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Royal Apartments Limited v Shah & another (Commercial Case 472 of 2017) [2026] KEHC 7624 (KLR) (Commercial and Tax) (28 May 2026) (Judgment) Neutral citation: [2026] KEHC 7624 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Commercial Courts) Commercial and Tax Commercial Case 472 of 2017 PM Mulwa, J May 28, 2026 Between Royal Apartments Limited Plaintiff and Virajbhushan D Shah 1st Defendant Sapna V Shah 2nd Defendant Judgment 1.The Plaintiff sued by Plaint dated 20th November 2017 claiming Kshs. 87,606,219.87 against the Defendants jointly and severally, interest at 18% per annum from January 2017 until payment, general damages, and costs. 2.The claim arises from three sub‑lease/sale transactions for Apartments Nos. 201, 202 and 302 on L.R. No. 1870/380 (Parklands Royal Apartments). The core factual dispute concerns whether the Defendants paid the purchase price in full and whether the Plaintiff was properly authorized to institute these proceedings. 3.Defendants filed a joint Statement of Defence dated 28th May 2021, denying liability and asserting payments, while citing coercion to admit a debt that is disputed, and lack of prior demand before to the commencement of the suit. They contend that the amounts demanded were unconscionable, punitive and fraudulent. 4.The matter proceeded to trial. Each side called one witness: Pw}1 - Arul Selvaraj Mudaliar, Managing Director of the Plaintiff, and Dw1 - Vrajbhushad Shah, a Director of the Plaintiff and one of the purchasers. Parties were required to file written submissions. Only the Plaintiff filed written submissions dated 15th December 2025. Evidence 5.Pw1 testified and adopted his witness statement dated 21st November 2017, the list of documents, and the supplementary list of documents as his evidence in chief. 6.He stated that the Plaintiff developed apartments on the suit property and sold three apartments to the Defendants, who took possession thereof but failed to pay the agreed purchase price despite numerous demands and engagements. He stated that his authority to swear on behalf of the company was issued on 5th February 2013 by its resolution. 7.In cross-examination, he testified that the subleases were registered on 20th February 2014. That the agreed purchase price was initially Kshs. 20 million per apartment, which was discounted to Kshs. 16 million for each unit, bringing the total consideration for the three apartments to Kshs. 48 million. He maintained that despite the Defendants taking possession of the apartments in 2013 and repeated promises to pay, the purchase price remained unpaid. He denied that the payments relied upon by the Defendants related to the transaction in issue and maintained that no evidence of full payment had been produced. 8.He states that on 21st December 2017, the negotiated settlement amount was 58 million. 9.Dw1 testified that he is the director of the Plaintiff company together with Pw1 and the 2nd Defendant. He adopted his witness statements dated 28th May 2021 and 28th March 2025, list of documents of the respective dates, as his evidence in chief. 10.He further testified that there was no meeting held before the institution of the suit. And that the letter dated 20th January 2017 to Oyatta & Associates was in respect to the appointment of legal representation of Royal Apartment. 11.He admitted entering into agreements for purchase of the three apartments and confirmed taking possession thereof. He however contended that substantial payments had been made towards the purchase price and that any outstanding balance was far below the sum claimed by the Plaintiff. 12.Dw1 testified that he had paid Kshs. 14 million towards one of the apartments leaving a balance of Kshs. 6 million, and further made instalment payments evidenced in the documents produced before Court. He acknowledged signing an agreement dated 21st December 2017 for settlement of outstanding sums and also admitted that the letter dated 3rd March 2013 constituted an admission of indebtedness. He however, stated that he was pressured by the police to sign some of the documents relied upon by the Plaintiff. 13.He states that he agreed to sell the apartment and settle the outstanding amount. And that he sold the apartment and partly paid the outstanding balance through cheques. Plaintiff's submissions 14.The Plaintiff submitted that the suit was competently instituted pursuant to a valid Board Resolution dated 5th February 2013 authorizing Pw1 to commence and prosecute proceedings on behalf of the company. It was argued that the authority had never been revoked and that under Section 262 of the Companies Act, a written resolution remains valid unless formally rescinded. 15.The Plaintiff further submitted that the Defendants could not rely on an alleged oral agreement to vary the terms of the written and registered sub-leases. It was contended that Section 3(3) of the Law of Contract Act and the parole evidence rule barred reliance on oral negotiations to alter written land agreements. 16.On the Terms of Settlement dated 21st December 2021, the Plaintiff argued that the same were voluntarily negotiated, prepared by the Defendants’ own advocates, executed and commissioned before an advocate, and therefore binding and enforceable. The Plaintiff contended that allegations of coercion were unsupported by evidence and were inconsistent with the Defendants’ conduct. 