https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/3463

Kariuki v Ringsview Apartment Ltd & another (Environment and Land Case Civil Suit E140 of 2021) [2026] KEELC 3463 (KLR) (5 June 2026) (Judgment) Neutral citation: [2026] KEELC 3463 (KLR) Republic of Kenya In the Environment and Land Court at Nairobi Environment and Land Case Civil Suit E140 of 2021 OA Angote, J June 5, 2026 Between Macharia Kariuki Plaintiff and Ringsview Apartment Limited 1st Defendant Kenya Commercial Bank Limited 2nd Defendant Judgment Background 1.Vide a Plaint dated 23rd April, 2021, the Plaintiff seeks as against the Defendants the following reliefs:i.A declaration that the charge on the property known as Land Reference No. 4858/11 in favour of Kenya Commercial Bank Limited, the 2nd Defendant, is illegal and fraudulent to the extent that it includes the property known as Apartment Number C6 erected on Land Reference No. 4858/11 Kileleshwa.ii.A permanent injunction restraining Kenya Commercial Bank Limited, the 2nd Defendant from exercising its remedies of a chargee on the property known as Land Reference No. 4858/11 to the extent that the said exercising of remedies shall include the property known as Apartment Number C6 erected on Land Reference No. 4858/11 Kileleshwa.iii.An order for partial discharge of the property known as Land Reference No. 4858/11 to discharge the property known as Apartment Number C6 erected on Land Reference No. 4858/11 Kileleshwa.iv.An order directing the 1st Defendant to issue a title, in form of a sub-lease in respect of the property known as Apartment Number C6 erected on Land Reference No. 4858/11 Kileleshwa in favour of Macharia Kariuki, the Plaintiff.v.Punitive and exemplary damages for the illegal and fraudulent actions of the Defendants.vi.Costs of this suit together with interest on all monetary awards.vii.Any other reliefs that the court shall deem necessary. 2.The Plaintiff’s case is that vide a sale agreement dated 31st October 2013, between him and the 1st Defendant, he purchased the property known as Apartment Number C6 erected on Land Reference No. 4858/11 Kileleshwa (hereinafter known as the suit property) at a price of Kshs. 11,500,000, which amount was paid in full. 3.It was averred that pursuant to the terms of the agreement, the 1st Defendant was obligated to process and issue title to the suit property in the form of a sub-lease in favour of the Plaintiff upon completion of the development. However, despite the development having been duly completed, the 1st Defendant failed and/or neglected to process and issue the said title. 4.The Plaintiff has since established, upon conducting a search at the Companies Registry, that in or about the year 2018, the 1st Defendant obtained a loan facility of Kshs. 90,000,000, secured against the property known as Land Reference No. 4858/11, being the parent title upon which the suit property is erected. 5.It was averred that the 1st Defendant has failed and/or neglected to service the said loan facility, and as a consequence, the 2nd Defendant has threatened to, and/or has commenced steps to, exercise its statutory remedies as a chargee. 6.The Plaintiff avers that the 1st Defendant fraudulently and illegally caused the suit property to be charged to the 2nd Defendant. In particular, that the 1st Defendant misrepresented to the 2nd Defendant that it had the requisite authority to charge the property known as Land Reference No. 4858/11, including the suit property. 7.Further, that it failed to disclose that the suit property, being part of the charged property, had already been sold and could not lawfully be subjected to a further charge without the Plaintiff’s consent. Notwithstanding this, it was averred that it proceeded to charge the property without seeking or obtaining such consent, thereby failing to comply with due process in the creation of the charge. 8.The Plaintiff further asserts that the suit property is presently occupied by a tenant and that neither he nor the tenant has received any statutory or other notice from the 2nd Defendant. It was urged that as a result of the Defendants’ actions, the Plaintiff has been subjected to unnecessary litigation and attendant prejudice. 9.In response, the 1st Defendant filed a Defence and Counterclaim dated 7th November 2022, in which it denied the Plaintiff’s claims as pleaded in the Plaint. It conceded that there was indeed a sale agreement between it and the Plaintiff dated 31st October, 2013 for the sale and purchase of Apartment Unit No. C6 (suit property) erected on Land Reference No. 4858/11 Kileleshwa at a lease premium of Kshs 11,500,000. 10.According to the 1st Defendant, whereas indeed it was obligated to process title in the form of a sub-lease, the same was conditional on full payment of the purchase price by the Plaintiff. It contended that it was in fact the Plaintiff who frustrated the sale agreement by failing, refusing and/or neglecting to pay the full purchase price for the suit property. 11.Further, that the 1st Defendant failed to furnish the Vendor’s Advocates, Messrs. Mulondo, Oundo, Muriuki & Co. Advocates, with the requisite completion documents, including his identification card details, a copy of his KRA PIN, and his contact particulars. Additionally, it was alleged that the Plaintiff did not settle the necessary legal fees and stamp duty payable to the said advocates, thereby impeding the completion of the transaction. 12.The 1st Defendant conceded that it obtained a loan facility Kshs. 90,000,000.00 from the 2nd Defendant, which was secured by a charge over Land Reference Number 4858/11 Nairobi. It maintained that the Plaintiff’s consent was not required prior to the creation of the charge, as the Plaintiff had failed to complete payment of the purchase price and was never registered as the owner of the suit property. Consequently, it was averred that the Plaintiff did not acquire any proprietary or beneficial interest capable of requiring his consent. 13.The 1st Defendant further stated that it made full disclosure of its indebtedness to the 2nd Defendant to all purchasers of the apartment units, including the Plaintiff, and had actively engaged them on various options for repayment of the loan and the discharge of their respective units. It admitted the fact that there has been a tenant living on the suit property who was brought by the Plaintiff and from whom the Plaintiff has been collecting rent. 14.Vide the Counterclaim, the 1st Defendant affirmed that it began development of Ringsview Apartments in Kileleshwa on or about July 2011. In order to finance the project, it obtained a facility of Kshs. 118,000,000 from I&M Bank on or about 7th January, 2013 and the said loan was secured by a Charge over the project land otherwise known as Land Reference Number 4858/11 Nairobi and a Debenture and that the loan facility was to be serviced through the funds obtained from the purchasers of the apartment units. 15.According to the 1st Defendant, the project was completed in June 2014 and a Certificate of Practical Completion issued on 30th June 2014. Thereafter, the project encountered financial difficulties when one Vijay Morjaria allegedly colluded with a contractor, Vishnu Builders and Developers Limited, to defraud the 1st Defendant of eight apartment units through direct payments and/or set-off arrangements made without its approval. 16.As a consequence, the 1st Defendant instituted proceedings in Nairobi ELC Case No. 782 of 2014, Ringsview Apartments Limited vs Vishnu Builders and Developers Limited and Vijay Morjaria, seeking to recover the purchase price. 