https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/7885

 **REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA** **AT NAKURU** **CIVIL SUIT NUMBER 19 OF 2014** **NAKURU STEROS SERVICES COMPANY** **LIMITED ----------------------------------------------------PLAINTIFF/APPLICANT** **-VERSUS-** **NATIONAL BANK OF KENYA LIMITED- DEFENDANT/RESPONDENT** **RULING** 1. By Notice of Motion dated 4/9/2025 the Applicant seeks these reliefs; 2. **Spent.** 3. **Spent.** 4. **THAT the court declares that letter of instructions issued by the Respondent and the subsequent 45 days redemption notices violates provisions of rules 11(1b) and rule 15(d) of the Auctioneers Rules and therefore the scheduled sale by public auction flowing there from is unprocedural and illegal.** 5. **Any other order the court may deem fit to grant.** 6. **THAT costs be provided for.** 7. A director of the Applicant (Joseph M. Wakubwa) swore an affidavit in support of the Motion. He avers that on 9/9/2025 the Respondent instructed INTEGRA AUCTIONEERS (K) COMPANY to sell by public auction, a parcel of land described as Nakuru Municipality Block 5/81 belonging to the Applicant. Earlier, the Auctioneers are said to have been instructed to issue a statutory 45 days redemption notice to the Applicant demanding payment of Kshs. 128,785,586 exclusive of interest, which sum was stated to continue accruing interest. 8. The Applicant’s witness further deposes that on 31/7/2025, the Respondent issued a letter indicating the outstanding balance as at that date to be Kshs. 301,822,964. A loan statement also purportedly issued by the Respondent showed the book loan balance as Kshs. 103,497,098/= as at 19/5/2025 and the matter the Applicant paid Kshs. 2,048,395/= leaving a balance of Kshs. 101,448,703/=. According to the Applicant, this demonstrates that it has been repaying the loan. 9. The Applicant further testified through its said Director that *vide* a letter dated 4/4/2025 it made a proposal for a final settlement to the Respondent whose Advocates replied by letter dated 21/5/2025 accepting an all inclusive figure of Kshs. 142,000,000/= that would enable the Applicant to source for financiers to buy off the facility. 10. The court is told that many financial institutions offered to buy off the facility but the Respondent alleged “ringfenced’’the Applicant through the Credit Reference Bureau (CRB) thereby denying it access to funds to buy off the loan. The Applicant laments that the Respondent’s conduct amounts to fettering his right to redeem the charged property, as put to the Respondent by one of the interested financiers (Credit Bank Limited) through its letter dated 19/6/2025. 11. Meanwhile, the Applicant is said to have continued to make repayments as agreed with the Respondent, and between July and August 2025 it had paid a total of Kshs. 2,048,395/=. As at the time of bringing this Application claims to have paid a total of Kshs. 63,266/= hearing the loan balance of Kshs. 101,385,437/=. 12. In the premises, the Applicant contends through its Director that the notices issued by the Respondent are illegal and prejudicial for failing to disclose the full amount owed to it. 13. The Respondent opposes the Application through an affidavit in reply sworn by its Manager Remedial and Recovery Department (Morris Tiema). *Inter alia*, he contends that the Application is an abuse of the court process and meant to delay recovery of the loan balance. The Respondent attacks the Applicant’s conduct of forestalling recovery of the loan which conduct is also said to have been deprecated by this court (Hon. H. M. Nyaga J) in a Ruling of 16/12/2024 made in a similar Application. The court is quoted to have directed that the Applicant would not be allowed to move the court again over the loan unless “…. . , it has updated its loan account in full by paying up all loan instalments as required ….” My brother Judge also directed the Applicant to prosecute the suit within 6 months from the date of the Ruling. 14. The Respondent’s Officer further avers that the Applicant appealed the decision to the Court of Appeal at Nakuru and also sought similar orders of injunction that were rejected by this court. The Court of Appeal is said to have declined to grant injunction on the ground that default on the loan was admitted and the grounds upon which the Application was predicated were held to be not arguable. 15. Undeterred, the Applicant is said to have returned to this court by filing an Application dated 28/4/2025 for the same injunctive relief. The Respondent’s witness laments that when the Applicant failed to obtain an *ex-parte* temporary injunction, it never served and/or prosecuted this latest Application and instead brought the instant Application. 16. The Applicant’s *bonafidei* is therefore questioned owing its stated conduct in the prosecution of this action. The Applicant allegedly breached a previous agreement with the Respondent on payment of the outstanding debt among other infractions, alluded to in the Respondent’s reply. 17. Apparently on advice by the legal Counsel, the Respondent impugns this Application as *res judicata* on account of the previous court’s Ruling of 16/12/2024 *supra* and other decisions earlier rendered in this matter. The Applicant is further faulted for dithering on having the suit fixed for hearing despite admonition by the court. 