https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/5040

**REPUBLIC OF KENYA** **IN THE ENVIRONMENT AND LAND COURT AT KITALE** **ELC NO. E007 OF 2022** **KUNDAN RAJNIKANT SHAH &** **PARAS RAJNIKANT SHAH** ***(Suing for and on behalf of the Estate of*** **RAJNIKANT DEVCHAND SHAH (Deceased)----------1ST PLAINTIFF** **JITEN RASIKLAL DEVCHAND SHAH** ***(Suing for and on behalf of the Estate of*** **RASIKLAL DEVCHAND GOVINDJI SHAH(Deceased)----2ND PLAINTIFF** **MIKUL RASIKLAL DEVCHAND SHAH** ***(Suing for and on behalf of the Estate of*** **RASIKLAL DEVCHAND GOVINDJI SHAH (Deceased)----3RD PLAINTIFF** **SUAM HANDWARE LIMITED-----------------------------4TH PLAINTIFF** **MOI’S BRIDGE QUARRY LIMITED----------------------5TH PLAINTIFF** **VERSUS** **KENYA RAILWAYS CORPORATION-----------------1ST DEFENDANT** **NATIONAL LAND COMMISSION-------------------2ND DEFENDANT** **COUNTY GOVERNMENT OF** **TRANS NZOIA----------------------------------------------3RD DEFENDANT** **CHIEF LAND REGISTRAR-------------------------------4TH DEFENDANT** **HON. ATTORNEY GENERAL--------------------------5TH DEFENDANT** **RULING** 1. The 1st defendant, Kenya Railways Corporation, moved this court by way of a Notice of Motion Application dated **3/6/2026** seeking the following judicial reliefs: 2. **…spent.** 3. **…spent.** 4. **THAT the Honourable Court be pleased to grant a stay of execution of the judgment and/or decree issued on 29/4/2026 by Hon. Justice C.K. Nzili, pending hearing and determination of the appeal.** 5. **…spent** 6. **THAT this Honourable Court be pleased to issue orders of status quo in granting a stay of execution of the judgment/decree in a bid to preserve the suit properties thus restraining the plaintiffs either by themselves or agent/servants from disposing, alienating, or in any way interfering with and/or dealing with the cattle-loading ramp comprised in suit properties Kitale Municipality block 4/197, 4/198, 4/199 and 4/202 (formerly LR No. 2116/317, 381, 319, 321, 322, 323, 324, 325, and 326 pending the hearing and determination of this appeal.** 7. **THAT costs of this application be provided for.** 8. The application is based on the grounds on the face of it, mainly that the court delivered a judgment on **29/4/2026** wherein it found for the plaintiffs and made orders which included, among others, that the defendants are liable to pay damages to the tune of **Kshs. 138,522,675.02**. That the court granted a sixty-day stay of execution of the judgment, which days were to lapse on **27/6/2026** and that even though the 1st defendant has lodged a notice of appeal intending to appeal the decision of the trial court, the plaintiffs could execute the judgment of the court and render the appeal nugatory. 9. The application is further supported by the sworn affidavit of Stanley Gitari, the Ag. General Manager, Legal Services & Corporation Secretary of the 1st defendant, setting out the facts giving rise to the same. A cursory look at the said affidavit reveals that it is a reiteration of the grounds laid out in the body of the application. 10. The application is opposed. The 1st plaintiff, Paras Rajnikant Shah swore a replying affidavit on **16/6/2026**. At paragraph **12** of the said affidavit, the deponent avers that even if the court were to refuse to grant a stay of execution, the 1st defendant would not suffer any loss which it cannot recover from the decree holders. The deponent further stated that the 4th and 5th plaintiffs are robust companies with a significant capital base and would, therefore, compensate the applicant in the event that the intended appeal is successful. 11. At paragraphs **13** and **14** of the said affidavit, the deponent produced copies of audited accounts of the 4th and 5th plaintiffs showing that the companies made profits in the sum of **Kshs. 79,020,810.02** and **Kshs. 59,501,865.00** respectively. The 1st plaintiff further provided evidence in the form of a letter from the 4th and 5th plaintiffs’ bankers dated **16/6/20267** confirming that they are in good standing with their said bankers. 12. The 1st plaintiff further stated in the affidavit that the application for stay of execution does not satisfy the conditions set out in **Order 42 Rule 6** of the Civil Procedure Rules and urged the court to decline the application for stay of execution. 13. In a further affidavit sworn by Stanley Gitari on **23/6/2026**, the deponent avers that the 1st defendant will suffer substantive loss as there is uncertainty on the ability of the plaintiffs to refund the decretal sum of **Kshs. 138,522,675.02** in the event the appeal succeeds, as the reports relied upon by the plaintiffs do not support the current financial status of the plaintiffs, nor do the letters from the bank support any evidence that the plaintiffs will be in a position to refund the same 14. The 1st defendant further reiterated that he has demonstrated the conditions set out for the grant of stay orders, to wit: substantial loss, application being filed without undue delay and that he is willing and ready to abide by the terms that may be set by the court to guarantee security for costs. 