https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/12144

**REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA AT KISUMU** **CIVIL CASE NO. E011 OF 2024** **SURJIT SINGH PANDHAL………………….…………………PLAINTIFF** **VERSUS** **AFRICAN BANKING CORPORATION……………………DEFENDANT** **RULING** 1. **THE PLAINTIFF’S NOTICE OF MOTION.** 2. The Plaintiff’s notice of motion application dated 1st July, 2024 seeks the following orders: 3. **[Spent].** 4. **The Defendant, its employees, servants and or agents be restrained by an order of injunction from advertising for sale, from selling by public auction or by private treaty, from taking possession of and from interfering with in any manner howsoever all the properties known as Kisumu Municipality/Block 7/171 and Kisumu Municipality/Block 7/181 pending the haring and determination of this suit.** 5. **Cost of the application be provided for.** 6. The grounds upon which the application is premised are that the Plaintiff contends that the Defendant’s intended exercise of its statutory power of sale over the suit properties is tainted by fraud and illegality. 7. It is alleged that the Defendant has unlawfully inflated the redemption amount by including sums allegedly prohibited under *Section 44A* of the *Banking Act* (the *in duplum* rule) and by charging interest at increased rates without the requisite approval of the Minister for Finance. 8. The Plaintiff further alleges that the Defendant, through its appointed auctioneer, issued redemption notices and notifications of sale containing false, exaggerated and unlawful redemption figures, thereby undermining and frustrating the Plaintiff’s equity of redemption. It is also contended that the notices are defective and incapable of sustaining a lawful exercise of the statutory power of sale. 9. The Plaintiff additionally asserts that the Defendant deliberately procured valuations that grossly undervalue the charged properties, namely Kisumu Municipality/Block 7/171 and Kisumu Municipality/Block 7/181, with the intention of disposing of them at throw-away prices. According to the Plaintiff, the valuations do not reflect the prevailing market values and are intended to justify artificially low forced sale values, contrary to the Defendant’s statutory duty under *Section 97* of the *Land Act.* 10. The Plaintiff therefore maintains that, by relying on allegedly unlawful redemption figures and grossly undervalued valuations, the Defendant’s intended realization of the securities is contrary to the law and amounts to an illegal exercise of its statutory power of sale. 11. The Plaintiff further avers that unless the application is heard and determined on an urgent basis, the Defendant, through its auctioneer, will proceed with the scheduled public auction upon the expiry of the redemption notices, thereby disposing of the suit properties through a process alleged to be fraudulent, irregular and unlawful. It is contended that such a sale would defeat the Plaintiff’s right of redemption and occasion substantial and irreparable loss. 12. **THE PLAINTIFF’S SUPPORTING AFFIDAVIT.** 13. The application is supported by the Plaintiff’s affidavit sworn on 1st June, 2024, in which, in precis, he deposes that he is a joint registered proprietor, together with his late brother, of the charged properties known as Kisumu Municipality/Block 7/171 and Kisumu Municipality/Block 7/181. He states that the properties were charged to the Defendant as security for loan facilities aggregating Ksh.135,000,000/- advanced to Caneland Limited. 14. He deposes that he is aware that the loan facilities fell into arrears, following which the Defendant issued a statutory notice dated 26th October, 2012 demanding payment of Ksh.28,256,869.46/-. He avers, however, that efforts have continued to settle the outstanding indebtedness. 15. The Plaintiff further states that on 20th May, 2024 he was served with redemption notices and notifications of sale issued by Saddabri Auctioneers on behalf of the Defendant. Upon obtaining legal advice, he was informed that the notices were irregular and unlawful as they demanded a redemption sum of Ksh.230,169,711.75/-, which was grossly in excess of the amount demanded in the earlier statutory notice and allegedly included sums prohibited under *Section 44A* of the *Banking Act* as well as interest charged without the requisite approval of the Minister for Finance. 16. He further deposes that he was advised that the redemption notices contravened *Rule 15(d)* of the *Auctioneers Rules, 1997,* by failing to state the actual redemption amount and that they were not served upon all the registered proprietors of the charged properties as required by law. 17. He also contends that the notifications of sale contained forced sale values that were unsupported by current professional valuation reports and reflected a deliberate undervaluation of the properties. He further complains that the notifications included unspecified legal costs described as *“Ksh. TBA”,* thereby rendering the redemption figures inconsistent and uncertain. 18. The Plaintiff maintains that the Defendant’s intended realization of the securities is tainted by fraud and illegality. According to him, the Defendant seeks to recover sums that are legally irrecoverable while simultaneously undervaluing the charged properties in order to dispose of them at throw-away prices, thereby defeating his equity of redemption. 19. He finally deposes that unless the court intervenes by granting the orders sought, the Defendant will proceed with the intended auction, exposing him to the loss of valuable immovable property through an unlawful process and causing him substantial prejudice, while enabling the Defendant to benefit from the alleged fraud and illegality 20. **THE DEFENDAT’S REPLYING AFFIDAVIT.** 21. The application is opposed and to that end the Defendant filed a replying affidavit sworn on (date not clear) by **Kajuju Marete,** the Defendant’s Legal Manager. The said deponent contends that the Plaintiff’s allegations of fraud, illegality, breach of *Section 44A* of the *Banking Act,* unlawful variation of interest rates, inflation of the redemption amount and undervaluation of the charged properties are unfounded. According to her, the Defendant has at all material times acted lawfully in the exercise of its statutory power of sale. 22. The deponent further avers that the dispute over the charged properties has been the subject of several previous proceedings before the courts. She states that the Plaintiff and his co-director previously instituted suits and applications seeking substantially similar injunctive relief, which were dismissed, and that subsequent appeals were either dismissed, withdrawn or abandoned. 23. She adds that a later suit filed before the Environment and Land Court was also dismissed after the Plaintiff failed to prosecute it. It is therefore contended that the present suit and application are barred by the doctrine of *res judicata* under *Section 7* of the *Civil Procedure Act.* 24. The deponent denies that the redemption notices and notifications of sale are illegal or that the redemption amount claimed offends *Section 44A* of the *Banking Act.* She maintains that the sums demanded are lawful, properly computed and consistent with the applicable banking laws and the *Central Bank of Kenya Prudential Guidelines.* She further contends that the Plaintiff has placed no credible evidence before the court to substantiate the allegations of unlawful interest charges or other irregularities. 25. The deponent also disputes the allegation that the charged properties were undervalued, asserting that the Defendant instructed qualified valuers, M/S Acumen Valuers Limited, to undertake professional valuations in compliance with *Section 97* of the *Land Act.* According to the deponent, the Plaintiff has not demonstrated any impropriety in the valuation process or established any basis for impugning the valuation reports. 26. The deponent further maintains that the Defendant has never sought to deprive the Plaintiff of his equity of redemption and that the Plaintiff remains at liberty to redeem the properties by settling the outstanding indebtedness. She also points out that the Plaintiff’s complaint regarding non-service of the redemption notices is contradicted by his own affidavit, in which he expressly acknowledges receipt of the notices. 27. The deponent finally contends that the Plaintiff has failed to establish a *prima facie* case with a probability of success or to demonstrate that he would suffer irreparable harm incapable of compensation by an award of damages. 