https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/7892

Victoria Commercial Bank PLC v Davita Solutions Limited & 2 others (Commercial Case E698 of 2025) [2026] KEHC 7892 (KLR) (Commercial and Tax) (4 June 2026) (Ruling) Neutral citation: [2026] KEHC 7892 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Commercial Courts) Commercial and Tax Commercial Case E698 of 2025 MO Ado, J June 4, 2026 Between Victoria Commercial Bank Plc Plaintiff and Davita Solutions Limited 1st Defendant Reena Davindrakumar Magon 2nd Defendant Lalita Magon 3rd Defendant Ruling 1.Before the Court is the Plaintiff's Notice of Motion dated 22nd October 2025 brought under Sections 1A, 1B, 3 and 3A of the Civil Procedure Act, Order 39 Rules 5, 6 and 7, Order 40 Rule 1 and Order 51 Rule 1 of the Civil Procedure Rules. 2.The Plaintiff seeks, principally, orders restraining the Defendants from disposing of assets allegedly charged in its favour, orders compelling the Defendants to furnish security in the sum of KShs. 33,354,918.52, orders requiring production and disclosure of assets and ownership documents, and in default, attachment before judgment of the Defendants' movable and immovable property pending the hearing and determination of the suit. Background 3.The application is supported by the affidavit of Clement Gitau sworn on 22nd October 2025. 4.The Plaintiff's case is that by a Letter of Offer dated 24th June 2024, it advanced credit facilities to the 1st Defendant amounting to KShs. 26,000,000 comprising an overdraft facility of KShs. 13,000,000 and a temporary overdraft facility of KShs. 13,000,000 for working capital purposes. 5.According to the Plaintiff, the facilities were secured by a Fixed and Floating Debenture dated 6th June 2024 over the assets of the 1st Defendant and by Personal Guarantees and Indemnities executed by the 2nd and 3rd Defendants. 6.The Plaintiff avers that the facilities fell due for repayment but the 1st Defendant defaulted. It states that as at the time of filing suit, the outstanding indebtedness stood at KShs. 33,354,918.52 inclusive of accrued interest. 7.The Plaintiff further contends that despite issuance of demand letters and notices, the Defendants have failed to settle the debt. It asserts that there exists a real risk that the Defendants may dispose of, conceal or transfer assets with the intention of frustrating execution of any decree that may ultimately be issued in its favour. 8.On that basis, the Plaintiff urges the Court to preserve the Defendants' assets and compel them to furnish security pending determination of the suit. The Response 9.The application is opposed through the Replying Affidavit of Ritu Magon sworn on 21st November 2025 on behalf of the 1st Defendant. 10.The deponent states that the 3rd Defendant resigned as a director of the 1st Defendant and annexed a CR12 dated 10th July 2025 showing that the current directors and shareholders are Reena Magon and Ritu Magon. 11.While admitting that the Plaintiff advanced the facilities pleaded in the Plaint, the Defendants contend that the facilities were secured by a Fixed and Floating Debenture over the assets of the company together with Personal Guarantees executed by the 2nd and 3rd Defendants. 12.The Defendants argue that the Debenture already secures the Plaintiff's interests and covers substantially all the company's assets, including stocks, shares, goodwill, intellectual property, motor vehicles, plant, machinery, chattels and book debts. 13.They contend that the Plaintiff has failed to identify any specific asset that has been disposed of, transferred or interfered with so as to warrant the orders sought. 14.The Defendants further submit that the application is founded on speculation and unsupported allegations of intended dissipation of assets. 15.In particular, they deny that the 1st Defendant owns the shop allegedly situated at Nova Apartments along Muthangari Road and state that no title documents exist in its name capable of being produced before the Court. 16.The Defendants also maintain that discussions had taken place regarding repayment of the facilities through weekly instalments of KShs. 100,000 and that the Plaintiff accepted the arrangement. They therefore contend that the Plaintiff is estopped from recalling the entire facility. 17.The Defendants deny any intention to dispose of assets or defeat execution and urge the Court to dismiss the application. Further Affidavit 18.In a Further Affidavit sworn on 22nd December 2025, Clement Gitau reiterates that the facilities and securities are not disputed. 19.He states that the facilities matured on 30th June 2025 and that the Defendants admitted default by proposing repayment through instalments after receipt of the Plaintiff's demand letter. 20.The Plaintiff denies having approved any restructuring arrangement and maintains that the repayment proposal was rejected. 21.The Plaintiff further contends that the Defendants' movable assets are susceptible to dissipation and that the Court should intervene to preserve them pending determination of the suit. Analysis and Determination 22.The Plaintiff filed written submissions dated 13th January 2026 while the Defendants filed submissions dated 23rd April 2026. I have considered those submissions together with the pleadings, affidavits and authorities cited. 23.Although the application contains numerous prayers, the issue for determination is whether the Plaintiff has established sufficient grounds for the grant of preservatory orders, including an injunction, disclosure of assets, provision of security, and attachment before judgment pending the hearing and determination of the suit. 24.The application is principally anchored on Order 39 Rule 5 of the Civil Procedure Rules which provides:“Where, at any stage of a suit, the court is satisfied by affidavit or otherwise that the defendant, with intent to obstruct or delay the execution of any decree that may be passed against him—(a)is about to dispose of the whole or any part of his property; or(b)is about to remove the whole or any part of his property from the local limits of the jurisdiction of the court,the court may direct the defendant, within a time fixed by it, either to furnish security in such sum as may be specified in the order, to produce and place at the disposal of the court the said property or the value thereof, or to appear and show cause why he should not furnish security.” 