keelc-2026-03115

2. The prayers above are premised on the grounds set out in the Motion and supported by the Plaintifi/ Applicant’s afidavit of the same date. The Plaintifi claims that he is the registered owner of the parcel of land known as L.R. No. Uasin Gishu/Illula/685 (the suit property herein). He deponed that he purchased the suit property while working for the Defendant herein, through a loan obtained under stafi mortgage terms from the Defendant. The Plaintifi claims that he serviced the loan until he lost employment in 2018, which caused temporary financial strain. That thereafter, he continued servicing the loan. 3. The Plaintifi avers that he was however served with a Notification of Sale and a 40-day Statutory Demand Notice demanding payment of KShs. 6,288,519/-. He accused the Defendant of unilaterally converting his stafi mortgage into a commercial loan, and consequently infiating the arrears from KShs. 3,711,023.82 to the KShs. 6,288,519/- now claimed. The Plaintifi alleged that the conversion was done without his consultation or consent, contrary to the loan agreement as well as Sections 84, 85 and 97 of the Land Act. The Plaintifi acknowledged receipt of the statutory notices, but claims that he has been making payments and is currently negotiating settlement. He however states that the sum demanded is exaggerated and fails to account for payments he had made. 4. The Plaintifi deponed that he has approached the Defendant repeatedly with written proposals seeking to negotiate a reasonable payment plan. That despite his efiorts however, the Defendant has refused and ignored all attempts at negotiating and insists on auctioning his property based on an unlawful figure. He urged that unless the court intervenes, his property will be sold unlawfully. He states that he is willing to regularise the legitimate arrears once a lawful, accurate statement of account is supplied. He claims that he risks losing his only land through an unlawful sale, thus it is in the interest of justice that the court grant the orders sought. 5. The Defendant opposed the application through a Replying Afidavit sworn on 3rd February, 2026 by John Keen Murkeu, the Defendant’s County Executive, Car and Mortgage Revolving Fund Administrator. He deponed that the Defendant ofiered the Plaintifi mortgage facility of KShs. 7,000,000/-, which was secured by a charge dated 8th September, 2017 and registered on 18th September, 2017 over the suit property. That the Plaintifi was at the time the Defendant’s employee, thus the deductions were made directly from his payslip, but upon leaving employment, the Plaintifi stopped making payments towards the loan. He claimed that as at 25th January, 2026 the Plaintifi had defaulted for 90 months. 6. Mr. Murkeu deponed that the stafi mortgage facility is administered per the Car and Mortgage Revolving Fund Act, and the terms set by the Salaries & Remuneration Commission vide Circular dated 17th December, 2014. That the said Circular provides that when a public oficer leaves employment and defaults on the loan, it reverts to commercial terms, and thus the Plaintifi’s mortgage reverted to a commercial rate of 15%. He pointed out that the Plaintifi had admitted the loan as well as the default, upon which the loan has continued to accrue interest for 7½ years, and currently stands at KShs. 6,465,565/-. 7. Mr. Murkeu also deponed that owing to the Default, the Defendant issued a statutory notice dated 4th July, 2025 pursuant to Section 90(2) of the Land Act. That thereafter, the Defendant issued a 40 day chargee statutory demand notice dated 2nd September, 2025 under Section 96(2) of the Land Act, informing him that if they did not correct the default, the Defendant would exercise its statutory remedy. He deponed that the loan remain unpaid, therefore the Defendant instructed the Interested Party to issue the requisite notices and execute its statutory remedy under Section 90(3) of the Land Act. He averred that service of the notices was acknowledged, upon which the Plaintifi reached out to the Defendant to agree on a payment plan, and subsequently filed the present suit. https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/3115/eng@2026-05-21 2

