Electrical Marketing (Wholesale) Ltd v Nairobi City County & 2 others [2019] KEELC 1982 (KLR)
The bottom line
#The Environment and Land Court cancelled a Nairobi county auction of a company's land worth Kshs. 120 million, sold for just 5 million, because proper notice was never given.
What this practically means
#Executive summary
#Key legal issues
#Proper service of demand notice and summons under the Rating Act
No demand notice was served before suit and no proper service of the summons was effected; affixing the summons on the gate of a deserted property did not give the Appellant reasonable notice.
Section 17 requires service of a written demand notice before suit, and Section 26(2) prescribes modes of service. The process server's own affidavits showed the property was deserted and unmanned. The court held the options must not be applied mechanically and that reasonable notice of the demand and suit must be shown. Since the premises were deserted, the process server should have returned the summons under Order 5 Rule 20(2), or served out of Kenya under Order 5.
Irregularity of the execution process
Execution was irregular: no notice of entry of judgment was served, a notice to show cause was wrongly used, the prohibitory order was never registered against the title, no valuation or notification of sale occurred, sale proceeds were not paid into court, and a vesting order was wrongly issued for immovable property.
Under Order 22 Rule 6, ten days' notice of entry of judgment was required where judgment was entered in default; none was served. A notice to show cause under Rule 18 was inapplicable. Rule 48 required registration of the prohibitory order for attachment to be complete, which was not done. Rules 57, 58 and Rule 11 of the Auctioneers Rules required a valuation, reserve price and disclosure of encumbrances; none was done. Rule 70 required sale proceeds to be paid into court; they were not.
Fraud and material irregularity in the sale and availability of setting aside
The failure to value the property before the sale rendered the auction improper and fraudulent, and the Appellant was entitled under Order 22 Rule 75 to seek setting aside rather than being confined to damages.
No valuation was carried out before sale despite the property being valued at Kshs. 120,000,000 in 2008 and sold at Kshs. 5,000,000. The court rejected the Respondents' argument that damages were the sole remedy, holding that Rule 75 entitles an affected person to apply to set aside a sale conducted with material irregularity or fraud on proof of substantial injury.
Legal principles established
#- Service under Section 17 of the Rating Act must afford the rate defaulter reasonable notice of the demand and of the suit; the modes of service are not to be applied mechanically.
- Where the premises are deserted and personal service impossible, the process server should return the summons to court with an affidavit of the attempts made, which is deemed evidence of non-service, under Order 5 Rule 20(2).
- Attachment of immovable property in execution is effective and complete only upon registration of the prohibitory order against the title.
- A person affected by a sale of immovable property in execution may apply under Rule 75 of Order 22 to set the sale aside for material irregularity or fraud on proving substantial injury; damages are not the only remedy.
Court orders
#- 1.The appeal is allowed
- 2.The orders made for the sale of L.R. No. 209/8323 by way of public auction on 30/8/2011 and all subsequent orders relating to the Suit Property are set aside
- 3.The judgment of Hon. M. W. Njagi, First Class Magistrate delivered on 29/5/2017 in Civil Suit Number 3 of 2011 and all consequential orders are set aside
- 4.The Appellant is awarded the costs of the appeal to be borne by the 1st Respondent
- On appeal from
- Nairobi City Court (First Class Magistrate)
- Civil Suit Number 3 of 2011
- Jurisdiction invoked
- First appellate jurisdiction over a magistrate's court suit (memorandum of appeal; appeal against ruling and order of the First Class Magistrate)
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Electrical Marketing (Wholesale) Limited & another v Nairobi City County & 5 others (Environment and Land Petition 21 of 2017) [2026] KEELC 144 (KLR)[2026] KEELC 144 (KLR)26 Jan 2026applied
Cite this brief
#Cite this brief
Caselaw, "Electrical Marketing (Wholesale) Ltd v Nairobi City County & 2 others [2019] KEELC 1982 (KLR)", Case Analysis (2019). E.L.C. Appeal No. 22 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2019/1982/eng@2019-07-15
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.