Pirbhai & another v Middle East Bank Ltd (Environment and Land Case E533 of 2025) [2026] KEELC 5383 (KLR)

2. In the first instance, ex parte, this honourable court issues an order for temporary injunction restraining itself, the its defendant/ servants, respondent, agents, by directors, employees, or any other persons acting on its behalf, from selling, advertising for sale, transferring, charging, leasing or otherwise dealing with the property known as LR. no. 209/8619 junction of Nanyuki and Tanga roads, Industrial area, Nairobi city county, pending inter partes hearing of this application. 3. In the first instance, ex parte, this honourable court be pleased to issue an order of inhibition inhibiting any dealings whatsoever with LR no. 209/8619 pending inter partes hearing and determination of this application. 4. A mandatory interlocutory injunction do issue compelling the defendant/respondent to specifically perform and complete the transfer of L.R. No. 209/8619 to the 1 st and 2nd plaintiffs/applicants, pending the hearing and determination of this suit. 5. Pending the hearing and determination of the suit, this honourable court issues an order for temporary 2|Page RULING ELCLC VIRTUALLY ON injunction restraining NO. E533 OF 2025 DELIVERED 3RD SEPTEMBER 2026. the

page 2 of 21

defendant/respondent, its directors, agents, employees, servants, clients or whomsoever, from trespassing, developing, interfering, wasting and/or dealing, damaging or dealing in any manner whatsoever with L.R. no. 209/8619. 6. Pending the hearing and determination of this suit, this honourable court be pleased to issue an order of inhibition inhibiting any dealings with L.R. no. 209/8619 either by way of transfer, sale, lease, charge or otherwise. 7. The honourable court be pleased to issue any further or consequential orders as it may deem just and expedient in the circumstances. 8. The costs of this application be borne by the defendant/respondent. 2. The application is premised on the grounds inter alia that the 1st plaintiff/applicant was declared the highest bidder pursuant to a valid and enforceable memorandum and certificate of sale executed on 21 st November, 2023. The application is supported by the affidavit of the 1 st plaintiff/applicant sworn on even date on his behalf and on behalf of the 2nd plaintiff/applicant. The 1st plaintiff/applicant 3|Page RULING ELCLC VIRTUALLY ON NO. E533 OF 2025 DELIVERED 3RD SEPTEMBER 2026.

page 3 of 21

deposed that on 21st November 2023, he was declared the successful bidder at a public auction conducted by the defendant/respondent, as chargee, for the purchase of the property known as LR. no 209/8619 junction of Nanyuki and Tanga roads, the suit property at KShs. 195,000,000/-. 3. He further deposed that immediately upon the fall of the hammer, he duly paid a deposit of Kshs.19,500,000/- being 10% of the purchase price, and a memorandum of sale was executed on the same date between the parties, thereby creating a valid and binding contract. Furthermore, that acting upon the defendant/respondent’ representations and persistent requests, express the 2 nd plaintiff/applicant, remitted the balance of the purchase price of Kshs.175,750,330/- on 20 th February, 2024 in good faith, with the legitimate expectation that completion and transfer would be effected without delay. 4. However, it later emerged that at the time of payment, there existed subsisting injunctive orders issued in HCCC no. E594 of 2023 — Arboretum Plaza Ltd v. Middle East Bank Kenyan Limited & 4 Others, which the defendant/respondent was 4|Page RULING ELCLC VIRTUALLY ON NO. E533 OF 2025 DELIVERED 3RD SEPTEMBER 2026.

page 4 of 21

fully aware, thereby rendering completion legally impossible. That despite full performance and repeated follow-ups by the plaintiffs/applicant, the defendant/respondent failed to progress the transfer, compelling the issuance of several correspondences emphasizing that the continued retention of the purchase funds had placed the 2 nd plaintiff/applicant under severe financial strain. To add on to this, the delay rendered the short-term financing facility, secured at an interest rate of 8.75%, financially unsustainable and exposed the 2nd plaintiff/applicant to escalating interest obligations and liquidity constraints. 5. The 1st plaintiff/applicant further deposed that owing to the protracted delay and the financial pressure occasioned by the retention of the purchase funds, they were compelled to request a refund of the balance of the purchase price, which was subsequently refunded on 12 th November 2024, while retaining the 10% deposit. On 31 st July 2025, this court rendered a ruling dismissing HCCC no. E594 of 2023, thereby vacating all legal impediments to the completion of due sale and effectively clearing the way for the defendant/respondent to finalize the transfer. 5|Page RULING ELCLC VIRTUALLY ON NO. E533 OF 2025 DELIVERED 3RD SEPTEMBER 2026.