page 2 of 9

8. Mr. Murkeu added that the Defendant’s remedies are provided in the Charge and the Plaintifi cannot avoid them, whereas the claims of unemployment are non-existent in the loan. He asserted that the dispute is the default on the loan which ought to be remedied, and pointed out that the Plaintifi had signed the requisite undertakings as well as the charge acknowledging the efiect of Section 90 of the Land Act, and is thus bound by the law. He claimed that the Plaintifi’s default has been subject of audit queries by the Ofice of the Auditor General and the Senate, and the Defendant is under strict timelines to recover the said funds. 9. Mr. Murkeu further deponed that the Plaintifi will sufier no prejudice, while the Defendant continues to sufier financial prejudice as a result of the default. He urged that the Defendant had not acted illegally by exercising a lawful remedy or violated any expectations of the Plaintifi in doing so. He accused the Plaintifi of improperly approaching a court of equity, and asked the court not to accord legal approval to the actions of a belligerent defaulter. He averred that the Plaintifi had not met the threshold for granting injunctions set out in Giella vs Cassman Brown. He asked the court to dismiss the application with costs as it lacks merit, is frivolous and an abuse of the court process. Submissions: 10. The Application was canvassed by way of written submissions. The Plaintifi’s submissions filed in support of the Application are dated 26th February, 2026. The Defendant’s submissions are dated 15th April, 2026 opposing the application. The Plaintifi/Applicant’s Submissions; 11. Counsel for the Plaintifi cited Order 40 Rule (1)(a) of the Civil Procedure Rules on the circumstances under which a temporary injunction may be granted. Counsel submitted that the principles for grant of an injunction are set out in the case of Giella vs Cassman Brown & Co. Ltd (1973) EA 358. Counsel submitted that from the facts and evidence tendered before the court, the Plaintifi had established a prima facie case. Counsel reiterated that the Plaintifi had acquired the land through a stafi mortgage facility from the Defendant. Counsel also reiterated that the Defendant had converted the stafi mortgage facility into a commercial loan without consent, infiated the loan arrears and that the notices issued are founded on disputed figures. 12. Counsel argued that statutory notices must be based on lawful accounts, and where they are issued on disputed amounts and reconciliation has not been done, the statutory power of sale cannot arise validly. Counsel thus submitted that the notices issued under Sections 90 and 96 of the land Act were invalid and cannot lead to a valid statutory power of sale. Counsel argued that the Defendant’s refusal to provide reconciliation demonstrates bad faith. Counsel further argued that the Plaintifi has a prima facie case with high chances of success. 13. On irreparable harm, Counsel for the Plaintifi submitted that the suit property is the Plaintifi’s home and he stands to lose his only residence. For this reason, Counsel argued that damages might not be adequate compensation. That if the statutory power of sale is exercised, the property may be sold to a third party for value without notice and render the suit nugatory. Counsel contended that the Plaintifi stands to sufier irreparable harm that cannot be quantified in monetary terms, and is thus incapable of compensation by damages or being cured. 14. Counsel further submitted that the balance of convenience tilts on favour of maintaining the status quo. Counsel asserts that the Defendant is a Government institution which can be compensated by interest should the suit fail, whereas the Plaintifi’s loss will be permanent and irreversible if the injunction is denied and the suit property sold. In support of his arguments, Counsel cited Paul https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/3115/eng@2026-05-21 3

