[2021] KEELC 2856 (KLR)

REPUBLIC OF KENYA

IN THE ENVIRONMENT AND LAND COURT

AT NAIROBI

PETITION NO. E007 OF 2020

MODERN COAST BUILDERS & CONTRACTORS LIMITED….PE.TITIONER

VERSUS

NATIONAL LAND COMMISSION.…………..……….....................RESPONDENT

JUDGMENT

1. The petitioner, Modern Coast Builders & Contractors Limited, brought a constitutional petition dated 24/8/2020, seeking the following verbatim reliefs against the respondent, National Land Commission:

a) A declaration that the respondent has contravened Articles 2,3,10, 25,27,28,40 43 and 47 of the Constitution by purporting to compulsorily acquire the petitioner’s Land Reference No. 209/12060 and declining to make prompt payment for the just compensation of the same.

b) An order compelling the respondent to forthwith pay to the petitioner the full sum awarded for the compulsory acquisition of Land Reference Number 209/12060 together with interest at court rates from November 2015 until payment in full

c) The respondent be compelled to pay exemplary damages to the petitioner for the breaches of its constitutional rights

d) Costs of this petition

e) Any other reliefs the honourable court may deam fit, just and expedient to grant.

2. The petition was supported by an affidavit sworn on 24/8/2020 by Haroon Butt, the Petitioner’s Managing Director. The respondent replied to the petition through a replying affidavit sworn on 18/1/2021 by Fidelis Mburu, the respondent’s Acting Director of Valuation and Taxation. The said petition is the subject of this Judgment.

Petitioner’s Case

3. In summary, the petitioner’s case was that, at all material times, they were the registered proprietors of a parcel of land surveyed as Land Reference Number 209/12060, measuring approximately 3. 7 acres, situated in Embakasi Area of Nairobi City County. They purchased the said land in 2014 from one Fredrick Otieno Oyaya at Kshs 33,000,000. They paid the purchase price and had the land transferred into their name. In 2015, the respondent gazetted the said parcel of land for compulsory acquisition for the purpose of construction of Phase One of the Standard Gauge Railway, connecting the City of Nairobi and the Port of Mombasa. The respondent proceeded to undertake the acquisition processes as set out in Sections 107 to 110of theLand Act and determined that the land belonged to the petitioner. The respondent thereafter made an award of Kshs 128,915,000 as the compensation amount payable to the petitioner for the land together with the improvements thereon. The respondent subsequently took possession of the land in October 2015 and handed it to Kenya Railways Corporation who in turn proceeded to utilize the land for the construction of Mombasa-Nairobi Standard Gauge Railway. The respondent, however, failed to pay the petitioner the compensation sum awarded, despite several requests and demands.

4. The petitioner contended that the respondent’s failure to pay them the awarded sum contravened Article 40(3) of the Constitution. Through the petition, the petitioner invited the court to determine the following issues:

i. Whether the respondent contravened Articles 40(3) of the Constitution in purporting to compulsorily acquire the petitioner’s Land Reference No 209/12060 and taking possession of the same without paying any compensation for the same.

ii. Whether the Respondent has the express jurisdiction and authority under the Constitution to take possession of private property without paying any compensation for the same.

iii. Whether the petitioner is entitled to immediate payment of the awarded sum together with interest at court rates

Respondent’s Case

5. The Respondent’s case was contained in the replying affidavit of Fidelis Mburu. He deposed that, in line with Part VIII of the Land Act, the respondent compulsorily acquired 1. 5124 hectares of the suit land [Land Reference Number 209/12060] for the purpose of the construction of Nairobi – Mombasa Standard Gauge Railway. The compulsory acquisition was done on behalf of Kenya Railways Corporation (the acquiring body) on condition that they would promptly avail compensation funds to the respondent for onward transmission to the proprietors of the acquired land. The respondent duly applied the provisions of Part VIII of the Land Act and issued an award of Kshs 128,915,000 as the just compensation for the land acquired and the developments thereon. Since then, the respondent had written severally to the acquiring body, Kenya Railways Corporation, requesting them to remit to the respondent the awarded sum to no avail. It was the case of the respondent that it only pays compensation sums upon receipt of the sums from the acquiring bodies since it has no compensation funds of its own. The respondent contended that it was ready and willing to compensate the petitioner once it receives funds from Kenya Railways Corporation. When invited to tender written submissions in response to the petitioner’s written submissions, Mr. Mbuthia, counsel for the respondent, stated thus:

“There is really nothing to submit on. I will simply be relying on the replying affidavit”

6. The petition was canvassed through the petitioner’s written submissions dated 25/3/2021, filed by the Firm of Prof. Albert Mumma & Co Advocates. I have duly considered the said submissions.

