https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/12108

**REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA AT NAROK** **COMMERCIAL SUIT NO. E005 OF 2025** **(CORAM: HON. CHARLES M. KARIUKI – J)** **SERAH MUTHONI MUNKA..................................................... PLAINTIFF /APPLICANT** **-VERSUS** **UN DT SACCO.....................................................................DEFENDANT/RESPONDENT** **RULING** 1. **INTRODUCTION** 2. Before this Court is the Plaintiff's Notice of Motion dated 21st March 2025 seeking, principally, interlocutory injunctive orders restraining the Defendant from exercising its statutory power of sale over land parcel CIS MARA/LEMEK/1208 pending the hearing and determination of the suit. The application also seeks orders compelling disclosure of loan statements and insurance documentation and invites the Court to reopen and restructure the loan facility secured by the suit property. 3. The application arises from a dispute concerning a charged property formerly registered in the name of the late John Sankau Ole Munka, who guaranteed a loan that the Defendant advanced to one Joseph Mulli Munyonyi. The Plaintiff, who describes herself as the widow of the deceased chargor, contends that the intended realisation of the security is unlawful for want of statutory notices and because the loan ought to have been discharged through a loan insurance scheme upon the borrower's death. 4. The Defendant opposes the application and maintains that the loan account had been in default long before the borrower's death, that the insurance cover was inapplicable due to policy exclusions, and that all statutory notices required under the Land Act were duly issued. 5. **PLEADINGS** 6. **Notice of Motion** 7. The Notice of Motion dated 21st March 2025 seeks, on an urgent basis, interim and interlocutory injunctive orders restraining the Defendant, UN DT SACCO, from proceeding with the scheduled public auction of land parcel **CIS MARA/LEMEK/1208** pending the hearing and determination of both the application and the suit. The Applicant further seeks orders halting the auction on the ground that the intended sale is materially irregular, fraudulent and contrary to the provisions of the Land Act, the Auctioneers Act, the Auctioneers Rules and the Civil Procedure Rules. In addition, the Applicant prays for disclosure of a comprehensive loan statement together with particulars of the loan insurance policy allegedly covering the guaranteed loan, and requests the Court to exercise its powers under sections 105 and 106 of the Land Act by reopening and restructuring the loan to allow repayment through fresh instalments with waiver of penalty interest. 8. The application is premised on the fact that the suit property is the Applicant's matrimonial home, that the deceased proprietor had only guaranteed the loan of the late John Mulli Munyoki, that the guaranteed loan ought to have been settled by insurance upon the borrower's death, and that the Respondent failed to issue the requisite statutory notices before advertising the property for sale. 9. **Supporting Affidavit** 10. In her supporting affidavit sworn on 21st March 2025, Serah Muthoni Munka deposes that she was lawfully married to the late John Sankau Ole Munka, the registered proprietor of the suit property, which served as their matrimonial home. 11. She states that her late husband guaranteed a loan advanced to John Mulli Munyoki, who died on 1st September 2023 while still in active employment and whose loan was allegedly insured through the Respondent SACCO. She contends that despite the existence of the insurance cover, the Respondent failed to invoke the policy and instead sought to realise the security by selling the matrimonial property without complying with the mandatory statutory procedures, including the issuance of statutory notices to the deceased guarantor. 12. She further avers that she only learnt of the intended auction through newspaper and social media advertisements, annexed copies of the title deed, chief's letters, identification documents and the auction advertisements in support of her claim, and maintains that the intended sale is unlawful and would occasion grave injustice if not restrained. She asserts that the application was filed without delay, that the Respondent would suffer no prejudice if the orders sought are granted, and expresses her willingness to comply with any conditions imposed by the Court. 13. **Replying Affidavit** 14. In the replying affidavit sworn on 17th April 2025, Moses Amolo, the Defendant's Head of Credit Management, opposes the application and contends that it is incompetent and undeserving of the equitable relief sought. 15. He deposes that the application is fatally defective because the plaint does not seek any substantive injunctive relief. He denies that the suit property constitutes the Applicant's matrimonial home, asserting that valuation reports consistently indicate that the land is vacant and devoid of any structural development. 16. He further states that the property was lawfully charged with the Applicant's spousal consent as security for a loan of Kshs. 5,200,000 advanced to Joseph Mulli Munyonyi, and clarifies that the borrower was erroneously referred to in the application as John Mulli Munyoki. 