page 3 of 9

Gitonga Wanjau vs Gathuthi Tea Factory Company Limited & 2 Others (2016) eKLR, James Muigai Thuku vs County Government of Trans-Nzoia & 2 Others (2015) eKLR and Mrao vs First American Bank of Kenya Limited & 2 Others (2003) KLR 125. Counsel submitted that the Plaintifi is entitled to the injunction, and asked the court to allow the prayers sought to preserve the suit property. The Defendant/Respondent’s Submissions; 15. In opposing the Application, Counsel for the Defendant submitted that the suit property was indeed used as security for the loan facility as admitted by the Plaintifi. Counsel submitted that the Plaintifi has further admitted that he indeed defaulted on the loan for a period over 7 years, and the Defendant pursued the recovery strategy outlined under Section 90 of the Land Act. That the Plaintifi was issued with the requisite notices but defaulted on them for over 2 years. 16. Counsel submitted that the Defendant exercised its statutory power of sale as provided for under Section 90(3) of the land Act. Counsel accused the Plaintifi of running to court with half-truths in an attempt to deny the Defendant its right to exercise the statutory power of sale, which the Defendant is entitled to exercise and had been carried out in accordance with the law. Counsel relied on Nyando Enterprises Limited vs Barclays Bank Kenya Limited (2018) eKLR and Executive Curtains and Furnishings Limited v Family Finance Building Society (2007) eKLR. 17. Counsel submitted that the Plaintifi ought to have met the threshold for the granting an injunction as outlined in Giella vs Cassman Brown & Co. Ltd (Supra). As to what amounts to a prima facie case, Counsel cited Mrao Ltd vs First American Bank of Kenya Ltd & 2 Others (supra), and submitted that the Plaintifi has no prima facie case. That the Respondent had not infringed on any of the Plaintifi’s rights, while the Plaintifi was in default of servicing the loan, and the Defendant had no option but to exercise its statutory power of sale. That the funds subject of the dispute herein are public funds that have been the subject of several audit queries. 18. Counsel explained that the order of injunction will be prejudicial and unjust to the Defendant. Counsel accused the Plaintifi of running to court to frustrate and oppress the Respondent and deny its justified right to seek for the repayment of loan advanced to him. Counsel asked that the court should not aid the Plaintifi in economically oppressing the Defendant, which the court is warned against, in the case of Ochola Kamili Holdings Limited vs Guardian Bank Limited (2018) eKLR. 19. On the requirement of irreparable injury, Counsel submitted that the Plaintifi had not demonstrated to the court what kind of irreparable damage he stands to sufier if the order of injunction is denied. That any injury sufiered would adequately be compensated by way of an award of damages. Counsel argued that it is the Defendant who stands to sufier irreparable injury as the loan facility advanced to the Plaintifi will remain in arrears. That the Plaintifi is a man of straw, who will not be able to pay the outstanding amount or accruing interests and penalties, having failed to do so despite being given suficient time and being given a loan restructure. 20. Counsel asked the court to deny the orders sought and allow the Defendant to exercise its statutory power of sale. Counsel further submitted that any damages sufiered from the intended sale are recoverable in law, which the Defendant, being a County Government with a good financial muscle, will be able to pay. Counsel urged that the Plaintifi had failed to demonstrate that he will incur irrecoverable damages, and asked the court to dismiss the application with costs. 21. Counsel submitted that the Plaintifi has not met the threshold in Giella vs Cassman Brown (Supra). Counsel submitted that the Plaintifi is seeking equity with unclean hands. The Defendant asked the court not to allow the Defendant to be prejudiced by the wilful omissions and misconduct of the Plaintifi. Counsel asked that the present application be dismissed with costs. Counsel further cited https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/3115/eng@2026-05-21 4