17.It was further pleaded that the fraudulent diversion of funds, amounting to Kshs 92,000,000 precipitated a financial crisis, and that by 2017, the 1st Defendant had defaulted on its loan obligations to I&M Bank Limited, thereby exposing the project to the risk of statutory sale. In 2018, the loan was classified as non-performing and transferred to the bank’s recovery department, which instructed auctioneers to seek buyers. 18.It was contended by the 1st Defendant that faced with the imminent loss of the project, the 1st Defendant sought legal advice from MMC Asafo Africa and Igeria & Ngugi Advocates, who advised that alternative financing was necessary; that through their intervention, the 1st Defendant secured a mortgage facility of Ksh 90,000,000.00 from the 2nd Defendant, which was applied to settle the outstanding loan with I&M Bank Limited, leading to a discharge of charge on 6th November 2018. 19.As security for the new facility, the 2nd Defendant required, inter alia, a first legal charge over L.R. No. 4858/11, guarantees and indemnities by the directors, and charges over multiple apartment units within the project. 20.The 1st Defendant further contended that, under Clause 10.2 of the sale agreement, any alleged breach by the vendor required the purchaser to issue a twenty-one (21) day notice specifying the default. It was asserted that the Plaintiff never issued such notice and that the claims of default were an afterthought. 21.Consequently, it was urged, the Plaintiff lacks any basis to seek the court’s protection, particularly as he was in breach of the sale agreement as aforesaid. Notwithstanding these breaches, the Plaintiff took possession of the suit property without the 1st Defendant’s authority and has remained in unlawful occupation. 22.It was averred by the 1st Defendant that the valuation report dated 9th April 2018 reveals that the Plaintiff has derived an average monthly benefit of Ksh 85,000 since June 2014 and that on that basis, the 1st Defendant has suffered mesne profits amounting to Kshs. 11,592,000.00, together with additional losses arising from deprivation of use and wear and tear of the property. 23.Accordingly, the 1st Defendant seeks the following reliefs in its counter claim:i.A declaration that the Plaintiff is in breach of the sale agreement dated the 31st October, 2013.ii.Special damages in the sum of Kshs 11, 592, 000/= being mesne profits and interest accrued thereof from June 2014 to date.iii.An order for specific performance directed at the Plaintiff requiring him to pay the balance of the purchase price for the suit property.iv.In the event of failure to comply with prayer (c)above, an order directed at the Plaintiff requiring him to give up vacant possession of the suit property.v.General damages for breach of contract.vi.Costs of the suit.vii.Any other orders that this Honourable Court may deem fit and just to grant. 24.The 2nd Defendant filed its Defence on 12th June, 2023 in which it denied the assertions contained in the Plaint. It averred that, pursuant to a request made by the 1st Defendant and accepted by it, the 2nd Defendant took over the outstanding loan debt that had been due to I & M Bank and exercised its right of takeover in that regard. 25.It was further pleaded that upon settlement of the said debt, the suit property being the security for the previous charge, was duly charged in favour of the 2nd Defendant. Subsequently, after processing the 1st Defendant’s application, the 2nd Defendant offered the 1st Defendant a mortgage facility of Kshs. 90,000,000 on the terms set out in the Letter of Offer dated 25th July 2018 and that upon acceptance of those terms, the 2nd Defendant proceeded to advance the said sum of Kshs. 90,000,000 to the 1st Defendant’s loan account. 26.According to the 2nd Defendant, the loan was to be repaid over a period of ten (10) years from the date of drawdown, in monthly instalments of Kshs. 1,481,790. However, the 1st Defendant fell into default in servicing the loan. Following this default, it was averred that the 2nd Defendant issued several correspondences urging compliance with the agreed terms, but these went unheeded. Consequently, the 2nd Defendant issued a 90-day statutory notice from the 28th April 2021, demanding repayment in accordance with Sections 96(2) and (3) of the Land Act, 2012. 27.The 2nd Defendant averred that it duly served the statutory notices upon the 1st Defendant, being the registered proprietor of the suit property, and maintained that it was under no legal obligation to serve any notices upon the Plaintiff. It contended that, having not entered into any contractual relationship with the Plaintiff, there existed no privity of contract between them, and consequently, the Plaintiff had no cause of action against it. 28.It maintained that at no point did the Plaintiff’s alleged interest in the suit property come to its attention, and that it acted in good faith throughout. Hearing and Evidence 29.The matter proceeded for hearing on 29th September, 2025. The Plaintiff testified as PW1. He adopted his witness statement dated 23rd April, 2021 as his evidence in chief and produced the documents of an even date as PEXHB1 and further list of documents as PEXHB2. 30.It was his oral evidence that he purchased the apartment outright in cash and paid the full purchase price in three instalments, as acknowledged in both the letter of offer and the sale agreement. He further testified that the property was charged only after he had completed payment and taken possession, and that the purchase price of the property was Kshs. 11, 500,000.00 and both he and the two directors of the 1st Defendant executed documents confirming that the full amount had been paid. 31.PW1 further testified that he did not pay stamp duty, as the completion documents had not been availed to him. He also conceded that he did not issue any notice in accordance with clause 10.2 of the agreement, nor did he settle all the requisite fees as stipulated under clause 8.2. Additionally, he confirmed that at the time the charge was created, the title to the property was registered in the name of Ringsview. 32.During re-examination, Pw1 stated that he took occupation suit premises in 2013 and acknowledged that the valuation report indicated that some of the units had already been sold. He further confirmed that at the time of purchase, he was aware that the property had been charged to I & M Bank. 33.He testified that clause 2.4 of the agreement reflects that the balance of the purchase price, being Kshs 4,500,000.00, had been paid. He also pointed out that a sum of Kshs 7,000,000.00 was acknowledged in the letter of offer, while additional payments of Kshs 5,000,000.00 and Kshs 2,000,000.00 were similarly acknowledged. 34.He maintained that he paid the full purchase price in cash, which was duly acknowledged, and added that he was advised not to pay the stamp duty and legal costs at the time. He nonetheless stated that he remains ready and willing to settle those amounts. PW1 explained that the units were allocated to him by Lucy Maina, who asked him to choose between Unit C05 and C06, and that he selected Unit C06. He noted, however, that while the letter of offer refers to Unit C05, the sale agreement identifies the unit as C06. 35.Upon being questioned by the court, he added that he was well acquainted with the 1st Defendant’s directors, which informed his decision to proceed with the purchase. 