28. She states that the dispute arises from a purely commercial transaction, that the Defendant is merely enforcing its contractual and statutory rights following the Plaintiff’s persistent default, and that the balance of convenience favours the Defendant, whose ability to recover depositors’ funds continues to be prejudiced by the Plaintiff’s prolonged failure to discharge the debt. 29. Accordingly, she urges the court to dismiss the application with costs. 30. **THE PLAINTIFF’S FURTHER AFFIDAVIT.** 31. The Plaintiff filed a further affidavit sworn on 20th August, 2024 by **Wilfred A. Onono,** in which he deposes that he is the Managing Consultant of the Interest Rates Advisory Centre (IRAC) and is duly authorised to swear the affidavit on behalf of the Plaintiff. 32. The deponent avers that the Plaintiff engaged IRAC to undertake a recalculation of the loan accounts covering the period between 5th May, 2003 and 30th April, 2015. Following the exercise, IRAC prepared a report which, applying the *in duplum* rule, concluded that the amount recoverable by the Defendant stood at Ksh.53,483,814.64/-. He states that the recalculation was undertaken in accordance with the *Central Bank of Kenya Prudential Guidelines, 2013* and *Sections 44* and *44A* of the *Banking Act.* 33. He further deposes that IRAC determined the date on which the loan accounts became non-performing by reference to the bank statements supplied by the Defendant and the *Prudential Guidelines*, and disputes the Defendant’s contention that the methodology adopted in the recalculation was erroneous. 34. He adds that legal fees and recovery expenses referred to by the Defendant had not been debited to the loan accounts at the time of the recalculation and were therefore not factored into the computation. 35. The deponent further states that IRAC did not take into account any variable interest rates allegedly applied by the Defendant because no evidence was furnished to show that the Plaintiff had been notified of, or had consented to, any variation of the contractual interest rates. He maintains that interest constitutes a material contractual term and that any variation thereof required prior notice to the borrower and compliance with the applicable provisions of the *Banking Act.* Consequently, IRAC relied on the interest rates stipulated in the facility letters when undertaking its computations. 36. He also deposes that, in the absence of evidence demonstrating lawful approval for the variation of interest rates, the Defendant is precluded from recovering interest and charges beyond those permitted by law. According to the deponent, the applicable statutory provisions and banking guidelines limit the amount lawfully recoverable by the Defendant. 37. Finally, the deponent states that following a payment of Ksh.20,000,000/- made by the Plaintiff on 20th April, 2017, the amount recoverable by the Defendant reduced to Ksh.33,483,814.84/-. He expresses the view that, as a banking institution, the Defendant ought to act fairly and in good faith in the enforcement of its securities. 38. **THE PLAINTIFF’S SUBMISSIONS.** 39. The Plaintiff submits that the application dated 1st July, 2024 seeks an order restraining the Defendant, its servants, agents and employees from advertising for sale, selling by public auction or private treaty, taking possession of, or otherwise interfering with the properties known as Kisumu Municipality/Block 7/171 and Kisumu Municipality/Block 7/181 pending the hearing and determination of the suit. 40. He submits that the application is premised on the contention that the Defendant’s intended exercise of its statutory power of sale is tainted with fraud and illegality. It is argued that the Defendant, through its agents Saddabri Auctioneers, issued redemption notices and notifications of sale demanding Ksh.230,169,711.75/-, which amount was unlawfully inflated by including sums prohibited under *Section 44A* of the *Banking Act* and interest allegedly charged at rates not approved by the Minister responsible for Finance. 41. The Plaintiff submits that the Defendant’s actions further violated *Section 97* of the *Land Act* by relying on grossly undervalued forced sale values of the charged properties, with the intention of disposing of the properties at throw-away prices. It is contended that the Defendant’s conduct was calculated to defeat the Plaintiff’s statutory right of redemption. 42. The Plaintiff submits that he is the registered owner of the suit properties jointly with his late brother and that the properties were charged to the Defendant as security for loan facilities amounting to Ksh.135,000,000/- advanced to Caneland Limited, a company in which he is a director. It is acknowledged that the loan facilities fell into default, but the Plaintiff submits that substantial payments had been made towards settlement of the indebtedness. 43. The Plaintiff submits that as at 26th October, 2012, the Defendant’s statutory notice indicated that there was an outstanding amount of Ksh.28,256,869.46/-. However, upon issuing redemption notices dated 20th May, 2024, the Defendant demanded Ksh.230,169,711.75/-. The Plaintiff argues that the unexplained disparity between the amounts demanded demonstrates an unlawful inflation of the redemption debt and a violation of his equity of redemption. 44. The Plaintiff submits that the Interest Rates Advisory Centre (IRAC), through the further affidavit of **Wilfred A. Onono,** undertook a recalculation of the loan account for the period between 5th May, 2003 and 30th April, 2015. According to the Plaintiff, the recalculation, undertaken in accordance with *Section 44A* of the *Banking Act* and the *Central Bank of Kenya Prudential Guidelines* established that the amount lawfully recoverable by the Defendant under the *in duplum* rule was Ksh.53,483,814.64/-. 45. The Plaintiff submits that after taking into account a payment of Ksh.20,000,000/- made on 20th April, 2017, the recoverable amount stood at Ksh.33,483,814.64/-. It is therefore argued that the Defendant’s demand for Ksh.230,169,711.75/- was excessive and unlawful. 46. On the principles governing temporary injunctions, the Plaintiff relies on ***Giella v Cassman Brown & Co. Ltd [1973] EA 358,*** where the East African Court of Appeal held that an applicant seeking a temporary injunction must demonstrate a *prima facie* case with a probability of success, establish that he will suffer irreparable injury which cannot adequately be compensated by damages, and where the court is in doubt, determine the application on a balance of convenience. 47. The Plaintiff further relies on ***Nguruman Limited v Jan Bonde Nielsen & 2 Others [2014] eKLR, Civil Appeal No. 77 of 2012 (Court of Appeal),*** where the Court of Appeal affirmed that the three conditions for granting an interlocutory injunction are separate, distinct and sequential hurdles. The Court held that an applicant must first establish a *prima facie* case, then demonstrate irreparable injury and finally, if necessary, show that the balance of convenience favours the grant of the injunction. 48. On the question whether a *prima facie* case has been established, the Plaintiff relies on ***Mrao Ltd v First American Bank of Kenya Ltd & 2 Others [2003] eKLR, Civil Appeal No. 39 of 2002 (Court of Appeal),*** where the Court of Appeal defined a *prima facie* case as: ***“a case in which, on the material presented to the court, a tribunal properly directing itself will conclude that there exists a right which has apparently been infringed by the opposite party as to call for an explanation or rebuttal from the latter.”*** 1. The Plaintiff submits that he has established a *prima facie* case by demonstrating that the Defendant is seeking to recover sums that are prohibited by *Section 44A* of the *Banking Act.* It is submitted that the Defendant’s demand includes interest and charges which exceed the statutory limits imposed by the *in duplum* rule. 2. The Plaintiff submits that *Section 44A* of the *Banking Act* limits the amount recoverable by a financial institution from a borrower in respect of a non-performing loan to the principal owing when the loan became non-performing, contractual interest not exceeding the principal and expenses incurred in recovery of the debt. 3. The Plaintiff submits that by issuing redemption notices demanding Ksh.230,169,711.75/-, the Defendant violated the statutory limitation imposed by *Section 44A* of the *Banking Act,* thereby rendering the intended exercise of the statutory power of sale unlawful. 