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ELCDismissedPetition No. 8 of 2017 (filed 23/10/2017, amended 3/7/2018)· [2021] KEELC 1545 (KLR)

Dishon Muthama Nzina & 19 others v Attorney General & 4 others; Muringu Mukaru & 122 others (Interested Parties) [2021] KEELC 1545 (KLR)

Environment and Land Court
12 October 2021
JKJ. G. Kemei
4,973 words in judgment
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The bottom line

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What this practically means

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Executive summary

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Three petitioners, claiming to be among 420 members of Mathengeta Farmers Company Limited (incorporated 1970, dissolved 1991), petitioned the Environment and Land Court at Thika alleging that the company was illegally dissolved without shareholders' resolutions and that its undistributed assets, including 50 acres for housing and a 160-acre parcel (Makuyu/Kambiti/Block 11/5595/1), were fraudulently alienated to non-members. They sought declarations of nullity and fraud, vesting of the 160 acres in former members, mandamus to reinstate the company, nullification of titles held by the Interested Parties, compensation at market value, and mesne profits. The Land Registrar (1st-3rd Respondents) and the National Land Commission (4th Respondent) opposed the petition; the 5th Respondent and the Interested Parties did not respond. The court framed four issues. First, it held, sua moto, that jurisdiction over restoration of a company dissolved under the Companies Act lies with the High Court, and struck out the reinstatement claim. Second, it found fraud neither particularised under Order 2 rule 10(1) nor proved to the required high standard; the impugned titles were in fact issued in 1988, before dissolution, and no title evidenced company ownership of the 160-acre parcel. Third, applying Anarita Karimi Njeru, it held the dispute was essentially an ownership matter unsuitable for a constitutional petition, and no rights violations were proved. The claim for mesne profits also failed for want of evidence of wrongful possession. The petition was dismissed with costs on 12 October 2021.

Key legal issues

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01

Whether the ELC has jurisdiction to order reinstatement of a company wound up in 1991

Holding

No - restoration jurisdiction lies with the High Court under the Companies Act; the claim for reinstatement was struck out

Reasoning

The court invoked the Lillian SS principle that jurisdiction must be determined first and suo moto where it arises. Section 2 of the Companies Act defines 'Court' as the High Court and Part XXXIII governs dissolution and restoration, so the ELC cannot entertain the reinstatement claim.

p. 6
02

Whether fraud in the alienation of company land was proved

Holding

Not proved - fraud was not particularised and the documentary evidence contradicted the claim (titles issued in 1988, before dissolution)

Reasoning

Order 2 rule 10(1) requires particulars of fraud. Titles relied on were issued in 1988 under the Presidential Commission, before the 1991 dissolution, contradicting the averment of post-dissolution transfers. No title showed company ownership of 5995/1, which had passed to a third party in 1968. The burden of proof was not discharged.

p. 8
03

Whether constitutional rights were violated

Holding

No - the dispute is essentially an ownership dispute best pursued by ordinary civil suit, not a constitutional petition

Reasoning

Applying the Anarita Karimi Njeru rule, the petitioners pleaded articles of the Constitution but failed to demonstrate with precision how each was infringed and by whom. The claim's true nature being land ownership, the proper forum is a civil suit where evidence can be tested.

p. 8

Legal principles established

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  • Jurisdiction of the Environment and Land Court does not extend to restoration of companies dissolved under the Companies Act, which vests that jurisdiction in the High Court
  • Fraud must be specifically pleaded, particularised and proved to a standard higher than the balance of probabilities
  • A constitutional petition must set out with precision the provision infringed and the manner of infringement; a mere ownership dispute does not qualify

Court orders

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  1. 1.The claim for reinstatement of the company struck out for want of jurisdiction
  2. 2.The petition dismissed with costs

Authorities

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Legislation

  • Constitution of Kenya, 2010Articles 27, 36, 40, 42, 47, 67(e), 70, 162(2)(b)
  • Environment and Land Court Act No. 19 of 2011Section 13
  • Companies Act (repealed)Section 339(6)
  • Companies Act, 2015Section 912
  • Land Registration ActSections 25, 26, 28
  • National Land Commission ActSection 15
  • Civil Procedure ActOrder 2 rule 10(1); Order 21 rule 13

Cases cited (10)

  • Annarita Karimi Njeri Vs AG (1979) KLR 54
    (1979) KLR 54
  • Margaret Njeri Wachira V Eliud Waweru Njenga (2018) eKLR
    (2018) eKLR
  • Rajan Shah & Partners Vs Bipin P Shah (2016)
    (2016) eKLR
  • Owners of the Motor Vessel "Lillian S S" -vs- Caltex Oil Kenya Limited [1989] KLR
    [1989] KLR
  • Samuel Kamau Macharia Vs Kenya Commercial Bank & 2 others CA No 2 of 2011
    Sup. Ct. Pet. No. 2 of 2011
  • Ratilal Gordhanbhai Patel V. Lalji Makanji [1957] EA 314
    [1957] EA 314
  • Ulmila Mahindra Shah v. Barclays Bank International and Anor [1979] KLR
    [1979] KLR
  • Martin Nyaga Wambora & 4 others v Speaker of the Senate & 6 Others [2014] eKLR
    [2014] eKLR
  • Anarita Karimi Njeru v Republic (1976-1980) KLR 154
    (1976-1980) KLR 154
  • Ngugi Kinyanjui & Others Vs John Mburu Mwangi & others HCCA No 807 of 2001
    HCCA No 807 of 2001
Jurisdiction invoked
Article 162(2)(b) of the Constitution and Section 13 of the Environment and Land Court Act No. 19 of 2011

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, "Dishon Muthama Nzina & 19 others v Attorney General & 4 others; Muringu Mukaru & 122 others (Interested Parties) [2021] KEELC 1545 (KLR)", Case Analysis (2021). Petition No. 8 of 2017 (filed 23/10/2017, amended 3/7/2018). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/1545/eng@2021-10-12

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