7. In the absence of any challenge against the petitioner’s title to the acquired land and its entitlement to the awarded sum, there are no serious contested issues in this petition. All that the respondent has stated in reply to the petition is that it has not remitted the awarded sum because the acquiring body has not remitted the money to them. The single question to be answered in the circumstances of this petition, therefore, is whether the petitioner is entitled to the reliefs sought in the petition against the respondent.

8. The first relief sought by the petitioner is a declaration that the respondent has contravened Articles 2, 3, 10, 25, 27, 28, 40, 43and 47 of the Constitution by purporting to compulsorily acquire the petitioner’s parcel of land and declining to make prompt payment for the just compensation for the land. Article 2 emphasizes the supremacy of the Constitution. Article 3 places on every person the obligation to obey the Constitution. Article 10 contains national values and principles of governance. Article 25 sets out the fundamental rights and freedoms that cannot be limited. Article 27 contains the constitutional framework on equality and freedom from discrimination. Article 28 declares human dignity as a fundamental human right under the Bill of Rights. Article 40 contains the framework on protection of the right to property. Article 43 contains the framework on economic and social rights. Article 47 relates to the right to fair administrative action.

9. I have considered the constitutional framework under which the above relief is sought. I have also considered the framework in Part VIII of the Land Act. Article 40(3) (b) (i) requires prompt payment in full, of just compensation to a person whose property has been compulsorily acquired by the state for a public purpose. Secondly, Section 111 of the Land Act re-emphasizes this requirement and requires the acquiring body to deposit compensation funds with the National Land Commission before the acquisition is undertaken. It was therefore the duty of the National Land Commission to ensure that it had the requisite funds before taking possession of the petitioner’s land and before handing the petitioner’s land to the acquiring body. It does emerge from the evidence presented in this petition that the respondent undertook compulsory acquisition, took possession of the petitioner’s land, and handed the petitioner’s land to the acquiring body without first ensuring that it had been put in funds. In the circumstances, the court is satisfied that the respondent breached Article 40 (3) (b) (i) of the Constitution. Consequently, the first relief in the petition will be granted to the petitioner in so far as it relates to the breach of the said Article.

10. Prayer (b) is a plea for an order compelling the respondent to forthwith pay the petitioner the full sum awarded for the compulsorily acquired land. It is also a plea for interest at court rate from November 2015 till payment in full. In the absence of any challenge against the petitioner’s title to the acquired land, the court will grant the plea for an order compelling the respondent to forthwith pay the petitioner the sum awarded as just compensation.

11. With regard to the limb relating to interest, the Land Act contains an elaborate framework on interest. The petitioner opted not to pursue the remedy of statutory interest as provided in the Act. They opted to pray for interest at court rate from November 2015. Having elected not to pursue the remedy of statutory interest at the Central Bank of Kenya Base Lending Rate as provided in the Act, the court can only grant interest at court rate from the date of filing this petition and not earlier than that.

12. Prayer (c) is a plea for exemplary damages. The object of exemplary damages is to punish and deter the party in breach. The respondent has explained that the only reason why they have not remitted the compensation award is that the acquiring body has not remitted the money to them. On their part, the petitioner have not demonstrated by way of evidence and/or submissions why, besides interest, exemplary damages should be awarded. The court does not therefore have a proper basis upon which to grant to the petitioner exemplary damages in addition to the award of interest.

13. The last prayer is a plea for costs of the petition. In the absence of special circumstances, the petitioner shall be entitled to costs.

Disposal Orders

14. In the end, the court enters judgment in favour of the petitioner in the following terms:

a) A declaration is hereby made to the effect that the respondent has contravened Article 40 (3) (b) (i) of the Constitution by compulsorily acquiring the petitioner’s Land Reference Number 209/12060 and declining to make prompt payment for the just compensation for the land.

b) An order is hereby made compelling the respondent to forthwith pay to the petitioner Kshs 128,915,000 being the sum awarded for the compulsory acquisition of Land Reference Number 209/12060, together with interest on the said sum at court rate from the date of filing this petition.

c) The respondent shall bear costs of this petition.

DATED, SIGNED AND DELIVERED AT NAIROBI ON THIS 14TH DAY OF JUNE 2021.

B M EBOSO

JUDGE

In the Presence of: -

Mr Agwara for the Petitioner

Court Assistant: June Nafula