https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/12778

**REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA AT NAIROBI** **COMMERCIAL AND TAX DIVISION** **CIVIL CASE NO. E761 OF 2025** **MICAN FOODS LIMITED ……………… 1ST PLAINTIFF/APPLICANT** **MICHAEL STEPHEN NG’ANG’A …… 2ND PLAINTIFF/APPLICANT** **CATHERINE WAMBUI NJIRI …….… 3RD PLAINTIFF/APPLICANT** **VERSUS** **ABSA BANK KENYA PLC ……………………..…………. RESPONDENT** **RULING** 1. Before this Court for determination is an application dated 18th November, 2025, seeking the following orders set out herein verbatim; 1. ***That pending the hearing and determination of this Application, an interim injunction be issued restraining the Defendant whether by itself, officers, directors, servants and or its agents or whomsoever is acting on its behalf from selling, advertising for sale, transferring and/or dealing with LAND TITLE NO. NGONG/NGONG/91596 located in Ongata Rongai, Ngong Area of Kajiado County registered in the name of the 2nd Plaintiff/Applicant.*** 2. ***That pending the hearing and determination of this Application, an interim injunction be issued restraining the Defendant/Respondent to cease from imposing any further interest and penalties on the loan arrears owed by the Plaintiffs.*** 3. ***That the costs of this application be borne by the Respondents.*** 2. The application is premised on the grounds set out on the face of the motion and is supported by the affidavit of the 2nd Plaintiff/Applicant, a director of the 1st Plaintiff/Applicant. The Applicant’s case is that the 1st Plaintiff and the Defendant were in a banker-customer relationship arising from loan facilities advanced on 16th February, 2023. The facilities comprised a term loan of Kshs. 42,000,000/= for the buy-out and consolidation of existing facilities and renovation of rental apartments, a further term loan of Kshs. 12,000,000/= for the purchase of land and construction of a boundary wall and factory and an overdraft facility of Kshs. 1,000,000/= for working capital. 3. The facilities were secured by charges over Land Parcels Ngong/Ngong/22514 and Ngong/Ngong/91596, both registered in the name of Michael Stephen Kihonge Ng'ang'a, together with personal guarantees of Kshs. 55,000,000/= executed by the 2nd and 3rd Plaintiffs. 4. The 2nd Plaintiff deposes that shortly after execution of the facilities, the Defendant unilaterally withdrew the overdraft facility without notice or justification thereby reducing the total facilities from Kshs. 55,000,000/= to Kshs. 54,000,000/=. He contends that although the Plaintiffs diligently serviced the loans and made substantial repayments, the Defendant unlawfully imposed excessive charges, levies, penalties and interest, ignored their complaints and varied the interest rates contrary to Section 44 of the Banking Act. According to him, these actions rendered repayment difficult and culminated in the Defendant’s attempt to exercise its statutory power of sale, although the intended public auction was unsuccessful. 5. He further deposes that following the failed auction, the parties agreed to dispose of Land Parcel Ngong/Ngong/22514 by private treaty. The property, which had been valued at Kshs. 65,000,000/= with a forced sale value of Kshs. 48,000,000/= was sold for Kshs. 58,000,000/=. The entire purchase price was remitted to the Defendant for purpose of settling the outstanding loan facilities and facilitating the release of the title documents to the purchaser. However, despite receiving the proceeds, the Defendant allegedly failed to acknowledge receipt, provide reconciled loan statements, disclose the outstanding balance or explain the appropriation of the sale proceeds. The Defendant, through its advocates, is said to have demanded a proposal for settlement of an undisclosed residual debt and recovery costs without furnishing particulars despite repeated requests. 6. The 2nd Plaintiff further states that the Defendant failed to release the discharge of charge and completion documents relating to Ngong/Ngong/22514, despite an undertaking to do so within 14 days of receipt of the purchase price. He contends that the Defendant continued demanding payment of substantial loan arrears notwithstanding the parties' alleged agreement that the private treaty sale would extinguish the outstanding indebtedness. He maintains that the Plaintiffs relied on the Defendant's representation that the sale proceeds would constitute full and final settlement of the debt and that the Defendant is therefore estopped from claiming further interest. According to him, any outstanding balance has been occasioned by arbitrary and unlawful charges and interest levied by the Defendant. 7. He further deposes that by a letter dated 12th August, 2025, the Plaintiff sought a waiver of the outstanding interest. The Defendant, by its letter dated 2nd September, 2025, indicated that the request would be considered but did not communicate its decision. The Applicant contend that the Defendant's failure to address the request has allowed the outstanding balance to continue accruing interest to their detriment. They maintain that unless the orders sought are granted, they stand to suffer irreparable loss and damage, whereas the Defendant will suffer no prejudice incapable of being compensated by an award of costs. 8. The Application is opposed through a Replying Affidavit sworn on 23rd December, 2025, by the Defendant’s Secured Lending Team Leader- Collections & Recoveries. The Defendant confirms that the Plaintiffs obtained various loan facilities secured by charges over Land Parcels Ngong/Ngong/22514 and Ngong/Ngong/91596 and avers that the securities including the charge dated 14th April 2023 were validly executed. 