page 4 of 9

Nguruman Limited vs Jan Bonde Nielsen & 2 Others and Showind Industries Ltd vs Guardian bank Ltd & Another (2002) eKLR. Analysis and Determination: 22. I have considered the application filed herein, the grounds on the face of it, and the afidavit filed in support thereof. I have also considered the replying afidavit filed by the Defendant and the written submissions by Counsel for the parties. The issues that arise for determination are:i. Whether the Plaintifi has satisfied all the conditions for grant of an injunction; ii. Whether the Defendant should be compelled to and render the true and reconciled statement of account based on the original mortgage loan terms. a. Whether the Plaintifi has satisfied all the conditions for grant of an injunction; 23. 24. This being an application for temporary Injunction, the applicable principles of law in deciding whether or not to grant the orders of temporary Injunction are those that were enumerated in the celebrated case of Giella vs Cassman Brown & Another (1973) EA 358. These principles are that:i. The Applicant must establish a prima facie case with a probability of success. ii. The Applicant must show that he will sufier irreparable harm which cannot be adequately compensated by an award of damages, iii. And if the court is in doubt it should decide the application on the balance of convenience. Thus, the first question this court ought to ask is whether the petitioner has established a prima facie case. A prima facie case was defined by the Court of Appeal in Mrao Ltd vs First American Bank of Kenya Ltd & 2 Others (2003) KLR 125, where the Court defined the term prima facie case as follows:“ In civil cases a prima facie case is a case in which on the material presented to the court a tribunal properly directing itself will conclude that there exists a right which has apparently being infringed by the opposite party to call for an explanation or rebuttal from the latter.” 25. The Plaintifi admits that he obtained a mortgage facility from the Defendant at a time when he was its employee. He has admitted that he defaulted on the loan owing to the fact that he lost his employment in 2018 and was under financial strain. The Plaintifi however claims that he continued to service the loan even after his employment was terminated. 26. The Plaintifi has annexed a Filtered M-pesa Statement for the period between 1st January, 2024 and 31st December, 2024 showing that he paid KShs. 50,000/- to Access Bank PLC on 24th July, 2024. The Plaintifi has also annexed a Statement of Accounts from Access Bank Kenya Plc dated 5th November, 2025. From the said statement, there is shown a mortgage payment of KShs. 636,724/- made on 3rd May, 2019. These payments were made before even the first notice dated 4th July, 2025 was issued pursuant to Section 90(2) of the Land Act. 27. In the 40 days’ notice dated 2nd September, 2025, the Defendant first indicated that the arrears as at 25th April, 2024 stood at KShs. 3,711,023.82. It is not clear then how in the same letter, the Defendant states that as at that date, the outstanding debt had doubled to KShs. 6,288,519 in under two years. The argument that the loan reverted to commercial rates on default does not at this point make sense because if that were the case, then the said rates would have applied from the date of default in the years 2018-2019, and not from 2025. https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/3115/eng@2026-05-21 5

page 5 of 9

28. I am cognizant of the fact that a dispute as to the outstanding loan amount, in and of itself, cannot be a ground for granting an order of injunction. This is the position that was adopted in Mrao Limited vs First American Bank of Kenya Ltd & others (supra), where the court addressed itself thus:“ The mortgagee will not be restrained from exercising his power of sale because the amount due is in dispute, or because the mortgagor has begun a redemption action, or because the mortgagor objects to the manner in which the sale is being arranged. He will be restrained, however, if the mortgagor pays the amount claimed into court, that is, the amount which the mortgagee claims to be due to him, unless, on the terms of the mortgage, the claim is excessive.” Similarly, in the case of Margaret Njeri Muiruri vs Bank of Baroda (Kenya) Limited (2014) eKLR, the learned judges opined that:“ This court is in total agreement with the decisions cited above which upholds the view that a chargee cannot be restrained from exercising its power of sale merely because there exists a dispute as to the amount owing or interest charged. However, the chargee maybe be retrained where the amount claimed is paid in court or is excessive and unconscionable, and or the interest charged is un contractual or illegal. I also wish to categorically state that the existence of a dispute touching on the interest rate payable is not an excuse for nonrepayment of the principal amount of the loan facility. Thus despite existence of a dispute on interest rate payable, the Borrower should be able to continue repaying at least the principal amount of the loan facility pending the determination of the dispute on interest payable. In cases like this, evidence that the borrower continues repayment of the loan facility or at least the principal amount or proof of his willingness to do so is paramount.” 29. Indeed, in this present case, the outstanding loan amount is not only excessive, it has doubled from the amount claimed less than two years ago without any reasonable explanation. Therefore, without a proper explanation on how the amount due on the loan doubled in less than two years, there is every possibility that the amounts being claimed is in fact incorrect. In addition, there is a dispute as regards the interest terms applicable to the loan at this point. The reasons for the increase in the loan amount can only be given through testimony and evidence at the hearing of the main suit. 30. Moreover, aside from the default, the Plaintifi has also brought up the issue of accounts. The Plaintifi claims that some of the payments he made have not been captured in the amount claimed. The Defendant, aside from asserting that the Plaintifi is in default, has taken no steps to prove that the said payments were included in their final calculations. In Ezekiel Osugo Angwenyi & another vs National Industrial Credit Bank Limited (2017) eKLR, the court held as follows on the failure to provide statements of account in such a case as this one:“ In view of the difierent figures stated above, it was necessary for the Defendant to provide an account to the Plaintifi... The Plaintifis were entitled to know which entries had been made to their loan accounts, interests applied and applicable penalties. It is thus clear that with no accounts rendered, the sums owed by the Plaintifis’, if any, are not known and will never be known… Since between a bank and a borrower the former is the one obligated to keep a more dependable record and to avail statements of account, a bank, like in this case, which cannot keep and avail accountable record will be disqualified from making any claims against a borrower, and would be hard put to discharge any such claims by a borrower.” https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/3115/eng@2026-05-21 6

