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ELCAllowedCivil Case No 97 of 2015· [2016] KEELC 859 (KLR)

Stephen Muthaura v National Bank of Kenya Limited [2016] KEELC 859 (KLR)

Environment and Land Court of Kenya at Meru
13 April 2016
PNP.M. Njoroge
852 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Meru court blocked the National Bank of Kenya from auctioning a borrower's land because the bank sent the statutory notices to the wrong postal address.

What this practically means

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Executive summary

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This is an interlocutory ruling of the Environment and Land Court at Meru in a suit filed by Stephen Muthaura against National Bank of Kenya Limited. The plaintiff, the registered proprietor of parcel No. NYAKI/KITHOKA/2597, had in 2013 obtained a financial facility of Kshs 17,600,000 repayable within 10 years, secured by a charge over that parcel. On 16th October 2015 he was served with a public auction notice by Legacy Auctioneering Services indicating the land would be sold on 3rd November 2015. He deposed that a statutory notice had been sent to a wrong postal address (P.O Box 257-60200 Meru rather than his correct P.O Box 444-60200 Meru), that he had never been served with statutory notices enabling him to redeem the property, that the stated arrears were grossly exaggerated, that no demand notice preceded exercise of the statutory power of sale, and that his home - a double storey five-bedroomed permanent house with four servant quarters - stood on the land. By a Notice of Motion dated 19th October 2015 he sought temporary injunctions restraining the defendant from selling or alienating the property pending inter partes hearing and pending the hearing and determination of the suit. On 13th April 2016 the defendant and its advocate did not appear despite an inter partes date fixed in court when all parties were represented. The court deemed the application unopposed, allowed it, and confirmed prayer 3, restraining the defendant from selling, alienating or dealing with the suit property pending the hearing and determination of the suit. Costs were ordered to be in the cause. The ruling did not determine the merits of the underlying claim.

Key legal issues

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01

Temporary injunction restraining sale of charged land

Holding

The application being unopposed, the court allowed it and confirmed prayer 3, restraining the defendant from selling or dealing with the suit property pending hearing and determination of the suit.

Reasoning

The plaintiff swore a supporting affidavit showing he obtained a financial facility of Kshs 17,600,000 repayable in 10 years, secured by a charge over the suit property. He deponed that statutory notices were sent to a wrong postal address (P.O Box 257-60200 Meru instead of his correct P.O Box 444-60200 Meru), that no demand notice preceded exercise of the statutory power of sale, that the loan balance figures were inflated, and that his home and extensive developments lay on the land. The inter partes hearing date was fixed in court when all parties were represented; on the hearing date neither the defendant nor its advocate appeared, so the application was treated as unopposed and allowed.

p. 2

Legal principles established

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  • Where an application is not opposed, the court may allow it and confirm the substantive prayer

Court orders

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  1. 1.Prayer 3 of the Notice of Motion dated 19th October 2015 confirmed - a temporary injunction restraining the defendant, its auctioneers, agents, servants or anyone acting at its behest from selling, selling by auction and/or alienating parcel No. NYAKI/KITHOKA/2597 or in any other way dealing with the same pending the hearing and determination of the suit
  2. 2.Costs in the cause
Jurisdiction invoked
Environment and Land Court jurisdiction over the charge and land parcel NYAKI/KITHOKA/2597 (not expressly cited in the ruling)

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Stephen Muthaura v National Bank of Kenya Limited [2016] KEELC 859 (KLR)", Case Analysis (2016). Civil Case No 97 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2016/859/eng@2016-04-13

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.