https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/11972

REPUBLIC OF KENYA IN THE HIGH COURT OF KENYA AT NAIROBI COMMERCIAL AND TAX DIVISION CORAM: F. MUGAMBI, J COMM CASE NO. E796 OF 2025 MONARCH DEVELOPERS LIMITED … PLAINTIFF/APPLICANT BETWEEN VERSUS BANK OF BARODA (KENYA) LTD ……. 1ST DEFENDANT/RESPONDENT MAYWOOD AUCTIONEERS ……….… 2ND DEFENDANT/RESPONDENT RULING Introduction and Background 1. By Notice of Motion dated 2nd December 2025, brought under Order 40 Rules 1 and 4, Order 51 Rules 1 and 3 of the Civil Procedure Rules and Sections 1A, 1B, 3A and 63(e) of the Civil Procedure Act, the Plaintiff sought a temporary injunction restraining the Defendants from selling, transferring, leasing, taking possession of or otherwise disposing of office suites Nos. B1, B2, B3 HCCCOMM E796 OF 2025 RULING Page 1 and B4 on the Fourth Floor Wing B, and A1, A2, B2 and B4 on the Fifth Floor Wings A and B, of the property known as Doctors Park, L.R. No. 209/21739 (Old Ref. No. 209/17/4), situate along 3rd Parklands Avenue, Nairobi (the suit property), pending the hearing and determination of the application and, thereafter, the suit. 2. The application arises from the Plaintiff's registered proprietorship of the suit property, over which the 1st Defendant holds a legal charge as security for a credit facility. The Plaintiff avers that the 1st Defendant, through the 2nd Defendant, advertised the suit property for sale by public auction on 4th December 2025 in purported exercise of its statutory power of sale, to recover an alleged outstanding balance of Kshs.156,076,735.18. 3. The Plaintiff contends that the intended sale offends Sections 90(2) and 96(2) of the Land Act, 2012, in that neither the 90-day nor the 40- day statutory notice was served, and that a re- computation by M/s Interest Rates Advisory Center dated 2nd December 2025 places the true outstanding balance at Kshs.110,978,374.30, HCCCOMM E796 OF 2025 RULING Page 2 rendering the intended sale premature and unlawful. 4. The application was supported by the affidavit of Arul Selvaraj Mudaliar, a director of the Plaintiff, sworn on 2nd December 2025. Upon being certified urgent, Visram, J. issued a temporary injunction for a limited period, conditional upon the Plaintiff depositing Kshs.30,000,000.00 with the 1st Defendant towards the outstanding loan. 5. The 1st Defendant opposed the application through the Replying Affidavit of Stephen Mwangi, its Credit Officer, sworn on 11th December 2025, describing the application as an abuse of process calculated to frustrate recovery of an admitted debt. The 1st Defendant maintains that the statutory notices under Sections 90(1), (2) and (3)(e) and 96(2) of the Land Act were served on 9th April 2018 and 16th October 2019 respectively, together with a 45-day Auctioneer's redemption notice. The deponent further maintains that by a Deed of Variation dated 1st December 2025, the Plaintiff admitted the validity of the HCCCOMM E796 OF 2025 RULING Page 3 charge, its indebtedness, and the unauthorized sale of units B1–B4 to Park Eye Centre Limited. 6. The 1st Defendant also produced the Ruling in Environment & Land Case E106 of 2022 [2023] KEELC 18245 (KLR), which was a matter between the same parties before the Environment and Land Court, in which the Plaintiff's receipt of the same statutory notices was recorded as admitted. 7. By a Further Affidavit sworn on 16th December 2025, the Plaintiff confirmed having complied with the conditional order of Visram, J, through cumulative deposits of Kshs.28,313,000.00 made by two prospective purchasers to the 1st Defendant's advocates on 10th and 11th December 2025. The Plaintiff further disclosed that there was a sum of Kshs.11,539,760.00 held in escrow, which the 1st Defendant had declined to apply towards the loan despite the Plaintiff's written authorization of 16th December 2025. By directions issued on 18th December 2025, the court confirmed the Plaintiff's compliance and directed that Kshs.5,127,560.00 HCCCOMM E796 OF 2025 RULING Page 4 remain in escrow pending the hearing and final determination of the suit. 8. Pursuant to leave granted on 3rd March 2026, the Plaintiff filed a Further Affidavit sworn 2nd June 2026, demonstrating that further cumulative payments had been made between 28th November and 16th December 2025 totalling Kshs.159,781,047.00, a sum exceeding the Kshs.156,076,735.18 balance reflected in the 1st Defendant's own statement, as at 9th December 2025. The Plaintiff contends that the debt is fully discharged, that an overpayment is due to it, and that it has established a prima facie case warranting confirmation of the injunction pending suit. 9. The 1st Defendant, in submissions dated 3rd June 2026, maintains that no prima facie case is made out, that the debt remains admitted and outstanding at Kshs.156,076,735.18 with interest accruing from 31st March 2018, and that the balance of convenience favours immediate realization of the security, the Plaintiff having voluntarily assumed the risk of enforcement upon HCCCOMM E796 OF 2025 RULING Page 5 default. Notably, the 1st Defendant does not deny receipt of the payments now relied upon by the Plaintiff, nor has it filed any updated reconciliation to account for them. Analysis and Determination 10. The sole issue for determination is whether the Plaintiff has made out a case for the grant of a