page 6 of 9

31. Notably, the Plaintifi has admitted that he is in default. He has however indicated his willingness to settle the outstanding arrears upon taking of account and confirmation of the proper amount due and owing. In view of the above, I am satisfied that the Plaintifi has established a prima facie case with a probability of success as required for grant of an injunction. 32. Secondly, it must be demonstrated that the party seeking an injunction stands to sufier irreparable harm if the injunction is not granted. The Plaintifi contends that he stands to sufier irreparable harm if the order of injunction is not granted. The Plaintifi claims that the suit property is his only residence. It was argued that if the statutory power of sale is exercised and the property is be sold, the suit will be rendered nugatory. The Plaintifi claims that he stands to sufier irreparable harm that cannot be quantified in monetary terms, and is thus incapable of compensation by damages or being cured. 33. The Respondent contends that even if an injunction is not granted, the Plaintifi/Applicant will not sufier any substantial loss, that cannot be adequately compensated by an award of damages, the reason being that the suit property was ofiered as security to be sold in the event of default. The Respondent instead claims that it is the one that stands to sufier irreparable injury as the loan facility advanced to the Plaintifi will remain in arrears. The Defendant claimed that the Plaintifi being a man of straw, will not be able to repay the outstanding amounts and the accruing interests and penalties. It was pointed out that the Plaintifi had failed despite being given suficient time to do so, and being given a loan restructure. 34. First and foremost, I must state that the financial muscle of a party is not a prerequisite to the granting or denial of an order of injunction. Under Order 40, the main purpose of an injunction is to protect the substratum of a suit pending the hearing and determination of the suit without prejudicing any party. Injunctions are therefore granted to protect rights of a party and to preserve the suit property, and not to protect or preserve wealth. Moreover, an injunction is granted based solely on whether or not a party has meet the required legal test as prescribed by the law, and poverty is not a legal ground to deny an injunction. 35. Be that as it may, it is my considered view that if the injunction herein is denied, the Plaintifi does indeed risk losing the suit property, which is his residence. The property herein is not only his residence, but from the Afidavit attached as part of the Charge at pages 30 and 31 thereof, it also forms part of his matrimonial home. No doubt the value of the suit property can be ascertained from conducting a valuation. However, as to whether an award of damages would be suficient compensation, I am alive to the fact that, one’s residence or matrimonial home holds sentiment value. It cannot therefore be said that the Plaintifi will not sufier irreparable loss or injury if the injunction sought is not granted. 36. Warsame J, (as he was then) in Joseph Siro Mosioma vs Housing Finance Company of Kenya Limited & 3 Others (2008) eKLR, held that:“ … damages is not automatic remedy when deciding whether to grant an injunction or not. Damages is not and cannot be substituted for the loss which is occasioned by a clear breach of the law, in any case, the financial strength of a party is not always a factor to refuse an injunction. More so a party cannot be condemned to take damages in lieu of his crystalized right which can be protected by an order of injunction.” https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/3115/eng@2026-05-21 7

