Kasim Shaban Kombo v Kenya Commercial Bank Limited & Another
The bottom line
#The High Court in Eldoret allowed a bank to proceed toward auctioning a borrower's property because the borrower stopped repaying and could not prove the bank's notices were defective.
What this practically means
#Executive summary
#Key legal issues
#Whether the Appellant established a prima facie case with a probability of success on appeal
No prima facie case established; the notices appeared substantially compliant and the loan was in undisputed colossal arrears
The court examined the loan contract, the statutory notices under Sections 90 and 96 of the Land Act and the Auctioneers' Rules, found the notices substantially compliant despite negligible contradictions, and noted the Appellant did not deny default and had made no payments since 12/03/2020. Granting an injunction would amount to rewriting the parties' express contract.
Whether simultaneous service of the 45 days' redemption notice and 14 days' notification of sale is unprocedural or a clog on the right of redemption
Concurrent service of the two notices is not a sufficient ground for an interlocutory injunction at this stage
Relying on the persuasive reasoning of Ombwayo J in Simon Kipkoech Kwambai v Sidian Bank, the court found the two notices are separate and distinct, provided for under different legislation, and can be issued concurrently; the final verdict awaits the trial court.
Whether irreparable injury and balance of convenience favoured the Appellant
Both limbs failed; the loss was compensable in damages and the balance of convenience favoured the chargee
Once property is offered as security it becomes a commodity for sale whose loss is compensable in damages; the 1st Respondent, a large financial institution, was not shown incapable of compensating. Stopping the sale would allow the debt to grow, exposing the chargee to substantial irrecoverable losses.
Whether the 1st Respondent withheld part of the loan disbursement and varied interest rates without notice
Not established at this stage; the alleged disbursement was described as 'interest reversal-induplum adjustment' and no evidence of interest variation was adduced
The bank statement described the Kshs 827,341.75 payment as an interest reversal, not a loan disbursement, so it could not be treated as an admission of fault. The Appellant made allegations on interest variation without evidence; determination awaits the full trial.
Legal principles established
#- A chargee bears the burden of proving service of statutory notices; where receipt is not admitted, posting must be proved
- A dispute as to the amount due or interest rate is not, per se, a ground to restrain a chargee's statutory power of sale
- Courts cannot rewrite contracts between parties
- If no prima facie case is established, irreparable injury and balance of convenience need not be considered
Court orders
#- 1.The Appellant's Notice of Motion dated 25/05/2023 is hereby dismissed
- 2.Costs shall be in the Cause
- On appeal from
- Eldoret Chief Magistrate's Court
- Civil Suit No. E265A of 2022
- Jurisdiction invoked
- Order 42 Rule 6(6) of the Civil Procedure Rules 2010 (appellate jurisdiction to grant temporary injunction pending appeal)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kasim Shaban Kombo v Kenya Commercial Bank Limited & Another", Case Analysis (2024). Eldoret High Court Civil Appeal (from Eldoret CM Civil Suit No. E265A of 2022). Source: https://new.kenyalaw.org/akn/ke/judgment/kehc/
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.