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ELCStruck OutNot stated in the judgment· [2018] KEELC 2502 (KLR)

Tara Singh Dogra Suing through Manmohan Singh Dogra v Elesh Chandrakant Gheewala (Kenyan) & 4 others [2018] KEELC 2502 (KLR)

Environment and Land Court of Kenya
19 June 2018
2,332 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~9 min to read original · ~4 min brief

The bottom line

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Kenya's Environment and Land Court struck out a land claim because the company suing no longer exists—you cannot sue on behalf of a dead company.

What this practically means

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Executive summary

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This ruling by the Environment and Land Court at Eldoret (M. A Odeny J) determines a preliminary objection dated 27th November 2017 by the 1st and 3rd defendants on two grounds: lack of locus standi and limitation. Earlier, the 2nd defendant's name was struck out by consent. Counsel for the 1st and 3rd defendants argued that the plaintiff, suing through Manmohan Singh Dogra on behalf of a company that had closed down some 18-20 years earlier, was neither existent nor a juristic person capable of suing, invoking Foss v Harbottle; and that the claim was statute-barred under section 7 of the Limitation of Actions Act. The 4th and 5th defendants added that the land was leasehold, excluding adverse possession under section 41. Plaintiff's counsel relied on Articles 22, 258 and 159 of the Constitution, admitting the company ceased to exist but urging substantive justice. The court held that a company is a juristic person separate from its directors; the exceptions to Foss v Harbottle did not apply and no leave for a derivative action was sought; a party purporting to sue for a non-existent company is a sham. The court rejected the section 41 argument, finding the land was titled to the 3rd defendant and not public land, but held Article 22 inapplicable since adverse possession is not a rights violation. Lack of capacity goes to the root of the suit and cannot be saved as a procedural technicality. The preliminary objection was upheld and the suit struck out with costs to the defendants.

Key legal issues

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01

Locus standi of a plaintiff suing through a defunct company

Holding

The company ceased to exist 20 years ago, is not a juristic person capable of suing, and the person purporting to sue on its behalf is a sham; the plaintiff has no capacity to sue

Reasoning

The plaintiff's own pleadings admitted the company closed down 18-20 years ago and had not filed returns. A company is a juristic person separate from its directors and shareholders; the veil was not lifted and no derivative action with leave was sought. The belated claim in grounds of opposition that the plaintiff sued as administrator of a deceased person was unpleaded and further damaged capacity. With no plaintiff, there can be no suit.

p. 3
02

Rule in Foss v Harbottle and its exceptions

Holding

The plaintiff does not benefit from the exceptions to the rule in Foss v Harbottle; a derivative action would have required leave of the court, which was not obtained

Reasoning

The court restated the rule that only the company may enforce wrongs done to it, subject to exceptions (illegality/ultra vires, irregular resolutions, abridgement of individual member rights, fraud on the minority). The plaintiff claiming adverse possession against the defendants, including the Land Registrar and Attorney General, fell within none of these exceptions, and no leave for a derivative action was sought.

p. 3
03

Limitation of Actions Act and section 41 (public land exclusion for adverse possession)

Holding

Section 41 does not apply because the suit land is not public land; it is titled to the 3rd defendant

Reasoning

The 4th and 5th defendants argued that the subject matter was leasehold land with the government as head lessor, so adverse possession could not run against it under section 41. The court rejected this, holding that the lease merely gives terms and conditions of use and the land is not public land, as evidenced by the official search showing title in the 3rd defendant's name.

p. 3
04

Whether the suit could proceed under Articles 22 and 258 of the Constitution

Holding

Article 22 does not apply; adverse possession is not an enforcement of bill of rights claim and such proceedings must be by petition

Reasoning

The plaintiff relied on Articles 22 and 258 to argue every person may institute suit. The court held Article 22 governs enforcement of the Bill of Rights and requires petition proceedings under rules made by the Chief Justice; the plaintiff claimed no violation of any right, only adverse possession, so the constitutional route was unavailable.

p. 3
05

Procedural technicality (Article 159) as a saving device

Holding

Lack of capacity goes to the root and substance of the suit and cannot be waived as a mere procedural technicality

Reasoning

Counsel for the plaintiff invoked Article 159 urging substantive justice over technicalities. The court held the objection concerned the very existence of a plaintiff, a substantive point of law, so Article 159 could not save the suit; where there is no plaintiff, the suit must be struck out.

p. 3

Legal principles established

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  • A preliminary objection must consist of a point of law which may dispose of the suit
  • An individual shareholder cannot sue for wrongs done to a company (rule in Foss v Harbottle), subject to defined exceptions including derivative actions with leave
  • A company is a juristic person separate from its directors and shareholders, and a party purporting to sue on behalf of a non-existent company is a sham
  • Courts are guided by judicial precedents; the age of an authority does not render it non-binding
  • Lack of capacity goes to the root of the suit and cannot be excused as a procedural technicality under Article 159

Court orders

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  1. 1.The preliminary objection by the 1st and 3rd defendants dated 27th November 2017 is upheld
  2. 2.The suit is struck out
  3. 3.Costs to the defendants

Authorities

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Legislation

  • Limitation of Actions Actsection 7
  • Limitation of Actions Actsection 41 (a)(1)
  • Constitution of Kenya, 2010Article 22
  • Constitution of Kenya, 2010Article 258
  • Constitution of Kenya, 2010Article 159

Cases cited (5)

  • Foss Vs Harbottle
    (1843) 67 ER 189
  • Housing Finance of Kenya Ltd Vs Embakasi Youth Development project
    Nairobi HCCC No. 1068 of 2001
  • MUKISA BISCUIT MANUFACTURING CO LTD VS. WEST END DISTRIBUTORS LTD
    [1969] EA 696
  • Prudential Assurance co. Ltd Vs Newman Industries Ltd
    (1982) Ch. 204
  • DADANI –Vs- MANJI & 3 OTHERS
    [2004]KLR 95
Jurisdiction invoked
Original civil jurisdiction of the Environment and Land Court; preliminary objection raised on points of law (locus standi and limitation under the Limitation of Actions Act)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (3)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Tara Singh Dogra Suing through Manmohan Singh Dogra v Elesh Chandrakant Gheewala (Kenyan) & 4 others [2018] KEELC 2502 (KLR)", Case Analysis (2018). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2018/2502/eng@2018-06-19

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