Kariungi v Speed Capital Limited & 3 others (Civil Case 15 of 2019) [2026] KEHC 9676 (KLR) (1 July 2026) (Judgment)

Kariungi v Speed Capital Limited & 3 others (Civil Case 15 of 2019) [2026] KEHC 9676 (KLR) (1 July 2026) (Judgment) Neutral citation: [2026] KEHC 9676 (KLR) Republic of Kenya In the High Court at Kajiado Civil Case 15 of 2019 JL Tamar, J July 1, 2026 Between Patrick Kariungi Plaintiff and Speed Capital Limited 1st Defendant Peter M Gachie t/a Regent Auctioneers 2nd Defendant Ann Wangechi Njai 3rd Defendant Charles Njai Karobia 4th Defendant Judgment 1.The plaintiff filed this suit on 23rd May 2018 seeking an injunction to restrain the 1st and 2nd defendants, its agents, servants or any other person acting under its instructions from selling the suit property LRKajiado/Kitengela/31999(Original Number 31508) by public Auction. The plaintiff also sought for an order that he be accorded an opportunity to apply for equity of redemption by enlarging the repayment period of the loan amount. In the amended plaint dated 6th May 2019, the plaintiff further sought an order that the title deed be unconditionally released to him and the 3rd and 4th defendant be compelled to substitute the plaintiff title with their own. 2.It is worth noting at this stage, that the Notice of Motion dated 1st November 2022 and the further amended plaint of the same date was never prosecuted to conclusion. At the time of hearing of this suit therefore, the plaintiff had not obtained leave to further amend the amended plaint. 3.The plaintiff pleads that at all material times he was the registered owner of property LRKajiado/Kitengela/31999(Original Number 31508) which was charged in favour of the defendant for a financial facility in the sum of Ksh 7,000,000. The facility was advanced to the 3rd defendant -the plaintiff niece-using the plaintiff property as collateral on the understanding that the title would be returned to the plaintiff in July 2017 and that in the event the loan would not have been fully serviced the 4th defendant was to give another title as a substitute for the plaintiff title. The 3th defendant defaulted in loan repayment and failed to substitute the plaintiff title with another title as earlier agreed. It is averred that on or about the 12th day of July 2017, a mediation session was done during which the 4th defendant undertook to have the plaintiffs title returned to the plaintiff by 3rd defendant without any undue delay and which has never been effected to date. The plaintiff was surprised to learn that the 1st defendant had placed an advertisement on the Daily Nation newspaper informing the general public that the charged property was to be publicly auctioned. 4.The plaintiff aver that his property is worth more than 30 million and that he stands to suffer irreparably if the auction is carried out as he was not the beneficiary of the loan and never received the notice informing of the intended auction. It is further stated that the 3rd defendant had paid a sum of ksh1,280,000 towards settlement of the principal amount and that the plaintiff is ready and willing to exercise his equity of redemption as the property is matrimonial property. 5.The 1st and 2nd defendants filed a joint defence and aver that on or about 27th March 2015, the 3rd defendant applied for a loan of Ksh 7,000,000 to expand her business and executed an agreement to that effect. As a security for the loan advanced, the plaintiff offered his property Title Number LRKajiado/Kitengela/31999(Original Number 31508) which was valued and charged in favour of the 1st defendant. 6.The 1st defendant aver that both the plaintiff and the 3rd defendant had been made aware and advised of the outstanding loan amounts and steps being taken to recover the same. That all relevant statutory notices were served upon the plaintiff and the 3rd defendant on several occasions and were duly acknowledged. The defendant contend that the property was valued before the same was advertised for sale in public auction and were not aware of any negotiation between the plaintiff and the defendant. 7.The matter proceeded to hearing where both the plaintiff and the 1st defendants testified. Plaintiff Case 8.The plaintiff testified and adopted his written statement dated 5th October 2022 as his evidence in chief. In his statement, the plaintiff told the court that the 3rd defendant being his Niece approached him through his sister Beatrice Wanjiku Mwaniki and requested that he guarantee her a loan facility of Ksh 7,000,000 which he accepted and offered his property as a security. He told the court that the request to guarantee the 3rd defendant was on condition that upon the expiry of 2 years, the title would be released back to him. This understanding was reduced in writing and the plaintiff produced the agreement as exhibit. The 3rd defendant did not however honour the agreement as undertaken, in the meeting held on 12th July 2017 involving the 3rd defendant and her two brothers on one hand and the plaintiff on the other. The plaintiff in his statement stated that the 3rd defendant was to inform the 1st defendant of their intention to substitute the collateral. 