4. The Plaintiff further relies on the decision of the Supreme Court in ***Stanbic Bank Kenya Limited v Santowels Limited & Another [2024] KESC 11 (KLR), Petition No. E005 of 2023,*** where the Supreme Court held that interest rates charged by banks and financial institutions are subject to the regulatory framework under *Section 44* of the *Banking Act.* The Court declared that financial institutions are required to obtain approval from the Cabinet Secretary responsible for Finance before increasing interest rates on loans and facilities advanced to borrowers. 5. The Plaintiff submits that the Defendant has not demonstrated that it obtained the requisite approval before varying interest rates and is therefore prohibited from recovering interest charged pursuant to unlawful variations. 6. On irreparable injury, the Plaintiff relies on ***Pius Kipchirchir Kogo v Frank Kimeli Tenai [2018] eKLR,*** where the court held that irreparable injury means an injury that cannot adequately be compensated by an award of damages and that the mere existence of a *prima facie* case does not automatically justify the grant of an injunction unless the applicant demonstrates the likelihood of suffering such injury. 7. The Plaintiff submits that he will suffer irreparable loss if the Defendant proceeds with the auction because the suit properties are commercial properties and constitute his source of income. It is argued that the sale of the properties through an allegedly unlawful process would deprive him of his proprietary rights and defeat his right of redemption. 8. The Plaintiff further submits that the Defendant intends to dispose of the properties at undervalued forced sale prices without reference to proper current valuations. It is argued that once the properties are sold, the Plaintiff may not be adequately compensated by damages, particularly where the sale would have occurred through an unlawful process. 9. The Plaintiff submits that it would be contrary to public policy to permit a financial institution to proceed with the exercise of statutory power of sale while disregarding mandatory provisions of the *Banking Act,* the *Land Act* and the *Auctioneers Rules, 1997.* 10. On the balance of convenience, the Plaintiff relies on ***Paul Gitonga Wanjau v Gathuthi Tea Factory Company Ltd & 2 Others [2016] eKLR,*** where the court held that where doubt exists as to the applicant’s right, or where violation of a right is disputed, the court must consider the comparative prejudice likely to be suffered by each party and determine which party would suffer greater harm depending on whether the injunction is granted or refused. The court further held that maintaining the *status quo* may be appropriate where the balance of convenience favours preservation pending determination of the dispute. 11. The Plaintiff submits that the balance of convenience favours preservation of the suit properties because the Defendant can continue to hold the securities pending determination of the legality of the intended sale, whereas the Plaintiff risks losing valuable properties through a process alleged to be unlawful. 12. On the issue of *res judicata*, the Plaintiff submits that the present application is not barred by *Section 7* of the *Civil Procedure Act.* It is argued that although the Defendant relies on previous proceedings, including *Kisumu HCCC No. 124 of 2013, Caneland Limited v African Banking Corporation*, and *Kisumu ELC Case No. 140 of 2017*, the issues presently before the court have not previously been determined. 13. The Plaintiff submits that the doctrine of *res judicata* requires that the matter directly and substantially in issue must have been previously determined between the same parties, or parties claiming under them, litigating under the same title, by a court of competent jurisdiction. 14. The Plaintiff relies on the definition of *res judicata* in Black’s Law Dictionary, 10th Edition, which defines the doctrine as an issue that has been definitely settled by judicial decision and identifies the essential elements as an earlier decision on the issue, a final judgement on the merits, and involvement of the same parties or parties in privity with the original parties. 15. The Plaintiff submits that the previous proceedings relied upon by the Defendant involved different parties and different capacities. In particular, *Kisumu HCCC No. 124 of 2013* involved Caneland Limited as the borrower, whereas the present suit is instituted by the Plaintiff in his personal capacity as chargor and proprietor of the suit properties. 16. The Plaintiff relies on ***Gladys Nduki Nthuki v Letshego Kenya Limited [2022] eKLR, Machakos High Court Civil Case No. 7 of 2021,*** where the court held that the doctrine of *res judicata* could not apply where the parties were not the same or litigating under the same title, particularly where one party was the principal borrower and the other was a guarantor. 17. The Plaintiff submits that *Kisumu ELC Case No. 140 of 2017* was a land matter and did not determine the legality of the redemption notices and notifications of sale issued in 2024. It is argued that the present dispute concerns the legality of fresh notices and the manner in which the Defendant seeks to exercise its statutory power of sale. 18. Finally, on costs, the Plaintiff relies on *Section 27* of the *Civil Procedure Act* and submits that costs ordinarily follow the event unless the court, for good reason, orders otherwise. The Plaintiff therefore prays that the application be allowed with costs. 19. In conclusion, the Plaintiff submits that he has satisfied the three requirements for grant of a temporary injunction and urges the court to restrain the Defendant from proceeding with the intended sale of the suit properties pending hearing and determination of the suit. 20. **THE DEFENDANT’S SUBMISSIONS.** 21. On its part, the Defendant submits that the Plaintiff’s application dated 1st July, 2024 is premised on the allegations that the Defendant’s intended exercise of its statutory power of sale is unlawful and irregular on account of alleged inflation of the redemption debt, failure to comply with *Section 44A* of the *Banking Act,* non-service of redemption notices and undervaluation of the charged properties. It is the Defendant’s submission that these allegations are unsupported and do not disclose any basis for injunctive relief. 22. The Defendant submits that the application is opposed on the basis that the Plaintiff has failed to establish any *prima facie* case, failed to demonstrate irreparable loss and failed to show that the balance of convenience favours the grant of an injunction. 23. It is further submitted that the suit is barred by the doctrine of *res judicata* under *Section 7* of the *Civil Procedure Act.* 24. On whether the conditions for grant of an injunction have been met, the Defendant submits that the principles governing the grant of interlocutory injunctions are settled in ***Giella v Cassman Brown & Co. Ltd***(supra). 25. The Defendant further relies on ***Nguruman Limited v Jan Bonde Nielsen & 2 Others*** (supra), where the Court of Appeal restated the principles applicable to interlocutory injunctions and held that the three requirements are separate, distinct and sequential hurdles which an applicant must satisfy. The Court held that the existence of a *prima facie* case alone is insufficient and that an applicant cannot “leap-frog” over the requirements of irreparable injury and balance of convenience. 26. The Defendant also relies on ***Kenya Commercial Finance Co. Ltd v Afraha Education Society [2001] 1 EA 86,*** where the Court of Appeal held that the three conditions for the grant of an interlocutory injunction are sequential and that where a *prima facie* case has not been established, the court need not consider the other two requirements. 27. The Defendant submits that the Plaintiff has failed to establish a prima facie case because he admits that the borrower, Caneland Limited, obtained loan facilities amounting to Ksh.135,000,000/- from the Defendant, which remain unpaid. It is submitted that the Plaintiff has also admitted, through the IRAC report relied upon in his further affidavit, that at least Ksh.53,483,814.64/- is owing to the Defendant. 28. The Defendant submits that the only issue raised by the Plaintiff is the computation of the outstanding debt, which does not, without more, establish fraud or illegality sufficient to restrain a chargee from exercising its statutory power of sale. It is argued that the Plaintiff has failed to demonstrate any unlawful conduct on the part of the Defendant. 