Azim Taibjee & another v Harish Kumar Bhagwandas Kanabar & another [2021] KEELC 1411 (KLR)
The bottom line
#Kenya's Environment and Land Court refused to stop NCBA Bank from selling charged property because the buyers never obtained title.
What this practically means
#Executive summary
#Key legal issues
#Whether a purchaser under an uncompleted sale of charged property has standing to restrain a chargee's exercise of statutory power of sale
No - the Applicants acquired no title or interest and lacked locus standi against the chargee; their remedy lies in damages against the vendor for breach of contract
The suit property remained lawfully charged to the 2nd Defendant, who held superior rights. The sale agreement between the Applicants and the 1st Defendant never materialised into a transfer, so the Applicants accrued no title. Under the doctrine of privity of contract, they cannot enforce rights under the charge instrument to which they were strangers. Their remedies are refund of purchase price and damages for breach of contract against the vendor only.
Whether the 2nd Defendant complied with statutory conditions precedent to exercise of the statutory power of sale
Yes - the chargee issued and served the Section 90 notice, the Section 96(1) and (2) notice, and the notification of sale through a licensed auctioneer
The court enumerated the statutory pre-conditions under the Land Act 2012 and the Auctioneers Rules 1997. The 2nd Defendant annexed evidence of the primary and secondary notices and notification of sale. Service of the statutory notices was not opposed by the chargor, who also never challenged the exercise of the power of sale, effectively acquiescing in the sale.
Whether the Applicants would suffer irreparable loss if the injunction were refused
No - any loss is measurable in monetary terms being refund of purchase price and damages for breach of contract
The court held that sentimental attachment to land does not arise where the property stands charged; it became a commodity with market and forced sale value. The Applicants, not being registered owners and with a transaction that never materialised, would lose nothing they own. Their loss is compensable in damages against the 1st Defendant, not the chargee.
Where the balance of convenience lies
In favour of the 2nd Defendant/Respondent, since the outstanding debt of Kshs. 132,000,000 continues to accrue interest and penalties
An earlier ruling of the court had established the outstanding debt as at 3rd May 2021 at Kshs. 132,000,000, rising continuously. With no evidence of liquidation, and the monies meant to reduce the debt having been withdrawn by the vendor, the debt could outstrip the property's value. The power of sale had also not been challenged by the chargor.
Legal principles established
#- A prima facie case in civil matters is one where, on the material presented, a tribunal properly directing itself concludes that a right has apparently been infringed calling for an explanation or rebuttal
- A stranger to a contract cannot enforce its rights or obligations under the doctrine of privity of contract
- A chargee may exercise statutory power of sale upon default, subject to compliance with statutory conditions including issuance of Section 90 and Section 96 notices, statutory valuation and notification of sale
- Irreparable injury is injury that cannot adequately be compensated by an award of damages; speculative injury will not suffice
Court orders
#- 1.The Notice of Motion Application by the Plaintiffs/Applicants is dismissed
- 2.Costs awarded to the 2nd Defendant/Respondent only
- Jurisdiction invoked
- Original jurisdiction of the Environment and Land Court over land and charge disputes
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Azim Taibjee & another v Harish Kumar Bhagwandas Kanabar & another [2021] KEELC 1411 (KLR)", Case Analysis (2021). Notice of Motion dated 21st September 2020 (Environment and Land Court, Milimani, Nairobi). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/1411/eng@2021-10-21
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.