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ELCStruck OutNot stated in judgment (ELC Naivasha)· [2025] KEELC 6543 (KLR)

Mbugua & another v Family Bank Limited & another (Environment and Land Miscellaneous Case E010 of 2024) (Environment and Land) [2025] KEELC 6543 (KLR)

Environment and Land Court
2 October 2025
MOM.C. Oundo
1,647 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~7 min to read original · ~4 min brief

The bottom line

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The Environment and Land Court struck out a landowner's bid to stop a bank selling their charged property, because loan-enforcement disputes belong in the High Court, not the ELC.

What this practically means

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Executive summary

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The Plaintiffs, registered owners of Kijabe/Kijabe Block 1/9054, moved the court by undated Notice of Motion seeking a temporary injunction to restrain the Defendants from transferring, selling or alienating the suit property pending determination of the suit. They deponed that they had deposited the title as collateral for a loan of Kshs 935,000 advanced to their son, Kevin Mbugua t/a Connectors Computers, and that following a government directive affecting the business, a restructuring agreement was reached at Kshs 28,000 per month, with Kshs 70,000 paid. The 1st Defendant, through its Legal Services Manager Sylvia Wambani, opposed the application, contending it was undated, unsigned and unsupported by a sworn affidavit, filed by a person lacking capacity, and that its statutory power of sale had accrued after default; statutory notices were issued and the property advertised for sale over an outstanding balance of Kshs 835,118.19. Before engaging with the merits or the parties' submissions, the court, exercising the overriding objective, raised the question of its own jurisdiction. Applying the Court of Appeal decisions in Co-operative Bank v Kangethe Njuguna and Smith v KDIC, it held that the dominant issue was settlement of a loan secured by a charge, a commercial dispute within the High Court's civil jurisdiction and outside the ELC's mandate over use of land. It further noted the claim should have been filed in the Chief Magistrate's Court given the amount. The application and suit were struck out with costs.

Key legal issues

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01

Jurisdiction of the ELC over charge/loan enforcement disputes

Holding

The ELC lacks jurisdiction where the dominant issue is repayment of a loan secured by a charge; such disputes fall within the civil/commercial jurisdiction of the High Court

Reasoning

Relying on Co-operative Bank v Kangethe Njuguna and Smith v KDIC, the court reasoned that the 'use' of land does not include testing the charge instrument. The dispute required interrogation of loan terms, default and crystallisation of the statutory power of sale — a commercial dispute, not one touching use, occupation or title to land.

p. 4
02

Proper forum by pecuniary jurisdiction

Holding

The claim of Kshs 835,118.19 should have been filed in the Chief Magistrate's Court

Reasoning

Section 11 of the Civil Procedure Act requires suits to be filed in the lowest grade competent court; Section 7(1)(a) of the Magistrates' Court Act grants the Chief Magistrate's Court jurisdiction up to Kshs 20,000,000, covering the amount claimed.

p. 3

Legal principles established

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  • Where the predominant issue in a suit involves mortgages, charges, collection of dues and rents, jurisdiction lies with the High Court and not the Environment and Land Court
  • A suit must be instituted in a court of the lowest grade competent to try it; the Chief Magistrate's Court has pecuniary jurisdiction up to Kshs 20,000,000

Court orders

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  1. 1.Both the Application and the suit struck out with costs

Authorities

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Legislation

  • Constitution of Kenya 2010Article 159; Article 162
  • Civil Procedure ActSections 1A, 1B, 3A, 11, 63(c)(e)
  • Civil Procedure RulesOrder 40; Order 51 Rule 1
  • Magistrates' Court Act 2015Section 7(1)(a)
  • Environment and Land Court ActSection 13
  • Land ActSections 2, 80

Cases cited (2)

  • Co-operative Bank of Kenya Limited v Patrick Kangethe Njuguna & 5 others
    [2017] eKLR
  • Smith & another v Kenya Deposit Insurance Corporation (As receiver of Chase Bank Limited) & another
    [2025] KECA 294 (KLR)
Jurisdiction invoked
Article 162(2) of the Constitution and Section 13 of the Environment and Land Court Act (original jurisdiction in land matters); transfer/deficit considered under Section 11 Civil Procedure Act and Section 7(1)(a) Magistrates' Court Act 2015

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, "Mbugua & another v Family Bank Limited & another (Environment and Land Miscellaneous Case E010 of 2024)  (Environment and Land) [2025] KEELC 6543 (KLR)", Case Analysis (2025). Not stated in judgment (ELC Naivasha). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2025/6543/eng@2025-10-02

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