https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/10633

**THE REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA AT NAIROBI** **COMMERCIAL AND TAX DIVISION** **HCCOMM NO E274 OF 2025** MEGPREM LIMITED……...……………..……………………….1ST PLAINTIFF SAILESH KERAI…………...…………….…………………...…..2ND PLAINTIFF VERSUS D. MANJI CONSTRUCTION LIMITED…….………..………1ST DEFENDANT HARISH D. MANJI…………………………...……….………..2ND DEFENDANT DIPAK D. MANJI……………………………..………………..3RD DEFENDANT NARENDRA D. MANJI………………………..……...……….4TH DEFENDANT **RULING** 1. In the Notice of Motion application dated 28th July 2025 filed pursuant to Section 3A of the Civil Procedure Act, Order 1 Rule 10(2) , Order 2 Rule 15 (1), (b) and (c) and Order 25 Rule 4 of the Civil Procedure Rules, the defendants pray for orders that the Plaint dated 3rd April 2025 be struck out with costs, or in the alternative the 2nd, 3rd and 4th defendants be struck out of this suit. The defendants seek an alternative prayer for this suit to be stayed until such a time that the plaintiffs will have settled in full, the sum of Kshs.556,950.30 assessed and certified as costs due and payable to them in **Milimani MCCC No. E4327 of 2024 Megprem Limited v D. Manji Construction Limited & 3 others,** which was withdrawn with costs which remain unpaid. The defendants also pray for costs of the application. 2. The application is premised on the grounds on the face of it, and it is supported by an affidavit sworn on 28th July 2025 by Mr. Dipak H. Patel, on his own behalf as the 3rd defendant and on behalf of the 1st, 2nd and 4th defendants. Mr Patel deposed that the plaintiffs’ claim is for payment for an alleged contract of construction works, whose cause of action arose in September 2015. He contended that the suit herein is statutorily time barred by dint of Section 4 (1) of the Limitations of Actions Act, Cap 22 Laws of Kenya, and it should be struck out. 3. He deposed that the 2nd, 3rd and 4th defendants have been sued in their capacities as Directors of the 1st defendant, yet the plaintiffs have not shown fraud to warrant the plaintiffs to improperly lift the corporate veil. He urged this Court to strike out their names from the suit. 4. He stated that before filing of this suit, the plaintiffs had filed a suit in the Subordinate Court in Milimani **MCCC No. E4327 of 2024 Megprem Limited v D. Manji Construction Limited & 3 others,** which was withdrawn for want of pecuniary jurisdiction and costs were awarded to the defendants in the certified sum of Kshs.556,950.30, which remain unpaid. He thus urged this Court to stay further proceedings in this suit, until the outstanding costs are paid as required under Order 25 Rule 4 of the Civil Procedure Rules. 5. In opposition to the application, the plaintiffs filed a replying affidavit sworn on 11th August 2025 by Mr. Sailesh Kerai, the 2nd plaintiff herein, as the Managing Director of the 1st plaintiff. He stated that there is communication on Whatsapp and emails that are dated 14th August 2020 and part payments made, which revived the cause of action, and that since this suit was filed on 11th April 2025, it was filed within time. He averred that there was no formal contract between the parties, as they dealt with each other at corporate and personal levels. He contended that the 2nd, 3rd and 4th defendants ordered the 2nd plaintiff personally, to provide for labour and construction works, which shows that they personally procured the work in their individual capacities. 6. He averred that the suit had been inadvertently filed in the Subordinate Court, which lacked pecuniary jurisdiction but it was a genuine mistake by their previous Counsel. He urged this Court to order for costs to be recovered in this claim or to be paid after this suit is concluded. He stated that this suit should proceed as the defendants will not suffer any prejudice as the issue of costs will be catered for. He further stated that Order 25 Rule 4 of the Civil Procedure Rules, is not couched in mandatory terms as it is dependent on the circumstances of each case. He urged this Court to dismiss the defendants’ application as it is made in bad faith, with the intention of frustrating the plaintiffs’ efforts to recover their dues. 7. The defendants filed a supplementary affidavit sworn on 4th November 2025 by Mr. Dipak H. Patel, the 3rd defendant herein. He reiterated that the cause of action is on breach of contract which arose on 4th September 2015. He stated that the claim was supposed to be filed within the limitation period of 6 years. He contended that in the demand letter dated 2nd February 2024, the entire claim was mounted as against the 1st defendant and therefore the claim against the 2nd, 3rd and 4th defendants is not tenable. 8. He disputed the contention that acknowledgment of debt or part payment of a debt revives a cause of action. He stated that the plaintiffs did not plead part payment in the Plaint, and did not attach the Whatsapp messages and emails to show alleged admission of the debt. Mr. Patel disputed the bank statement in the replying affidavit as it does not show any payment from the defendant and yet the document dated 4th September 2015 shows the amount to be Kshs. 20,210,012.16 which is the exact amount claimed in the Plaint, which shows no part payment has been made as alleged in the plaint. He averred that the plaintiffs have not settled the costs adjudged against them in a previous suit. 9. This Court directed that the application would be canvassed by way of written submissions. The defendants’ submissions dated 5th November 2025 were filed by the law firm of G. Mutua Molo and the plaintiffs’ submissions dated 20th August 2025 were filed by the law firm of Ben Musundi & Co. Advocates. 