temporary injunction. The conditions for grant of an interlocutory injunction remain those set out in Giella V Cassman Brown & Co. Ltd, [1973] EA 358: an applicant must establish a prima facie case with a probability of success, demonstrate that it stands to suffer irreparable injury not adequately compensable in damages, and, where the court remains in doubt, the application falls to be determined on the balance of convenience. What constitutes a prima facie case was settled in Mrao Ltd V First American Bank of Kenya Ltd & 2 Others, [2003] eKLR , where the Court of Appeal held that it is a case in which, on the material presented, a properly directed tribunal would conclude that a right has apparently been infringed, calling for an explanation or rebuttal from the opposing party. HCCCOMM E796 OF 2025 RULING Page 6 11. On the question of service, I decline to revisit the ground covered in Environment & Land Case E106 of 2022 [2023] KEELC 18245 (KLR), which I have earlier stated was a suit between the same parties concerning the same charge. In its decision, the Court (Angote, J), found, at paragraph 34, that “The Defendant's counsel submitted that the Plaintiff has admitted it is indebted to the Defendant; that it received the statutory notice dated 9th April 2018 and the 45 days' notice of sale dated 16th October 2019; that it is yet to comply with the said notices and that the Plaintiff has not adduced evidence to show that the Defendant has inhibited, infringed or hindered its equity of redemption.” 12. Having upheld that finding at paragraphs 68 to 70 of that Ruling as one of fact, I am not persuaded that the issue of notification is properly reopened HCCCOMM E796 OF 2025 RULING Page 7 before me, and I decline to belabour it further. What is, however, of direct relevance is the finding at paragraph 65 of the ELC ruling, that the Plaintiff, as chargor, has a right at any time before the auction to pay the amount outstanding and redeem the property, which is one of the points, in my understanding, that the Plaintiff relies upon for the injunctive relief before this Court. 13. The payments relied upon by the Plaintiff, alleged to have been made between 28th November and 16th December 2025 totalling Kshs.159,781,047.00, fall to be assessed against that continuing right, and against the 1st Defendant's own statement "SM-10" showing a balance of Kshs.156,076,735.18 as at 9th December 2025. Critically, the 1st Defendant does not deny having received these payments, made in the period since the ELC Ruling, and has placed no updated reconciliation before the court to explain why they do not extinguish, or come close to extinguishing, the admitted balance. This materially alters the footing on which the matter stood before the ELC and is the central fact distinguishing fact. HCCCOMM E796 OF 2025 RULING Page 8 14. The Plaintiff has accordingly demonstrated an arguable case within the Mrao formulation, sufficient to call for an explanation at trial, without any concluded view being expressed on the ultimate merits. 15. The threshold for irreparable injury was restated in Nguruman Limited V Jan Bonde Nielsen & 2 others [2014] eKLR , where the Court of Appeal held that the injury must be actual, substantial and demonstrable, and is irreparable only where no reasonably accurate standard exists for measuring it, or where monetary compensation could never adequately remedy it; speculative apprehension does not suffice. Similarly, in Kenya Shell Limited V Benjamin Karuga Kibiru & Another, [1986] KECA, the Court of Appeal held that demonstrable substantial loss is the cornerstone of the jurisdiction to grant injunctive relief. 16. As already stated, there may be evidence supporting the Plaintiff's contention that it may already have made the payments demanded by the 1st Defendant. That evidence will be subjected to further scrutiny during hearing. Further, the suit HCCCOMM E796 OF 2025 RULING Page 9 units are each the subject of part-concluded arrangements with third-party purchasers who have already deposited substantial sums on account. Allowing the auction in the face of an equity of redemption that the Plaintiff appears to have been actively exercising through the payments, would create substantial problems not just to the Plaintiff but the third parties The substantial loss is demonstrable and satisfies the threshold in Nguruman and Kenya Shell is accordingly met. 17. Finally, the balance of convenience favours an injunction in the circumstances. The 1st Defendant's submissions on the Plaintiff’s admitted indebtedness, while weighty, do not resolve the unanswered question of what its own unreconciled receipt of the Plaintiff's payments does to that balance, nor do they establish any imminent risk of the 1st Defendant being kept out of its money, given the sums already deposited, paid and impounded. Final Orders and Disposition HCCCOMM E796 OF 2025 RULING Page 10 18. Accordingly, a temporary injunction is hereby issued in terms of prayer (d), pending the hearing and determination of the suit. The costs of the Application shall abide the outcome of the suit. DATED, SIGNED AND DELIVERED AT NAIROBI THIS 31 ST DAY OF JULY 2026. F. MUGAMBI JUDGE Delivered in presence of: Maina for Nyasani for plaintiff/applicant Ms Kubai for Nganga for defendant/respondent Court Assistant: Lillian HCCCOMM E796 OF 2025 RULING Page 11