9. The Defendant contends that the Plaintiffs have failed to disclose that they defaulted in servicing the facilities, thereby necessitating the issuance of the requisite statutory notices. In particular, it issued a three-month notice dated 29th May, 2024, pursuant to section 90(1) and (2) of the Land Act, followed by a forty-day notice dated 17th September, 2024, pursuant to Section 96(2) of the Land Act, 2012. The Defendant further states that although the Plaintiffs subsequently engaged it through a letter dated 13th July, 2025, they failed to remedy the default, prompting the appointment of auctioneers who issued the 45-day redemption notice and notification of sale. 10. The Defendant further deposes that, following negotiations, the Plaintiffs sought permission to sell one of the charged properties, Title No. Ngong/Ngong/22514 by private treaty. The request was approved through a conditional letter dated 20th August, 2025, which required the sale proceeds to be remitted to the loan account within 7 days and obligated the Plaintiffs to submit a proposal for settlement of the residual debt within thirty days. The Defendant states that, despite delays by the Plaintiffs, the property was eventually sold and a sum of Kshs. 50,000,000/= was remitted in two tranches on 17th and 18th September, 2025. It further avers that on 13th October, 2025, its advocates forwarded a draft discharge to the Plaintiffs' advocates for approval and subsequently on 24th November, 2025 transmitted the original title for Ngong/Ngong/22514 together with the duly executed discharge of charge in triplicate. 11. The Defendant denies the Plaintiffs' allegations that it failed to acknowledge receipt of the sale proceeds, or provide statements of account. It maintains that statements were available upon request and that the sale proceeds of Kshs. 58,000,000/= were formally acknowledged by a letter dated 26th September, 2025. 12. The Defendant further states that it furnished the Plaintiff with an explanation of how the proceeds had been appropriated towards the outstanding liabilities together with detailed statements of account showing the application of the funds and the balances remaining. 13. The Defendant also denies unlawfully varying the interest rates, asserting that all interest was levied strictly in accordance with the terms of the facility agreements and that the charged properties were duly valued before the intended realization process. 14. The Defendant contends that the Plaintiffs are bound by the terms of the loan agreements and cannot avoid their contractual obligations through the present proceedings. It characterises both the suit and the application as an abuse of the court process intended to defeat the lawful recovery of the outstanding debt and accordingly urges the Court to dismiss the application with costs. 15. I note from the record that on 26th November, 2025, this court issued status quo orders preserving Land Parcel No. Ngong/Ngong/91596 and directed that the property should not be sold pending the hearing and determination of the present application. The court further directed the parties to undertake a reconciliation of the two loan accounts in view of the Applicants' contention that the sum of Kshs. 58,000,000/= realised from the sale of one of the charged properties ought to have extinguished the outstanding indebtedness under the two loan facilities. I also note that on 29th January, 2026, the Applicants informed the court that they had filed another application dated 26th January, 2026. However, on 18th May, 2026, counsel for the Applicants stated that the application would not be pursued as it sought substantially similar reliefs to those sought in the Notice of Motion dated 18th November, 2025. 16. The present application was canvassed by way of written submissions. The Applicant’s submissions are dated 18th February, 2026, while the Respondent’s submissions are dated 19th March, 2026. ***Applicant’s submissions*** 1. The Applicant’s submissions gave an introduction and background of the application. They submit that despite the court’s direction that the parties reconcile the two loan accounts, the exercise could not be undertaken because the Respondent, as the custodian of the relevant records, failed to provide reconciled statements of account. They contend that this necessitated the filing of the application dated 26th January, 2026. 2. The Applicants identify the sole issue for determination as whether they are entitled to the interim reliefs sought. They submit that the court has jurisdiction to grant the reliefs sought pursuant to Sections 3A and 63(e) of the Civil Procedure Act and Order 40, rule 1 of the Civil Procedure Rules. They further contend that they have met the principles governing the grant of an interlocutory injunction as set out in ***Giella v Cassman Brown & Co. Ltd [1973] EA 358****.* 3. On whether a prima facie case has been established, the Applicants rely on ***Mrao Ltd v First American Bank of Kenya Ltd & 2 Others [2003] KLR 125***, and argue that the Respondent unlawfully varied the interest rates applicable to the loan facilities without obtaining the prior approval of the Cabinet Secretary as required under Section 44 of the Banking Act. They cite ***John Gatu Nderitu v Kenya Commercial Bank Ltd HCCC No. 55 of 2001 [2011] eKLR***, and ***Stanbic Bank Kenya Ltd v Santowels Ltd [2024] KESC 31 (KLR),***in support of the proposition that any variation of interest rates must comply with the statutory framework established under Section 44 of the Banking Act. They further rely on ***Kenleb Cons Ltd v New Gatitu Service Station Ltd & Another [1990] KLR 557*** submitting that they possess a legal and equitable right deserving of protection. 