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ELCPartially AllowedEldoret High Court Civil Suit (referenced via Nairobi HCC No. 2234 of 2001 not this suit)· [2021] KEELC 982 (KLR)

Sigilain Limited v Hasham Lalji Properties Limited [2021] KEELC 982 (KLR)

Environment and Land Court
12 November 2021
5,996 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~24 min to read original · ~4 min brief

The bottom line

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What this practically means

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Executive summary

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By a plaint dated 10th May 2002, Sigilain Limited sought declarations, injunctions and an account of rents over Eldoret Municipality Block 7/7 against Hasham Lalji Properties Limited, which counterclaimed for cancellation of the plaintiff's registration and rectification of the register. The plaintiff's suit was dismissed after it failed to comply with an order to deposit rental income into a joint account, the order carrying a default dismissal clause, leaving only the counterclaim for determination. The defendant traced the property's registration from Shah Somchand Nangpar and Shah Lalji Nangpar to Lapkeiyet Trust (Kenya) Limited in 1999 and then to Sigilain Limited in 2000. The defendant's witnesses, including the Land Registrar and a Senior State Counsel, showed that one registered owner was already dead when the lease was issued, transfers were executed by a purported trustee without a grant, attestation particulars were missing, and Lapkeiyet was only incorporated on 23rd September 2000, after both transfers. The court found the anomalies pointed to fraud, applied section 26(1)(b) of the Land Registration Act to hold that title acquired illegally, unprocedurally or through a corrupt scheme is impeachable even against an innocent title holder, and invoked section 80(1) to cancel the plaintiff's certificate of lease and order registration of the defendant as proprietor, with costs to the defendant.

Key legal issues

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01

Whether the defendant proved fraud in the transfer of the suit property

Holding

Fraud was proved: the transfers were riddled with irregularities, including execution by a purported trustee without a grant, undated and unattested transfer forms, and transfers to and by a company that did not exist at the time

Reasoning

The Land Registrar's evidence established that the transfer forms were improperly executed and attested, lacked dates, identifications and rates clearance certificates, and that a deceased co-proprietor's interest was conveyed without transmission by grant. A Senior State Counsel confirmed Lapkeiyet did not exist in the Companies Registry records despite receiving a certificate of lease in 1999 and transferring in 2000. The court held these anomalies pointed to fraud to beat the registration system.

p. 6
02

Whether the plaintiff is a bona fide purchaser entitled to indefeasible title

Holding

No; the protection of section 26(1) is removed where title is acquired illegally, unprocedurally or through a corrupt scheme, and it need not be shown that the title holder was party to the fraud

Reasoning

Relying on Elijah Makeri and Alice Chemutai Too, the court held that where title is impeached on the ground of illegal, unprocedural or corrupt acquisition, it is unnecessary to prove the title holder's personal participation in immoral conduct. The plaintiff's acquisition fell short of the law and procedure of registration, so its certificate of lease could not stand.

p. 7
03

Whether the defendant is entitled to cancellation of the title and rectification of the register

Holding

Yes; section 80(1) empowers the court to cancel a fraudulently acquired registration and the defendant was entitled to be registered as proprietor

Reasoning

The court invoked section 80(1) of the Land Registration Act and its own prior holding in Kenya Anti-Corruption Commission v Online Enterprise to cancel registrations obtained by fraud or mistake. The transfer to a non-existent Lapkeiyet and onward to the plaintiff was irregular, fraudulent and unprocedural, warranting cancellation of the plaintiff's certificate of lease of 10th May 2000 and registration of the defendant as proprietor.

p. 7

Legal principles established

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  • A registered proprietor whose root of title is under challenge must prove the legality of how the title was acquired, not merely produce the instrument of title
  • Under section 26(1)(b) of the Land Registration Act, title need not be held by a party to the fraud to lose indefeasibility; title obtained illegally, unprocedurally or through a corrupt scheme is impeachable
  • A transfer to a non-existent entity cannot pass valid title and betrays fraud or misrepresentation
  • The court may order rectification or cancellation of a registration obtained by fraud or mistake under section 80(1) of the Land Registration Act

Court orders

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  1. 1.The registration in favour of the plaintiff as proprietor of ELDORET MUNICIPALITY BLOCK 7/7 be and is hereby cancelled
  2. 2.An order granted for the rectification of the register and the Defendant be registered as the Proprietor of ELDORET MUNICIPALITY/BLOCK 7/7
  3. 3.Plaintiff to pay costs of this suit

Authorities

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Legislation

  • Registered Land Act, cap 300 (now repealed)Section 119
  • Land Registration Act, 2012Section 26(1)
  • Land Registration Act, 2012Section 80(1)
  • Land Registration Act, 2012Section 80(2)

Cases cited (8)

  • MUNYU MAINA V HIRAM GATHIHA MAINA
    [2013] eKLR
  • ELIJAH MAKERI NYANGW'RA v STEPHEN MUNGAI NJUGUNA & another
    [2013] eKLR
  • RATILAL GORDHANBHAI PATER vs LALJI MAKANJI
    [1975] EA 314, 317
  • ELIZABETH KAMENE NDOLO vs GEORGE MATATA NDOLO
    [1976] eKLR
  • KENYA NATIONAL HIGHWAY AUTHORITY vs SHALIEN MASOOD MUGHAL & 5 OTHERS
    [2017] eKLR
  • Alice Chemutai Too vs Nickson Kipkurui Korir & 2 Others
    [2015] eKLR
  • Kenya Anti-Corruption Commission vs Online Enterprise Limited
    Kisumu ELC No. 708 of 2015
  • ETHICS & ANTI-CORRUPTION COMMISSION V ANN WANJIKU & 3 OTHERS
    [2021] eKLR
Jurisdiction invoked
Original jurisdiction under the Land Registration Act, 2012 (sections 26(1) and 80(1)) over the defendant's counterclaim seeking cancellation of title and rectification of the register

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, "Sigilain Limited v Hasham Lalji Properties Limited [2021] KEELC 982 (KLR)", Case Analysis (2021). Eldoret High Court Civil Suit (referenced via Nairobi HCC No. 2234 of 2001 not this suit). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/982/eng@2021-11-12

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