29. The Defendant submits that the Plaintiff has not demonstrated that the redemption amount of Ksh.230,169,711.75/- is unlawful. It is argued that the amount demanded reflects the outstanding loan obligations, accrued interest and other lawful charges, and that the Plaintiff has failed to produce credible evidence to demonstrate that the Defendant acted in breach of *Section 44A* of the *Banking Act.* 30. The Defendant further submits that the Plaintiff’s reliance on the *in duplum* rule is misplaced because the IRAC report relied upon by the Plaintiff was not an admission by the Defendant of the amount owing, but merely a report commissioned by the Plaintiff. The Defendant maintains that the Plaintiff remains indebted and has not discharged the debt. 31. On the allegation of unlawful variation of interest rates, the Defendant submits that the Plaintiff has not provided evidence demonstrating that the Defendant charged unlawful interest or that any approval required under *Section 44* of the *Banking Act* was absent. It is therefore submitted that the allegations remain mere assertions unsupported by evidence. 32. The Defendant submits that the Plaintiff has also failed to prove fraud or illegality. Reliance is placed on ***Central Bank of Kenya Ltd v Trust Bank Ltd & 4 Others [1996] eKLR,*** where the court held that allegations of fraud and conspiracy to defraud are serious allegations requiring a higher degree of proof than ordinary allegations in civil proceedings. The Defendant argues that the Plaintiff has made only vague allegations without providing cogent evidence. 33. On whether irreparable loss has been demonstrated the Defendant submits that the Plaintiff has failed to demonstrate that he will suffer such loss if the injunction is not granted. It is argued that the Plaintiff’s alleged injury is purely economic and capable of being compensated by damages. 34. The Defendant again relies on ***Nguruman Limited v Jan Bonde Nielsen & 2 Others*** (supra), where the court held that the burden lies on the applicant to demonstrate the nature and extent of the injury likely to be suffered and that speculative injury or mere apprehension is insufficient. The court stated that irreparable injury must be actual, substantial and demonstrable, and incapable of adequate compensation by damages. 35. The Defendant submits that the Plaintiff has merely made generalized assertions that he will suffer irreparable loss but has not demonstrated the nature of that loss. It is argued that the suit properties are commercial properties offered as security for a loan and that any loss arising from their sale is quantifiable. 36. The Defendant relies on ***Kihara v Barclays Bank (K) Ltd [2001] 2 EA 421,*** where **Ringera J** (as he then was) held that a person who offers property as security for a loan does so knowing that, in the event of default, the property may be sold. The court held that once property is pledged as security, it becomes a commodity for sale and its loss is compensable by damages. 37. On balance of convenience the Defendant submits that the same favours the Defendant because the dispute arises from a commercial lending transaction and the Plaintiff does not deny that the borrower remains indebted. 38. The Defendant submits that despite admitting indebtedness, the Plaintiff has not presented any repayment proposal or demonstrated willingness to settle the outstanding amount. It is argued that the Plaintiff cannot retain the benefit of the loan facility while simultaneously restraining the Defendant from realizing its security. 39. The Defendant relies on ***Andrew Muriuki Wanjohi v Equity Building Society Limited & 2 Others [2006] eKLR,*** where the court held that restraining a chargee from exercising its power of sale where the borrower had failed to repay the loan exposed the lender to the risk that the debt would continue increasing and eventually exceed the value of the security. 40. The Defendant submits that the *Central Bank of Kenya Prudential Guidelines* require banks to make provisions for non-performing loans, which adversely affects the Defendant’s resources and exposes it to the risk of the debt becoming irrecoverable. It is therefore argued that the balance of convenience favours allowing the Defendant to exercise its statutory rights. 41. On whether the statutory power of sale had accrued, the Defendant submits that the same had accrued because the borrower defaulted in repayment of the loan facilities. It is argued that the Defendant complied with the requirements of the law before commencing realization of the securities. 42. The Defendant submits that *Section 97(2)* of the *Land Act* requires a chargee, before exercising the power of sale, to ensure that a forced sale valuation is undertaken by a valuer. 43. The Defendant states that it instructed M/S Acumen Valuers Limited, who prepared valuation reports dated 22nd December, 2023 in respect of the suit properties. It is therefore submitted that the Defendant complied with *Section 97* of the *Land Act.* 44. On the redemption notice, the Defendant relies on *Rule 15(d)* of the *Auctioneers Rules, 1997,* which requires an auctioneer dealing with immovable property to give the owner a written notice of not less than forty-five days within which to redeem the property. 45. The Defendant submits that the Plaintiff admitted in his supporting affidavit that he received the redemption notices and notifications of sale. It is therefore argued that the allegation of non-service is without basis. 46. On whether the properties were grossly undervalued, the Defendant submits that the allegation is unsupported because the Plaintiff did not provide any independent valuation report challenging the Defendant’s valuation. 47. The Defendant relies on valuation reports prepared by M/S Acumen Valuers Limited, which assessed the forced sale value of Kisumu Municipality/Block 7/171 at Ksh.60,000,000/- and that of Kisumu Municipality/Block 7/181 at Ksh.63,750,000/-. 48. The Defendant submits that the valuations were undertaken on 19th December, 2023 and the intended auction was scheduled for 30th July, 2024, meaning that the valuation was current and complied *with Section 97* of the *Land Act.* 49. The Defendant relies on ***Zum Zum Investment Limited v Habib Bank Limited [2014] eKLR,*** where the court held that an applicant alleging undervaluation must demonstrate that the valuation relied upon by the chargee was improper, outdated, undertaken by an incompetent valuer or failed to establish the best price reasonably obtainable. 50. The Defendant submits that the Plaintiff failed to challenge the competence of the Defendant’s valuer or provide evidence demonstrating that the forced sale values were not the best prices obtainable. 51. On whether the suit is barred by *res judicata* the Defendant submits that the suit and application are barred by the doctrine under *Section 7* of the *Civil Procedure Act.* 52. The Defendant relies on ***Omondi & 2 Others v National Bank of Kenya & 2 Others [2001] eKLR,*** where **Ringera J** (as he then was) held that parties cannot evade the doctrine of *res judicata* by introducing additional parties or causes of action in subsequent proceedings and that litigants are required to bring their entire case at once. 53. The Defendant further relies on ***Mwangi Njangu v Meshack Mbogo Wambugu, Civil Case No. 2340 of 1991,*** where **Kuloba J** held that litigants cannot be permitted to litigate indefinitely over the same issue merely by giving their case a different form or cosmetic appearance. 54. The Defendant submits that the Plaintiff, being a director and guarantor of Caneland Limited, is privy to the borrower and cannot reopen issues that have previously been determined in *Kisumu HCCC No. 124 of 2013* and *Kisumu ELC Case No. 140 of 2017.* 55. The Defendant submits that the present application is merely an attempt to relitigate issues that have already been determined and amounts to an abuse of the court process. 56. The Defendant relies on ***Eric Wambua Muli & Another v Prime Bank Limited & 3 Others [2017] eKLR,*** where **Mativo J** (as he then was) held that multiplicity of actions concerning the same matter, even where a right to sue exists, may amount to an abuse of court process where the intention is to harass, annoy or delay the administration of justice. 57. In conclusion, the Defendant submits that the Plaintiff has not satisfied the requirements for grant of an interlocutory injunction, has approached the court without clean hands, and is merely seeking to delay realization of the security. The Defendant therefore urges the court to dismiss the application with costs. 