9.The plaintiff contend that save the notification of sale dated 14th march 2018, he was never served with the demand letters and the statutory notice of sale as required by law. 10.In cross examination by the defendants’ counsel, the plaintiff stated that he moved to court because the 3rd and 4th defendant had not paid the loan advanced and that although they met to resolve the issue, as a family, the 1st defendant was not a party to the discussion. He agreed that he signed for the offer letter and all other related documents and that the addressed indicated in the documents is his. Defendant Case 11.James Karebe, recovery manager working for the 1st defendant testified and relied on his witness statement dated 12th march 2021as his evidence in chief. He also produced the documents relied upon as exhibits. In his statement, the witness told the court in his statement that the plaintiff had offered to guarantee the 3rd defendant loan and gave his title number to be charged in favour of the 1st defendant for Ksh. 7,000,000. That when the 3rd defendant defaulted in payment, the 1st defendant issued statutory notices dated 1st September 2017, in respect of 90 days and 8th January 2018 in respect of 40 days to the 3rd defendant and the plaintiff which notices were duly acknowledged by both parties. The defendant avers that at the time the notices were issued, the amount outstanding was ksh 21,090,967 which remains unpaid. The property was advertised for sale and a valuation done which returned a forced sale value of 22,500,000 12.He told the court that the property was sold but not transferred hoping that the plaintiff would repay the loan. Plaintiff submissions 13.The plaintiff counsel framed two issues for determination to wit;1.Whether the plaintiff title should be released and /or substituted2.Whether the plaintiff parcel of land was sold 14.The plaintiff submits that he was never served with all the statutory notices as required by section 90 of the Land Act which places an obligation upon the charge to serve the charger notice in writing requiring the charger to pay the money owing or perform and observe the agreement. It is submitted that the 1st defendant filed documents and attached a letter dated 1st September 2017 which the plaintiff confirmed during the trial that it did not receive nor signed the acknowledgement attached to the letter. It is also submitted that the letter dated 8th January 2018 addressed to the 3rd defendant was never received b nor is there proof of service to the plaintiff and the 3rd defendant. The case of Jane Wairimu Ngure (suing as administratrix of the estate of peter Tharao (deceased) vs National Bank of Kenya & 2others (2019) KEELC where the court observed that once a borrower refutes service with the requisite notices by the bank, the burden of proof shifts to the bank to prove so. Counsel submitted relying on the case of Nyangilo Ochieng & Another vs Fanuel B Ochieng & 2 others that where the court of appeal stated that it is for the charge to make sure that there is compliance with the requirements of section 74(1) of Registered Land Act. That the burden is in no way on the charger. Once the charger alleges non receipt of the statutory notice it is for the charge to prove that such notice was in fact sent. 15.The plaintiff submitted that in as much as the 3rd defendant was in default the defendant did not follow the laid down procedures before the alleged sale of the plaintiff property and therefore the plaintiff title should be released to him unconditionally. 16.On whether the plaintiff property was sold, the plaintiff submitted that there is no evidence that the plaintiff was served with a letter from the auctioneer to exercise his right of redemption. Further if the property is sold as contended by the defendants, there is no evidence on how the funds were applied and whether any accounts were rendered to the plaintiff. There is also no evidence it is submitted the price at which the property was sold in 2021 considering that at the time of valuation in 2015, the property’s forced value was ksh. 22,500,000. Plaintiff submissions 17.The defendants counsel filed submission dated 18th December 2025. It is submitted on behalf of the 1st and 2nd defendant that the statutory notices to demand payment and rectify default were served upon the plaintiff and the 3rd defendant pursuant to section 90(1) of the Land Act 2012, granting at least a three- month period to pay the outstanding amount. It is submitted that the notice clearly informed the plaintiff of the consequences of non-payment. The defendant contend that the plaintiff and all other required persons were served with the 40-day notice to sell the charged land under section 96(2) of the Land Act. Subsequently 45 days redemption notice was served upon the plaintiff by the auctioneer. 18.The defendants submit that after the expiry of the notice period as required by law and the property advertised for sale, the same was sold by public auction to a third party but the transfer process initiated was halted by the plaintiff court action.it is therefore the defendants’ submissions that the plaintiff has no cause of action against the defendants and the suit should be dismissed. 19.The defendant identified the following three issues for determination;1.Whether the 1st and the 2nd defendant complied with all the mandatory Land Act Notices and Conditions before selling the land charged, that is section 90, 96, and Rule 15 of the auctioneers Rules.2.Whether the plaintiff, having admitted compliance, is precluded from challenging the sale and must be bound by the results ……….(.it is the court that must be satisfied of compliance with the law and not admission by a party to the proceedings);3.Whether the plaintiff claim should be dismissed with cost. 20.The defendants submit that the plaintiff was served with 90-day statutory notice and informed of default vide letter dated 1st September 2017 through his address P.O Box Mbagathi 156 and at his residence. Again, vide letter dated 8th January 2018, it submitted that the plaintiff and the guarantor were served with the 40-day notice under section 96(2) of the Land Act. And finally, under the auctioneer’s rule 15(d), the plaintiff was given 45 days redemption notice. Counsel referred the court to the case of Martin Karimi Baithambu vs Jeremiah Miriti (2017) KEHC 6458 KLR where the court of appeal stressed that the Land Act Section 90, 96, and 97 exist precisely to “strictly regulate default and sale of charged property” by giving notice to the chargor or guarantor. 21.The defendant contends that after the sale of the charged property, it lodged the transfer at the land registry as provided for in section 98(3) which according to the defendant was evidence enough that the power of sale had been duly exercised. 