10. Mr Mutua, learned Counsel for the defendants submitted that this Court has the power to strike out a suit though the same should be used sparingly. He cited the case of **Equatorial Commercial Bank Ltd v Jodam Engineering Works Ltd & 2 others** [2014] eKLR. He however stated that this suit is untenable and groundless and it amounts to abuse of Court process. He relied on the case of **Mpaka road Development Co Ltd V Abdul Gafur Kana T/A Anil Kapuri Pan Coffee House** [2001] eKLR and **Muchanga Investments Ltd v Safaris Unlimited Africa (Ltd) & 2 others** [2009] eKLR, to support his position. 11. Mr Mutua submitted that the alleged contract took place in 2015 and under Section 4(1) of the Limitations of Actions Act, this suit ought to have been filed within 6 years. He stated that since this suit was filed outside the timelines raises an absolute defence. He relied on the case of **Pius Kimaiyo Langat v Cooperative Bank of Kenya Limited** [2017] KECA 152 KLR. He argued that even if the Court was to find the case tenable, the claim against the 2nd, 3rd and 4th defendants would fail as there was no justification to lift the corporate veil. He placed reliance on the case of **Brandworld Communications Limited & 2 others v Improtech Kenya Ltd & another** [2024] KEHC 5851 KLR. He urged this Court to allow the application dated 28th July 2025 as prayed. 12. Mr. Musundi, learned Counsel for the defendants argued that there was correspondence exchanged via Whatsapp and email, between the 2nd plaintiff and the defendants, which is supported by a Certificate of Electronic Evidence, which indicates that the defendants made promises to settle the outstanding debt on 14th August 2020, showing a clear and unequivocal acknowledgment of debt, within the meaning of Section 23(3) of the Limitation of Actions Act. He submitted that the said written communication revived the cause of action and restarted the limitation period on 14th August 2020. He contended that since this suit was filed on 11th April 2025, it is within the six-year limitation period prescribed under Section 4(1)(a) of the Limitation of Actions Act. He cited the case of **Muturi Mwaniki & Wamiti** **Advocates v Edward Mukundi Karanja & 2 others** [2017] eKLR. He further cited the case of **National Bank of Kenya Ltd v Peter Kipkoech Korat & another** [2006] eKLR, to buttress his submissions. 13. On the issue of misjoinder of the 2nd, 3rd and 4th defendants, Mr Musundi submitted that there was no formal written contract executed between the parties. He stated that the 2nd plaintiff was personally engaged by the 2nd, 3rd, and 4th defendants to provide labour and construction services at the 1st defendant’s site. He stated that the said services were rendered through the 2nd plaintiff’s company, which shows that the 2nd, 3rd and 4th defendants are personally liable and it confirms that they were rightly enjoined to this suit. He relied on the case of **Vasco Da Gama Properties Ltd v Patrick Ochieng & 3 Others** [2019] eKLR and **Victor Mabachi & Another v Nurturn Bates Ltd** [2013] eKLR, to support his assertion. 14. He argued that even though there was no written contract, it does negate the existence of a valid and binding agreement in accordance to Section 3(1) of the Law of Contract Act**.** He cited **Ali Shabaan T/A Alpha Traders v Ebrahim Shabaan & another** [2014] eKLR. 15. On the last issue of stay of these proceedings pending the full payment of costs in the Subordinate Court, Mr. Musundi submitted that the said suit was withdrawn as it had been inadvertently filed. He argued that a withdrawn suit cannot fully support a plea of stay as it does not have any legal effect. He cited the case of **Priscilla Nyambura Njue v Geochem Middle East Ltd; Kenya Bureau of Standards (Interested Party)** [2021] KEHC 13341 KLR. He also stated that the costs may be recovered from the final judgment of this suit. He opposed stay of proceedings by stating that the power of the Court is discretionary. He relied on the case of **Global Tours & Travels Limited**; Nairobi HC Winding Up Cause No. 43 of 2000 (unreported). 16. The plaintiffs’ Counsel prayed for costs of the application and cited the case of **Republic v Rosemary Wairimu Munene, Ex-Parte Applicant v Ihururu Dairy Farmers Co-operative Society Ltd** [2014] eKLR; **M’daka Mbiuki v James Mbaabu Mugwiria** [2020] KEHC 8561 KLR and **Party of Independent Candidates of Kenya v Mutula Kilonzo & 2 others** [2013] eKLR, to support his prayer. **ANALYSIS AND DETERMINATION**. 1. I have considered the instant application, the supporting and supplementary affidavits filed by the defendants. I have also considered the replying affidavit, as well as the written submissions filed by Counsel for the parties. The issues for determination are: 2. **Whether the plaintiff’s suit is statutorily time barred;** 3. **If the answer to (i) above is the negative, whether the 2nd, 3rd and 4th defendants were properly sued in this case; and** 4. **Whether the Court should issue orders for stay of proceedings pending payment of costs in the Subordinate Court.** **Whether the plaintiff’s suit is statutorily time barred.