applicant’s asserts in contravention of the law.

22. The Plaintiff/Applicant further relied on the Provisions of section 56 of the Land Registration Act on forms and effect of charges, section 90 (3) of the Land Act on the remedies that a chargee may choose to exercise in case of a chargor’s default, Section 96 of the Land Act on the Chargee’s power of sale, Section 12 (1) and 15 of the Auctioneers Rules, 1997 on the prerequisites of an intended attachment and auction of movable and immovable properties by Auctioneers, and that disregarding any of the said auctioneers’ duties rendered an auction void from the beginning. That the 1st Respondent chose to exercise its statutory power of sale over the charged properties to recover the debt by first proclaiming, attaching and auctioning the plaintiff/applicant’s movable assets being work machinery, Rollers and TIPA Lorries to recover part of the debt owed.

23. That consequently, the 1st Defendant/Respondent conducted the auction of the said movable assets without the Plaintiff/Applicant’s involvement neither did the sai 1st Defendant/Respondent account for the sale of the said assets after the auction. Further that the 1st Defendant/Respondent failed to issue the Plaintiff/Applicant with an account of the value for which each machine was sold for and the amount recovered and deducted from the principle debt owing. Further that the said 1st Defendant/Respondent failed to issue the Plaintiff/Applicant with his statement of loan accounts to disclose the status of his account after recovering money from the said auction and deducting the same from the principal loan and interests owed.

24. It was his submissions that the 1st Defendant/Respondent extended the exercise of its statutory power of sale to sale the charged property by instructing the 2nd Defendant/Respondent to recover the outstanding debt through auction and sale of the Plaintiff/Applicant’s assets known as Kericho Municipality Block 4/457 & 4/458 comprising Tabsview Apartments and Title Number LR NO. 631/1668 comprising his matrimonial home. That it was trite law and imperative that all statutory provisions must be complied with in the process of auction and sale of immovable properties which includes, issuing a notification of sale of property and a notice of not less than 45 days to the chargor and his/her spouse in case of a matrimonial property to redeem the property by paying the debt. That the 1st and the 2nd Defendants/Respondents neither issued the Plaintiff/Applicant with a notification of sale of his properties nor the 45 days redemption notice before publishing the scheduled auction in a national gazette.

25. It was further submitted that the Plaintiff/Applicant’s spouse was not served with a notice of sale with regards to Title Number LR No. 631/1668 which is a matrimonial property in contravention of Section 96 (3) (c) of the Land Act. He submitted that the 1st and 2nd Defendants/Respondents did not make any effort to serve the said notices upon the chargor, the plaintiff/Applicant herein personally in contravention of Section 15 (c) of the Auctioneers Rules, 1997. He thus submitted that he had clearly demonstrated lack of service of the statutory notice of sale of immovable property and the 45 days redemption notices by the 1st and 2nd Defendants/Respondents hence the intended auction was being conducted in contravention of the law. Subsequently, that he had demonstrated infringement which showed that he had a prima facie case with merit hence he prayed that orders of temporary and permanent injunction sought in the instant application be issued.

26. Concerning the second limb as to whether the Plaintiff/Applicant will suffer irreparable injury, he placed reliance on the meaning of irreparable injury as was explained in the case of Pius Kipchirchir Kogo v Frank Kimeli Tenai [2018] eKLR where it was held as follows:“Irreparable injury means that the injury must be one that cannot be adequately compensated for in damages and that the existence of a prima facie case is not itself sufficient. The applicant should further show that irreparable injury will occur to him if the injunction is not granted and there is no other remedy open to him by which he will protect himself from the consequences of the apprehended injury.”

27. The Plaintiff/Applicant submitted that he stood to suffer irreparable harm if the 1st and the 2nd Defendants/Respondents were allowed to proceed with the auction of his properties as there was a risk of the same being sold of at a throw away price as he was disputing the valuation conducted by the 1st Defendant/Respondent as the said properties were greatly undervalued yet the true value for the two properties was Kshs. 125,000,000/=. Further that the current value of one property was higher than the combined outstanding loans and interests owed by the Plaintiff/Applicant thus the auction and sale of both properties by the 1st Defendant/Respondent was unfair, malicious and aimed at impoverishing the Plaintiff/Applicant.