page 7 of 9

37. Finally, where the court is in doubt, it is to determine the application on a balance of convenience. In Pius Kipchirchir Kogo vs Frank Kimeli Tenai (2018)KEELC 2424 (KLR), the Court explained the element of balance of convenience as follows:“ The court should issue an injunction where the balance of convenience is in favor of the plaintifi and not where the balance is in favor of the opposite party. The meaning of balance of convenience in favor of the plaintifi is that if an injunction is not granted and the suit is ultimately decided in favor of the plaintifis, the inconvenience caused to the plaintifi would be greater than that which would be caused to the defendants if an injunction is granted but the suit is ultimately dismissed. Although it is called balance of convenience it is really the balance of inconvenience and it is for the plaintifis to show that the inconvenience caused to them would be greater than that which may be caused to the defendants. Should the inconvenience be equal, it is the plaintifis who sufier. In other words, the plaintifis have to show that the comparative mischief from the inconvenience which is likely to arise from withholding the injunction will be greater than which is likely to arise from granting it.” 38. On the material before the court, it is clear that the inconvenience caused to Plaintifi if the injunction is denied and the suit eventually succeeds, will be greater than that which may otherwise be caused to the Defendant. Owing to the foregoing, I am convinced that the same tilts in favour of the Plaintifi for granting the injunction sought. b. Whether the Defendant should be compelled to and render the true and reconciled statement of account based on the original mortgage loan terms; 39. Prayer (5) of the motion seeks an order that the Defendant be compelled to issue and render a true, correct and reconciled statement of account based on the original mortgage loan terms. 40. The prayer for accounts, while reasonable, is tainted by the fact that the Plaintifi expressly wants the accounts rendered based on the original mortgage terms. However, the Defendant has informed this court that the facility extended to the Plaintifi was governed by a Circular from the Salaries and Remuneration Commission dated 17th December, 2014. Per this circular, upon default by a public oficer no longer in service, the loan terms revert to commercial terms. 41. No doubt therefore, that one of the issues for determination by this court will be whether the terms applicable to the charge are those in the original mortgage, or commercial rates per the aforementioned circular. To expressly demand accounts on the basis of the original mortgage terms is to presume that the court will automatically defer to the said terms, yet the matter is yet to be heard for the court to determine which terms will apply in his case. 42. Owing to the pre-determinative nature of this prayer, the court hereby will not allow it. Notably, the accounts may be rendered at a later stage after the parties have been heard on the applicable loan terms, and a determination made thereon on merit. 43. As regards costs, the Court notes that the suit has just commenced an is yet to be heard on merit. Consequently, the Court hereby directs that the costs of the application shall abide the outcome of the main suit. Orders:44. All in all, the court finds that the Plaintifi’s application dated 28th November, 2025 partially succeeds, and makes the following orders in conclusion thereof:- https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/3115/eng@2026-05-21 8

page 8 of 9

45. a. An order of temporary injunction do hereby issue restraining the Defendant, its agents, servants, or auctioneers from selling, advertising for sale, transferring, or in any other manner interfering with the Plaintifi’s parcel of land known as L.R. No. Uasin Gishu/Illula/685 pending the hearing and determination of this suit. b. The costs of this application shall abide the main suit. Orders accordingly. DATED, SIGNED AND DELIVERED VIRTUALLY AT ELDORET ON THIS 21ST DAY OF MAY, 2026 VIDE MICROSOFT TEAMS. HON. C. K. YANO JUDGE In the virtual presence of; Ms. Metto for Plaintifi/Applicant No appearance for Defendant. No appearance for Interested Party. Court Assistant - Laban. https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/3115/eng@2026-05-21 9

page 9 of 9