https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/6727

Masinde v Stanbic Bank Kenya Limited (Commercial Case E414 of 2025) [2026] KEHC 6727 (KLR) (Commercial and Tax) (14 May 2026) (Ruling) Neutral citation: [2026] KEHC 6727 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Commercial Courts) Commercial and Tax Commercial Case E414 of 2025 PM Mulwa, J May 14, 2026 Between Robert Wire Masinde Plaintiff and Stanbic Bank Kenya Limited Defendant Ruling 1.Before the court for determination, the Plaintiff/applicant's Notice of Motion dated 17th June 2025, brought under Section 22 and 39 of the Insolvency Act, Section 89 of the Land Act, Order 40 of the Civil Procedure Amendment Rules 2020. The Applicant seeks an injunction restraining the Defendant, their Agents and or servants from advertising, offering for sale, purporting to sell, disposing of by way of public auction, private sale, or in any way alienating land parcels Title Numbers Ngong/Ngong/23056 and Ngong /Ngong 23058 (hereinafter the suit properties). 2.The application is supported by the annexed affidavits of the Applicant and premised on the ground that the Applicant is the registered owner of the suit properties, which were charged to the Defendant to secure a loan advanced to the Plaintiff. The Plaintiff is in serious financial distress, amounting to Kshs. 322,323,307/= and unable to pay his debts, and has lodged a Debtor’s petition. That the Defendant intends to defeat the Plaintiff's equity of redemption by selling the property through a public auction, and the property has been advertised for sale to recover a sum of Kshs. 150, 872, 447.42. 3.The Defendant opposes the application through the affidavit sworn by Angela W. Njeri, its manager, Non-performing Loans Department on 1st July 2025. She depones that the Plaintiff’s application was fatally defective for failure to comply with Rule 9 of the Oaths and Statutory Declarations Rules, arguing that the annexures to the supporting affidavit were neither properly sealed nor serially marked, thereby rendering the application incompetent. 4.The Defendant deposed that the Plaintiff applied for and was advanced a home loan facility of Kshs. 4,500,000/= pursuant to a Home Loan Application dated 28th November 2007. A first legal charge over L.R Nos. Ngong/Ngong/23056 and Ngong/Ngong/23058 secured the facility and was registered in favour of the Defendant. The Defendant averred that the Plaintiff had persistently defaulted in servicing the loan, resulting in substantial arrears as reflected in the loan statements. Consequently, the Defendant initiated the process of realizing the security by issuing the requisite statutory notices, including the 90-day statutory notice, the 40-day redemption notice, and the 45-day notification of sale through auctioneers. 5.The Defendant further stated that upon receipt of the notification of sale, the Plaintiff acknowledged his indebtedness through email correspondence and entered into negotiations with the Bank while making various promises to regularize the account. However, despite the Defendant's indulgence and accommodation, the Plaintiff allegedly failed to honour his commitments to redeem the facility. 6.The Defendant asserted that the mere filing of such proceedings did not operate as a bar to a secured creditor exercising its statutory power of sale. The Defendant further pointed out that in HCCOMM/E209/2025, the Court only stayed execution against the person of the Plaintiff in relation to arrest and committal to civil jail, and did not restrain realization of the charged securities. 7.The Defendant maintained that it had acted lawfully and in good faith throughout the recovery process and denied allegations that it had clogged the Plaintiff’s equity of redemption. It was further contended that the Plaintiff had not approached the Court with clean hands, having admitted the debt while continuing to default, and that the Court could not rewrite the parties’ contractual obligations. The Defendant, therefore, urged the Court to find that the Plaintiff had failed to establish a prima facie case and that the application was merely intended to frustrate the Defendant’s lawful exercise of its statutory power of sale. 8.The application was heard by way of written submissions. The Plaintiff’s submissions are dated 21st July 2025 while the Defendant filed submissions dated 3rd October 2025. Analysis and determination 9.I have considered the application, the affidavits on record, and the rival submissions by counsel. The issue for determination is whether the Plaintiff has met the threshold for the grant of an interlocutory injunction restraining the Defendant from exercising its statutory power of sale over the suit properties pending the hearing and determination of the suit. 10.The principles governing the grant of interlocutory injunctions are now settled. In the celebrated case of Giella v Cassman Brown & Co. Ltd [1973] EA 358 the Court held that an applicant must establish: firstly, a prima facie case with a probability of success; secondly, that he stands to suffer irreparable injury which cannot adequately be compensated by an award of damages; and thirdly, if the Court is in doubt, the application is to be determined on a balance of convenience. These principles were reaffirmed by the Court of Appeal in Nguruman Limited v Jan Bonde Nielsen & 2 Others [2014] eKLR, where the Court emphasized that the three conditions are sequential and distinct hurdles to be surmounted by an applicant. 11.The Plaintiff’s case is principally anchored on the contention that he is financially distressed and has already lodged a Debtor’s Petition under the Insolvency Act. He contends that the intended sale of the charged properties would defeat his equity of redemption and render the insolvency proceedings nugatory. The Defendant, on the other hand, maintains that the Plaintiff admittedly defaulted in servicing the facility and that all statutory notices requisite under the Land Act were duly issued before commencement of the realization process. 12.It is not disputed that the Plaintiff obtained a loan facility from the Defendant and secured the same by charging the suit properties. It is equally not disputed that the Plaintiff fell into arrears. Indeed, the correspondence exhibited by the Defendant demonstrates repeated acknowledgements of indebtedness by the Plaintiff together with proposals for repayment. 