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ELRCDismissedNot stated in the judgment (notice of motion dated 29th January 2015)· [2016] KEELRC 239 (KLR)

Ushaben Jashvantsinh Solanki & another v Bank of Baroda (Kenya) Limited [2016] KEELRC 239 (KLR)

Environment and Land Court
7 December 2016
SKS. M. Kibunja
810 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~3 min to read original · ~4 min brief

The bottom line

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A Kenyan court let a bank proceed toward selling charged land because the borrowers failed to genuinely dispute the debt or prove the statutory notices were defective.

What this practically means

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Executive summary

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The Applicants, Ushaben and Kajalben Jashvantsinh Solanki, moved the Environment and Land Court by notice of motion dated 29th January 2015 seeking a temporary injunction restraining Bank of Baroda (Kenya) Limited from selling, alienating, transferring, auctioning or otherwise dealing with Kisumu Municipality/Block 5/55, charged to secure a loan facility, pending the hearing of the suit. They relied on eleven grounds, principally that the statutory notice of redemption had not been served, that the Respondent had already been paid Ksh.27,000,000 but was demanding a further Ksh.80,000,000, and that the accounts had not been reconciled. The Respondent opposed through a replying affidavit sworn by Banambar Behera, and the court directed written submissions. Framing the dispute against the Giella v Cassman Brown principles, S.M. Kibunja J found no prima facie case: the Respondent annexed bank statements (July 2009 to September 2012) and a worksheet summary showing an outstanding Ksh.84,070,755.29, which the Applicants never disputed, and produced the statutory and redemption notices with proof of service. The court noted the Applicants' own offer to find a third-party buyer by private treaty, indicating the loan was in arrears, and cited superior court authority that a mere dispute over interest, charges or the outstanding amount does not stop a chargee's exercise of its statutory power of sale. Damages were held adequate since the charged land is a commercial commodity capable of valuation, and no inability of the bank to pay damages was shown. The notice of motion was dismissed with costs on 7th December 2016, in the absence of the parties and counsel, the Deputy Registrar to communicate the ruling.

Key legal issues

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01

Whether the Applicants established a prima facie case with a probability of success for a temporary injunction

Holding

No prima facie case was established: the bank availed bank statements and a worksheet showing an outstanding figure of Ksh.84,070,755.29, which the Applicants never disputed, and statutory notices including redemption notices were proved served.

Reasoning

The court found the Respondent annexed bank statements for July 2009 to September 2012 and a worksheet summary to January 2015 showing the outstanding amount, and the Applicants did not show they had disputed the calculations. The Respondent also produced the statutory and redemption notices with evidence of service, satisfying the court that requisite notices were properly issued and served.

p. 2
02

Whether damages would be an adequate remedy if the property is sold and the Applicants later succeed

Holding

Damages would be adequate: the charged property is a commercial commodity whose value can be established by valuation, and nothing showed the Respondent would be unable to pay damages.

Reasoning

Once the Applicants offered the suit property as security, it became a commodity for commercial transaction capable of valuation. There was also no evidence that the Respondent would be unable to pay damages should the Applicants ultimately succeed, so the balance of convenience favoured refusal of the injunction.

p. 2

Legal principles established

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  • A mere dispute as to interests, charges levied or the outstanding loan amount does not, on its own, suffice to stop a chargee from exercising a right of sale that has arisen.
  • Where land is offered as security for a loan facility it becomes a commodity for commercial transaction whose value is capable of being established through valuations, so damages can compensate.

Court orders

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  1. 1.The Applicants' notice of motion dated 29th January 2015 is dismissed with costs

Authorities

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Cases cited (4)

  • Giella -V- Cassman Brown & Co. Ltd
    [1973] E.A. 358
  • Sammy Japheth Karuku –V- Equity Bank & Another
    Mombasa HCCC No.84 of 2013
  • Kihara –V- Barclays Bank (K) Ltd
    (2001) 2 EA 420
  • Maithya –V- Housing Finance of Kenya & Another
    [2003] 1EA 133
Jurisdiction invoked
Original civil jurisdiction of the Environment and Land Court over a charged land parcel (Kisumu Municipality/Block 5/55); no specific provision invoked.

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, "Ushaben Jashvantsinh Solanki & another v Bank of Baroda (Kenya) Limited [2016] KEELRC 239 (KLR)", Case Analysis (2016). Not stated in the judgment (notice of motion dated 29th January 2015). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/239/eng@2016-12-07

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