18. While acceding to the fact that a proposal on a full and final settlement of the amount outstanding was discussed between the parties, the Respondent accuses the Applicant of failing to settle the final amount agreed, resulting in the Respondent resorting to pursuing the entire debt owed. 19. Regarding the Applicant’s complaint about its negative listing with the CRB, the Respondent retorts that it is bound by various legal instruments including the Banking Act to provide necessary information for protection of lenders. As the Applicant is in default, the court is told that the Respondent was justified in that respect and was indeed required to provide relevant information regarding the non-performing loan. 20. According to the Respondent, the principal loan amount stood at Kshs. 125,733,747/= as at the time of filing the present Application. Repayments being made are dismissed as meagre and significantly below amounts agreed upon. 21. It is further brought to the court’s attention that the parties have since agreed on the principal loan amount due as per consent dated 11/11/2019 adopted by the court, and at the time of bringing the Application the amount was Kshs. 125,733,747/= as adverted to above. 22. In a nutshell, therefore, the Respondent states that the Application lacks in merit and maintains that it issued all the requisite notices in compliance with the law including the Auctioneers Act and Rules made thereunder. 23. The Applicant put in a further affidavit in answer to the Respondent’s affidavit evidence. Reiterating its position, the Applicant’s witness claims that the Respondent has not addressed their specific contention that the instructions to the Auctioneers and subsequent 45 days redemption notice issued offend **rule 11(1b) and rule 15(d)** of the **Auctioneers Rules**, thus tainting the planned auction. The Applicant maintains that it is still servicing the loan as shown by loan statements exhibited. 24. Among other contentions in the further affidavit, the Applicant’s Director states that the Auctioneers Rules alluded to hereinabove have not been complied with since the full amount due is not disclosed in the Auctioneers redemption notice. According to the Applicant, the disputed amount of interest outstanding is not included in the amount due. The balances indicated as due are therefore said to be contradictory. 25. Only Learned Counsel for the Applicant filed written submissions. 26. Counsel for the Applicant submit that different amounts of loan balances are claimed to be owing and the intention is to fetter the Applicant’s right of redeeming the charged property. Reference is made to **Rule 15 Auctioneers Rules which enacts as follows :-** **“Upon receipt of a court warrant or letter of instruction the auctioneer shall in the case of immovable property;** **……(d) give in writing to the owner of the property a notice of not less than forty five days within which the owner may redeem the property by payment of the amount set forth in the court warrant or letter of instruction.”** 1. By failing to include interest owed in the 45 –days notice, the Applicants’ Advocates submit *inter alia* that the total amount payable is not shown, and owing to the alleged contradictory figures claimed, the Applicant would not be able to wholly redeem its charged property in breach of **Rule 15(d) of the Auctioneers Rules** *supra.* 2. It is pointed out by the Applicant’s Counsel that the contentious issue of interest has always remained unresolved and ought to be addressed before the charged property is put up for sale in exercise of the Respondent’s statutory power to realize the loan security. 3. It is not in dispute that the contentious amount the Respondent claims which triggered this Application does not include interest due on the loan balance. In **Ace Motors Limited & Another vs M. Oriental Bank Limited & Another (Civil Suit 12 of 2022) [2023] KEHC 18513(KLR) (16 JUNE 2023) (Ruling),** it is underscored that proper statutory notices of sale of charged property including the 45 -days Auctioneers redemption notice ought to be issued so as not to clog the chargor’s right to redeem the property. The Respondent was obligated to state the entire indebtedness of the Applicant as required by the law. 4. By failing to include interest in the amount claimed, the Applicant is put in a quandary at a time it is looking for another financier to buy off the facility. This claws its right of redeeming the loan security. 5. The Applicant has indeed previously been directed not to file further Applications on the matter until it had fully updated its loan account. I don’t, however, think that this order barred it from pointing out a legal violation such as done through this Application. 6. As regards the other directive given to the Applicant to prosecute the suit within 6 months from 16/12/2024 when the order was given, the record shows that both sides are responsible for the delay. The parties took time to file and exchange documents as required before the suit could be fixed for hearing. 7. It is evident from the history of this matter that the dispute can only be resolved if the suit is fixed for hearing without further delay so that the contentious issue of interest is finally ventilated and determined. The court is prepared to facilitate the parties in this regard. 8. The upshot is that prayer 3 of the Notice of Motion dated 4/9/2025 is granted. The costs of the Application shall be in the cause. **J. M. NANG’EA, JUDGE.** **Ruling dated, signed and delivered virtually at Nakuru this 3rd day of June, 2026.** **In the presence of:** **Mr. Ndichu Advocate for the Plaintiff/Applicant.** **Defendant’s /Respondent’s Advocate, Absent.** **Court Assistant, Jeniffer.** **J. M. NANG’EA, JUDGE.**