15. Thereafter directions were taken to the effect that the application be argued by way of written submissions and both counsel obliged. 16. In its submissions dated **1/7/2026** through counsel on record, the 1st defendant stated that the main issue for determination is whether the applicant has met the criteria to warrant a stay of execution of the judgment pending appeal, which criteria is established under Order **42 Rule 6** of the Civil Procedure Rules, namely: 17. *That it shall suffer substantial loss should the orders sought not be granted;* 18. *That it has approached the court without unreasonable delay; and* 19. *That it has deposited security as ordered by the court.* 20. Learned counsel for the 1st defendant made reference to the case of ***Selestical Limited vs Gold Rock Development Ltd [2015] eKLR***, in which the court had occasion to give a judicial interpretation of **Order 42 Rule 6** aforesaid. 21. On the issue of whether the 1st defendant would suffer substantial loss, counsel highlighted two scenarios to buttress his argument. Counsel submitted that the 1st defendant stands to lose use of property reserved for its use, being the cattle-loading ramp which is comprised in the suit properties and has been in use since **1954** for its administration and control of its services. Counsel further submitted that the 1st defendant stands to suffer substantial loss owing to the uncertainty of the ability of the plaintiffs to refund the decretal sum of **Kshs. 138,522,675.02** in the event that the appeal succeeds. Counsel’s contention is that the 4th and 5th plaintiffs’ audit reports that have been provided by the 1st plaintiff are not current as they are for the financial year **2023-2024**. That the current status of their financial standing is not known and, therefore, this uncertainty runs the risk of the decretal sum being lost in addition to rendering the appeal nugatory and a mere academic exercise; subjecting the applicant to substantial loss. 22. For the judicial interpretation of what constitutes substantial loss, the learned counsel for the 1st defendant cited the case of ***James Wangalwa & Another vs Agnes Naliaka Cheseto [2012] eKLR***, ***Silverstein vs Chesoni [2002] 1 KLR 867*** and ***Mukuma vs Abuoga***. 23. On the second issue of unreasonable delay in filing the application, counsel contended that the applicant moved the court swiftly, the court having delivered its judgment on **29/4/2026** in which judgment the court issued a stay of execution for **sixty (60) days**, while this application was filed under certificate of urgency on **9/6/2026**. Counsel further stated that the applicant lodged the appeal within reasonable time, on **5/5/2026**. 24. On the issue of security for costs, counsel submitted that the applicant has deposed in the supporting affidavit that it is willing and ready to furnish security as may be ordered by this court and further made reference to the ***Selestica Limited Case*** *(Supra),* for the elucidation of **Order 42 Rule 6(2)** of the Civil Procedure Rules by the court. Counsel thus urged the court to allow the application on account of the facts of this case and the principles set out under **Order 42 Rule 6** of the Civil Procedure Rules. 25. On their part, the plaintiffs through counsel on record attacked the 1st defendant’s application as devoid of merit, incompetent and an abuse of the court process. The learned counsel for the plaintiffs raised one issue for determination, to wit: whether the applicant is entitled to a stay of execution pending appeal. 26. Counsel submitted that a stay of execution pending appeal is not an automatic right available to an intended appellant but rather, a discretionary relief granted by the court where circumstances warrant. That an applicant must comply with a set of conditions under **Order 42 Rule 6(2)** of the Civil Procedure Rules, mainly; evidence of substantial loss, timely filing of the application for stay and provision of security for costs. 27. Counsel submitted that the applicant has not complied with the conditions provided under the above Rule. That the applicant has merely stated that it will suffer substantial loss in the form of danger to the tune of **Kshs. 138,522,675,02**. The plaintiffs’ contention through counsel on record is that merely stating by the 1st defendant that the sum ordered as damages is high is not enough. That a party must go further than mere assertions and demonstrate the substantial loss it would suffer. Counsel relied on the case of ***Kenya Shell Limited vs Benjamin Karuga Kibiru & Another [1986] KECA 94 [KLR]*** for this proposition. 