page 5 of 21

6. Despite the removal of all legal barriers and repeated demands, the plaintiffs/applicants defendant/respondent of remaining accuse non-responsive the and failing and/or neglecting to complete the sale, necessitating a formal demand for completion dated 11 th September 2025, which equally went unanswered. The plaintiffs/applicants are apprehensive that the defendant/respondent may proceed to dispose of, transfer, or otherwise encumber the suit property to a third party at any time, thereby defeating their proprietary and equitable interest under the memorandum of sale. 7. In response to the application, the defendant/respondent filed its replying affidavit sworn on 25 th February, 2026 by Elizabeth Ong’are, the manager, credit. The defendant/respondent deposed that the 1 st plaintiff/applicant was declared the purchaser of the suit property at the public auction at a price of Kshs.195,000,000/- and then signed an agreement of sale dated 21st November, 2023 with the auctioneer and proceeded to pay deposit of Kshs.19,500,000/-. That immediately after the execution of 6|Page RULING ELCLC VIRTUALLY ON NO. E533 OF 2025 DELIVERED 3RD SEPTEMBER 2026.

page 6 of 21

the said sale agreement, there were no legal or procedural impediments restraining the defendant/respondent from transferring the suit property. 8. The defendant/respondent deposed that it was on 5 th December 2023, when the owner of the suit property, filed legal proceedings, being HCCC no. E594 of 2023. Through various correspondences defendant/respondent annexed deposed to that her affidavit, the they informed the plaintiffs/applicants of the injunction over the suit property, and they subsequently requested for a refund of the purchase price but thereafter expressed willingness to complete the transaction. By their email dated 19th February 2024, any delay in completion of sale was as result of the said injunction, and the plaintiffs/applicant had agreed to the postponement of such completion awaiting a decision from the high court. 9. It was further deposed that by the plaintiffs/applicants letters dated addressed 4 th October, 2024 and 14th October, 2024 to the defendant/respondent, the 2nd plaintiff/applicant rescinded the said agreement of sale, and 7|Page RULING ELCLC VIRTUALLY ON NO. E533 OF 2025 DELIVERED 3RD SEPTEMBER 2026.

page 7 of 21

demanded repayment of the entire purchase price from the defendant/respondent. However, the defendant/respondent deposed that the plaintiffs/applicants never paid the balance of the purchase price, and neither did it make any such repayment to the 2nd plaintiff/applicant. defendant/respondent by a letter dated The 24 th April, 2015 called upon the plaintiffs/applicants to complete the sale by paying the balance of the purchase price. 10. By its letter of 15th May 2025, the plaintiffs/applicants advocates rejected the said offer. As a result, the agreement of sale was rescinded by the plaintiffs/applicant, and the deposit was forfeited by the defendant/respondent in accordance with the terms of the said agreement of sale. Further, that the refund of the balance of the purchase price was never made by the defendant/respondent, but it was repaid by Esmail & Esmail who were holding the relevant amount to the order of the 2 nd plaintiff/applicant. The defendant/respondent contends that it owes no fiduciary duty to the plaintiffs/applicants, and the Land Act has no application to the said agreement of sale. 8|Page RULING ELCLC VIRTUALLY ON NO. E533 OF 2025 DELIVERED 3RD SEPTEMBER 2026.