58. **THE PLAINTIFF’S SUPPLEMENTARY SUBMISSIONS.** 59. **The Plaintiff, in his supplementary submissions, reiterates that** the Defendant’s intended exercise of its statutory power of sale is unlawful, oppressive and premature because it is founded on a debt computation that violates *Section 44A* of the *Banking Act* and the *in duplum* rule. 1. The Plaintiff submits that *Section 44A* of the *Banking Act* provides the statutory foundation for the rule by limiting the amount recoverable by a banking institution from a borrower in respect of a non-performing loan. And that the maximum recoverable amount comprises the principal outstanding when the loan became non-performing, interest not exceeding the principal amount and expenses incurred in recovery. 2. The Plaintiff further relies on *Part V Rules 5.1* and *5.2* of the *Central Bank of Kenya Prudential Guidelines* which similarly restrict the amount recoverable from a debtor in respect of a non-performing loan. 3. **The Plaintiff contends that** the Defendant has failed to demonstrate compliance with *Section 44A* of the *Banking Act* and the *in duplum* rule. He submits that although the Defendant alleges that there is no proper analysis of the outstanding debt, the Plaintiff provided evidence through the affidavit and report of **Wilfred Onono** of the Interest Rates Advisory Centre (IRAC), which contained a computation of the loan account applying the statutory limitation. 4. It is argued that the Defendant has not provided any counter-computation showing how the sum of Ksh.230,169,711.75/- claimed in the statutory notices was arrived at or demonstrating that the amount complies with *Section 44A* of the *Banking Act.* The Plaintiff therefore submits that there exists a serious dispute regarding the correct amount due, which requires reconciliation and taking of accounts before the Defendant can proceed with the sale of the charged properties. 5. **The Plaintiff relies on the decision of the Court of Appeal in *Mwambeja Ranching Company Limited & Another v Kenya National Capital Corporation Limited [2019] eKLR,*** where the Court considered the purpose and application of the *in duplum* rule. 6. The Court held that the rule is founded on public interest considerations and is intended to protect borrowers from exploitation by lenders who allow interest to accumulate to astronomical levels. The Court further held that the rule safeguards the equity of redemption by preventing circumstances where accumulated interest makes it impossible for a borrower to redeem charged property. 7. The Plaintiff submits that allowing the Defendant to proceed with a sale based on a debt figure allegedly inflated beyond the statutory limit would defeat the purpose of *Section 44A* of the *Banking Act.* 8. **The Plaintiff also relies on the decision of the Court of Appeal in *Kenya Hotels Limited v Oriental Commercial Bank Limited (Formerly Known as The Delphis Bank Limited) [2019] KECA 250 (KLR)*** where the Court addressed the difficulty of determining disputed loan balances and interest calculations. 9. The Court observed that where figures are disputed and require reconciliation, courts should not simply accept figures presented by either party but should require proper computation and reconciliation of accounts. 10. The Plaintiff relies on this decision to submit that the Defendant’s assertion of an outstanding amount of Ksh.230,169,711.75/- cannot be accepted without demonstrating compliance with the law and reconciling the account. 11. **The Plaintiff further relies on *Daima Bank Limited (In Liquidation) v David Musyimi Ndetei [2018] eKLR*,** where the Court of Appeal considered a dispute involving interest calculations and payments made towards a loan facility. 12. The Court held that where the determination of the amount owing involves reconciliation and tabulation of accounts, the court may direct the parties to reconcile the accounts in order to establish the exact amount payable. The Court emphasized that such reconciliation must take into account payments made and applicable interest adjustments. 13. The Plaintiff submits that the same approach should be adopted in the present matter before the Defendant is permitted to exercise its statutory power of sale. 14. **The Plaintiff also relies on *James Muniu Mucheru v National Bank of Kenya Limited [2019] eKLR*,** where the Court of Appeal considered the application of *Section 44A* of the *Banking Act.* 15. The Court held that *Section 44A* introduced the *in duplum* rule and applies retrospectively, including to loans that became non-performing before the enactment of the provision. 16. The Court observed that the provision was intended to protect both borrowers and lenders and to prevent loans from escalating to astronomical figures beyond the borrower’s ability to repay. 17. The Court further held that a lender who proceeds contrary to *Section 44A* acts unlawfully and cannot rely on an unlawful computation of the debt to enforce its rights against the borrower. 18. **The Plaintiff further relies on *Housing Finance Company of Kenya Limited v Scholarstica Nyaguthii Muturi & Another [2020] KECA 833 (KLR)*,** where the Court of Appeal reiterated the purpose of the *in duplum* rule. 19. The Court held that the rule exists to protect borrowers from exploitation by lenders who allow interest to accumulate excessively and to safeguard the equity of redemption. 20. The Court further held that once a loan becomes non-performing, the lender must comply with *Section 44A* of the *Banking Act* and cannot continue recovering sums beyond the statutory limit. 21. The Plaintiff relies on this authority to argue that the Defendant’s statutory notices are tainted by illegality because they demand payment of sums allegedly exceeding the amount recoverable in law. 22. **On the issue of the exercise of the statutory power of sale, the Plaintiff submits that** his complaint is not that the Defendant’s statutory power of sale has not crystallized, but rather that the Defendant is exercising that power unlawfully. He argues that the 45-day redemption notice and notification of sale issued by Saddabri Auctioneers on 7th May, 2024 are defective because they demanded payment of an unlawful amount and thereby frustrated his equity of redemption. 23. The Plaintiff contends that the notices were allegedly served upon one **Rumi Singh** at Kicomi, Kisumu, who was neither the registered owner of the properties nor the Plaintiff’s authorized agent, contrary to *Rule 15(d)* of the *Auctioneers Rules, 1997.* 24. **The Plaintiff further submits that** the notices failed to disclose the auctioneer’s charges and merely indicated the same as *“TBA”,* thereby denying him knowledge of the full redemption amount required to recover his properties. He argues that a chargor must be furnished with accurate information regarding the amount required to redeem the property and that a notice founded on an unlawful or uncertain amount cannot validly form the basis of a sale. 25. **The Plaintiff contends that** the Defendant has engaged in material non-disclosure by relying on the original loan amount of Ksh.135,000,000/-instead of the amount allegedly recoverable after applying the *in duplum* rule. He submits that according to the IRAC computation, the amount recoverable stood at Ksh.53,483,814.64/- and was further reduced by payments amounting to Ksh.20,000,000/-. 26. The Plaintiff argues that by relying on the alleged outstanding figure of Ksh.230,169,711.75/-, the Defendant has exaggerated the indebtedness and falsely created the impression that the debt exceeds the value of the securities. 27. **The Plaintiff further challenges the Defendant’s contention that the debt risks outstripping the value of the charged properties.** He argues that this assertion is based on an unlawful debt computation and undervalued property valuations. According to the Plaintiff, the properties are worth approximately Ksh.200,000,000/- and Ksh.185,000,000/- respectively, contrary to the Defendant’s alleged market valuations of Ksh.80,000,000/- and Ksh.85,000,000/-. 28. He therefore submits that the Defendant’s argument regarding the inadequacy of the securities is founded on incorrect assumptions. 29. **On the issue of *res judicata,* the Plaintiff submits that** the present suit is not barred by *Section 7* of the *Civil Procedure Act* because the cause of action arose from the redemption notices and notification of sale issued on 7th May, 2024. The Plaintiff argues that those notices could not have formed part of the earlier proceedings and that the mere fact that the same properties were involved does not satisfy the requirements of *res judicata.