4. According to the Applicants, the Respondent failed to demonstrate compliance with Section 44 of the Banking Act and, consequently, the continued accrual of interest constitutes an ongoing illegality warranting the intervention of the Court. 5. On irreparable injury, the Applicants contend that the continued charging of allegedly unlawful interest has increased the outstanding indebtedness beyond the value of the remaining charged property, thereby exposing it to imminent realization. Citing ***Nguruman Ltd v Jan Bonde Nielsen & 2 Others [2014] eKLR*** and the principles set out in Halsbury's Laws of England, Third Edition, Volume 21, paragraph 739, they submit that Land Parcel Ngong/Ngong/91596 constitute the matrimonial home of the 2nd and 3rd Applicants and its loss cannot adequately be compensated by an award of damages. 6. Regarding the balance of convenience, the Applicants submit that it tilts in their favour. They argue that unless the injunction is granted, they risk losing their matrimonial home, through the Respondent's exercise statutory power of sale in respect of a debt whose quantum is disputed. Conversely, they maintain that the Respondent will suffer no prejudice if restrained from levying interest because its interests remain secured by the charged property and any accrued interest found to be lawfully due may ultimately be recovered should the suit be determined in its favour. In support of this position, they rely on ***Paul Gitonga Wanjau v Gathuthi Tea Factory Company Ltd & 2 Others [2016] eKLR.*** ***Respondent’s submissions*** 1. The Respondent submits that the Applicants have failed to satisfy the legal threshold for the grant of an interlocutory injunction and urges the Court to dismiss the application with costs. It contends that the loan facilities advanced to the Applicants were governed by duly executed facility letters and secured by valid charges over Land Parcels Ngong/Ngong/22514 and Ngong/Ngong/91596. 2. The Respondent notes that the Applicants do not dispute obtaining the facilities or executing the requisite security documents. It further submits that the Applicants defaulted in servicing the facilities, thereby triggering the Bank's statutory recovery process. Consequently, the Respondent issued a three-month statutory notice dated 29th May, 2024, under Section 90(1) and (2) of the Land Act, followed by a forty-day statutory notice dated 17th September, 2024, under Section 96(2) of the Land Act, 2012. According to the Respondent, despite subsequent engagements between the parties including the Applicants’ letter dated 13th July, 2025, the default, remained unresolved, necessitating the issuance of a redemption notice and notification of sale by its appointed auctioneers. 3. The Respondent further submits that, following negotiations, it acceded to the Applicants' request to dispose of Land Parcel Ngong/Ngong/22514 by private treaty. By a conditional approval dated 20th August, 2025, the Respondent authorised the sale subject to remittance of the purchase price to the loan account and the submission of a proposal for settlement of the residual debt. It states that, the property was subsequently sold and Kshs. 50,000,000/= remitted in two tranches on 17th and 18th September, 2025, but in United States Dollars. 4. The Respondent further avers that it's advocates forwarded a draft discharge of the charge to the Applicant’s advocate on 13th October, 2025, and subsequently released the original title and duly executed discharge documents on 24th November, 2025. It denies ever representing that the sale of one charged property would extinguish all the Applicants' indebtedness, pointing out that its correspondence expressly required the Applicants to submit a proposal for settlement of the outstanding balance. 5. The Respondent also rejects the Applicants assertion that it failed to acknowledge receipt of the sale proceeds or provide statement of account. It contends that statements were always available upon request and that receipt of the sale proceeds was formally acknowledged by a letter dated 26th September, 2025. 6. It further states that detailed statements of account were furnished showing the application of the sale proceeds, leaving outstanding balances of Kshs. 17,425,203.65/= and Kshs. 175,563.15/= as at 25th November, 2025, together with a letter explaining how the sale proceeds had been appropriated. The Respondent denies unlawfully varying the interest rates, maintaining that all interest was charged strictly in accordance with the facility letters and that the Applicants have neither identified the specific interest rates allegedly varied nor produced evidence of any unlawful variation. It further submits that the charged property was duly valued before the intended realization. 