28. It was the Plaintiff/Applicant’s submissions that Title Number LR No. 631/1668 had been the Plaintiff/Applicant’s matrimonial home for decades, if the same was sold off, he would suffer irreparable harm as the same could not be recovered once auctioned and sold off. Further that the property known as Kericho Municipality Block 4/457 & 4/458 comprising Tabsview Apartments when in perfect condition and full occupy state, earns monthly rental income of around Kshs. 1,000,000/= the proceeds which the plaintiff used to easily service the loan prior to the said property’s unfortunate collapse hence he also stood to suffer irreparable economic losses and damages should the said property be auctioned.

29. Consequently, the Plaintiff/Applicant submitted that he stands to suffer irreparable harm if the 1st Defendant/Respondent proceeds to exercise its statutory right of sale and auction his properties while on the other hand, the 1st Defendant/Respondent would not suffer any irreparable harm if the injunctive orders are granted.

30. Regarding the third limb on balance of convenience, the Plaintiff/Applicant submitted that despite the unintentional delay in servicing the loans, he was willing and ready to repay the outstanding loans and interests hence the grant of temporary injunctive orders would not occasion inconvenience on the 1st Defendant/Respondent. On the other hand, if the 1st Defendant/Respondent is allowed to proceed with the auction, the substratum of the suit shall have been defeated and the suit would be rendered nugatory in the event of success as there were various competing claims by the parties herein which required further interrogation by the court.

31. In conclusion, the Plaintiff/Applicant submitted that having demonstrated that he had met the threshold for grant on injunctive orders at the interlocutory stage, the Application dated 18th October, 2022 be allowed and the orders sought be granted as prayed.

32. The Respondents filed their written submissions dated 21st September, 2022 (sic) in opposition of the Application dated 18th October, 2023 whereby they summarized the factual background of the matter before framing one issue for determination as to whether the Applicant had met the threshold for the grant of temporary injunction.

33. They adopted the parameters for the grant of a temporary injunction as was stated in the case of Hannah Njeri Thube v Equity Bank Limited [2021] eKLR, the said parameters being establishing a prima facie case with a probability of success, that the applicant stands to suffer irreparable injury which cannot be compensated by an award of damages and that the balance of convenience tilts in favour of granting the injunction.

34. On the prima facie case with a probability of success, the Respondents submitted that the Applicant had not demonstrated that the Respondents had violated his rights for the reason that the Applicant was served with all the requisite statutory notices by way of registered post to his last known addresses being 2005-20200 Kericho in strict compliance with section 90 (1) and 96 (2) of the Land Act. Further that the 40 days’ Notice and the 45 days Redemption Notice were served upon the Applicant personally but he declined to acknowledge service. To buttress the above assertion, the Respondents relied on the decision in the case of Stek Cosmetics Limited v Family Bank Limited & another [2020] eKLR where the court observed as follows:“The applicant argues that statutory notices were not served by the 1st respondent as required by sections 90(1) and 96(2) of the Land Act. The 1st respondent on its part has attached notices addressed to the applicant and the chargors which are shown to have been sent to the applicant and the chargors by registered mail. Notices issued by the 2nd respondent are admitted to have been served. The applicant’s grievance is with regard to the 45 days’ notice which it argues was not dated. A perusal of the notice as well as the replying affidavit of the 1st respondent shows that the notice was served on 27th July 2019. The applicant further argues that the properties were undervalued and that if they were sold, they would not even clear the outstanding amount and urged the court to intervene.On the basis of these facts, I am not persuaded that the applicant has satisfied the test for granting a temporary injunction. That is to say the applicant has not demonstrated that he has a prima facie case with a probability of success. The applicant has not denied that it is in default. The 1st respondent issued notices as required by statute and the 2nd respondent served the 45 days’ notice and the notification of sale, thus complying with the law.”