* 30. **The Plaintiff submits that** *Kisumu HCCC No. 124 of 2013* involved Caneland Limited, a separate legal person, and that his position as a director of that company does not make him the same party for purposes of *Section 7* of the *Civil Procedure Act.* 31. He further submits that *Kisumu ELC No. 140 of 2017* cannot operate as *res judicata* because the suit was dismissed for want of prosecution and was not determined on merits. 32. **In support of that proposition, the Plaintiff relies on *Cosmas Mrombo Moka v Co-operative Bank of Kenya Limited & Another [2018] KEHC 5154 (KLR),*** where the Court considered whether a suit dismissed for want of prosecution could operate as *res judicata.* 33. The Court held that such dismissal does not amount to a hearing and final determination of the dispute within the meaning of *Section 7* of the *Civil Procedure Act* because the court has not considered and determined the merits of the parties’ claims. 34. **The Plaintiff further relies on *Kenya Commercial Bank Limited v Benjoh Amalgamated Limited & Another [2017] eKLR,*** where the Court of Appeal set out the elements required to establish *res judicata.* 35. The Court held that the elements are conjunctive and all must be satisfied before a subsequent suit can be barred. These include that the matter must have been directly and substantially in issue in the former suit; the former suit must have been between the same parties or parties claiming under them; the parties must have litigated under the same title; the issue must have been heard and finally determined; and the former court must have had jurisdiction. 36. **The Plaintiff also relies on *The Tee Gee Electricals & Plastics Company Limited v Kenya Industrial Estates, Civil Appeal No. 333 of 2001 (Court of Appeal at Kisumu),*** where the Court of Appeal held that a previous suit dismissed for want of prosecution does not amount to a determination on merits and therefore cannot found a plea of *res judicata.* 37. **The Plaintiff further relies on the persuasive authority of *State of Maharashtra & Another v National Construction Company, Bombay, Supreme Court Civil Appeal No. 1497 of 1996 (Supreme Court of India)*,** where the Court held that the expression *“heard and finally decided”* requires that the court must have applied its judicial mind to the dispute and rendered a final adjudication on the merits. The Court held that a dismissal on a technical ground without determination of the substantive issues cannot operate as *res judicata.* 38. **In conclusion, the Plaintiff submits that** the Court ought to grant the injunction sought in order to preserve the substratum of the suit and protect his equity of redemption pending reconciliation of accounts and determination of the lawful amount due under *Section 44A* of the B*anking Act.* 39. **ISSUES FOR DETERMINATION.** 40. Having considered the pleadings, the affidavits on record, the rival submissions by the parties and the applicable law, I am of the view that the following four issues arise for determination: 41. Whether the Plaintiff has established a *prima facie* case with a probability of success to warrant the grant of a temporary injunction. 42. Whether the Plaintiff has demonstrated that he will suffer irreparable loss incapable of compensation by an award of damages if the injunction is not granted. 43. Whether the balance of convenience favours the grant or refusal of the temporary injunction. 44. Whether the Plaintiff’s suit and application are barred by the doctrine of *res judicata* under *Section 7* of the *Civil Procedure Act.* 45. I will proceed to address the foregoing issues sequentially. 46. The first issue for determination is whether the Plaintiff has established a *prima facie* case with a probability of success. 47. The principles governing the grant of interlocutory injunctions are now well settled. The starting point is the decision in ***Giella v Cassman Brown & Co. Ltd*** (supra), where the Court held that an applicant seeking an interlocutory injunction must demonstrate a *prima facie* case with a probability of success; that unless the injunction is granted, he is likely to suffer irreparable injury which cannot adequately be compensated by an award of damages; and where the court is in doubt, the application should be determined on a balance of convenience. 48. The meaning of a *prima facie* case was authoritatively explained by the Court of Appeal in ***Mrao Ltd v First American Bank of Kenya Ltd & 2 Others [2003] eKLR*,** where the Court stated that a prima facie case is: ***“a case in which, on the material presented to the court, a tribunal properly directing itself will conclude that there exists a right which has apparently been infringed by the opposite party as to call for an explanation or rebuttal from the latter.”*** 1. The Court of Appeal subsequently clarified in ***Nguruman Limited v Jan Bonde Nielsen & 2 Others***(supra) that the three requirements for grant of an interlocutory injunction are separate, distinct and sequential hurdles. The Court held that an applicant must first establish a *prima facie* case before the court proceeds to consider irreparable injury and, finally, the balance of convenience. The Court cautioned that an applicant cannot “leap-frog” one stage and rely on the other considerations where the first requirement has not been satisfied. 1. The Plaintiff’s case is founded principally on the contention that the Defendant’s intended exercise of its statutory power of sale is unlawful because the redemption amount demanded in the notices issued by Saddabri Auctioneers, namely Ksh.230,169,711.75/-, allegedly violates *Section 44A* of the *Banking Act* and the *in duplum* rule. The Plaintiff contends that the Defendant is seeking to recover sums which it is legally prohibited from recovering and is thereby defeating his equity of redemption. 2. *Section 44A* of the *Banking Act* provides the statutory foundation for the *in duplum* rule in Kenya. The provision limits the amount that a financial institution may recover from a borrower in respect of a non-performing loan to the sum of the principal owing when the loan became non-performing, interest not exceeding the principal owing when the loan became non-performing and expenses incurred in recovery of the amount owed. 3. The rationale behind the *in duplum* rule was explained by the Court of Appeal in ***Mwambeja Ranching Company Limited & Another v Kenya National Capital Corporation Limited*** (supra), where the Court held that the rule is founded on public interest considerations and is intended to protect borrowers from exploitation by lenders who permit interest to accumulate to astronomical figures. The Court further held that the rule safeguards the equity of redemption by ensuring that borrowers are not placed in a position where accumulated interest makes it impossible for them to redeem charged property. 4. Similarly, in ***Housing Finance Company of Kenya Limited v Scholarstica Nyaguthii Muturi & Another*** (supra), the Court of Appeal reiterated that the purpose of the *in duplum* rule is to protect both borrowers and lenders by ensuring that debts do not escalate beyond reasonable limits. The Court held that once a loan becomes non-performing, the lender must comply with *Section 44A* of the *Banking Act* and cannot recover amounts beyond the statutory limits. 5. The Plaintiff has placed before the court the report prepared by the Interest Rates Advisory Centre (IRAC) through the affidavit of **Wilfred A. Onono.** According to the Plaintiff, the report applied the provisions of *Section 44A* of the *Banking Act* and the *Central Bank of Kenya Prudential Guidelines* and concluded that the amount recoverable by the Defendant was Ksh.53,483,814.64/-, which was subsequently reduced to Ksh.33,483,814.64/- after taking into account a payment of Ksh.20,000,000/-. 6. The Defendant, however, disputes the methodology adopted by IRAC and maintains that the report is merely a document commissioned by the Plaintiff and does not constitute an admission of the amount owing. The Defendant contends that the amount demanded represents the outstanding loan obligations, accrued interest and other lawful charges. 7. In my view, the Plaintiff has demonstrated that there exists a genuine dispute regarding the computation of the outstanding indebtedness. However, the mere existence of a dispute as to accounts does not, without more, establish that the Defendant’s statutory power of sale has been unlawfully exercised or that the Plaintiff has established a *prima facie* case warranting an injunction. 