17.The Plaintiff also submitted that the alleged transfer of Apartment No. 102 to Veena Arul Mudaliar did not extinguish the debt owed to the Plaintiff company, as the transaction related to a personal arrangement involving Pw1 and not the Plaintiff company. 18.On interest, the Plaintiff argued that the Defendants were contractually bound to pay interest at the agreed rate under the sale agreements and subsequent settlement arrangements. It was submitted that courts cannot rewrite contracts freely entered into by parties. 19.Lastly, the Plaintiff submitted that the cash bail receipts produced by the Defendants did not establish coercion or duress. It was argued that no criminal proceedings, complaint, or evidence linking the Plaintiff to any alleged arrest had been produced and that the Defendants never repudiated the settlement agreements contemporaneously. Analysis and determination 20.I have considered the pleadings, evidence tendered and the Plaintiffs' submissions on record. The issues for determination are:i.Whether the Plaintiff was properly authorized to institute and prosecute the suit.ii.Whether the Defendants owe the sums claimed as outstanding under the three transactions and the correct quantum.iii.Whether the Terms of Settlement dated 21st December 2017 are binding and enforceable or vitiated by coercioniv.Whether the Plaintiff is entitled to the reliefs sought. Whether the Plaintiff had proper authority to institute and prosecute 21.The Defendants challenged the authority of Pw1 to institute the suit on behalf of the Plaintiff. Pw1 testified that he was authorized by a company resolution dated 5th February 2013 to manage the affairs of the company. The resolution is signed by the three directors, inclusive of the two named Defendants. 22.A company, being a juristic person, acts through resolutions and authorized officers. In Bugerere Coffee Growers Ltd v Sebaduka & Another [1970] EA 147, the court emphasized that proceedings by a company ought to be sanctioned by the company. However, Kenyan courts have also taken the view that want of authority is not always fatal where authority is subsequently shown or ratified. See Leo Investments Ltd v Trident Insurance Co. Ltd [2014] eKLR). 23.In the present case, the Plaintiff produced evidence of authority. The Defendants did not produce a subsequent resolution revoking Pw1’s authority. I am therefore satisfied that the suit was competently instituted. Whether the Defendants owe the sums claimed 24.It is not disputed that the parties entered into agreements for the sale of Apartments Nos. 201, 202 and 302 erected on L.R. No. 1870/380 and that the Defendants subsequently took possession of the said apartments. The issue in dispute is whether the purchase price was paid in full. 25.The Plaintiff’s evidence was that although the agreed purchase price was initially Kshs. 20 million per apartment, the same was later discounted to Kshs. 16 million per apartment, bringing the total consideration to Kshs. 48 million. Pw1 testified that despite repeated demands and negotiations, the Defendants failed to settle the agreed consideration. Dw1 expressly admitted both the execution of the agreements and possession of the units. 26.The burden of proof lay with the Plaintiff to establish the existence of the debt claimed. He who alleges must prove. The Plaintiff bore the burden of proving the debt. Once the Plaintiff demonstrated that the Defendant were indebted, the evidential burden shifted to them to demonstrate full payment or material reduction of the debt. 27.While the Defendants contended that substantial payments were made, the payments tendered were not sufficiently particularized or reconciled against the Plaintiff’s accounts. Where receipts, cheques or bank documents are relied upon, the Court must be satisfied they relate to the relevant transactions and amounts claimed. The Defendant argued that some payments were made through cash transactions and therefore there were no receipts to show. The Defendants did not provide bank records or receipts that conclusively discharged the Plaintiff’s stated balances. 28.Indeed, Dw1 admitted that there remained an outstanding balance and further acknowledged executing the settlement agreement dated 21st December 2017 in respect of the outstanding sums. He equally admitted that the letter dated 3rd March 2013 constituted an acknowledgement of indebtedness. 29.The Defendants alleged that some of the documents relied upon by the Plaintiff were executed under police pressure and coercion. However, no evidence was placed before the court to substantiate those allegations. No complaint to any investigative agency, criminal proceedings, or contemporaneous protest challenging the alleged coercion was produced. Mere allegations unsupported by evidence cannot suffice. 30.The law is settled that parties are bound by the terms of contracts voluntarily entered into. In National Bank of Kenya Ltd v Pipeplastic Samkolit (K) Ltd & Anor (2001) eKLR the Court of Appeal held that a court of law cannot rewrite a contract between parties and is bound to enforce the same unless fraud, coercion or undue influence is established. 