17. The deponent avers that the borrower retired from employment on 16th October 2020 and was therefore not in active employment at the time of his death on 1st September 2023. He states that the loan had been in arrears since October 2020, had remained in persistent default, and had already been recalled by the Sacco before the borrower's demise. Consequently, the Loan Guard insurance policy issued by CIC Group was inapplicable because it expressly excluded loans that were already in default or dormant at the time of death. He further maintains that the Plaintiff lacks locus standi to institute the proceedings on behalf of the deceased chargor's estate in the absence of letters of administration. 18. Mr Amolo further deposes that the Sacco fully complied with the law by issuing all requisite demand letters, statutory notices, redemption notices and notifications of sale to the borrower, the guarantor/chargor and the Plaintiff, who had executed the spousal consent. He therefore denies that the intended auction was unlawful or that the Plaintiff was taken by surprise, contending that she was fully aware of the default and the recovery process. He also disputes the Applicant's assertion that the property was occupied as a matrimonial home, relying on valuation reports and the charge documentation to demonstrate that the land was vacant and that the Applicant had voluntarily consented to its use as security. He concludes that the application is an attempt to delay the Sacco's lawful recovery of members' funds, that the Plaintiff has not approached the Court with clean hands, and that granting the orders sought would occasion prejudice to the Sacco and its members. He accordingly urges the Court to dismiss the application with costs. 19. **SUBMISSIONS** 20. **Plaintiff/Applicant’s submissions** 21. The Plaintiff submits that the Defendant's intended exercise of its statutory power of sale over parcel CIS MARA/LEMEK/1208 is unlawful and should be restrained. It is argued that the Plaintiff is the widow of the late John Sankau Ole Munka, whose matrimonial property was charged to secure a loan advanced to Joseph Mulli. The Plaintiff contends that the borrower died while still in active employment, that the loan had been serviced through salary deductions during his lifetime, and that the outstanding balance ought to have been settled by the Defendant's loan insurance policy upon his death. Instead, the Defendant allegedly failed to invoke the insurance cover, declined the Plaintiff's offer to redeem the property, and proceeded with an intended auction without serving the mandatory statutory notices. 22. On the legality of the intended auction, the Plaintiff submits that the Defendant failed to comply with the mandatory requirements under sections 90 and 96 of the Land Act, 2012, and Rule 15 of the Auctioneers Rules, 1997, which require service of statutory notices, notices to sell, redemption notices and notifications of sale before a chargee may lawfully exercise the statutory power of sale. Reliance is placed on **Kenya Commercial Bank Ltd v Specialised Engineering Company Ltd & Another [2015] eKLR,** in which the Court held that a chargee's statutory power of sale arises only upon strict compliance with the statutory requirements. The Plaintiff further cites **Heshimart Enterprises v Rafiki Microfinance Bank [2023] KEHC 27070 (KLR), Co-operative Bank of Kenya Ltd v Patrick Kangethe Njuguna & 2 Others [2017] eKLR, National Bank of Kenya Ltd v Pipeplastic Samkolit (K) Ltd & Another [2001] EA 503, and Wilfred Gitonga (t/a Wilkel Traders Co.) v Barclays Bank of Kenya Ltd [2007] KEHC 1799 (KLR),** for the propositions that guarantors who charge their property enjoy the protections accorded to chargors, that failure to issue statutory notices renders the exercise of the power of sale invalid, and that a chargee cannot rely on a default attributable to its own omission to enforce its security. 23. On the issue of loan insurance, the Plaintiff submits that the Defendant was under a contractual and equitable obligation to invoke the credit life insurance policy upon the borrower's death before resorting to realisation of the security. It is argued that the Defendant failed to pursue the insurance claim and instead improperly shifted liability to the Plaintiff. In support of that proposition, reliance is placed on **Napier v Hunter [1993] 1 All ER 385 (HL), Mbuthia v Jimba Credit Finance Corporation & Another [1988] KLR 1,** where the Court emphasized that a mortgagee exercising a power of sale must act in good faith, and **Orion Insurance Co. plc v Sphere Drake Insurance plc [1992] 1 Lloyd's Rep 239,** for the equitable principle that no party should benefit from its own wrongdoing. 