28. Counsel further submitted that the applicant has not demonstrated any substantial loss it would suffer should the court refuse to grant a stay of execution, noting that the plaintiffs are yet to tax their bill and no imminent execution can issue before the taxation. 29. Further, counsel submitted that a stay of execution, being a discretionary relief by the court, is governed by the rules of equity, one of which is that he who comes to equity must come with clean hands. The learned counsel’s view is that the applicant’s hands are muddied having not vacated the suit properties which were declared to be the property of the 1st and 3rd plaintiffs. 30. Counsel further cited the case of ***Antoine Ndiaye vs African Virtual University[2015] KEHC 6783 [KLR],*** for the proposition that merely stating that the decretal sum is substantial without giving the court the basis upon which to assess that risk and loss is not enough. 31. The plaintiffs further contended through counsel that even though the applicant did not plead that they would be unable to recover the decretal sum from the plaintiffs should the appeal succeed, they have nonetheless provided financial statements that demonstrate their ability to repay the decretal sum in the event that the applicant is successful in its appeal. 32. On the issue of security for costs, counsel submitted that the applicant has not furnished any or any material to demonstrate that it is willing to furnish or has already furnished any security for costs. Counsel argued that for an application for stay of execution to succeed, the applicant must meet all the conditions set out under **Order 42 Rule 6** and not some. Learned counsel cited the case of ***Equity Bank Limited vs Taiga Adams Company Limited [2006] eKLR***. Counsel thus urged the court to dismiss the application with costs. 33. I have carefully considered the application together with the rival affidavits on record. I have equally considered the applicable laws as well as the submissions by counsel, for which I am grateful. 34. From the said affidavits, the law, and submissions by counsel, the issue that I consider material for determination is only one: whether the application for stay of execution pending the appeal is merited. This issue cannot, however, be addressed without resorting to **Order 42 Rule 6** of the Civil Procedure Rules, which is the codified law governing the grant of stay of execution orders pending appeal. It provides as follows: ***“No order for stay of execution shall be made under Sub rule (1) unless -*** 1. ***the court is satisfied that substantial loss may result to the applicant, unless the order is made and that the application has been made without unreasonable delay; and*** 2. ***such security as the court orders for the due performance of such decree as may ultimately be binding on him has been given by the applicant.*** 3. In seeking to breathe life into the above legal provision, the Court of Appeal in the case of ***Butt vs Rent Restrictions Tribunal [1982] KLR 417***, gave the following guidelines when determining whether to grant or refuse a stay of execution pending appeal: 4. **The power of the court to grant or refuse an application for stay of execution is discretionary, and the discretion should be exercised in such a way as not to prevent an appeal.** 5. **Secondly, the general principle in granting or refusing a stay is, if there are no other overwhelming hindrances, a stay must be granted so that an appeal may not be rendered nugatory should the appeal court reverse the judge's discretion.** 6. **Thirdly, a judge should not refuse a stay if there are good grounds for granting it merely because, in his opinion, a better remedy may become available to the applicant at the end of the proceedings.** **(d) Finally, the court in exercising its discretion whether to grant or refuse an application for stay will consider the special circumstances and its unique requirements. The court, in exercising its powers under Order XL1 Rule 4(2) (b) of the Civil Procedure Rules, can order security upon application by either party or on its own motion. Failure to put security for costs as ordered will cause the order for stay of execution to lapse.** 1. I am well guided by the Court of Appeal guidelines in the ***Butt Case*** *(Supra).