13.The law is settled that a chargor who has voluntarily offered property as security cannot restrain a chargee from exercising its statutory power of sale merely because the debt remains unpaid. In Mrao Ltd v First American Bank of Kenya Ltd & 2 Others [2003] KLR 125, the Court held that a prima facie case is not established merely by raising issues for trial, but by showing an apparent infringement of a right calling for rebuttal from the opposite party. 14.In the present case, the Plaintiff has not denied the indebtedness. Neither has he demonstrated that the statutory notices contemplated under Sections 90 and 96 of the Land Act were not served. Section 90(1) of the Land Act entitles a chargee to issue a notice to a chargor upon default, while Section 96 empowers the chargee to exercise the power of sale after the expiry of the prescribed notices. The Defendant exhibited copies of the statutory notices, redemption notice and notification of sale, service has not been disputed and as such I find that the Defendant’s statutory right of sale has crystalized. 15.The Plaintiff further relies on Sections 22 and 39 of the Insolvency Act. Section 22 of the Insolvency Act provides as follows:1.After a creditor's application has been made, the debtor or any creditor may apply to the relevant court for an order stopping the issue or continuance by any other creditor of an execution process against the debtor in respect of the property of the debtor.2.On the hearing of an application under subsection (1), the Court may make an order—a.stay the execution process on such terms as the Court considers appropriate; orb.allowing the execution process to continue on such terms as the Court considers appropriate. 16.Section 39 of the Insolvency Act provides as follows:1.A creditor of the debtor may not issue an execution process under section 23 after notice of the appointment of the interim trustee has been published.2.A creditor may not continue an execution process already issued before notice of the appointment of the interim trustee has been published.3.A creditor or any other interested person may apply to the Court for an order allowing the issue or continuation of an execution process, and the Court may make an order on such terms as it considers appropriate.4.Any action taken in contravention of subsection (1) or (2) is void. 17.A reading of the foregoing provisions shows that the protection afforded under the Insolvency Act is not absolute. The purpose of the provisions is to prevent a disorderly race by unsecured creditors against the estate of a debtor and to preserve the debtor’s property pending insolvency proceedings. However, the provisions do not automatically extinguish or suspend the proprietary rights of secured creditors unless a specific order is issued by the Court staying or restraining realization proceedings. 18.In the present case, although the Plaintiff states that he has lodged a Debtor’s Petition, no evidence was placed before this Court demonstrating that an interim trustee has been appointed or that any specific order has been issued staying the Defendant’s realization of the charged securities. Equally, there is no evidence that the insolvency court restrained the Defendant from exercising its remedies as a secured creditor. It is noteworthy that a charge creates a proprietary interest in favour of the chargee. Upon default and upon compliance with the statutory requirements under the Land Act, the chargee’s statutory power of sale accrues and becomes exercisable. 19.The Plaintiff voluntarily charged the suit properties as security for the repayment of the facility and therefore became commodities for sale in the event of default. (See Andrew Muriuki Wanjohi v Equity Building Society & 2 Others [2006] eKLR). The Plaintiff cannot therefore, seek refuge in insolvency proceedings to defeat the Defendant’s contractual and statutory rights absent a lawful basis. The Court also takes cognizance of the fact that insolvency proceedings are not intended to operate as an instrument to shield debtors from legitimate claims by secured creditors. 20.Further, the material placed before the Court shows that the Plaintiff repeatedly acknowledged the indebtedness and engaged the Defendant in negotiations with proposals to regularize the account. Such conduct is inconsistent with the assertion that the Defendant’s exercise of its statutory power of sale is unlawful. The Plaintiff has neither challenged the validity of the charge instruments nor demonstrated fraud, illegality, or material non-disclosure on the part of the Defendant in the realization process. 21.The Plaintiff has also argued that the intended sale would extinguish his equity of redemption. However, the equity of redemption is not defeated by a lawful exercise of the statutory power of sale. On the contrary, it subsists until the fall of the hammer. Where default is admitted and the realization process has been lawfully commenced, the Court ought not to interfere unless the chargor demonstrates fraud, illegality, irregularity, or failure to comply with mandatory statutory requirements. 22.In those circumstances, I am unable to find that the Plaintiff has established a prima facie case with a probability of success. The Defendant appears to have complied with the mandatory provisions of Sections 90 and 96 of the Land Act, and its statutory power of sale has properly crystalized. 23.Having found that the Plaintiff has failed to establish a prima facie case, then irreparable injury and balance of convenience need no consideration. (See Nguruman Limited (supra)). 24.I have also considered the Defendant’s objection regarding non-compliance with Rule 9 of the Oaths and Statutory Declarations Rules. While some of the annexures appear not to have been ideally marked, I do not consider the defect fatal in the circumstances of this case. Article 159(2)(d) of the Constitution obliges the Court to administer justice without undue regard to procedural technicalities. The objection does not go to the substance of the dispute and is curable. 25.In the premises, I am not persuaded that the Plaintiff has demonstrated any legal basis upon which this Court can interfere with the Defendant’s accrued statutory power of sale. The application before the Court appears calculated to delay and obstruct the Defendant from realizing its security, notwithstanding the admitted default. 26.Accordingly, the Notice of Motion dated 17th June 2025 lacks merit and is hereby dismissed with costs to the Defendant.It is so ordered. RULING DELIVERED VIRTUALLY, DATED AND SIGNED AT NAIROBI THIS 14TH DAY OF MAY 2026.P.M. MULWAJUDGEIn the presence of:Mr. Vincent Olala for Plaintiff/ApplicantMs. Kariuki for Defendant/ RespondentCourt Assistant: LispaPage 3 of 3