35. Further reliance was placed on the decided case of Jiinue Holdings Limited v Housing Finance Corporation of Kenya & another [2017] eKLR where it was held as follows:“I am guided by the above principles and I am aware that I am not supposed to hold a mini trial or examine the merits of the case closely. Based on the material before the court, it is clear that the plaintiff had defaulted on the facility and that a statutory notice was issued. A 45-day redemption notice and notification of sale were issued. The plaintiff even sought indulgence from the 1st defendant after these notices were issued. I am aware that the trial court will have occasion to examine the evidence in totality and make its own findings. For the purposes of the application before me I am not persuaded that a prima facie case with a probability of success has been established. In view of the sequence laid down by the Court of Appeal in Nguruman Limited v Jan Bonde Nielsen & 2 Others [2014] eKLR I do not need to make a finding on whether the other principles have been established.”

36. That it was uncontested that there existed a debt of Kshs. 53,276, 416. 69/= that had not been paid and that the Plaintiff/Applicant conceded the same in the partial mediation agreement. He relied on the decided case of Quantum Petroleum Limited v Diamond Trust Bank Kenya Ltd [2017] eKLR, to submit that a debt is resolved by payment hence it would be unconscionable for the court to stop the 1st Respondent from exercising its statutory power when no unlawful conduct on the part of the 1st Respondent had been demonstrated. They thus urged the court to find that the Plaintiff/Applicant had not established a prima facie case.

37. On whether the Applicant had demonstrated irreparable loss, the Respondents submitted that the value of the suit property was clearly ascertainable from the valuation reports produced hence the Applicant could adequately be compensated in the event the court finds that the 1st Respondent wrongly exercised its statutory power of sale. The Respondent placed reliance on the decision in the case of Esso Kenya Limited v Mark Makwata Okiya [1972] eKLR, as cited with approval in Kitho Civil & Engineering Co. Ltd v National Bank of Kenya Linmited & another (civil Appeal (Application) E706 of 2021) [2023] where it was held that;“as it is settled law that where the remedy sought can be compensated by an award of damages, then the equitable relief of injunction is not available.”

38. Further reliance was placed on the decided case of HCCC Number 82 of 2006, Maltex Commercial Supplies Limited & Another v Euro Bank Limited (In Liquidation) as cited with approval in Co-operative Bank of Kenya & another v Kanut Odongo Oketch [2016] eKLR, where it was held that:“…Any property whether it is matrimonial or spiritual house, which is offered as security for loan/overdraft is made on the understanding that the same stands the risk of being sold by the lender if default is made on the payment of the debt secured.”

39. From the foregoing, the Respondents urged the court to find that the equitable remedy of injunction was not available to the Applicant.

40. Concerning the balance of convenience, the Respondents relied on the definition of the same as was explained in the case of Pius Kipchirchir Kogo (supra) where it was observed as follows:“The meaning of balance of convenience in favor of the plaintiff 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. Although it is called balance of convenience it is really the balance of inconvenience and it is for the plaintiffs to show that the inconvenience caused to them would be greater than that which may be caused to the defendants. Should the inconvenience be equal, it is the plaintiffs who suffer. In other words, the plaintiffs have to show that the comparative mischief from the inconvenience which is likely to arise from withholding the injunction will be greater than which is likely to arise from granting it.”

41. It was the Respondents submissions that apart from alleging that the suit property was matrimonial and that the Applicant had invested a lot in it, the 1st Respondent stood to suffer greatly should the court allow the Application as prayed since it was clear that there was an outstanding loan balance of Kshs. 53, 276, 416. 69/= that had not been paid and which continued to attract interest daily. That should the injunction be granted, the debt will grow and outstrip the value of the suit property leaving the 1st Respondent exposed to a possibility of never recovering its monies. Consequently, the Respondents submitted that the balance of convenience tilts against granting the injunction and they urged the court to so find.

42. In conclusion, it was submitted that the 1st Respondent had demonstrated why the Applicant did not deserve the orders sought in the instant application as he had not met the threshold for grant of temporary injunction hence they urged the court to dismiss the application with costs.

43. I have carefully considered the applicant’s Notice of motion, grounds, supporting affidavit and submissions. I have also considered the opposing affidavit and submissions by the Respondents and the statutory and case law relied on by both parties in their respective submissions.