7. On the applicable principles governing interlocutory injunctions, the Respondent relies on ***Giella v Cassman Brown & Co. Ltd [1973] EA 358*** and ***Nguruman Limited v Jan Bonde Nielsen & 2 Others [2014] eKLR****,* submitting that the three requirements of a prima facie case, irreparable injury and balance of convenience are distinct and sequential hurdles which an Applicant must satisfy. It further *cites* ***Collogne Investments Limited v KCB Bank Kenya Limited; Nakumatt Holdings Limited (Under Administration) (Proposed Interested Party) [2020] eKLR****,* and***Innercity Properties Limited & Another v Housing Finance & Another [2022] KEHC 156 (KLR),*** wherein the Court, citing ***Thomas Ratemo Oira v Equity Bank Limited [2012] eKLR and Woodcraft Industries Ltd & 3 Others v East African Building Society, HCCC No. 602 of 2000***, reiterated that courts should not restrain a chargee from exercising a lawfully accrued statutory power of sale merely because enforcement would occasion hardship to the borrower, as doing so would undermine contractual rights and render securities worthless. 8. The Respondent further relies on ***Innercity Properties Limited v Housing Finance & Another; Josephine Mukuhi & Another (Interested Parties) [2020] eKLR,*** where the Court held that the balance of convenience favours a lender where the grant of an injunction would merely postpone recovery while interest continues to accrue to the detriment of the value of the security. 9. In conclusion, the Respondent submits that the recovery process was undertaken strictly in accordance with the law and the contractual terms governing the facilities, that the Applicants' rights have not been infringed, and that the material placed before the court falls short of the legal threshold for the grant of an interlocutory injunction. It therefore urges the court to dismiss the application with costs. ***Analysis and Determination*** 1. I have carefully considered the Notice of Motion dated 18th November, 2025, the supporting affidavit sworn by the 2nd Applicant, the replying affidavit sworn on behalf of the Respondent, together with the rival submissions and authorities cited by parties. 2. At the outset, it is necessary to identify the precise nature of the reliefs sought. Prayers 2 and 3 of the application sought orders restraining the Respondent from exercising its statutory power of sale over Land Parcel No. Ngong/Ngong/91596 and from levying further interest and penalties pending the hearing and determination of this application. Significantly, no prayer was sought restraining the Respondent pending the hearing and determination of the suit. 3. The distinction is not merely procedural but goes to the substance of the Court's jurisdiction. Courts are bound by the pleadings and reliefs sought by the parties and cannot grant remedies that have neither been prayed for nor flow from the pleadings before them. Likewise, a court does not act in vain by issuing orders that have no practical utility or are incapable of taking effect. 4. By the time this ruling is delivered, the very event upon which the duration of the injunctive relief was predicated, namely the hearing and determination of the present application, has occurred. The application has now been heard and is being determined through this ruling. Consequently, the period for which the interim orders were sought has come to an end. 5. There is therefore no subsisting period during which the orders sought can operate. In effect, the Court is confronted with reliefs whose lifespan has expired contemporaneously with the delivery of this ruling. Any order purporting to grant the injunctions sought would be incapable of enforcement because the application is itself being concluded. Such an order would be purely academic and devoid of practical effect. 6. The Court must avoid engaging in the determination of abstract or hypothetical questions. Judicial power is exercised for the purpose of resolving real controversies and granting effective relief. Where events have overtaken the relief sought such that no effective remedy can result, the matter becomes moot and the Court should decline to embark upon an unnecessary examination of the merits. 7. In the present case, considerable arguments were advanced by the parties but since the only substantive relief sought in the Motion was interlocutory relief pending the hearing and determination of the application itself, and that application has now reached its conclusion, any analysis of whether the Applicants have established a prima facie case, irreparable injury or balance of convenience would serve no practical purpose. Such an exercise would amount to rendering an advisory opinion on spent prayers rather than determining a live dispute. 8. Moreover, to proceed to grant injunctive relief at this stage would effectively amount to reformulating the Applicants' case by converting prayers limited to the pendency of the application into orders subsisting pending the determination of the suit. That would constitute granting relief not sought by the Applicants and would be contrary to the settled principle that parties are bound by their pleadings. 9. Accordingly, I find that the Notice of Motion dated 18th November, 2025, has been overtaken by events. The prayers for interlocutory injunction having been expressly limited to the period pending the hearing and determination of the application, and that period having lapsed upon delivery of this ruling, the Motion has become spent and incapable of yielding any effective remedy. 10. In the circumstances, I decline to consider the merits of the application. Consequently, the Notice of Motion dated 18th November, 2025, is hereby struck out for having been overtaken by events and rendered spent. 11. Costs of the application shall abide the outcome of the suit. 12. Orders accordingly ***Delivered, Dated and Signed virtually this 6th day of August, 2026*** **RHODA RUTTO** **JUDGE** **Court Assistant: Wabwire**