31.In the circumstances, I am satisfied that the Plaintiff has proved, on a balance of probabilities, that the Defendants breached the sale agreements. I find that the Defendants did not prove full payment. The evidence before the Court shows that there remained an outstanding debt due from the Defendants to the Plaintiff. Whether the settlement agreement dated 21st December 2017 is enforceable 32.The Defendants alleged that the settlement agreement was signed under police pressure and coercion. The law is settled that a party alleging duress, coercion or undue influence must plead and prove the same by cogent evidence. 33.In Flora N. Wasike v Destimo Wamboko [1988] eKLR, the Court of Appeal held that a consent or settlement agreement has contractual effect and may only be set aside on grounds that would justify setting aside a contract, such as fraud, mistake, misrepresentation or coercion. 34.In support of the allegation of coercion, Dw1 produced a receipt evidencing payment of cash bail to the police but no criminal proceedings, complaint, police record, or independent evidence was produced to show that the Plaintiff procured the alleged coercion. Further, the Defendants did not promptly repudiate the settlement agreement. 35.The Defendants’ conduct, including partial payments made subsequent to the agreement, further supports the conclusion that the parties intended to be bound by its terms. 36.I therefore find that the allegation of coercion was not proved. The settlement agreement dated 21st December 2017 is binding and enforceable. Whether the Plaintiff proved the sum claimed 37.The Plaintiff Claims Kshs. 87,606,219.87 together with contractual interest. However, the evidence on record reveals material inconsistencies as to the agreed purchase price and the amount allegedly outstanding. 38.Pw1 testified that the agreed price was discounted to Kshs. 16 million per apartment, making a total of Kshs. 48 million. The settlement agreement dated 21st December 2017, however, records the indebtedness as Kshs. 58 million, while the Plaint filed on 20th November 2017 has a claim of Kshs. 87,606,219.87. The Plaintiff did not produce a clear computation reconciling how the sum increased from Kshs. 48,000,000/= to Kshs. 58,000,000/= and ultimately to Kshs. 87,606,219.87. 39.The Court cannot enter judgment for a sum that has not been strictly proved. Special damages must not only be specifically pleaded but also strictly proved. (See Hahn v Singh [1985] KLR 716). 40.While I am satisfied that the Defendants are indebted to the Plaintiff, I am not satisfied that the Plaintiff proved the pleaded sum of Kshs. 87,606,219.87. The proved amount is the acknowledged settlement sum of Kshs. 58,000,000/= less any payments shown to have been made thereafter. 41.While admissions may ground a judgment, it is well settled that such admission must be plain, clear and unequivocal. In Choitram v Nazari (1984) eKLR the Court held:“That judgment can only be entered on admission where the admission is clear and unambiguous, and that admissions can be expressed or implied either on the pleadings or otherwise e.g. in correspondence.” 42.The exercise of discretion to enter judgment on admission must not produce a miscarriage of justice. The settlement agreement dated 21st December 2017 contains an acknowledgement by the Defendant of indebtedness in the sum of Kshs. 58,000,000/= and a proposal to pay that amount. That acknowledgement constitutes an admission. 43.Dw1 denied owing the amount claimed and asserted that substantial payments had been made towards the purchase price, including transfer of one apartment unit to Pw1’s wife pursuant to the settlement arrangement. Although the Defendants admitted the existence of the agreements and acknowledged some indebtedness, they disputed the precise amount due. The Defendants allege they have paid the debt, but no cogent evidence was placed before the court to prove payment. 44.However, the Court was not supplied with a clear reconciled account demonstrating the exact amount paid after the settlement. In the absence of such reconciliation, I find that judgment can only be entered for the sum admitted in the settlement, subject to any payments already received and acknowledged by the Plaintiff. Interest 45.The Plaintiff seeks interest at 18% per annum. Courts do not rewrite contracts freely entered into by parties. (See National Bank of Kenya Ltd v Pipeplastic Samkolit (K) Ltd & Another [2001] eKLR). 46.However, contractual interest must be proved by the relevant agreement. In this case, the court will exercise jurisdiction to award interest at court rates. General damages 47.The Plaintiff claimed general damages. No specific evidence of additional non‑pecuniary loss or special damages was led beyond the contractual loss; accordingly, separate general damages are not awarded. The Plaintiff, having succeeded on the principal claim, is entitled to costs. Costs are awarded to the Plaintiff, to be taxed if not agreed. 48.In the result, I enter judgment for the Plaintiff against the Defendants jointly and severally as follows:i.Judgment is entered for the Plaintiff in the sum of Kshs. 58,000,000/=, less any payments proved to have been made and received after 21st December 2017.ii.Interest shall accrue at court rates from the date of filing suit until payment in full.iii.The claim for general damages is declined.iv.The Plaintiff shall have the costs of the suit.Orders accordingly. JUDGMENT DELIVERED VIRTUALLY, DATED AND SIGNED AT NAIROBITHIS 28TH DAY OF MAY 2026.P.M. MULWAJUDGEIn the presence of:Mr. Oyatta for PlaintiffMr. Shikanda h/b for Mr. OsunDwa for DefendantCourt Assistant: Lispa