page 8 of 21

11. The application was canvassed through written submissions. The plaintiffs/applicants filed their written submissions dated 27th February 2026, while the defendant/respondent filed its written submissions dated 30th March, 2026. I have considered the application, the reply thereof and the written submissions filed. The issue for determination is whether the plaintiff/applicant has established a prima facie case to warrant the orders of temporary injunction. 12. The plaintiffs/applicants seek injunctive orders and order of inhibition, restraining the defendant/respondent from dealing in any manner whatsoever with LR. no. 209/8619, the suit property. Further, they also seek a mandatory interlocutory injunction compelling the defendant/respondent to specifically perform and complete the transfer of the suit property pending the hearing and determination of this suit. It is not in dispute that the parties entered into a memorandum for the sale of the suit property following the 1st plaintiff/applicant successful bid on the suit property after auction on 21st November, 2023. The defendant/respondent 9|Page RULING ELCLC VIRTUALLY ON NO. E533 OF 2025 DELIVERED 3RD SEPTEMBER 2026.

page 9 of 21

conducted this said auction, as chargee, and the agreement was for a purchase price of Kshs.195,000,000/-. 13. It is also not in dispute that the plaintiffs/applicants duly paid a deposit of Kshs. 19,500,000/- being 10% of the purchase price. What is in dispute is whether there is still a binding contract between the parties. The plaintiffs/applicants contend that the agreement still subsists and seeks to compel the defendant/respondent to perform its obligations under the contract. However, the defendant/respondent deposes that the plaintiffs/ applicants rescinded their agreement and by the terms of the agreement, also forfeited the 10% deposit paid. 14. By a letter dated 4th October 2024, addressed to the defendant/respondent, by the 2nd plaintiff/applicant, the same reads in part:“Subsequent to our withdrawal. We kindly request the refund of all payments made in consideration for the said property.” 15. Further to this, LJA Advocates LLP, acting on behalf of the 2 nd plaintiff/applicant, in a letter to the defendant/respondent 10 | P a g e RULING ELCLC NO. E533 OF 2025 DELIVERED VIRTUALLY ON 3RD SEPTEMBER 2026.

page 10 of 21

dated 14 th October 2024, they state in part as follows:“Our client has instructed us to serve you with the enclosed letter, through which they rescind the sale of LR. No. 209/8619, and demand a refund of the all the monies paid for the property.” 16. As per the memorandum of sale executed by the parties on the 21st of November 2023, the same stipulates at the clause headed ‘Default of Purchaser’ that:“lf the purchaser fails to pay the balance of the purchase price within (90) ninety days, of the sale, the deposit paid by the purchaser shall be forfeited to the charge absolutely....” 17. Did the plaintiffs/applicants default the terms of the agreement and consequently forfeit the said 10% of the purchase price, being Kshs.19,500,000/-? The court is of the view that this is a question that can only be answered at the full hearing and determination of this suit and not at this interlocutory stage. 18. The plaintiffs/applicants have sought a mandatory injunction for specific performance. However, in the circumstance that 11 | P a g e RULING ELCLC NO. E533 OF 2025 DELIVERED VIRTUALLY ON 3RD SEPTEMBER 2026.

page 11 of 21

the issue of whether there still exists any valid and binding contractual obligations between the parties herein, this prayer is premature at this juncture. Courts have hesitated to grant mandatory injunctions unless there are compelling reasons to order for the same. The court of appeal in the case of Joseph Kaloki t/a Royal Family Assembly v Nancy Atieno Ouma [2020] eKLR quoted itself thus:“As this court stated in Kenya Breweries Limited & another vs. Washington O. Okeyo [2002] eKLR a mandatory injunction can be granted on an interlocutory applications as well as at the hearing but should not normally be granted in the absence of special circumstances but that if a case is clear and which the court thinks it ought to be decided at once, a mandatory injunction will be granted at an interlocutory application. The court also stated in Shariff Abdi Hassan vs. Nadhif Jama Adan [2006] eKLR that: “The courts have been reluctant to grant mandatory injunction at the interlocutory stage. However, where it is prima facie established as per the standards spelt out in law as stated above that the party against whom the mandatory injunction is sought is on the wrong, the courts have taken action to ensure that justice is meted out without 12 | P a g e RULING ELCLC NO. E533 OF 2025 DELIVERED VIRTUALLY ON 3RD SEPTEMBER 2026.