24. The Plaintiff further submits that she retains an unextinguished equity of redemption, having expressed her willingness to redeem the charged property by paying the outstanding amount, but that the Defendant has unreasonably refused to accept payment. It is argued that the suit property constitutes her matrimonial home and is entitled to constitutional and statutory protection under Article 40 of the Constitution, section 28 of the Land Act and the Matrimonial Property Act, 2013. Reliance is placed on **Federation of Women Lawyers (FIDA-K) & 5 Others v Attorney General & Another [2011] eKLR, Rajnikantkhetshi Shah v Habib Bank A.G. Zurich [2016] KEHC 6740 (KLR)**, which cited **Noakes & Co. Ltd v Rice [1902] AC 24**, for the principle that equity will not permit any device intended to defeat the chargor's right of redemption. 25. Finally, regarding the prayer for an interlocutory injunction, the Plaintiff submits that the application satisfies the principles set out in **Giella v Cassman Brown & Co. Ltd [1973] EA 358**. It is argued that a prima facie case has been established through the Defendant's failure to issue statutory notices, invoke the insurance policy and permit redemption. The Plaintiff relies on **Mrao Ltd v First American Bank of Kenya Ltd & 2 Others [2003] KLR 125** to define a prima facie case, and **Nguruman Ltd v Jan Bonde Nielsen & 2 Others [2014] eKLR** for the principles governing irreparable injury and the balance of convenience. The Plaintiff contends that the sale of her matrimonial home would occasion irreparable loss incapable of compensation by damages. In contrast, preservation of the property pending trial would occasion no prejudice to the Defendant. She therefore urges the Court to declare the intended auction unlawful, restrain the Defendant from selling the property, compel disclosure of the loan account and insurance documents, direct the Defendant to accept redemption upon payment of the lawful outstanding amount, and award costs of the application. 26. **Defendant/Respondent Submissions** 27. The Defendant submits that the Plaintiff's Notice of Motion dated 21st March 2025 is incompetent, unmeritorious and ought to be dismissed with costs. As a preliminary point, the Defendant argues that the supporting affidavit is fatally defective because it bears the date 21st March 2024, a year before the application was filed, and contends that this defect cannot be cured, since an affidavit is evidence on oath. The Defendant further submits that the Plaintiff has not sought any substantive injunctive relief in the plaint and therefore cannot obtain interlocutory injunctive orders. 28. On the merits, the Defendant maintains that the suit property, Title No. CIS MARA/LEMEK/1208, was lawfully charged with the Plaintiff's spousal consent to secure a loan of Kshs. 5,200,000 advanced to Joseph Mulli Munyonyi. It is submitted that the borrower retired in October 2020, defaulted on servicing the loan, and that by the time of his death on 1st September 2023, the loan had long been recalled, was in arrears, and the account had become dormant. Consequently, the Loan Guard insurance policy did not apply because its exclusion clauses barred cover for defaulted or dormant loan accounts. The Defendant also argues that the Plaintiff lacks locus standi to litigate on behalf of the deceased chargor's estate without obtaining letters of administration. 29. The Defendant further submits that it fully complied with the statutory requirements governing the exercise of the statutory power of sale under sections 90, 96 and 97 of the Land Act, 2012. It contends that the borrower, the chargor and the Plaintiff were duly served with demand letters, statutory notices, redemption notices and notifications of sale, and that a forced sale valuation was undertaken before the intended auction. It therefore argues that the intended sale was lawful and that the Plaintiff cannot claim to have been taken by surprise. 30. On the applicable principles for the grant of an interlocutory injunction, the Defendant relies on **Giella v Cassman Brown & Co. Ltd [1973] EA 358**, submitting that the Plaintiff has failed to establish a prima facie case with a probability of success, cannot demonstrate irreparable injury, and that the balance of convenience favours the Defendant. It argues that the undisputed loan default, coupled with documentary evidence of compliance with the statutory notice requirements, defeats the Plaintiff's claim for equitable relief. The Defendant further submits that once property is offered as security, it becomes a commercial asset whose loss is compensable by damages, relying on **Nyanza Fish Processors Ltd v Barclays Bank of Kenya Ltd, Nairobi Civil Application No. 114 of 2009 (UR 73/09),** where the Court held that charged property ceases to have purely sentimental value and any loss is ordinarily compensable in damages. 31. The Defendant additionally relies on **Susan Adoyo v Equity Bank (Kenya) Ltd [2021] eKLR, National Bank of Kenya Ltd v Shimmers Plaza Ltd, Nairobi Civil Appeal No. 26 of 2002, Joseph Kiarie Mbugua v Consolidated Bank of Kenya Ltd & Garam Investments, Nairobi Milimani HCCC No. 609 of 2005, Farmers Partners Ltd & 2 Others v Barclays Bank of Kenya Ltd, Nairobi Milimani Commercial HCCC No. 526 of 2009, Abbellana Properties Ltd v National Social Security Fund Board of Trustees, Mombasa HCCC No. 339 of 2008, and Kyangavo v Kenya Commercial Bank Ltd & Another, Nairobi HCCC No. 428 of 2001**, for the propositions that a chargee who has complied with the statutory requirements should not be restrained from exercising its statutory power of sale, that equity does not aid a defaulting borrower, and that damages are an adequate remedy where charged property is sold. On those grounds, the Defendant urges the Court to dismiss the application with costs. 