44. The orders being sought in the motion is whether a mandatory temporary injunction order against the Defendants/Respondents should issue pending the hearing and determination of this suit. The law on the grant of interlocutory injunctions is set out under order 40(1) (a) and (b) of the Civil Procedure Rules 2010 which provides that:“Where in any suit it is proved by affidavit or otherwise—(a)That any property in dispute in a suit is in danger of being wasted, damaged, or alienated by any party to the suit, or wrongfully sold in execution of a decree; or [Rev. 2012] Civil Procedure CAP. 21 [Subsidiary] C17 – 165;(b)That the defendant threatens or intends to remove or dispose of his property in circumstances affording reasonable probability that the plaintiff will or may be obstructed or delayed in the execution of any decree that may be passed against the defendant in the suit, the court may by order grant a temporary injunction to restrain such act, or make such other order for the purpose of staying and preventing the wasting, damaging, alienation, sale, removal, or disposition of the property as the court thinks fit until the disposal of the suit or until further."

45. It should also be noted that the power exercised by the courts in an application seeking temporary injunctive orders is discretionary. The discretion is guided by the principles established in the case of Giella v Cassman Brown & Company Limited (1973) EA 358, where the court expressed itself on the conditions that a party must satisfy for the court to grant an interlocutory injunction as follows:“First, an applicant must show a prima facie case with a 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."

46. I have perused the pleadings relied on by both parties in the instant Application, On the first limb on whether the applicant has shown a prima facie case with a probability of success, I note that the applicant bases her claim on this limb on the existence of infringement by the 1st and 2nd Defendants/Respondents who intended to auction and sale the Plaintiff/Applicant’s asserts in contravention of the law.

47. That the 1st and the 2nd Defendants/Respondents did not issue the Plaintiff/Applicant with a notification of sale of his properties or the 45 days redemption notice before publishing the scheduled auction in a national gazette and further that the Plaintiff/Applicant’s spouse was not served with a notice of sale with regards to Title Number LR NO. 631/1668 which is a matrimonial property in contravention of Section 96 (3) (c) of the Land Act. That the 1st and 2nd Defendants/Respondents did not make any effort to serve the said notices upon the chargor, the plaintiff/Applicant herein personally in contravention of Section 15 (c) of the Auctioneers Rules, 1997 hence the intended auction was being conducted in contravention of the law.

48. The Respondents on the other hand submitted that the Applicant had not demonstrated that the Respondents had violated his rights for the reason that the Applicant was served with all the requisite statutory notices by way of registered post to his last known addresses being 2005-20200 Kericho in strict compliance with section 90 (1) and 96 (2) of the Land Act. That the 40 days’ Notice and the 45 days Redemption Notice were served upon the Applicant personally and but the said applicant declined to acknowledge service. Further that it was uncontested that there existed a debt of Kshs. 53,276, 416. 69/= that had not been paid and that the Plaintiff/Applicant conceded to that in the partial mediation agreement.

49. Without delving into the merits of the issue of service of the statutory notices, it is my opinion that this is a matter that can be settled when the court has had the opportunity to entertain both parties on what amounts to proper service. In my view, the issue of lack of service of statutory notices, raise a prima facie case with a chance of success. To that extent, I am persuaded that the applicant has satisfied the first limb to warrant grant of temporary injunction. This is because the issues raised cannot be settled at this interlocutory stage. It is important to note that a prima facie case with a probability of success is not necessarily one that must succeed.

50. As to whether the Applicant will suffer irreparable injury/loss that cannot be compensated by an award of damages if the application for temporary injunction is not allowed, the 1st Respondent contended that the value of the suit property was ascertainable from the valuation reports produced hence the Applicant could adequately be compensated in the event the court finds that the 1st Respondent wrongly exercised its statutory power of sale.

51. The Applicants on the other hand contended that he stood to suffer irreparable harm if the 1st and the 2nd Defendants/Respondents were allowed to proceed with the auction of his properties as there was a risk of the same being sold at a throw away price since the Plaintiff/Applicant was disputing the valuation conducted by the 1st Defendant/Respondent as the said properties were greatly undervalued yet the true value for the two properties was Kshs. 125,000,000/=. Further that the current value of one property was higher than the combined outstanding loans and interests owed by the Plaintiff/Applicant thus the auction and sale of both properties by the 1st Defendant/Respondent was unfair, malicious and aimed at impoverishing the plaintiff/applicant.