page 12 of 21

the need to wait for full hearing of the entire case.” 19. The court therefore declines to grant a mandatory injunction for specific performance at this interlocutory stage, until all the questions arising herein are fully determined. 20. The plaintiffs/applicants have also sought orders of temporary injunction and inhibition. Order 40 rule 1 of the Civil Procedure Rules, provides that:“Where in any suit it is proved by affidavit or otherwise— (a) that any property in dispute in a suit is in danger of being wasted, damaged, or alienated by any party to the suit, or wrongfully sold in execution of a decree; or (b) that the defendant threatens or intends to remove or dispose of his property in circumstances affording reasonable probability that the plaintiff will or may be obstructed or delayed in the execution of any decree that may be passed against the defendant in the suit, the court may by order grant a temporary injunction to 13 | P a g e RULING ELCLC NO. E533 OF 2025 DELIVERED VIRTUALLY ON 3RD SEPTEMBER 2026.

page 13 of 21

restrain such act, or make such other order for the purpose of staying and preventing the wasting, damaging, alienation, sale, removal, or disposition of the property as the court thinks fit until the disposal of the suit or until further orders.” 21. The conditions set for consideration in granting an injunction are now well settled in the case of Giella vs Cassman Brown & Company Limited (1973) E.A 358, where the court expressed itself on the conditions that a party must satisfy for the court to grant an interlocutory injunction:“First, an applicant must show a prima facie case with a probability of success. Secondly, an interlocutory injunction will not normally be granted unless the applicant might otherwise suffer irreparable adequately be injury, which compensated by would an award not of damages. Thirdly, if the court is in doubt, it will decide an application on the balance of convenience.” 22. A prima facie case must be one where the plaintiffs/ applicants demonstrate that there is a clear and unmistakable right which needs protection, as was held by 14 | P a g e RULING ELCLC NO. E533 OF 2025 DELIVERED VIRTUALLY ON 3RD SEPTEMBER 2026.

page 14 of 21

the court of appeal in Mrao Ltd V First American Bank Of Kenya Limited And 2 Others [2003] eKLR as follows:“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 been infringed by the opposite party to call for an explanation or rebuttal from the latter.” 23. Similarly, in Nguruman Limited vs. Jan Bonde Nielsen & 2 Others [2014] eKLR the court of appeal stated that:“The party on whom the burden of proving a prima facie case lies must show a clear and unmistakable right to be protected which is directly threatened by an act sought to be restrained, the invasion of the right has to be material and substantive and there must be an urgent necessity to prevent the irreparable damage that may result from the invasion. We reiterate that in considering whether or not a prima facie case has been established, the court does not hold a mini trial and must not examine the merits of the case closely. All that the court is to see is that on the face of it the person applying for an injunction has a right which has been or is threatened with violation.” 15 | P a g e RULING ELCLC NO. E533 OF 2025 DELIVERED VIRTUALLY ON 3RD SEPTEMBER 2026.

page 15 of 21

24. Having evaluated the plaintiffs/applicants case as discussed above, the court is of the view that they have presented a prima facie determination. case that raises several questions for The 2nd limb is that the plaintiffs/applicants must demonstrate that they will suffer irreparable damage that is incapable of being compensated by damages. The case of Nguruman Limited v Jan Bonde Nielsen & 2 others [2014] eKLR defined irreparable injury as such:“On the second factor, that the applicant must establish that he “might otherwise” suffer irreparable injury which cannot be adequately remedied by damages in the absence of an injunction, is a threshold requirement and the burden is on the applicant to demonstrate, prima face, the nature and extent of the injury. Speculative injury will not do; there must be more than an unfounded fear or apprehension on the part of the applicant. The equitable remedy of temporary injunction is issued solely to prevent grave and irreparable injury; that is injury that is actual, substantial and demonstrable; injury that cannot “adequately” be compensated by an award of damages. An injury is irreparable where there is no standard by which their amount can be measured with reasonable accuracy or the injury or 16 | P a g e harm is such a nature that monetary RULING ELCLC NO. E533 OF 2025 DELIVERED VIRTUALLY ON 3RD SEPTEMBER 2026.