36.DW1 was Dr Mburu Gikonyo, He adopted his witness statement dated the 7th December, 2022 as his evidence in chief. He stated that he is a Director of the 1st Defendant, duly authorised and conversant with the facts of the matter, and therefore competent to testify. 37.He explained that the 1st Defendant entered into a sale agreement with the Plaintiff dated 31st October 2013 for the sale of apartment C6 erected on L.R. No. 4858/11 Kileleshwa at a purchase price of Kshs. 11,500,000.00, and that the issuance of a sub-lease was conditional upon full payment of the purchase price. 38.According to him, the Plaintiff frustrated the agreement by failing, refusing and/or neglecting to pay the full purchase price, and further failed to provide his identification documents, KRA PIN, and contact details to the Vendor’s Advocates, Messrs. Mulondo, Oundo, Muriuki & Co. Advocates, as well as failing to pay the requisite legal fees and stamp duty, thereby breaching the terms of the agreement. 39.He explained that the 1st Defendant had obtained loan facilities secured over L.R. No. 4858/11, including a facility of Kshs. 90,000,000.00 from the 2nd Defendant, and that the Plaintiff’s default exposed the 1st Defendant to difficulties in servicing the loan. He stated that the 1st Defendant had lawful authority to charge the suit property and denied any fraud or illegality in the securitisation of the loan, maintaining that the Plaintiff had no proprietary or beneficial interest in the suit property, having failed to complete payment, and that his consent was therefore not required prior to the charge. 40.He further stated that the 1st Defendant disclosed its indebtedness to purchasers and engaged them on repayment options, and that the Plaintiff’s expectation of obtaining a sub-lease without fulfilling his obligations was misplaced. He stated that a tenant introduced by the Plaintiff occupied the suit property and that the Plaintiff had been collecting rent therefrom. He also stated that the court lacked jurisdiction in light of an arbitration clause under Clause 21 of the sale agreement, and that the suit was an abuse of process, founded on non-disclosure, misrepresentation, and falsehoods. 41.He stated that the development project, Ringsview Apartments, commenced around July 2011 and was financed through loan facilities, including Kshs. 118,000,000.00 from I&M Bank Limited secured by a charge and debenture, with the expectation that the loan would be serviced through proceeds from purchasers. He stated that the project was completed in June 2014, but later faced financial challenges arising from alleged fraudulent dealings involving certain purchasers and contractors, leading to loss of funds and eventual default on the loan in 2017. 42.Following the default, the 1st Defendant sought alternative financing and obtained a facility of Kshs. 90,000,000.00 from KCB Bank Limited to settle the I&M Bank loan, which was secured by a charge over L.R. No. 4858/11 and various apartment units. He stated that the Plaintiff never issued any default notice under clause 10.2 of the sale agreement and that any claims of breach were an afterthought. 43.He stated that the Plaintiff had no lawful basis to seek the court’s protection, was in unlawful occupation of the suit property and had derived benefit therefrom by collecting rent estimated at Kshs. 85,000.00 per month since June 2014. He stated that as a result, the 1st Defendant had suffered loss quantified at Kshs. 11,592,000.00 as mesne profits, together with interest at commercial rates. 44.It was his evidence on cross-examination that the Plaintiff is his good friend. He stated that although the Plaintiff purchased the property, he did not personally hand over the completion documents. He added that he only took over the company in 2018. 45.It was his further evidence on cross-examination that, although the letter of offer was not signed by him, it was issued on the letterhead of Ringsview. He confirmed that he was aware the Plaintiff has been in occupation of the premises since 2013 and that Lucy Maina had previously served as a director of the 1st Defendant. 46.He further stated that they had no issue with the charge in favour of the 2nd Defendant, maintaining that it was lawfully executed and that the default was admitted. However, he alleged that, notwithstanding the bank’s entitlement to exercise its statutory power of sale, it acted in collusion with the purchasers through their advocates. He stated that they have learned that Kenyariri Advocate held meetings with the bank without their knowledge or involvement. 47.During re-examination, he stated that they permitted occupation of the premises after the contractor took over and denied them access, which compelled them to seek court intervention and obtain orders. He explained that they subsequently allowed purchasers who had made partial payments to take possession of their respective units. 48.He further clarified that a cash buyer is one who does not rely on financing, although he noted that cash payments carry inherent risks and, in his view, should ideally be made through RTGS or bank deposits. He stated that the company had obtained a loan from KCB and would have serviced it were it not for what he described as collusion between the advocates and the purchasers. 49.He also admitted that he did not inquire from Lucy whether she had received payment from the Plaintiff. Nonetheless, he confirmed that he executed the agreement, adding that in the course of his work he regularly handles multiple documents and reads each page before signing. 50.DW2 was Beatrice Chesero, a platinum banker at KCB. She adopted her witness statement dated the 23rd January, 2024 as her evidence in chief and produced the documents of an even date as 2DEXHB1. 51.Briefly, her evidence was that the 1st Defendant expressed interest in obtaining a loan facility of Kshs. 90,000,000/= from the 2nd Defendant, to be secured by the property known as L.R. No. 4858/11. Upon processing and considering the application, the 2nd Defendant offered the 1st Defendant a mortgage facility of Kshs. 90,000,000 on the terms and conditions set out in the letter of offer dated 25th July 2018. The facility was secured by a charge over L.R. No. 4858/11, Ring Road, Kileleshwa. 52.The loan was to be paid within 10 years from the date of the drawdown in monthly instalments of Kenya Shillings 1, 481, 090 until payment in full. The 1st Defendant defaulted in repayment of the monthly instalments from time to time and as at 9th March, 2021, their account went into arrears to the tune of Kshs 4, 454, 987. 49. 53.Pursuant to the default, the 2nd Defendant issued several correspondences urging the 1st Defendant to comply with the agreed repayment terms, but these went unheeded. Consequently, on 26th April 2021, the 2nd Defendant issued a 90-day statutory notice as from 28th April 2021, demanding payment in accordance with Section 96(2) of the Land Act. 54.The 1st Defendant failed to settle the arrears, leaving the 2nd Defendant with no option but to recall the entire outstanding debt and proceed to exercise its statutory power of sale pursuant to Sections 90(1) and (3)(e), read together with Section 96(2) of the Land Act, which culminated in the filing of the present suit. She maintained that at the time of conducting its due diligence, the existence of the Plaintiff had not come to its attention. 