* 2. Turning to the application before me, the applicant contends that the application was made without unreasonable delay. That the trial judge delivered his judgment on **29/4/2026** and issued a **60-day** stay of execution; that the applicant filed its Notice of Appeal on **5/5/2026** and subsequently this application on **9/6/2026**. There is no contention by the respondents that the application was not made timeously. I, therefore, find and hold that the application was filed without what may be considered to be unreasonable delay. The application therefore passes this test. 3. Turning to the question of whether the applicant has provided security for the due performance of such decree or order as the court may ultimately make, Ms. Moraa for the applicant submitted that the applicant is willing and ready to furnish security as may be ordered by this court. On the other hand, Mr. Mwangi for the respondents has submitted that no material was supplied to demonstrate that the applicant is willing to furnish or has already furnished any security for costs and as such the vague assertions and allegations cannot foster confidence that the applicant will be willing and able to furnish security for costs. 4. With respect, I do not consider that failure to furnish security or to provide material to demonstrate willingness and ability to furnish security for costs, as has been urged by counsel for the respondents is fatal to the applicant’s cause. This is so because the court can make an order for security for costs either on its own motion or upon application by either party. I draw guidance from the ***Butt Case*** *(Supra).* It follows, therefore, that the applicant has passed this test as well. 5. Turning to the 3rd test as to whether the applicant would suffer substantial loss, counsel for the applicant contends that the applicant stands to lose use of property reserved for its use, being the cattle loading ramp which has been in use since **1954** for its administration and control of its services. 6. The applicant’s counsel further contends that the applicant stands to suffer substantial loss owing to uncertainty of the ability of the plaintiffs to refund the decretal sum of **Kshs. 138,522,615,02**, in the event of a successful appeal. 7. In a rejoinder, counsel for the respondents has argued that the respondents (4th and 5th plaintiffs) have provided audit reports which demonstrate their financial status and ability, and that they are able to repay their decretal sum should the appeal go the applicant’s way. 8. On the issue of substantial loss, courts have held that execution is a lawful process and that it is not enough for a party to seek stay orders merely because execution is imminent. The applicant must establish other factors which show that the execution will create a state of affairs that will irreparably affect or negate the very essential core of the applicant as the successful party in the appeal. (See ***James Wangalwa & Another vs Agnes Naliaka Cheseto [2012] eKLR***. 9. Flowing from the above, I do not think that it is trite observation for the applicant to say that it stands to lose use of the property reserved for its use. This view does not seem to contemplate and appreciate the judgment of the court which held that the said property belongs to the respondents. The applicant cannot be heard to decry loss of use of property which by dint of the judgment of the court delivered on **29/4/2026** belongs to the respondents. There is no telling what the findings of the appellate court will be. This application must, therefore, be considered against the background of the said judgment and weighed against the conditions set out under Order 42 Rule 6 of the Civil Procedure Rules. 10. Equally, even though the applicant contends that the audit reports provided are for the year **2023** and **2024**, there is no contrary evidence to show the respondents' inability to repay the decretal sum should the appeal succeed. 11. Looking at the totality of the circumstances of this case, and the fact that the trial judge had already granted a stay of execution of the judgment of court and the orders therefrom for sixty (60) days, I am not persuaded that this is a fit case for this court to exercise its discretion further, in favour of the applicant. The applicant has not demonstrated how it would suffer substantial and irreparable loss in the event of a successful appeal. The applicant has thus failed the 3rd test. 12. The corollary to this is that the application dated **3/6/2026** fails and is dismissed with costs to the respondents. 13. Orders accordingly. **Ruling dated, signed,** and **delivered** via **Microsoft Teams/Open Court** at **Kitale** on this **31st** day of **July 2026.** **In the presence of:** Court Assistant - Matui/Nancy Mr. Gakugi for Mr. Mwangi for the plaintiffs/respondent Ms. Moraa for 1st defendant/applicant  **HON. G.M. GITONGA** **JUDGE, ELC KITALE.**