TSS Salt Manufuctures Limited v NIC Bank Limited [2018] KEELC 3358 (KLR)
The bottom line
#A Kenyan court blocked a bank from auctioning a borrower's land because the bank failed to prove it served the required notices before selling.
What this practically means
#Executive summary
#Key legal issues
#Compliance with Section 90 of the Land Act, 2012 (Statutory Notice)
The Statutory Notice dated 11th January 2016 met the requirements of Section 90; it specified the arrears and the three-month period, and proof of postage by registered post to the Plaintiff's charge address was produced
The notice was addressed to the same postal address used in the Charge document, and a certificate of postage evidenced dispatch by registered post. The court held the notice clearly specified the amount in arrears and the consequence of non-remediation within three months, thus satisfying Section 90.
Compliance with Section 96(2) of the Land Act (Notice to Sell)
The 40 days Notices of Intention to Sell were not properly served on the Plaintiff, as the process server's affidavits did not show service on the Plaintiff and the claimed simultaneous service of properties hundreds of kilometres apart was implausible
The process server purported to have served on 19th May 2016 all properties of the Borrower, Plaintiff and two other guarantors, but those properties were in Lamu, Malindi, Mariakani and Nairobi, some more than 500 km apart. The court found non-service established, which alone sufficed for a prima facie case.
Service of the Notification of Sale under Rule 15 of the Auctioneers Rules
The Defendant failed to prove service of the Notification of Sale because no certificate of postage was annexed, and failure of proof attracted the evidentiary burden under Section 107 of the Evidence Act
Unlike the Statutory Notice, the Notification of Sale forwarded by registered post was not accompanied by a certificate of postage. The absence of proof of service meant the Defendant had not discharged its burden of proof, and a sale without proper notice would clog the equity of redemption.
Legal principles established
#- Failure to comply with statutory notice requirements before exercising a statutory power of sale gives rise to a prima facie case supporting an injunction
- Sale of charged property without a proper notice to sell clogs the Chargor's equity of redemption
Court orders
#- 1.Temporary injunction restraining the Defendant from interfering with the Plaintiff's quiet possession of, marketing, advertising, selling, leasing, sub-dividing or exercising a Statutory Power of Sale over LR No. 24207 (CR 31954) pending hearing and final determination of the suit
- 2.The injunction granted applies mutatis mutandis to Malindi ELC No. 145 of 2017 in regard to LR No. 25986 (CR 35612)
- 3.Each party to bear their own costs
- Jurisdiction invoked
- Original civil jurisdiction of the Environment and Land Court over the charged land (LR No. 24207 (CR 31954)); no specific constitutional provision cited
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "TSS Salt Manufuctures Limited v NIC Bank Limited [2018] KEELC 3358 (KLR)", Case Analysis (2018). ELC Case No. 144 of 2017 (with related Malindi ELC No. 145 of 2017). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2018/3358/eng@2018-04-19
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.