52. The Applicant also submitted that Title Number LR NO. 631/1668 has been the Plaintiff/Applicant’s matrimonial home for decades, if the same is sold off, the Plaintiff/Applicant would suffer irreparable harm as the same cannot be recovered once auctioned and sold off. Further that the property known as Kericho Municipality Block 4/457 & 4/458 comprising Tabsview Apartments when in perfect condition and full occupancy state earns a monthly rental income of around Kshs. 1,000,000/= the proceeds which the plaintiff used to easily service the loan prior to the said property’s unfortunate collapse hence the Plaintiff/Applicant stands to suffer irreparable economic losses and damages should the auction proceed as planned.

53. From the pleadings filed herein and the supporting documents, it is not disputed that the chargee intended to exercise its statutory power of sale on both LR No. 631/1668 (IR 67070) and Kericho Municipality Block 4/457 & 458, Tabsview Apartments. However, there is only one Valuation report annexed by the 1st Respondent with regards to LR NO. 631/1668 (IR 67070). There is no valuation report annexed with regards Kericho Municipality Block 4/457 & 458, Tabsview Apartments yet there was a 45 days redemption notice dated 10th August, 2022 by the 2nd Defendant/Respondent. The Applicant on the other hand has annexed a valuation report dated 30th August, 2022 with regards to Kericho Municipality Block 4/457 & 458, Tabsview Apartments that gives a market value of Kshs. 90,000,000/=, Mortgage value of Kshs. 72,000,000/= and forced sale value of Kshs. 67,500,000/=. I have also observed that by the time the Plaintiff/Applicant started being in default, he had repaid a substantial amount to the 1st Defendant/Respondent towards servicing the loan facilities.

54. I note that the one of the subject matters in this suit, that is LR NO. 631/1668 (IR 67070) is a matrimonial property that has been the Applicant’s home for decades. I am also aware that the fact that a property that has been offered as security for banking facilities is matrimonial home, does not provide immunity against such a property being realized in case of default. However, in a case where the alleged value of one property is more than the value of the two loans combined and can adequately be used to recover the said loan it cannot be said that the Applicant will not suffer irreparable loss or injury if both the properties are auctioned and especially the matrimonial home.

55. As to in whose favour the balance of convenience lies, it is the Respondents’ case that if the injunction is granted, it will inflict greater hardship on the 1st Respondent because the outstanding debt shall continue to accumulate interest that may grow and outstrip the value of the suit property. That if an injunction is refused and it is found that the Applicant was entitled to an injunction, the 1st Respondent can easily compensate the Applicant for any loss. The Applicant on the other hand submitted that if the 1st Defendant/Respondent is allowed to proceed with the auction, the substratum of the suit shall have been defeated and the suit would be rendered nugatory in the event of success as there were various competing claims by the parties herein which required further interrogation by the court.

56. Taking all the above into consideration, it is my opinion that the balance of convenience tilts in favour of the Applicant as he stands to lose not only the suit property but also a property that has been a matrimonial home for decades. Further it serves the interest of justice that this court exercises its discretion by conserving and preserving the suit property pending hearing and determination of the suit.

57. Consequently, I find and hold that the Applicant’s Application dated 18th October, 2022 is merited. It is hereby granted in terms of the following order:i.That pending the hearing and determination of this suit, a temporary order of injunction is hereby issued restraining the 1st and 2nd defendants/respondents through their employees, agents, servants, workers, or any other person whomsoever from auctioning, selling, disposing and transferring the subject matter of this application being properties described as LR NO. 631/1668 (IR 67070) and Kericho Municipality Block 4/457 & 458, Tabsview Apartmentsii.However, to avoid a situation where the applicant gets an injunction and goes to slumber, it is hereby ordered that the injunctive orders herein issued shall remain in force for a period not exceeding six (6) months from the date of this ruling. The applicant must ready this suit for hearing and determination within the said period.iii.Costs of the Motion to abide the outcome of the main suit.

DATED, SIGNED AND DELIVERED AT KERICHO THIS 14TH DAY OF DECEMBER, 2023. ………………………J.K. SERGONJUDGEIn the presence of:C/Assistant - RutohOndeng holding brief for Ongicho for ApplicantNo Appearance for the Respondent