55.On cross-examination, she testified that the charge was created in 2018. She confirmed that she had not seen the sale agreement between the Plaintiff and the 1st Defendant, and that the 1st Defendant had not disclosed that apartment C06 had been sold. Consequently, they were unaware that the unit had been occupied, as no information was provided regarding leased apartments. She further stated that they took over the loan from I & M Bank in its existing form, noting that it was a global facility. In addition, she explained that some apartments had since been discharged, with partial discharges being effected upon proof of payment. 56.It was her evidence on re-examination that the loan was for the entire block, and all the apartments in the letter of offer were charged. 57.Upon being cross-examined by the court, she stated that the charge was created over specific apartments. She explained that they were financing Ringsview following the takeover of the development, and that purchasers were expected to make payments into an escrow account, which, according to her, was not done. She added that, in the circumstances, they would proceed to sell the property. Submissions 58.The Plaintiff filed submissions on the 4th December, 2025. Counsel submitted that pursuant to Section 107 of the Evidence Act and guided by the Court of Appeal decision in Jennifer Nyambura Kamau vs Humphrey Mbaka Nandi [2013]eKLR, the burden of proof lays on he who alleges. Similarly, as expressed in Daniel Otieno Migore vs South Nyanza Sugar Co Ltd [2018]KEHC 5465 (KLR) parties are bound by their pleadings and any pleadings at variance with the evidence must be rejected. Also cited was Munyu Maina vs Hiram Gathitha Maina (2013)KECA 94 KLR. 59.It was noted that the Plaintiff testified and proved payment of the entire purchase price of Kshs 11, 500,000/= which was acknowledged by Lucy Maina the 1st Defendants director and set out in the sale agreement which DW1 acknowledged signing as well as in the offer letter. Equally, no demand was ever sent to him to vacate the apartment. 60.Counsel submitted that it is undisputed that the 1st Defendant procured a loan facility over the Plaintiff’s apartment without notice, thereby violating the Plaintiff’s proprietary rights. It was argued that the 2nd Defendant cannot enforce its rights over the entire parcel in disregard of the Plaintiff’s interest in Apartment C6, which the Plaintiff fully purchased and has occupied for over 13 years without any demand being made. Counsel further contended that the assertion that the loan was secured over the whole parcel is untenable, as the letter of offer refers only to specific units, and on that basis, the Plaintiff is entitled to a partial discharge of its apartment. 61.As to costs, it was submitted that costs follow the event and should in this case be borne by the Defendants. Cited in this regard was Cecilia Karuru Ngayu vs Barclays Bank of Kenya & Anor [2016]eKLR and RoseMary Wairimu Munene Ex-parte Applicant vs Ihururu Part Farmers Co-operative Society Limited. [2014] eKLR. 62.The 1st Defendant filed submissions on 28th April 2026, in which counsel argued that the Plaintiff did not acquire any proprietary or beneficial interest in the suit property, having failed to pay the full purchase price, provide identification details, and settle the requisite stamp duty and legal fees. 63.It was further submitted that the Plaintiff did not comply with clause 8.2 of the sale agreement regarding maintenance-related expenses. Counsel relied on Section 43 of the Land Registration Act to contend that no disposition of land can take effect unless duly registered, and on that basis argued that equity could not come to the Plaintiff’s aid, rendering him undeserving of the remedy of specific performance. Reliance in this regard was placed on the case of Mwaura vs Keen[2025]KEELC 7319. 64.It was stated that had the Plaintiff undertaken due diligence, he would have discovered the charge over the property by I&M Bank and having neglected to protect his interests at the time of the purchase, he cannot ask the court to shield him from consequences that were avoidable. Reliance was placed on the case of Dina Management Limited vs County Government of Mombasa & 5 Others (Petition 8 (E010) of 2021) [2023] KESC 30 (KLR) (21 April 2023) (Judgment) on the importance of due diligence. 65.As regards the second charge in favor of the 2nd Defendant, it was urged that the same was legitimate. They were unable to repay the loan to I & M bank leading them to enter into a second charge. As a condition of the charge the 2nd Defendant required security in the form of among others charges over specific parcels. As a result of the Plaintiffs breach and negligence in fulfilling his obligations, ownership remains vested in the 1st Defendant which was entitled to use its property as security for financing. 66.It was urged that the 1st Defendant is entitled to the reliefs sought in its counterclaim including mesne profits as guided by Section 13 of the Civil Procedure Act and the Court of Appeal case in Attorney General vs Hala Meat Products Limited [2016] eKLR. 67.It was stated that the sum of 12, 249,000,00 from June 2014 to date is reasonable and justifiable and grounded in evidence. Reliance was placed on Kenya Hotel Properties Limited vs Willesden Investments Limited & Kenya Revenue Authority [2018] KECA 832 (KLR). Additionally, the 1st Defendant is entitled to specific performance and in the alternative vacant possession as well as general damages for the breach occasioned by the Plaintiff. 68.It was urged that the 1st Defendant having established its case, it is entitled to costs pursuant to Section 27 of the Civil Procedure Act and guided by the decision in Hellen Wandiga Ngeru vs National Land Commission [2020] eKLR. 69.The 2nd Defendant filed its submissions on 3rd March 2026. Counsel submitted that the law is settled that a party challenging the exercise of a statutory power of sale must first establish a prima facie case against the chargee itself, and not merely against the borrower. In that regard, reliance was placed on the principles in Giella vs Cassman Brown Limited (1973) EA 358, where the court held that an applicant must demonstrate a prima facie case with a probability of success, that he will suffer irreparable injury not compensable by damages, and, if in doubt, that the matter be decided on a balance of convenience. 70.Counsel further cited Nguruman Limited vs Jane Bonde Nielsen and 2 Others NRB CA Civil Appeal No. 77 of 2012 [2014] eKLR for the proposition that these conditions are distinct and must be satisfied sequentially, and Mrao Ltd vs First American Bank of Kenya Ltd & 2 Others [2013] eKLR for the definition of a prima facie case as one disclosing an apparent infringement of a right. 71.Counsel contended that it is undisputed that L.R. No. 4858/11 was registered in the name of the 1st Defendant at the time the loan facility was advanced, and that upon due diligence, the 2nd Defendant advanced the facility and registered a legal charge, thereby acquiring a proprietary interest in the land. In contrast, the Plaintiff relies on a private purchase arrangement with the 1st Defendant, yet no sub-lease was issued and no interest was registered in his favour, rendering him merely a purchaser with a contractual claim. 72.It was further submitted that the Plaintiff admitted knowledge that the property had previously been charged to I & M Bank and was unaware whether the loan had been serviced, thus transacting with full awareness of the encumbrance. Having assumed that commercial risk, the Plaintiff cannot shift the burden to the lender who relied on the register. 