page 16 of 21

compensation, of whatever amount, will never be adequate remedy....... In conclusion, we stress that it must always be borne in mind that the very foundation of the jurisdiction to issue orders of injunction vests in the probability of irreparable injury, the inadequacy of pecuniary compensation and the prevention of the multiplicity of suits and where facts are not shown to bring the case within these conditions the relief of injunction is not available.” 25. In my view, the loss of the sum of Kshs.19,500,000/- as well as the loss of the suit property which the plaintiffs/applicants have expressed interest in is certainly considered irreparable harm. The court notes that the defendant/respondent holds the 10% deposit as well as the suit property at the moment, therefore the balance of convenience lies in favour of granting the temporary injunction in order to preserve the suit property. 26. Regarding the prayer for inhibition, Section 68 of the Land Registration Act provides as follows:“(1) The court may make an order (hereinafter referred to as an inhibition) inhibiting for a particular time, or until the occurrence of a particular event, or generally until a further 17 | P a g e RULING ELCLC NO. E533 OF 2025 DELIVERED VIRTUALLY ON 3RD SEPTEMBER 2026.

page 17 of 21

order, the registration of any dealing with any land, lease or charge. (2) A copy of the inhibition under the seal of the court, with particulars of the land, lease or charge affected, shall be sent to the registrar, who shall register it in the appropriate register. (3) An inhibition shall not bind or affect the land, lease or charge until it has been registered.” 27. In the case of Peter Kariuki Njue v Severina Njira Kithumbu & another [2020] eKLR the court expressed the purpose of the order of inhibition as follows:“The purpose of an order of inhibition is to prohibit further dealings with the suit property. The court is thus of the opinion that it has a duty to preserve any property which is the subject of a dispute to prevent the risk of its alienation before the suit is heard and the rights of the parties conclusively determined. That legal duty was recognized in the case of Shivabhai Patel v Manibhai Patel [1959] EA 907.” 18 | P a g e RULING ELCLC NO. E533 OF 2025 DELIVERED VIRTUALLY ON 3RD SEPTEMBER 2026.

page 18 of 21

28. The conditions necessary for grant of an order of inhibition were listed down in the case of Japhet Kaimenyi M’Ndutho vs M’ndatho M’Mbwiria [2012] eKLR that:“In an application for orders of inhibition, in my understanding, the applicant has to satisfy the following conditions:a. That the suit property is at the risk of being disposed transferred to of the or alienated detriment of or the applicant unless preservatory orders of inhibition are issued. b. That the refusal to grant orders of inhibition would render the applicant’s suit nugatory. c. That the applicant has arguable case. The court has power to grant orders of inhibition against a suit land restricting registration of any dealing with suit land for a particular time or until the occurrence of a particular even or generally until further orders.” 29. From the above, it is in only fair that since the defendant/respondent holds the suit property, there is need to preserve the same pending the hearing and determination of the suit. Having established that the plaintiffs/applicants 19 | P a g e RULING ELCLC NO. E533 OF 2025 DELIVERED VIRTUALLY ON 3RD SEPTEMBER 2026.

page 19 of 21

have an arguable case, I find that they have satisfied the conditions necessary for the grant of an order of inhibition. 30. From the above, the notice of motion dated 21 st October, 2025 is allowed in the following terms:i. Pending the hearing and determination of the suit, an order for temporary injunction is hereby issued restraining the defendant/respondent, its directors, agents, employees, servants, clients or whomsoever, from trespassing, interfering, dealing, developing, wasting and/or damaging or dealing in any manner whatsoever with L.R. no. 209/8619. ii. Pending the hearing and determination of this suit, an order of inhibition is hereby issued inhibiting any dealings with L.R. no. 209/8619 either by way of transfer, sale, lease, charge or otherwise. iii. Costs in the cause. It is so ordered. 20 | P a g e RULING ELCLC NO. E533 OF 2025 DELIVERED VIRTUALLY ON 3RD SEPTEMBER 2026.

page 20 of 21

DATED, SIGNED & DELIVERED VIRTUALLY THIS 3RD DAY OF SEPTEMBER, 2026. HON. MBOGO C.G. JUDGE 03/09/2026. In the presence of:Mr. Benson Agunga – Court assistant Mr. Akber Ismail for the Defendant/Respondent Ms. Khauser for the Plaintiffs/Applicants 21 | P a g e RULING ELCLC NO. E533 OF 2025 DELIVERED VIRTUALLY ON 3RD SEPTEMBER 2026.

page 21 of 21