Victoria Commercial Bank v Kamau (Enviromental and Land Originating Summons E061 of 2022) [2024] KEELC 4709 (KLR)

Environment and Land Court

30 May 2024

JOJudy Omange

1,504 words in judgment

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The bottom line

A Kenyan bank lost its bid to take possession of charged land because the two statutory notices were issued too far apart and service was defective.

What this practically means

Executive summary

The Applicant bank sought an order for vacant possession of land parcel Kabete/Lower Kabete/3725, forcible entry, and police supervision of enforcement, under an Originating Summons dated 24th October 2022. The bank had advanced Ksh 14,800,000 to the Respondent under a charge dated 24th August 2017; the loan went into arrears and the bank issued a statutory notice under Section 90(1) of the Land Act on 9th March 2020 and a notice of intention to take possession on 21st June 2022. The Respondent opposed, contending that he was not properly served with the notice of intention to take possession and that he remained willing to settle arrears despite joblessness and economic hardship. The court framed a single issue: whether the chargee had complied with the legal requirements to exercise its right of possession. It found the first notice compliant in form and service, but noted discrepancies in the second notice - deponed as issued on 21st June 2022 yet dated 21st June 2021 - and observed that the debt had risen from Ksh 17,514,665.70 to Ksh 23,179,058 in the interval. Holding that the period between the two notices must be reasonable so one can be related to the other, the court found service discrepant and the suit premature, dismissing it. Because the Respondent was in default, the court declined to penalise the Applicant with costs.

Key legal issues

Compliance with statutory notice requirements for a chargee to take possession

Holding

The chargee failed to prove proper service of the notice of intention to take possession and the two-year gap between the statutory notice and the notice of intention to enter rendered the second notice ineffective; the suit was premature

Reasoning

Section 90 of the Land Act requires a notice specifying the nature and extent of default, the amount to rectify it and consequences of continued default, and Section 94 requires a subsequent notice of intention to enter. The first notice complied with these requirements. However, the second notice was dated 21st June 2021 yet allegedly issued 21st June 2022, and the debt had escalated in the interim, so the second notice could not be related to the first and service was discrepant.

p. 4

Legal principles established

Where a chargee's statutory notices under Section 90 and 94 of the Land Act are issued too far apart in time, the notices cannot be related to each other and possession proceedings founded on them are premature

Court orders

1.The suit (Originating Summons) is dismissed
2.Each party to bear their own costs - the Applicant is not condemned to pay costs despite dismissal

Authorities

Legislation

Land ActSection 90(1), (2), (3)
Land ActSection 89
Land ActSection 94(1), (2)

Cases cited (2)

Patrick Githinji Ndichu & 2 others v Equity Bank (Kenya) Limited & Another
[2021] eKLR
East Africa Ventor Co Ltd v Agricultural Finance Corporation Ltd & Another
(2017) eKLR (Nyahururu ELC no 287 of 2017)

Jurisdiction invoked: Land Act, Sections 90 and 94; Originating Summons jurisdiction

Key timeline

Practical implications

Frequently asked questions

Cite this brief

Caselaw, "Victoria Commercial Bank v Kamau (Enviromental and Land Originating Summons E061 of 2022) [2024] KEELC 4709 (KLR)", Case Analysis (2024). Originating Summons dated 24th October 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/4709/eng@2024-05-30

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