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ELCPartially AllowedELC 1 of 2022 (consolidated with ELC E001 of 2022)· [2022] KEELC 1952 (KLR)

Charles Murugu Mukindia & 2 others v Consolidated Bank of Kenya Ltd & another [2022] KEELC 1952 (KLR)

Environment and Land Court
26 January 2022
CNC.K. Nzili
3,377 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~14 min to read original · ~4 min brief

The bottom line

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A Kenyan court stopped a bank auction of family land because the bank couldn't produce legally required notices, but ordered the borrowers to keep up monthly payments.

What this practically means

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Executive summary

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The plaintiffs applied by notice of motion dated 12.1.2022 for temporary and permanent injunctions restraining the defendants from selling charged lands (various Nkuene, Ontulili and Ntakira titles) offered as security for a loan facility. They alleged default following Covid-19 business disruption, a negotiated restructuring at Kshs. 400,000/= monthly, over Kshs. 20 million repaid against a Kshs. 37 million auction notice requiring account reconciliation, and non-compliance with statutory notices under Sections 90 and 96 of the Land Act. The 1st defendant filed a preliminary objection on jurisdiction, abuse of process, and competence of the forum, arguing charged property disputes belong to a commercial court and that a pending matrimonial suit rendered the matter res judicata and sub judice. The defendants filed no defence or replying affidavit. The court held the Environment and Land Court has jurisdiction under Article 162(2)(b), Sections 4 and 13 of the ELC Act, and the Land Registration and Land Acts, finding the view that it lacks jurisdiction over commercial lending to be a misconception. The res judicata/sub judice ground failed as requiring evidence, per Oraro v Mbaja and Khaemba. On the merits, applying Mrao and the tripartite injunction test, the court found a prima facie case: evidence of consistent monthly repayments, an unreconciled outstanding figure, and the defendants' failure to produce statutory notices. The injunction was granted as a temporary measure conditioned on continued monthly payments of Kshs. 400,000/=, vacating automatically upon any default. The two suits were consolidated, with timelines for pleadings and a case conference within 60 days. No costs order was made.

Key legal issues

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01

Jurisdiction of the ELC over charged land

Holding

The ELC has jurisdiction; Sections 13(1) ELC Act, Sections 2, 78-106 Land Act and Sections 2, 101 Land Registration Act confer it.

Reasoning

The suit raises issues of a charge, enforceable interests, statutory notices under Sections 90 and 96 of the Land Act and proprietary rights under Section 25 of the Land Registration Act. The legislature vested all matters touching on environment and land in the ELC; the notion that commercial lending ousts that jurisdiction is a misconception. The court aligned itself with Kenwood Property Developers, Lydia Nyambura Mbugua and Alphose Yankulije.

p. 4
02

Res judicata/sub judice as preliminary objection

Holding

Rejected; not a pure point of law absent pleadings establishing the other suits.

Reasoning

A preliminary objection must be a pure point of law. The 1st defendant listed no suits and attached no pleadings; determining res judicata would require probing facts and evidence. Relying on Oraro v Mbaja and Henry Wanjama Khaemba, the court held such issues are incapable of resolution at the preliminary objection stage and rejected that ground.

p. 4
03

Temporary injunction

Holding

Granted on conditions; prima facie case established because mandatory statutory notices under Sections 90 and 96 of the Land Act were not produced.

Reasoning

Applying the Giella-style tripartite test, the court found the applicants showed a genuine and arguable case: a bank statement evidencing consistent Kshs. 400,000/= monthly repayments post-restructuring, an unreconciled discrepancy between sums repaid (Kshs. 20 million) and the Kshs. 37 million noticed for auction, and absence from the respondents of duly issued and served statutory notices. Irreparable loss and balance of convenience favoured injunction per Section 104 of the Land Act.

p. 5

Legal principles established

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  • The Environment and Land Court has jurisdiction over disputes concerning charges on land and statutory power of sale, notwithstanding the commercial lending element.
  • Res judicata and duplicity of suits require probing of evidence and cannot be raised as preliminary objections.

Court orders

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  1. 1.Temporary injunction restraining the respondents from selling or dealing with the suit properties, granted in terms of prayer No. 4 (status quo) rather than a permanent injunction.
  2. 2.The applicant to continue repaying Kshs. 400,000/= monthly not later than the 5th day of each month.
  3. 3.In default of any single instalment the orders shall stand vacated.
  4. 4.ELC 1 of 2022 and ELC E001 of 2022 consolidated.
  5. 5.Leave granted to file pleadings and exchange witness statements and documents within 30 days.
  6. 6.Mention for case conference within 60 days.

Authorities

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Legislation

  • Civil Procedure ActSections 1A, 3A
  • Civil Procedure RulesOrder 40 Rules 1, 2, 4; Order 31 Rules 1, 3, 14; Order 51 Rule 1; Order 11 Rule 1
  • Constitution of KenyaArticle 162(2)(b)
  • Environment and Land Court ActSections 4, 13(1)
  • Land Registration ActSections 2, 25, 28, 52, 56, 57, 58, 59, 101
  • Land ActSections 2, 56(2), 78-106, 90(1), 90-98, 92, 96(2), 104
  • Auctioneers RulesRule 15

Cases cited (14)

  • Mukisa Biscuits Manufacturing Co. Ltd v West End Distributors Ltd
    [1969] E.A 797
  • Bii v Kenya Commercial Bank Ltd
    [2001] KLR 458
  • National Bank of Kenya Ltd v Christian Community Life Church
    [2020] eKLR
  • Cooperative Bank of Kenya Ltd v Patrick Kangethe Njuguna & 5 Others
    [2017] eKLR
  • Kenwood Property Developers Ltd v Family Bank Ltd, Onesmus Ngige Munyambu & Another (Interested Party)
    2020 eKLR
  • Lydia Nyambura Mbugua v Diamond Trust Bank (K) Ltd & Another
    [2018] eKLR
  • Alphose Yankulije v One Twiga Road Ltd & 2 Others
    [2019] eKLR
  • ACS v ECK & Another
    [2020] eKLR
  • Naitore M'Iburi & Another v Attorney General & 2 Others, Sebastian Kaaria Interested Party
  • County Council of Nandi v Ezekiel Kibet Ruto & 6 Others
    [2013] eKLR
  • Oraro v Mbaja
    [2005] 1 KLR 141
  • Henry Wanjama Khaemba v Standard Chartered Bank Ltd & Another
    [2014] eKLR
  • Mrao Ltd v First American Bank of Kenya Ltd & 2 Others
    [2003] eKLR
  • Leonard Jefwa Kalama & Another v Consolidated Bank of Kenya & 3 Others
    [2014] eKLR
Jurisdiction invoked
Article 162(2)(b) of the Constitution; Sections 4 and 13 of the Environment and Land Court Act, 2011

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (3)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Charles Murugu Mukindia & 2 others v Consolidated Bank of Kenya Ltd & another [2022] KEELC 1952 (KLR)", Case Analysis (2022). ELC 1 of 2022 (consolidated with ELC E001 of 2022). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/1952/eng@2022-01-26

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