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ELCPartially AllowedEnvironment & Land Case 186 of 2013· [2023] KEELC 16794 (KLR)

Rapam Limited & another v Kazungu & another

Environment and Land Court of Kenya
9 February 2023
LNL.L. Naikuni
7,832 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~31 min to read original · ~4 min brief

The bottom line

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Kenya's Environment and Land Court upheld a bank auction sale, confirming that a registered buyer's title stands unless fraud is clearly proven.

What this practically means

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Executive summary

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The Environment and Land Court at Mombasa (L.L. Naikuni, J) determined a dispute over LR Number 2129/1/MN (Original Number 1244/3), Shanzu. The Plaintiff, Rapam Limited, bought the land at a public auction on 22nd May 2009 for Kshs 4,100,000 in exercise by Kenya Tourist Development Corporation of its statutory power of sale over a charge securing a loan to the original owner, Kazungu Ngala Kasunji (the Defendant's deceased father). The Plaintiff claimed vacant possession and a permanent injunction, alleging obstruction by the Defendant. The Defendant, by amended defence and counter claim, alleged the sale was fraudulent: no statutory notice was served, and the land was sold at a throwaway price well below market value, and sought cancellation of the Plaintiff's title. The court framed three issues: regularity of the acquisition, entitlement to reliefs, and costs. It held the loan was never proved repaid, the Chargor was served with notice and notification of sale personally and by registered post, and the auction was twice advertised in the Daily Nation. Fraud was not specifically proved - no police or forensic evidence was produced, and the Defendant's valuation post-dated the sale by over three years. The Plaintiff was held a bona fide purchaser for value with indefeasible title under Sections 24, 25 and 26 of the Land Registration Act. Judgment was entered for the Plaintiff with a declaration that the transfer was legal, an order for demolition of structures within 90 days, police security for eviction, a permanent injunction, and costs; the Counter Claim was dismissed with costs.

Key legal issues

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01

Validity of the exercise of the statutory power of sale by the Chargee (KTDC)

Holding

The sale was valid: the loan was unpaid and the Chargor was served with notice and notification of sale personally and by registered post, and the auction was advertised twice in the Daily Nation

Reasoning

The court found the Defendant produced no empirical proof of repayment of the KTDC loan. Service of the notice dated 5th March 2009 and notification of sale was proved, and the auction was advertised in the Daily Nation on 4th and 18th May 2009. Section 69A of the Transfer of Property Act and the Nancy Kahoya Amadira decision were applied to hold the power of sale properly exercised.

p. 12
02

Whether fraud was proved to impeach the Plaintiff's title

Holding

Fraud was not proved; the Plaintiff was a bona fide purchaser for value without notice with indefeasible title

Reasoning

Although fraud was pleaded, the Defendant produced no investigative report or forensic document examiner's evidence. The valuation relied on was done over three years after the sale. Section 107 of the Evidence Act places the burden on the allegers, and the Plaintiff, having bought at a properly conducted public auction, took indefeasible title under Sections 24, 25 and 26 of the Land Registration Act.

p. 12
03

Entitlement to vacant possession and permanent injunction

Holding

The Plaintiff, as registered proprietor, was granted vacant possession, demolition of structures, security for eviction and a permanent injunction

Reasoning

Having found the Plaintiff the bona fide registered proprietor, the court held it entitled to the reliefs sought. The permanent injunction was granted on the merits after full trial, following the Kenya Power & Lighting Co. Ltd v Sheriff Molana Habib decision on perpetual injunctions granted after evidence.

p. 13

Legal principles established

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  • A party alleging fraud must specifically plead and prove it; he who alleges must prove
  • A registered proprietor under the Land Registration Act holds indefeasible title under Sections 24, 25 and 26
  • Costs follow the event under Section 27(1) of the Civil Procedure Act

Court orders

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  1. 1.Judgment entered in favour of the Plaintiff with costs as its case has merit
  2. 2.The Counter Claim by the Defendant dismissed with costs for lack of merit
  3. 3.Declaration that the transfer of LR Number 2129/1/MN (Original Number 1244/3) from the original owner to the Plaintiff was legal, regular and procedural
  4. 4.Defendant, his agents, servants and/or assigns compelled to remove and/or demolish any buildings/structures on the Suit Property within 90 days, failing which the Plaintiff may demolish at the Defendant's expense
  5. 5.OCS Bamburi Police Station or any other station with jurisdiction to provide security during the eviction and demolition
  6. 6.Permanent injunction restraining the Defendant and/or his servants from trespassing into the Suit Land
  7. 7.Costs and interest of the Suit awarded to the Plaintiff, to be borne by the Defendant

Authorities

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Legislation

  • Indian Transfer of Property Act, 1882Sections 69A, 69B(1)
  • Land Registration Act, No. 3 of 2012Sections 24, 25, 26(1)
  • Evidence Act, Cap. 80Section 107
  • Civil Procedure Act, Cap. 21Section 27(1)
  • Civil Procedure Rules, 2010Order 7 Rule 5; Order 11
  • Constitution of Kenya, 2010general reference

Cases cited (11)

  • Nancy Kahoya Amadira v Expert Credit Limited and Anor
    (2015) eKLR

    Instances where a notice need not issue before exercising statutory power of sale, e.g. interest in arrear over two months

  • Euro Bank Limited (In Liquidation) v Twic for Investments Limited & 2 Others

    Fraud must be specifically pleaded and proved; burden on the allegers

  • Galerius Investments Limited v County Government of Mombasa & Another
    [2020] eKLR

    Counter claim must be accompanied by a verifying affidavit under Order 7 Rule 5

  • Priska Onyango Ojwang v Henry Ojwang Nyabenda
    (2018) eKLR

    Consequences of a counter claim not supported by a verifying affidavit

  • Arthur Highway Developers Limited v West End Butchery Limited & 6 Others
    (2015) eKLR

    Definition and conduct of a bona fide purchaser for value without notice

  • Elijah Makeri Nyangwira v Stephen Mungai Njuguna & Anor
    (2013) eKLR

    Impeachability of title acquired fraudulently, unprocedurally or through corrupt scheme under Section 26(1) LRA

  • Petronilla Najuna Khaemba v Attorney General & 7 Others
    (2019) eKLR

    Protection of real title holders from deprivation by subsequent transactions

  • Kenya Power & Lighting Co. Limited v Sheriff Molana Habib
    (2018) eKLR

    Permanent injunction granted on merits after full trial

  • Jasbir Rai Singh Rai v Tarchalon Singh
    (2014) eKLR

    Costs follow the event

  • RoseMary Wambui Munene v Ihururu Dairies Co-Operative Limited
    (2014) eKLR

    Costs follow the event; compensating the successful party

  • Cecilia Nyayo v Barclays Bank of Kenya Limited
    (2016) eKLR

    Basic rule on attribution of costs

Jurisdiction invoked
Original civil jurisdiction of the Environment and Land Court over land title, charge and possession disputes

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, "Rapam Limited & another v Kazungu & another", Case Analysis (2023). Environment & Land Case 186 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/16794/eng@2023-02-09

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