25.The jurisdiction conferred by the Rule is exceptional. It is intended to prevent a defendant from deliberately frustrating the execution of a future decree. It is not intended to provide a plaintiff with advance security merely because a debt is claimed or because the plaintiff fears that recovery may ultimately prove difficult. 26.In Kanyoko t/a Amigos Bar & Restaurant v Nderu & 2 Others [1988] eKLR, the Court observed that the power to attach property before judgment should only be exercised upon clear proof that the defendant is about to dispose of or remove property with the intention of obstructing or delaying execution of a decree that may be passed against him. 27.Likewise, in John Kipkemboi Sum v Lavington Security Guards Ltd [1998] eKLR, the Court of Appeal emphasized that attachment before judgment cannot be granted merely because a defendant appears unable to satisfy a future decree. There must be evidence of the specific mischief contemplated by the Rule. 28.It is not disputed that the Plaintiff advanced credit facilities amounting to KShs. 26,000,000 to the 1st Defendant under the Letter of Offer dated 24th June 2024. 29.It is equally not disputed that the facilities were secured by a Fixed and Floating Debenture dated 6th June 2024 and by Personal Guarantees executed by the 2nd and 3rd Defendants. 30.The Debenture created security over a broad range of the 1st Defendant's assets, including stocks, shares, goodwill, intellectual property, motor vehicles, plant, machinery, chattels and book debts. 31.The Plaintiff contends that the facilities are in default and that the outstanding indebtedness stands at KShs. 33,354,918.52. Whether the precise amount claimed is due is a matter that will ultimately be determined at the hearing of the suit. For purposes of this application, the Court proceeds on the basis that there is an undisputed lending relationship between the parties and that the Plaintiff holds contractual securities in support of its claim. 32.The critical question is whether the Plaintiff has demonstrated that the Defendants are about to dispose of, conceal or remove their assets from the jurisdiction with the intention of obstructing or delaying execution of any decree that may be issued. 33.Having considered the material placed before the Court, I am unable to find any evidence demonstrating such intention. 34.The Plaintiff has expressed apprehension that the Defendants may dissipate assets. However, apprehension alone is insufficient. The Rule requires evidence. 35.The Plaintiff has not identified any specific asset that is the subject of a pending sale, transfer or disposal. 36.It has not produced evidence of negotiations for sale of any property. 37.It has not shown that the Defendants are relocating assets outside the jurisdiction. 38.It has not demonstrated that the Defendants are winding up operations, concealing property or engaging in any conduct from which an intention to defeat execution may reasonably be inferred. 39.The existence of indebtedness, even if established, does not by itself justify attachment before judgment. 40.Similarly, a defendant's financial difficulty or inability to immediately repay a debt does not satisfy the requirements of Order 39 Rule 5. 41.I also note that the Plaintiff already holds substantial contractual security in the form of a registered Fixed and Floating Debenture over the assets of the 1st Defendant together with Personal Guarantees executed by the 2nd and 3rd Defendants. 42.While the existence of those securities does not preclude the Court from granting relief under Order 39 Rule 5, it is nevertheless a relevant consideration when assessing whether additional extraordinary interlocutory measures are warranted. 43.A secured creditor seeking attachment before judgment must still demonstrate the statutory requirements prescribed by the Rule. 44.In the present case, those requirements have not been established. 45.The Plaintiff also seeks orders compelling disclosure of all assets owned by the Defendants and production of title documents, motor vehicles, machinery and other movable property. 46.Such orders are intrusive and far-reaching. They cannot be granted merely because a plaintiff has filed a claim for a liquidated sum. There must be cogent evidence showing that the defendants are acting in a manner intended to defeat execution. No such evidence has been presented. 47.With regard to the alleged shop situated at Nova Apartments along Muthangari Road, the Defendants expressly deny ownership of the property. 48.The Plaintiff has not produced any title document, search, lease or other evidence demonstrating that the property belongs to the 1st Defendant. 49.In the absence of proof of ownership, the Court cannot compel the production of title documents relating to that property. 50.The Plaintiff further invites the Court to infer an intention to dissipate assets from the Defendants' proposal to repay the debt through instalments. 51.I am unable to draw such an inference. 52.Whether accepted or rejected, a proposal for settlement is not evidence of an intention to obstruct execution. If anything, it may equally be viewed as an attempt to address an existing indebtedness. 53.The Court must guard against transforming the remedy of attachment before judgment into a mechanism for securing debts before liability has been established. 54.The purpose of Order 39 Rule 5 is to prevent abuse of the Court's process through deliberate dissipation of assets and not to provide a plaintiff with additional security merely because it considers its claim to be meritorious. 55.Having considered the totality of the evidence before me, I am not satisfied that the Plaintiff has demonstrated that the Defendants are about to dispose of, conceal or remove their assets from the jurisdiction with the intention of obstructing or delaying execution of any decree that may ultimately be issued. 56.The Plaintiff's apprehension remains speculative and unsupported by evidence. 57.Consequently, the threshold for the grant of orders under Order 39 Rule 5 of the Civil Procedure Rules has not been met. 58.For the same reason, there is no basis for granting the ancillary orders compelling disclosure of assets, provision of security, production of title documents or attachment before judgment. 59.Accordingly, the Notice of Motion dated 22nd October 2025 lacks merit and is hereby dismissed. 60.The costs of the application are awarded to the Defendants. 61.It is so ordered. DATED, SIGNED, AND DELIVERED AT NAIROBI THIS 4TH DAY OF JUNE 2026HON. MR. JUSTICE MOSES ADO JUDGE OF THE HIGH COURTIn the Presence of:Moses C/A………………for the Applicant……………for the Respondent