32. **ISSUES FOR DETERMINATION** 33. Having considered the pleadings, affidavits, annexures and submissions of the parties, the issues arising for determination are: 34. **Whether the Plaintiff has established the requisite locus standi to maintain the present proceedings.** 35. **Whether the Defendant complied with the statutory requirements governing the exercise of its statutory power of sale under the Land Act, 2012.** 36. **Whether the question concerning the applicability of the loan insurance policy discloses a prima facie case warranting preservation of the suit property pending trial.** 37. **Whether the Plaintiff has satisfied the principles for the grant of an interlocutory injunction as set out in Giella v Cassman Brown & Co. Ltd [1973] EA 358.** 38. **Whether the Plaintiff is entitled to the ancillary orders sought.** 39. **ANALYSIS AND DETERMINATION** 40. **Whether the Plaintiff has locus standi** 41. The Defendant has challenged the Plaintiff's standing on the basis that she has not obtained letters of administration to the estate of the late John Sankau Ole Munka. 42. The law is settled that a party cannot institute proceedings on behalf of a deceased person's estate without a grant of representation. In **Trouistik Union International & Another v Jane Mbeyu & Another [1993] eKLR**, the Court of Appeal held that only a personal representative can sue on behalf of a deceased person's estate. Similar holdings were made in **Otieno v Ougo & Another [1986-1989] EA 468** and **Virginia Edith Wambui Otieno v Joash Ochieng Ougo & Another [1987] eKLR**. 43. However, the present application is not solely founded upon rights accruing to the deceased chargor. The Plaintiff asserts rights as a spouse who executed a spousal consent and who claims an interest in what she describes as her matrimonial property. She also challenges the propriety of the intended statutory sale and alleges that statutory notices were not served upon her. 44. At this interlocutory stage, the Court is not persuaded that the absence of a grant completely extinguishes the Plaintiff's right to challenge an intended sale which she alleges affects her proprietary and matrimonial interests. The question of whether she can ultimately prosecute all the substantive claims pleaded is better left to determination at trial. 45. Accordingly, the Court finds that the issue of locus standi does not, at this stage, dispose of the application. 46. **Whether the Defendant complied with the statutory requirements for exercise of the statutory power of sale** 47. The exercise of a chargee's statutory power of sale is governed principally by sections 90, 96 and 97 of the Land Act, 2012. 48. In **Co-operative Bank of Kenya Ltd v Patrick Kangethe Njuguna & 5 Others [2017] eKLR**, the Court of Appeal emphasised that compliance with the statutory notice regime is mandatory before a chargee may lawfully exercise its remedies. 49. Likewise, in **Kenya Commercial Bank Ltd v Specialised Engineering Co. Ltd & Another [2015] eKLR, the Court reaffirmed that the statutory power of sale only crystallises** upon strict compliance with the statutory requirements. 50. The Plaintiff contends that neither she nor the deceased chargor was served with the requisite notices. The Defendant, on the other hand, has exhibited demand letters, statutory notices, redemption notices, notifications of sale and certificates of postage demonstrating service upon the borrower, the chargor and the Plaintiff. 51. At this interlocutory stage, the Court is not called upon to conclusively determine disputed questions of fact. The Court's duty is limited to assessing whether the Plaintiff has demonstrated a prima facie case. 52. Having examined the material before the Court, the Defendant has placed before the Court documentary evidence showing issuance of a demand letter dated 21st September 2021, a statutory notice dated 23rd November 2021, redemption notices and subsequent notifications of sale. The Plaintiff has not produced material capable of displacing the evidentiary weight of those documents at this stage. 53. Prima facie, therefore, the Defendant has demonstrated substantial compliance with the statutory notice requirements. 54. **Whether the dispute regarding the insurance cover establishes a prima facie case** 55. A substantial part of the Plaintiff's case rests upon the assertion that the outstanding loan balance ought to have been settled by insurance upon the death of the borrower. 56. The Defendant responds that the loan account had fallen into arrears long before the borrower's death and that the applicable Loan Guard Insurance policy expressly excluded loans that were already in default or dormant. 57. The Court notes that the parties have placed before it competing factual assertions regarding the status of the loan account, the scope of the insurance cover, and the applicability of policy exclusions. 