73.Counsel argued that the Plaintiff failed to conduct due diligence and is therefore the author of his own misfortune, and cannot restrain the 2nd Defendant from exercising its statutory power of sale. Emphasis was placed on the principle that a registered charge takes priority over unregistered interests, and that a purchaser cannot elevate a contractual expectation into a proprietary right capable of defeating a registered security. 74.It was further argued that the Plaintiff neither pleaded nor proved fraud against the 2nd Defendant, and in the absence of fraud, a registered charge cannot be impeached. Moreover, any purchase monies paid were remitted to the 1st Defendant and not to the bank, and thus any grievance lies against the vendor and not the lender. Counsel relied on the dicta in Mrao Ltd vs First American Bank of Kenya Ltd(supra) to caution against undermining commercial lending. 75.On the validity of the charge, counsel submitted that the 2nd Defendant took over and discharged the outstanding debt owed to I & M Bank, and a new facility was created through a duly executed letter of offer, supported by consideration and intention to create legal relations. 76.It was argued that courts will not rewrite contracts, as affirmed in National Bank of Kenya Ltd vs Pipe Plastic Samkolit (K) Ltd & Another [2002] EA 503 and Margaret Njeri Muiruri vs Bank of Baroda (Kenya) Limited (2014) eKLR). Further reliance was placed on Co-operative Bank of Kenya Limited vs Patrick Kangethe Njuguna & 5 Others 2017] eKLR, on the nature of a charge as an instrument creating enforceable rights. 77.On whether the 2nd Defendant is entitled to exercise its statutory power of sale, counsel submitted that as at 26th April 2021, the account was in arrears of Kshs 7,536,987.26/=, and after unsuccessful demands, the 2nd Defendant issued a statutory notice under Sections 90(1) and 90(3)(e) of the Land Act on 28th April 2021 indicating arrears of Kshs 92,292,616/=. 78.It was emphasized that there was no obligation to serve the Plaintiff, who was neither a chargor nor guarantor. Counsel further relied on Rupa Kenya Limited & 2 others vs Kenya Commercial Bank Limited (Civil Appeal 330 of 2014) 2023 KЕСА and Wangoma v Equity Bank Limited & another [2025] КЕНС 729 (KLR) to argue that once the statutory power of sale accrues, the mere filing of a suit does not extinguish it, provided due process is followed. 79.On the reliefs sought, counsel submitted that the Plaintiff has not met the threshold for a permanent injunction as set out in Kenya Power and Lighting Company vs Sheriff Molana Habib [2018] eKLR. As expressed in Stars and Garters Restaurant & Another vs National Bank of Kenya Ltd [2019] eKLR, it was urged, a dispute as to the amount due is not a ground for restraining a statutory sale. Any loss alleged by the Plaintiff is purely financial and compensable in damages against the vendor. Once land is offered as security, it becomes a commodity for sale upon default, and a purchaser cannot claim a superior position to that of the chargee. 80.It was urged that public interest considerations dictate that banks, which lend out public funds, must be able to rely on the certainty and enforceability of securities, as this is essential to maintaining stability in the financial system. Reliance was placed on John Nduati Kariuki T/A Johester Merchants vs. National Bank of Kenya Ltd Civil Application No. Nai. 306 of 2005 [2006] 1 EA 96 to underscore that borrowers cannot resist realization of securities after default. 81.Counsel further opposed the prayer for partial discharge of Apartment C6, submitting that it would unlawfully fragment the security and amount to rewriting the charge instrument, contrary to established principles on sanctity of contract. 82.In conclusion, counsel submitted that the Plaintiff has failed to demonstrate any enforceable legal right against the 2nd Defendant, has not established irreparable harm, and has not met the threshold for injunctive relief. The claim for exemplary damages was also termed unsustainable, as the 2nd Defendant acted within the law. It was therefore urged that the Plaint discloses no sustainable cause of action against the 2nd Defendant and ought to be dismissed with costs. Analysis and determination 83.Having considered the pleadings, evidence and submissions, the issues that arise for determination are:i.Whether or not the Plaintiff acquired a valid and enforceable interest in Apartment C6 erected on L.R 4858/11 Kileleshwa?ii.Whether the charge over Apartment C6 on L.R 4858/11, Kileleshwa is lawful and enforceable against the Plaintiff?iii.What are the appropriate reliefs to issue? Whether or not the Plaintiff acquired a valid and enforceable interest in Apartment C6 erected on L.R 4858/11 Kileleshwa? 84.The Plaintiff instituted this suit against the Defendants seeking inter-alia, a declaration that the charge over the parcel of land known as L.R 4848/11 is fraudulent to the extent that it includes the property known as C6 erected thereon, permanent injunctive orders restraining the 2nd Defendant from exercising its statutory power of sale in respect of apartment C6 and an order of partial discharge over property C6. 85.He also seeks an order directed to the 1st Defendant to issue a title, in the form of a sub-lease in respect of the property C6 as well as punitive and exemplary damages. It is the Plaintiffs case in this regard that sometime in 2013, he entered into a sale agreement with the 1st Defendant over apartment C6. He paid the full purchase price and was granted possession. 86.Pursuant to the agreement, the 1st Defendant was to process the title in the form of a sub-lease from property in his favour. He however realized that in 2018, the 1st Defendant in what he terms an illegal move, for want of his consent, obtained a loan facility from the 2nd Defendant which is now in default and the 2nd Defendant intends to exercise its statutory power of sale over several apartments including his. 87.The Plaintiff adduced into evidence the letter of offer dated the 13th August, 2012, sale agreement dated 31st October, 2013, copy of CR12 for Ringsview Apartment Limited, emails from the Director of the 1st Defendant, credit facility from Equity Bank to the Plaintiff, notification of payment from the 1st Defendant to the Plaintiff dated 20th September, 2012. 88.The 1st Defendant admits that it entered into an agreement with the Plaintiff. However, it contends that the Plaintiff failed to discharge his obligations under that agreement, particularly by not paying the full purchase price and failing to settle the requisite legal fees and stamp duty. On that basis, the 1st Defendant asserts that the Plaintiff’s continued possession of the apartment is unlawful. It further maintains that any rent collected by the Plaintiff from the property has been wrongfully received and rightfully belongs to the 1st Defendant. 89.It was maintained that the Plaintiff’s consent was not required to charge the property, as he had failed to complete payment of the purchase price and was therefore never registered as the owner of the suit property. In any event, the Plaintiff was at all material times aware that the property was charged and had actively engaged the 2nd Defendant on various options for discharging their respective units. 90.The 1st Defendant seeks vide the counterclaim, inter-alia, a declaration that the Plaintiff is in breach of the agreement between them, special damages, specific performance and in default, vacant possession. It adduced into evidence a letter of authority from the 1st Defendant dated 2nd May, 2021, sale agreement dated 31st October, 2012, valuation report by Transcounty Valuers Limited, correspondence, documents regarding the mortgage facility with KCB Bank, charge dated 31st October, 2017. 