Harp Investco Limited v National Social Security Fund Board of Trustees & 4 others [2022] KEELC 2024 (KLR)
The bottom line
#Kenya's land court ordered KeNHA to pay a company Kshs. 730 million because it occupied land for years without ever legally completing the compulsory acquisition process.
What this practically means
#Executive summary
#Key legal issues
#Whether compulsory acquisition of the 17.44 acres was ever legally completed
No. Neither the 2006 gazette notice under the Land Acquisition Act nor the 2016 gazette notice under the Land Act ripened into a completed acquisition, both lapsing for want of an inquiry/award within 24 months.
The 2006 notice lapsed because the Commissioner of Lands failed to hold a compensation inquiry within 24 months as required by Section 9(4A) of the Land Acquisition Act (repealed). The 2016 notice under Section 111(1B) of the Land Act also lapsed after 24 months. Possession taken by KeNHA in 2006 was therefore unlawful, as vesting requires completion of the statutory process and payment of compensation.
Whether the Plaintiff has a compensable interest in the suit land
Yes. The Plaintiff, having paid the full purchase price under the 2005 sale agreement with NSSF, acquired an equitable beneficial interest that was consistently acknowledged by the 1st, 2nd and 3rd Defendants.
The court applied the Court of Appeal's reasoning in Peter Mbiri Michuki: payment of the full purchase price renders the vendor a trustee for the purchaser, conferring an equitable beneficial interest. The 1st Defendant admitted the Plaintiff's beneficial ownership, and the Attorney General confirmed the Plaintiff as the person entitled to compensation under Section 2 of the Land Acquisition Act and Section 112 of the Land Act.
Who bears the duty to compensate the Plaintiff
The 4th Defendant (KeNHA), as the acquiring authority which took possession and benefited from the land, not the NLC.
The NLC is merely an agent of the acquiring body in the compulsory acquisition process; compensation funds are to be deposited by the acquiring authority under Section 111(1A) of the Land Act. The Attorney General himself advised KeNHA to compensate the owners, and KeNHA's own advocate had confirmed willingness to pay for the 17.44 acres. Public purpose does not justify uncompensated deprivation.
What quantum of compensation is payable
Kshs. 730,000,000 being the 2021 open market value per the Transnational Valuers report, plus Kshs. 9,459,412 special damages for survey costs, with interest at 14% per annum from the date of judgment.
The court adopted the Plaintiff's current valuation report (dated 24th June 2021) at current market value rather than the 2005 or 2013 values, holding that compensation must make good the Plaintiff's loss. The Kshs. 9,459,412 paid to surveyors at KeNHA's behest is refundable. Loss of profits and injunctive relief were refused for lack of evidence and because the land is already put to public use.
Whether the 3.2 acres used as an access road was a surrender by the 1st Defendant
No. There was no evidence that either the Plaintiff or the 1st Defendant surrendered the 3.2 acres to the 4th Defendant.
KeNHA argued that 3.2 acres of the 17.44 acres was a voluntary surrender and thus not subject to acquisition. The court found no documentary or testimonial evidence of any such surrender by the registered owner or the beneficial owner; KeNHA had requested creation of the access road from the suit land, and the whole 17.44 acres was part of the acquisition.
Legal principles established
#- Where an inquiry is not held within the prescribed 24 months under the Land Acquisition Act, the Minister is deemed to have revoked the direction to acquire the land, and the gazette notice lapses by operation of law
- Under the Land Act 2012, an acquisition process not completed within twenty-four months of the notice of intention to acquire lapses
- A Gazette Notice of intended compulsory acquisition alone cannot effectuate the acquisition; the statutory procedure must be completed
- A purchaser who has paid the full purchase price acquires an equitable beneficial interest in the land, the vendor becoming a trustee
- The National Land Commission acts as an agent of the national or county government acquiring land; the acquiring authority bears the compensation
Court orders
#- 1.A declaration that the 4th Defendant's occupation and use of L.R No. 11895/90 (L.R. No. 11895/24/14) and LR No. 11895/24/13 measuring 17.44 acres without compensating the Plaintiff is illegal, unlawful and in breach of the Plaintiff's constitutional right to ownership of property
- 2.The 4th Defendant to pay the Plaintiff Kshs. 730,000,000 being the current open market value of L.R No. 11895/90 (L.R. No. 11895/24/14) and LR No. 11895/24/13 both measuring 17.44 acres
- 3.The 4th Defendant to pay the Plaintiff Kshs. 9,459,412 being the amount paid to the Surveyor for the sub-division of L.R No. 11895/24
- 4.The 4th Defendant to pay the Plaintiff interest on the above amounts at the rate of 14% per annum from the date of Judgment until payment in full
- 5.The 4th Defendant to pay the Plaintiff the costs of the suit
- Jurisdiction invoked
- Article 162(2)(b) of the Constitution (Environment and Land Court) - original jurisdiction over land and compulsory acquisition dispute
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.
Cite this brief
#Cite this brief
Caselaw, "Harp Investco Limited v National Social Security Fund Board of Trustees & 4 others [2022] KEELC 2024 (KLR)", Case Analysis (2022). Machakos ELC Case No. 213 of 2013 (formerly Nairobi ELC No. 537 of 2013). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/2024/eng@2022-01-20
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.