8. It is noteworthy that the Plaintiff does not deny that Caneland Limited obtained loan facilities amounting to Ksh.135,000,000/- from the Defendant or that the facilities fell into default. Indeed, even the Plaintiff’s own computation acknowledges that a substantial amount remains outstanding. The dispute is therefore not whether there is indebtedness, but rather the correct amount payable. 9. In ***Kenya Hotels Limited v Oriental Commercial Bank Limited (Formerly Known as The Delphis Bank Limited)*** (supra), the Court of Appeal dealt with a situation where parties disputed the figures arising from loan accounts and interest computations. The Court observed that where figures are disputed, reconciliation and proper computation may be necessary. However, the decision does not establish that every dispute concerning accounts automatically renders a chargee’s statutory remedies unlawful. 10. Likewise, in ***Daima Bank Limited (In Liquidation) v David Musyimi Ndetei [2018] eKLR*** (supra), the Court of Appeal held that where the determination of the amount owing involves reconciliation and tabulation, the parties may be required to reconcile the accounts in order to establish the exact amount payable. 11. Further, in ***James Muniu Mucheru v National Bank of Kenya Limited*** (supra), the Court of Appeal affirmed that *Section 44A* of the *Banking Act* applies retrospectively and was intended to prevent loans from escalating to astronomical levels. However, the Court’s decision was based on a finding that the lender had actually proceeded contrary to the statutory limitation after the amount recoverable had already been established. 12. In the present matter, the court is not at this interlocutory stage determining the final amount due between the parties. The issue is whether the Plaintiff has demonstrated sufficient evidence that the Defendant is acting illegally in seeking to realize the security. 13. Having considered the material before me, I am unable to conclude that the Plaintiff has established, at this stage, that the Defendant’s computation is plainly unlawful. 14. The Plaintiff further alleges that the Defendant varied interest rates without the requisite approval under *Section 44* of the *Banking Act.* He relies on ***Stanbic Bank Kenya Limited v Santowels Limited & Another*** (supra), where the Supreme Court considered the regulatory framework governing interest rates charged by banks and financial institutions and held that increases in interest rates are subject to the provisions of *Section 44* of the *Banking Act.* 15. However, apart from the assertion that the Defendant lacked approval for variation of interest rates, the Plaintiff has not, at this stage, demonstrated the specific variations complained of, the dates when such variations occurred or produced evidence conclusively showing that the Defendant acted contrary to the statutory framework. The issue remains one requiring determination upon evidence at trial. 16. The Plaintiff also alleges that the Defendant undervalued the charged properties contrary to *Section 97* of the *Land Act.* *Section 97(2)* of the *Land Act* requires a chargee exercising the power of sale to ensure that a forced sale valuation is undertaken by a valuer. 17. The Defendant has exhibited valuation reports prepared by M/S Acumen Valuers Limited. The Plaintiff has not placed before the court an independent valuation report demonstrating that the Defendant’s valuation was fraudulent, incompetent, outdated or did not represent the best price reasonably obtainable. 18. In ***Zum Zum Investment Limited v Habib Bank Limited*** (supra), the court held that a party challenging a valuation relied upon by a chargee must demonstrate that the valuation was improper, outdated, undertaken by an incompetent valuer or failed to establish the best price reasonably obtainable. Mere dissatisfaction with a valuation is insufficient. 19. The Plaintiff’s acknowledges default and indebtedness by Caneland Limited. His complaint is not that the Defendant lacks a right to realize the securities altogether, but rather that the amount demanded is excessive and that the notices are defective. That is an admission that the statutory power of sale has crystallized. In the circumstances, I find that although the Plaintiff has raised arguable issues regarding the computation of the debt, he has not demonstrated a *prima facie* case that the Defendant’s intended exercise of the statutory power of sale is unlawful. 20. The first limb in ***Giella v Cassman Brown & Co. Ltd*** (supra) has therefore not been satisfied. 21. The second issue for determination is whether the Plaintiff has demonstrated that he will suffer irreparable loss incapable of compensation by an award of damages. 22. Having found that the Plaintiff has not established a *prima facie* case with a probability of success, the application would ordinarily fail without the necessity of considering the other two limbs for grant of an injunction. 23. This position was restated by the Court of Appeal in ***Nguruman Limited v Jan Bonde Nielsen & 2 Others*** (supra), where the Court held that the three requirements for an interlocutory injunction are sequential and that failure to establish a *prima facie* case renders consideration of the other two requirements unnecessary. 24. However, considering that the parties extensively addressed the issue of irreparable injury, and for completeness, I shall consider the same. 25. The Plaintiff contends that unless the injunction is granted, he risks losing the suit properties through an unlawful sale process and that such loss cannot adequately be compensated by damages. He argues that the properties are commercial properties which constitute his source of income and that their sale would defeat his equity of redemption. 26. The law is settled that not every loss amounts to irreparable injury. In ***Nguruman*,** the Court of Appeal explained that irreparable injury means injury that cannot be adequately compensated by an award of damages. The Court stated that the injury must be actual, substantial and demonstrable and not merely speculative or based on apprehension. 27. Similarly, in ***Pius Kipchirchir Kogo v Frank Kimeli Tenai [2018] eKLR,*** the court held that the second limb for the grant of an interlocutory injunction requires an applicant to demonstrate that, unless the injunction is granted, he will suffer injury that cannot adequately be compensated by an award of damages. The court further held that the mere establishment of a *prima facie* case does not automatically entitle an applicant to an injunction, since the applicant must satisfy all the applicable principles governing the grant of injunctive relief. 28. The Plaintiff’s contention is that the suit properties have substantial commercial value and that their loss would occasion substantial prejudice. However, it is not disputed that the properties were voluntarily charged to the Defendant as security for loan facilities advanced to Caneland Limited. 29. A charge is not merely a transfer of an interest in land; it is a security instrument created precisely to enable a lender to recover its money upon default by exercising the remedies provided by law. 30. In ***Kihara v Barclays Bank (K) Ltd*** (supra), the court observed that where property is offered as security for a loan, the chargor must appreciate that, in the event of default, the property becomes liable to sale. The court held that once property is given as security, it becomes a commodity for sale and any loss arising from its realization is ordinarily compensable by damages. 31. The Plaintiff has not demonstrated any exceptional circumstances that would distinguish the present matter from the ordinary case of realization of a commercial security. The allegation that the properties are valuable or generate income, without more, does not establish that damages would be an inadequate remedy. 32. Further, the Plaintiff’s complaint is not that the Defendant lacks a right to realize the securities altogether, but rather that the amount demanded is excessive and that the notices are defective. Those are matters capable of determination through the hearing of the suit and, if necessary, appropriate remedies may be granted by the court. 33. It is also important to consider that the grant of an injunction would have the effect of continuing to restrain a secured creditor from realizing securities over which the Plaintiff admits there is an outstanding debt. The court must balance the competing interests of protecting the chargor’s equity of redemption and protecting the legitimate commercial interests of the lender. 