91.The 2nd Defendant maintains that it is a lawful chargee and at the time thereof it was unaware of the Plaintiff claim; that the loan is in default and that it intends to exercise the remedies open to it having already issued the 1st Defendant with the requisite notices. It adduced into evidence the letter of offer dated 25th July, 2018, notification of default dated 9th March, 2021, notification of default dated 13th April, 2021, statutory notice dated 28th April, 2021, and the statement of account dated 18th December, 2023. 92.It is trite that he who alleges must prove. Under Sections 107(1) and (2) and 109 of the Evidence Act, the burden lies upon the party who seeks the court to believe in the existence of a particular fact or legal right to establish the same. Section 112 imposes a further burden upon a party to prove facts that are especially within that party’s own knowledge. 93.In Mumbi M'Nabea vs David M. Wachira [2016] KECA 773 (KLR), the Court of Appeal reiterated that the standard of proof in civil cases is on a balance of probabilities. The court explained that it must evaluate the oral, documentary and other evidence presented by the parties and determine which version of events is more probable than not. The court relied on the exposition in Maria Ciabaitaru M’mairanyi & Others vs Blue Shield Insurance Company Limited, where it was observed that while the overall legal burden rests on the party asserting a claim, the burden of proving any particular fact may shift to the party who wishes the court to believe in its existence. 94.Similarly, in Palace Investments Limited vs Geoffrey Kariuki Mwenda & Another [2015] KECA 616 (KLR), the Court of Appeal explained that proof on a balance of probabilities does not require absolute certainty, but it must establish a reasonable degree of probability. A party succeeds if its version is shown to be more probable than that of the opposing party. Where the evidence on both sides is evenly balanced, the party bearing the burden of proof must fail. 95.It is also notable that allegations of fraud have been expressly pleaded in the matter. In law, such allegations attract a heightened burden of proof, requiring the party so asserting to not only plead the particulars with specificity but also to strictly prove the same to a standard higher than a balance of probabilities, though not as high as beyond reasonable doubt. 96.Speaking to this, the Court of Appeal in Demutila Nanyama Pururmu vs Salim Mohamed Salim [2021] eKLR relying on an earlier exposition by Vijay Morjaria vs Nansingh Madhusingh Darbar & Another [2000] eKLR noted thus:“It is well established that fraud must be specifically pleaded and that particulars of the fraud alleged must be stated on the face of the pleading. The acts alleged to be fraudulent must, of course, be set out, and then it should be stated that these acts were done fraudulently. It is also settled law that fraudulent conduct must be distinctly alleged and distinctly proved, and it is not allowable to leave fraud to be inferred from the facts.” 97.As regards the standard of proof, the Court of Appeal in Demutila Nanyama Pururmu vs Salim Mohamed Salim (supra) looked to its earlier decision in Kinyanjui Kamau vs George Kamau [2015] eKLR wherein it had held:“…It is trite law that any allegations of fraud must be pleaded and strictly proved. See Ndolo vs Ndolo (2008) 1 KLR (G & F) 742 wherein the Court stated that: “...We start by saying that it was the respondent who was alleging that the will was a forgery and the burden to prove that allegation lay squarely on him. Since the respondent was making a serious charge of forgery or fraud, the standard of proof required of him was obviously higher than that required in ordinary civil cases, namely proof upon a balance of probabilities; but the burden of proof on the respondent was certainly not one beyond a reasonable doubt as in criminal cases...”...In cases where fraud is alleged, it is not enough to simply infer fraud from the facts.” 98.As earlier stated, the gravamen of the Plaintiff’s case is that he lawfully acquired Apartment No. C6 upon full payment of the lease premium, and that the 1st Defendant could not thereafter, without regard to his interest, charge this apartment to the 2nd Defendant. The 1st Defendant, on its part, contends that the Plaintiff breached the agreement by failing to complete payment and to meet ancillary obligations, including payment of stamp duty and legal fees. 99.It is common ground that the parties entered into a sale agreement dated 31st October 2013. Clause C of that agreement expressly provided that the transfer of the property from the Vendor to the Purchaser was in consideration of the payment of the lease premium and was to be effected by way of a lease. Clause 1.8 defined the lease premium as the consideration payable for the apartment, while Clause 2 particularised the same as Kshs. 11,500,000/= payable in instalments. 100.The import of those provisions is that the Plaintiff’s entitlement to title was contingent upon the discharge of a central obligation, namely, payment of the lease premium. It is this payment that would, in turn, trigger the 1st Defendant’s obligation to effect the transfer. The question that therefore arises is whether the Plaintiff fulfilled this obligation. 101.It was the Plaintiff’s evidence that he did, asserting that he made full payments in cash. He maintained that these payments were duly acknowledged in the sale agreement, the letter of offer dated 13th August 2012, and a subsequent letter dated 20th September 2012 authored by Lucie Maina on behalf of Ringview Apartments Limited. In that letter, Ms. Maina expressly confirms receipt of Kshs. 2,000,000. The letter of offer, at clause 6, further provides that:6.Payment terms On or before the execution of this letter of offer the sum of Kshs 5,000,000 paid in cash on Monday, August, 13th, 2012 102.The sale agreement states as follows:Clause 2.2-An initial deposit of Kshs 5, ooo, ooo/= payable on or before the execution of the letter of offer.A subsequent instalment of Kshs 2,000,000/= payable on or before the 30th September, 2012(now past).The balance of Kshs 4,500,000/= shall be payable on or before completion of the project report (receipt of which the vendor acknowledges). 103.The documentary material on record lends credence to the Plaintiff’s account that the purchase price was settled in instalments, each of which was duly acknowledged by the 1st Defendant in the contemporaneous transaction documents. 104.In contrast, the 1st Defendant failed to place before the court any cogent evidence to displace or impeach those acknowledgments. While DW1 asserted that he did not personally receive the monies, he nonetheless conceded that he executed the sale agreement in which those payments are expressly acknowledged. 105.He further admitted that he only assumed control of the company’s affairs in 2018, well after the impugned transaction, and confirmed that Lucie Maina who authored the letter acknowledging receipt of part payment was at the material time a director of the 1st Defendant. 106.In law, a company, acts through its authorised agents. It cannot disown acts undertaken on its behalf in the absence of proof of fraud or illegality. As was stated in Kolaba Enterprises Limited v Shamshudin Hussein Varvani & another [2014] KEHC 7729 (KLR), a company is a distinct legal person and is bound by acts undertaken through its agents. 