58. These are matters that can only be conclusively determined upon production of the policy documents, insurance correspondence and oral evidence at trial. 59. The Court agrees with the principle stated in **Mbuthia v Jimba Credit Finance Corporation & Another [1988] KLR 1**, that a chargee exercising its remedies must act in good faith. Whether the Defendant acted in good faith regarding the insurance claim remains a triable issue. 60. Nevertheless, the mere existence of a triable issue does not automatically entitle a party to an interlocutory injunction. The Court must still apply the well-established principles governing injunctive relief. 61. **Whether the Plaintiff has satisfied the Giella principles** 62. The principles governing interlocutory injunctions were settled in **Giella v Cassman Brown & Co. Ltd [1973] EA 358. They were** restated by the Court of Appeal in **Nguruman Limited v Jan Bonde Nielsen & 2 Others [2014] eKLR**. 63. The Applicant must establish: 64. a prima facie case with a probability of success; 65. irreparable injury incapable of compensation by damages; and 66. if the Court is in doubt, the balance of convenience. 67. In **Mrao Ltd v First American Bank of Kenya Ltd & 2 Others [2003] KLR 125**, the Court defined a prima facie case as one which, on the material presented, demonstrates an apparent infringement of a right requiring rebuttal. 68. The evidence before the Court establishes that: 69. The suit property was voluntarily charged as security for a loan facility; 70. The Plaintiff executed spousal consent; 71. The loan fell into arrears; 72. The Defendant issued notices which, prima facie, complied with the law; 73. The insurance dispute remains unresolved and requires a full hearing. 74. While the insurance issue raises a genuine triable question, the Court is not persuaded that the Plaintiff has established a prima facie case demonstrating illegality in the Defendant's exercise of its statutory power of sale. 75. On irreparable injury, the Plaintiff argues that the property constitutes her matrimonial home. The Defendant disputes that assertion and relies on valuation reports showing undeveloped land. 76. More importantly, the law is settled that once property is offered as security, it becomes a commercial commodity available for sale upon default. 77. In **Nyanza Fish Processors Ltd v Barclays Bank of Kenya Ltd, Civil Application No. Nai. 114 of 2009 (UR 73/2009)**, the Court held that property offered as security becomes a commercial asset whose loss is ordinarily compensable by damages. 78. Similar observations were made in **Joseph Siro Mosioma v Housing Finance Company of Kenya Ltd & 3 Others [2008] eKLR** and **Andrew M. Wanjohi v Equity Building Society & 7 Others [2006] eKLR**. 79. If ultimately the Plaintiff succeeds at trial and establishes wrongful sale, damages would be available as a remedy against the Defendant, a financial institution capable of satisfying any decree that may arise. 80. On the balance of convenience, the evidence shows that the debt has remained unpaid for a considerable period. The Defendant is a cooperative society holding funds belonging to its members and has a legitimate interest in recovering monies advanced under the loan agreement. 81. The balance of convenience therefore tilts in favour of allowing the Defendant to exercise its contractual and statutory rights rather than restraining it indefinitely. 82. **Whether the Court should order restructuring of the loan and disclosure of documents** 83. The Plaintiff invites the Court to reopen the loan and revise its terms pursuant to sections 105 and 106 of the Land Act. 84. The Court's jurisdiction under those provisions is discretionary and must be exercised upon a proper evidentiary foundation. 85. At this interlocutory stage, and in the absence of sufficient material regarding the current indebtedness, insurance position and repayment proposals, the Court declines to interfere with the contractual arrangements freely entered into by the parties. 86. However, in the interests of transparency and fair adjudication, the Defendant shall furnish the Plaintiff with an updated loan statement and copies of any available documentation relating to the loan insurance claim within thirty (30) days. 87. **DISPOSITION** 88. Consequently, the Court makes the following orders: 89. **The Plaintiff's Notice of Motion dated 21st March 2025 seeking interlocutory injunctive relief is hereby dismissed.** 90. **The prayer seeking to restrain the Defendant from exercising its statutory power of sale over land parcel CIS MARA/LEMEK/1208 is declined.** 91. **The prayer seeking the reopening and restructuring of the loan facility has been declined.** 92. **The Defendant shall, within thirty (30) days from the date hereof, furnish the Plaintiff with an updated loan statement and copies of any available documentation relating to the loan insurance claim.** 93. **The costs of the application shall be subject to the outcome of the main suit.** 94. It is so ordered. **DATED, SIGNED, AND DELIVERED AT NAROK, THIS 31ST DAY OF JULY, 2026.** **CHARLES KARIUKI** **JUDGE**