** 1. Actions founded on contract should be filed within six (6) years in accordance with Section 4(1) of the Limitations of Actions Act, which provides as follows- 2. ***the following actions may not be brought after the end period of six years from the date on which the cause of action arose – a) Actions founded on contract”*** 3. The purpose of the limitation period is to ensure that there is no unreasonable delay in plaintiffs bringing claims against defendants. That was held in the case of **Gathoni vs Kenya Cooperative Creameries Limited** (Civil Application No. 122 of 1981), where the Court stated as follows- ***“The law on limitation is intended to protect defendants against unreasonable delay in bringing of suits against them. The statute expects the intending plaintiff to exercise reasonable diligence and to take reasonable steps in his own interest.”*** 1. In this case, it is evident and undisputed that the cause of action arose in 2015. The suit ought to have been filed by 2021. The suit herein was however filed in 2025, which would make it statutorily time barred by dint of Section 4(1) of the Limitation of Actions Act. 2. The plaintiffs rely on Section 23 (3) of the Limitations of Actions Act, to state that the defendants’ acknowledgment of debt had the legal effect of reviving the suit. The said provisions state that- “***Where a right of action has accrued to recover a debt or other liquidated pecuniary claim, or a claim to movable property of a deceased person, and the person liable or accountable therefor acknowledges the claim or makes any payment in respect of it, the right accrues on and not before the date of the Acknowledgment or the last payment:”*** 1. The Court of Appeal in **Kisii County Government v Masosa Construction Company Ltd** (2015) eKLR, when addressing the issue of when a cause of action is deemed to have arisen, held as follows- ***“That letter, written during the pendency of the proceedings in the lower court, undoubtedly emanated from the Council being the ‘person liable or accountable’ for the debt within the meaning of Section 23 of the Limitation of Actions Act Cap 22. It acknowledges the respondent’s debt of Kshs. 15,556,986.70. The learned Judge was therefore right in taking the view that the respondent’s claim, which was otherwise statute barred, was revived by dint of Section 23 of the***[***Limitation of Actions Act***](https://new.kenyalaw.org/akn/ke/act/1968/21)***cap 22.”*** 1. The plaintiffs admit that the cause of action arose in 2015, but stated that there are Whatsapp messages and emails in which the defendants acknowledged the debt. This Court has gone through the said Whatsapp messages and finds that there is no clear admission of the debt. There is nothing to show that the said communication was about the contract in the dispute herein. An admission of debt or acknowledgment of debt has to be clear, plain and obvious for it to stand. That was the holding in the Court of Appeal case in **Choitram v Nazari** [1984] KLR 327, where the Court held as follows- *“****Admissions have to be plain and obvious, as plain as a pikestaff and clearly readable because they may result in judgment being entered. They must be obvious on the face of them without requiring a magnifying glass to ascertain their meaning. Much depends upon the language used. The admissions must leave no room for doubt that the parties passed out of the stage of negotiations onto a definite contract. It matters not if the situation is arguable, even if there is a substantial argument, it is an ingredient of jurisprudence, provided that a plain and obvious case is established upon admissions by analysis. Indeed, there is no other way, and analysis is unavoidable to determine whether admission of fact has been made either on the pleadings or otherwise to give such judgment as upon such admissions any party may be entitled to without waiting for the determination of any other question between the parties.”*** 1. This Court has gone through the bank statements and has not seen any payments made by the defendants as the plaintiffs did not aid this Court by stating the exact dates and amounts that were made. This Court further notes that the emails exhibited by the plaintiffs date between 2013 and 2014, before the date of the alleged contract, which means that they do not have any legal effect to the case between the parties herein. 2. This Court finds that the plaintiffs have not persuaded it that the alleged admission of debt or part payment revived the suit as the evidence relied on by the plaintiffs was not substantive. 1. This Court therefore finds that the plaintiffs’ suit is statutorily time barred by dint of Section 4(1) of the Limitation of Actions Act. That being the case, this Court shall not address the other issues that had been identified for determination, as it would be a futile exercise. 2. The upshot is that the Notice of Motion application dated 28th July 2025 has merits. It is hereby allowed in the following terms- 3. **The plaintiff’s suit is hereby struck out for being statutorily time barred; and** 4. **Costs are hereby awarded to the defendants.** It is so ordered. **DATED, SIGNED and DELIVERED at KIAMBU on this 26TH day of JUNE 2026. Ruling delivered through Microsoft Teams Online Platform.** **NJOKI MWANGI** **JUDGE** **In the presence of:** Mr. Mutua for the defendants/applicants No appearance for the plaintiffs/respondents Ms Julia – Court Assistant.