107.This position is reinforced by the doctrine of indoor management, as codified under Section 34(2)(b) of the Companies Act and as articulated in Royal British Bank v Turquand (1856) 6 E&B 327. The Court of Appeal in Standard Chartered Bank of Kenya Limited v Al-Amin & 9 others (Civil Appeal E029 of 2021) [2023] KECA 1059 (KLR) (22 September 2023) emphasised that a person dealing with a company is entitled to assume that internal processes have been complied with and need not inquire into the regularity of internal management. 108.Applying those principles, the Plaintiff, having dealt with the 1st Defendant through its authorised agents and having obtained acknowledgements of payment, was entitled to rely on those representations. The 1st Defendant cannot now avoid its obligations by alleging internal irregularities or lack of knowledge on the part of its current directors. 109.Also reinforcing this position is the undisputed fact of possession. While the 1st Defendant now seeks to characterise that possession as unlawful, there is no evidence of any attempts to evict the Plaintiff, to demand vacant possession, or to challenge his occupation at the material time. 110.To the contrary, the Plaintiff’s entry into and continued occupation of the apartment appears consistent with the parties’ contractual arrangement and the payments acknowledged thereunder, thereby lending further support to the Plaintiff’s case that the transaction had been substantially performed. The court is, therefore, satisfied, on a balance of probabilities, that the Plaintiff paid the lease premium in full, being the sum of Kshs. 11,500,000, which constituted the consideration for the suit property. 111.The next question is whether the Plaintiff’s admitted failure to pay stamp duty, legal fees and other completion costs amounted to a breach sufficient to defeat his rights. 112.Clause 3.3 of the agreement provides that the property would be sold with vacant possession upon the completion date and upon payment of the full lease premium and all outgoings, including interest, legal charges, stamp duty and other incidental costs. Clause 8.1 further placed the obligation upon the purchaser to execute the lease and to pay stamp duty, registration fees and all completion costs within seven (7) days of being required to do so by the Vendor’s Advocates. 113.The operative words in Clause 8.1 are “within seven (7) days of the Vendor’s Advocates requiring the same.” The obligation to pay stamp duty and completion costs was therefore not self-executing; it was triggered by a formal demand by the Vendor’s Advocates. 114.The 1st Defendant did not adduce any evidence to show that such a demand was ever made and that the Plaintiff refused or failed to comply. There is no evidence of any requisition for execution of the lease, no demand for stamp duty, and no correspondence requiring payment of completion costs within the contractual timeline. 115.On the contrary, the Plaintiff testified that he was advised not to pay the advocates then on record and that he was not furnished with the necessary details to enable him effect payment of stamp duty and legal fees. That evidence was not controverted. 116.In those circumstances, it cannot be said that the Plaintiff was in breach of Clause 8.1. The triggering event for his obligation, namely, a demand by the Vendor’s Advocates was not proved. A party cannot rely on the non-performance of an obligation where it has failed to activate the contractual mechanism that would make performance due. Further, the law on stamp duty is now settled. In Abok James Odera t/a A.L. Odera & Associates v John Patrick Machira t/a Machira & Co. Advocates Civil Appeal No. 161 of 1999 [2013] eKLR the Court of Appeal held that non-payment of stamp duty does not invalidate an agreement. The court stated:“...such non-compliance is not however fatal to the enforcement of the agreement... the court is enjoined under section 19(3)(a), (b) and (c) not to reject such an agreement in totality, but to receive it and either assess the stamp duty itself and direct that it be paid or impound the agreement and forward it to the collector for assessment and payment.” 117.The import of that decision is that failure to pay stamp duty affects the admissibility and regularisation of the document for revenue purposes, but does not extinguish the contractual rights arising therefrom. 118.In the premises, the court finds that the Plaintiff did not breach the agreement for sale dated 31st October 2013. On the contrary, the Plaintiff substantially performed his obligations under the contract, and any outstanding completion requirements were either not duly triggered or were rendered unfulfilled by the 1st Defendant’s own failure to facilitate completion. 119.Upon full payment of the lease premium and the grant of possession, the Plaintiff acquired enforceable rights in the apartment, with the 1st Defendant thereafter holding the legal title in trust pending completion and registration of the sub-lease. Consequently, the 1st Defendant’s counterclaim, being premised on an alleged breach by the Plaintiff, is unsupported by the evidence and must fail. Whether the charge over Apartment C6 on L.R 4858/11, Kileleshwa is lawful and enforceable against the Plaintiff 120.Having found under the first issue that the Plaintiff paid the full purchase price and thereby acquired an equitable interest in Apartment C6, the question that now arises is whether the charge created in favour of the 2nd Defendant over L.R. No. 4858/11 was valid and enforceable as against that interest. 121.The 1st and 2nd Defendants have maintained that the charge was lawfully created, contending that the 1st Defendant, as the registered proprietor, was entitled to charge the property and that the Plaintiff, not being a registered owner, had no proprietary interest requiring protection. They further argue that the 2nd Defendant acted in good faith, without knowledge of the Plaintiff’s interest, and that its rights as a chargee take priority over any unregistered claims. 122.The Supreme Court in Shah & 7 others vs. Mombasa Bricks & Tiles Limited & 5 others [2023] KESC affirmed that while Sections 25 and 26 of the Land Registration Act confer prima facie indefeasibility of title, such title is subject to overriding interests under Section 28, including trusts, and that such trusts include constructive trusts. The Court emphasised that equity will intervene where justice demands, and that a constructive trust may be imposed to defeat a registered interest where circumstances render it unconscionable for the legal owner to assert absolute ownership. 123.Similarly, in Archer & another vs Archer & 2 others Civil Appeal 39 of 2020) (2023) KECA 298 (KLR), the Court of Appeal explained that a constructive trust arises where, by virtue of prior dealings, it would be unconscionable for a legal owner to deny another’s beneficial interest, and that such a trust is imposed by operation of law to prevent unjust enrichment. 124.Applying those principles to the present case, once the Plaintiff paid the full purchase price and was placed in possession, equity imposed a constructive trust upon the 1st Defendant in respect of Apartment C6. The 1st Defendant could not thereafter deal with that property in a manner inconsistent with the Plaintiff’s beneficial interest. To do so would amount to unconscionable conduct. 125.This court has already observed that upon receipt of the full purchase price, the 1st Defendant held the legal title not absolutely, but in trust for the Plaintiff pending completion and registration of the sub-lease. 