34. In the circumstances, I find that the Plaintiff has not demonstrated that he will suffer irreparable injury incapable of compensation by an award of damages if the injunction is not granted. 35. The third issue for me to address, which is the third consideration under the principles in ***Giella v Cassman Brown*** is whether the balance of convenience favours the grant or refusal of the injunction. This issue arises where the court is in doubt after considering the first two limbs. It requires the court to determine which party is likely to suffer greater prejudice depending on whether the injunction is granted or refused. 36. The balance of convenience involves weighing the comparative prejudice likely to be suffered by the parties. 37. The Plaintiff submits that the balance of convenience favours preservation of the suit properties because the Defendant can continue holding the securities pending determination of the dispute, whereas he risks losing valuable properties through what he alleges is an unlawful process. 38. The Defendant, on the other hand, submits that the balance of convenience favours allowing realization of the security because the borrower has been in default for a considerable period and the continued delay exposes the Defendant to the risk that the debt will continue increasing while the value of the security diminishes. 39. The Defendant relies on ***Andrew Muriuki Wanjohi v Equity Building Society Limited & 2 Others*** (supra), where the court declined to restrain a chargee from exercising its statutory power of sale and observed that preventing a lender from realizing security where there is default exposes the lender to the risk of the debt continuing to accumulate and ultimately exceeding the value of the security. 40. In the present matter, the Plaintiff does not dispute that the loan facilities were advanced or that there was default. The dispute concerns the amount recoverable. While the Plaintiff has raised a serious question regarding the computation of the debt, the Defendant’s security rights cannot be suspended indefinitely merely because accounts are disputed. 41. The court must also consider that a chargee exercising a statutory power of sale is not acting as an ordinary unsecured creditor. The security was created to enable the lender to recover the amounts advanced in the event of default. An order restraining realization of the security, without a clear demonstration of illegality, would substantially prejudice the Defendant. 42. On the other hand, refusal of the injunction does not leave the Plaintiff without protection. The Defendant remains bound by the statutory obligations imposed by the *Land Act,* the *Banking Act* and the *Auctioneers Rules, 1997.* Any unlawful sale or failure to comply with mandatory statutory requirements would remain subject to challenge. 43. In the circumstances, I find that the balance of convenience does not favour the Plaintiff. The Defendant’s interest in exercising its lawful statutory remedies outweighs the Plaintiff’s apprehension of loss, particularly where the Plaintiff has not established that the intended sale is unlawful. 44. The fourth issue for me to address is whether the suit and application are barred by the doctrine of *res judicata.* 45. The Defendant contends that the present suit and application are barred by the doctrine of *res judicata* under *Section 7* of the *Civil Procedure Act* because the dispute concerning the charged properties and the Defendant’s statutory power of sale has previously been the subject of litigation in *Kisumu HCCC No.124 of 2013, Caneland Limited v African Banking Corporation* and *Kisumu ELC Case No.140 of 2017.* 46. *Section 7* of the *Civil Procedure Act* provides that: **“No court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided by such court.”** 1. The Supreme Court in ***John Florence Maritime Services Limited & Another v Cabinet Secretary for Transport and Infrastructure & 3 Others*** (supra) explained that the doctrine of *res judicata* is founded on public policy considerations that litigation must come to an end and that parties should not be vexed repeatedly over the same dispute. The Court stated that all the elements of *res judicata* must be established before the doctrine can apply. 2. Similarly, the Court of Appeal in ***Kenya Commercial Bank Limited v Benjoh Amalgamated Limited & Another*** (supra) held that the elements of res judicata are conjunctive and must all be satisfied. These include that the issue was directly and substantially in issue in the former suit; the former suit was between the same parties or parties claiming under them; the parties litigated under the same title; the issue was heard and finally determined; and the former court had jurisdiction. 3. The Plaintiff argues that the present suit is founded on a fresh cause of action arising from the redemption notices and notification of sale issued on 7th May, 2024, which could not have been the subject of the earlier proceedings. He further contends that *Kisumu HCCC No.124 of 2013* involved Caneland Limited, a separate legal entity, whereas the present suit is brought by him personally as the registered proprietor and chargor. 4. I agree with the Plaintiff that the mere fact that the same properties are involved does not, by itself, satisfy the requirements of *res judicata.* The doctrine concerns the identity of issues and parties, not merely the similarity of subject matter. 5. The Defendant has, however, raised a legitimate concern regarding repeated litigation over the same securities and the same underlying indebtedness. Nevertheless, on the material before the court, I am not satisfied that the Defendant has demonstrated that the present dispute is barred by *res judicata.* 6. In particular, the present application challenges the legality of the redemption notices and notifications of sale issued in 2024. Those notices could not have been directly in issue in earlier proceedings commenced years before their issuance. 7. Further, with respect to *Kisumu ELC Case No.140 of 2017,* the Plaintiff relies on ***Cosmas Mrombo Moka v Co-operative Bank of Kenya Limited & Another*** (supra), where the court held that a suit dismissed for want of prosecution does not amount to a hearing and final determination on the merits for purposes of *Section 7* of the *Civil Procedure Act.* 8. The learned Judge observed that *res judicata* requires that the former matter must have been heard and finally decided after the court had applied its judicial mind to the issues in dispute. A dismissal based on procedural default, without determination of the merits, does not ordinarily satisfy that requirement. 9. I therefore find that although the Defendant has raised a serious issue regarding previous litigation between the parties, the plea of *res judicata* has not been sufficiently established to dispose of the present application. 10. **DISPOSITION AND ORDERS.** 11. Having considered the foregoing, I find that the Plaintiff has not satisfied the principles governing the grant of a temporary injunction. Although the Plaintiff has demonstrated that there is a dispute regarding the computation of the outstanding loan balance and the applicability of *Section 44A* of the *Banking Act,* he has not established that the Defendant’s intended exercise of its statutory power of sale is, on the material presently before the court, unlawful. 12. The dispute regarding the correct amount payable, compliance with the *in duplum* rule and the parties’ respective accounts are matters that can properly be determined at the hearing of the suit. They do not, in the circumstances of this case, justify restraining the Defendant from exercising its statutory remedies. 13. Consequently, the Plaintiff’s notice of motion dated 1st July, 2024 is hereby dismissed with costs to the Defendant. 14. For avoidance of doubt, the dismissal of this application shall not prevent the Plaintiff from pursuing at the trial his claims regarding the application of *Section 44A* of the *Banking Act,* the computation of the debt, the validity of the notices issued and any alleged breach of the statutory obligations governing realization of charged property. 15. Orders accordingly. DELIVERED (virtually), DATED and SIGNED this 29th day of July, 2026. **JOE M. OMIDO** **JUDGE** FOR THE PLAINTIFF: **Mr. Okero.** FOR THE DEFENDANT: **Mr. Njoga.** COURT ASSISTANTS: **Mr. Ngoge** & **Mr. Juma.** **Court:** Pretrial directions to be taken on 29th October, 2026. **JOE M. OMIDO** **JUDGE**