22.On whether the plaintiff having admitted compliance, is precluded from challenging the sale and must be bound by the results, it is submitted that the plaintiff admission that there was compliance on the part of the 1st and 2nd defendant precludes him from challenging the sale that had already taken place. The service of all the requisite notices is reiterated by the defendants and that the plaintiff guarantee still remains in force to cover the loan amount that had been guaranteed by the plaintiff. 23.It is also submitted that the plaintiff contention that the forced sale value does not reflect the property market value is not proved by the plaintiff under section 107,108 and 109 of the evidence Act. The case of Zum Zum Investment Limited vs Habib Bank Limited (2014) EKLR was cited for the proposition that once the defendant has undertaken a forced valuation the burden shift to the plaintiff to prove that the value arrived at by the defendant was not the best price reasonably obtainable at the time. And that it is not sufficient for the plaintiff to merely claim that the intended selling price is not the best price obtainable at the time. 24.On the third issue, the defendant submits that the plaintiff has no claim against the defendants since he admitted before the court that he was properly served with the statutory notices and that he knew what he was getting into by signing off his property, to be used as security over the loan. 25.The defendants therefore seek that the plaintiff suit be dismissed with cost. Analysis and Determination. 26.I have considered the parties pleadings and the documents produced as exhibits and read the submissions by counsel on both sides. As pointed earlier in this judgement the plaintiff made attempts to further amend his plaint but for one reason or another the notice of motion application seeking leave was never prosecuted to its logical conclusion. Parties are bound by their pleadings and I will therefore rely on the amended plaint dated 6th may 2019 which was amended before the pleadings closed. 27.The issue for this court’s consideration is whether the plaintiff as met the threshold for the orders sought. 28.There is no dispute whatsoever that the plaintiff is the registered owner of Title Number LRKajiado/Kitengela/31999(Original Number 31508) which property he voluntarily had it charged and used as security in favour of the 1st defendant for monies advanced to the plaintiff niece the 3rd defendant vide a facility letter dated 27th march 2015. The plaintiff accepted and agreed to the lenders offer, the terms and conditions contained therein and appended his signature on 27th march 2015. From the plaintiff filings and his testimony in court, he had agreed with the 3rd defendant who approached him with a request to use his title as a security for a loan. It was agreed between the plaintiff and the 3rd defendant that after the expiry of 2 years the title deed would be released to him and the 4th defendant who is the 3rd defendant father would substitute the plaintiff title for another. 29.The family arrangement did not materialize and in the meantime, the 3rd defendant defaulted in repayment of the loan and as a result of the default, the 1st defendant issued a statutory notice under section 90 and 96 of the Land Act 2012 demanding the payment of the amount due vide demand letter dated 1st September 2017. The 40 days’ notice as well as the 45-notice issued by auctioneers were all admitted to have been issued and received. 30.The plaintiff herein admits that he offered his property voluntarily as security for a loan of 7,000,000 million advanced to the 3rd defendant and the same was charged and registered in favour of the 1st defendant. The charge was not made conditional to the mutual agreement entered between the plaintiff and the 3rd defendant and other family members and neither was the charge to be read together with the mutual understanding dated march 2015. The agreement between the plaintiff and the 3rd defendants was a contract between them to which the 1st defendant was not privy to and the same cannot be a basis to impugn the defendant’s statutory power of sale when one has accrued. The plaintiff placed emphasise on the fact that it was mutually agreed between him and the 3rd defendant and other family members that another title would be availed to the 1st defendant in place of the plaintiff title which had been charged. That may be so, but from the evidence and documents availed, the 1st defendant was not privy to that agreement and liability cannot attach where it is not party to. In Savings & Loan (K) Limited vs Kanyenje Karangita Gakombe & another(2015) eklr the court of appeal stated that; “ In its classical rendering, the doctrine of privity of contract postulates that a contract cannot confer rights or impose obligations on any person other than the parties to a contract…” 31.Although the plaintiff in his pleadings denies having been served with the requisite statutory power of sale, he admits during the hearing that he had been served and the address used was his. The obligation of the plaintiff as a guarantor arises and accrue upon default by the principal debtor, the 3rd defendant a fact the plaintiff had known all this while. The matter has been in court since 2019 when the plaintiff sued the defendants. The court had on several occasioned granted the plaintiff at his request and indulgence of the 1st defendant an opportunity to engage with a view to settle the matter with no success. 32.I am therefore satisfied based on the material placed before this court that the plaintiff has not made out a case for the grant of the orders sought. 33.In the circumstances the suit herein is dismissed.There shall be no orders as to cost. DATED, DELIVERED AT GARISSA THIS 1ST DAY OF JULY 2026.JOHN T LOLWATANJUDGE