126.It follows therefore that when the 1st Defendant proceeded, in 2018, to charge the entire parent title to secure the facility from the 2nd Defendant, it did so subject to the Plaintiff’s equitable interest. That interest, although unregistered, qualifies as an overriding interest within the meaning of Section 28 of the Land Registration Act, and is therefore binding on the title. 127.The Defendants’ argument that the Plaintiff’s consent was unnecessary because he was not registered as proprietor is, with respect, overly formalistic and fails to account for the equitable dimension of property rights recognised under Kenyan law. Registration is not the sole determinant of proprietary interests. Equity intervenes precisely to protect interests that have arisen but remain unperfected due to circumstances beyond the purchaser’s control. 128.Further, the contention that the 2nd Defendant was unaware of the Plaintiff’s interest cannot, in the circumstances of this case, avail it. The evidence on record shows that the development comprised multiple apartment units intended for sale to purchasers, and some units had already been sold and occupied. DW2 conceded that information regarding sold or occupied units was not sought or provided, and that the bank took over the loan “as is.” 129.A prudent lender advancing a substantial facility secured over a residential development would be expected to undertake due diligence, not only on the register, but also on the ground, to ascertain the status of the units forming the security. The existence of purchasers in possession is a matter that would have been discoverable upon reasonable inquiry. 130.The 2nd Defendant cannot therefore be heard to rely solely on the register while ignoring the factual realities of the development. Equity will not permit a party to shut its eyes to obvious facts and later claim innocence. The doctrine of constructive notice applies in such circumstances. 131.Moreover, this was not, as urged by the 2nd Defendant, a dispute between a chargor and a chargee over repayment of a loan. The gravamen of the Plaintiff’s claim is that his proprietary interest in a specific apartment was unlawfully subjected to a charge without his consent, despite full payment having been made. That distinguishes this case from the authorities relied upon by the 2nd Defendant concerning enforcement of securities against defaulting borrowers. 132.The argument that the Plaintiff assumed a commercial risk by transacting with knowledge of a prior charge to I&M Bank is equally unpersuasive. Having paid the full purchase price, the Plaintiff was entitled to expect that his unit would be freed from encumbrances. 133.The 2nd Defendant’s further contention that the Plaintiff’s remedy lies solely against the vendor also fails. While it is true that the Plaintiff’s primary contractual relationship was with the 1st Defendant, equity permits the court to intervene where third-party rights are affected by unconscionable dealings with property subject to a trust. 134.In the present case, to permit the 2nd Defendant to exercise its statutory power of sale over Apartment C6 would be to defeat the Plaintiff’s equitable interest and to sanction unjust enrichment on the part of both Defendants. That is precisely the situation in which the doctrine of constructive trust operates. 135.The court therefore finds that, although the charge in favour of the 2nd Defendant was validly created as between the 1st and 2nd Defendants, its enforceability is subject to the Plaintiff’s overriding equitable interest in Apartment C6. What are the appropriate reliefs to issue? 136.The Plaintiff has sought, inter alia, a declaration that the charge over L.R. No. 4858/11 is illegal and unenforceable to the extent that it includes Apartment C6, a permanent injunction restraining the 2nd Defendant from exercising its statutory power of sale over the said apartment, an order for partial discharge of Apartment C6, an order compelling the 1st Defendant to issue a sub-lease in his favour, as well as punitive and exemplary damages. 137.Premised on the court’s findings that the Plaintiff paid the full purchase price, acquired an enforceable equitable interest in Apartment C6, and that the 1st Defendant thereafter held the legal title in trust for him, it follows that the prayers for declaratory relief, injunction, partial discharge, and specific performance in the form of issuance of a sub-lease are merited. Orders shall accordingly issue in those terms. 138.The Plaintiff has also sought punitive and exemplary damages. The law is settled that punitive, also known as exemplary damages, are distinct from ordinary compensatory damages. As stated by the Court of Appeal in Mbogori & another vs Nairobi City County (Civil Appeal 55 of 2012) [2018] KECA 702 (KLR) (23 March 2018) (Judgment), exemplary damages are intended to punish the defendant and deter similar conduct. 139.The court in that case, guided by Rookes vs Barnard [1964] AC identified the limited categories in which such damages may be awarded, namely: oppressive, arbitrary or unconstitutional action by government servants; where the defendant’s conduct was calculated to secure a profit exceeding any compensation payable; and where such damages are expressly authorised by statute. 140.Applying those principles to the present case, the conduct of the 1st Defendant in charging the entire property, including Apartment C6, after having received the full purchase price and placed the Plaintiff in possession, was unconscionable. 141.It was a deliberate act calculated to secure financial benefit through the loan facility, in disregard of the Plaintiff’s proprietary interest. Such conduct falls within the second category articulated in Rookes v Barnard(supra) and warrants the court’s censure. 142.In the circumstances, the court is satisfied that this is an appropriate case for the award of exemplary damages as against the 1st Defendant. However, no basis has been laid for such an award against the 2nd Defendant. 143.In the end, the court finds as follows:i.A declaration be and is hereby issued that the charge over Land Reference No. 4858/11, Kileleshwa in favour of the 2nd Defendant, is unlawful and unenforceable to the extent that it purports to include and encumber Apartment Number C6 erected thereon.ii.A permanent injunction does hereby issue restraining 2nd Defendant from exercising its remedies of a chargee on the property known as Land Reference No. 4858/11 to the extent that the said exercising of remedies shall include the property known as Apartment Number C6 erected on Land Reference No. 4858/11 Kileleshwa.iii.An order is hereby issued directing the partial discharge of Land Reference No. 4858/11, Kileleshwa so as to exclude and release Apartment Number C6 erected thereon.iv.An order does hereby issue directing the 1st Defendant to issue a title, in the form of a sub-lease in respect of the property known as Apartment Number C6 erected on Land Reference No. 4858/11 Kileleshwa in favour of Macharia Kariuki, the Plaintiff.v.The Plaintiff is awarded Kshs 2,000,000 as punitive and exemplary damages payable by the 1st Defendant.vi.The 1st Defendant’s counterclaim be and is hereby dismissed with costs.vii.The 1st Defendant shall bear the costs of the suit. DATED, SIGNED AND DELIVERED VIRTUALLY IN NAIROBI THIS 5TH DAY OF JUNE, 2026.O. A. ANGOTEJUDGEIn the presence of:Mr. Wanda for the PlaintiffMr. Nderi for the 1st DefendantMs Kwamboka for the 2nd DefendantCourt Assistant: Tracy