Mutiso & another v Kazungu & another

void and of no consequence as regarding proprietary interest in the suit land. d) Revocation and/ or cancellation of the title issued to the 2nd defendant. e) Costs of the suit. f) 2. Any other relief as the court may deem fit. The plaintiffs pleaded that the 1st defendant was the previous owner of subdivision No. 2830/1/MN (the suit property) located in Mombasa County. It was pleaded that sometime in 1995 the 1st defendant was granted a loan facility by Kenya commercial Bank Ltd (the Bank) and he charged the suit property to secure repayment of the loan. 3. It was the plaintiffs’ case that when the 1 st defendant defaulted in repayment of the loan the bank sold the suit property in 2008 to the late GABRIEL MUTISO MAADA (the deceased) whose estate they were representing. The plaintiffs pleaded that before the suit property could be transferred to the deceased or his estate the relevant file at the Lands office got lost prompting them to apply to court for its reconstruction. 4. The plaintiffs pleaded that long after the bank had auctioned the suit property the 1st defendant fraudulently obtained a provisional title to the suit property and purported to sell the MOMBASA ELC CASE NO. 149 OF 2021 (JUDGMENT) Page 2

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same to the 2nd defendant in the year 2013. It was further pleaded that the 2nd defendant had sued the 1 st defendant in Mombasa ELC No. 301 of 2017 for specific performance whereby the two defendants recorded a consent for transfer of the suit property to the 2nd defendant. It was the plaintiffs’ claim that the 1st and 2nd defendants’ said actions were tainted with fraud particulars which were pleaded in paragraph 10 of the Plaint. 5. The 1st defendant filed a defence dated 16.11.2021 denying the plaintiffs’ claim in its entirety. Although the 1 st defendant conceded having charged the suit property to the bank he denied that he ever defaulted on the loan or that the bank ever sold the suit property in exercise of its statutory power of sale under the charge. 6. The 1st defendant pleaded that the title document to the suit property was misplaced and that he lawfully sold the suit property to the 2nd defendant for valuable consideration. He denied any form of fraud in his dealings with the suit property. It was his defence that the consent Judgment recorded in the previous suit was properly recorded in the spirit of facilitating expeditious disposal of suits. MOMBASA ELC CASE NO. 149 OF 2021 (JUDGMENT) Page 3

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7. The 2nd defendant filed a statement of defence dated 16.11.2021 denying all the material allegations in the plaint. He denied the allegations and particulars of fraud pleaded in the plaint and put Plaintiffs to strict proof thereof. He pleaded that he was a bonafide purchaser for value of the suit property and prayed for dismissal of the Plaintiffs’ suit with costs. 8. At the trial hereof, the plaintiffs called one witness and closed their case. The material on record shows that the plaintiffs were the administrators of the estate of the deceased. It was the 1st plaintiff who testified on behalf of both plaintiffs. The plaintiffs also called a second witness called Joseph Munyithia who was at the time of the auction the advocate acting for the bank. 9. The record shows that the 1st defendant testified on his own behalf as the sole witness. witness statement evidence in chief. and He adopted the contents of his supplementary statement as his He also produced the documents in his list of documents and supplementary list as exhibits. However, the 2nd defendants did not attend court to defend the suit. 10. Upon conclusion of the trial the parties were given timelines within which to file and exchange their respective submissions. The record shows that the plaintiffs filed submissions dated MOMBASA ELC CASE NO. 149 OF 2021 (JUDGMENT) Page 4

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23.02.2026 whereas the 1st defendants were dated 06.03.2026. The 2nd defendant, however, did not file any submissions. 11. The court is of the view that the main issues for determination herein are the following: a) Whether the suit property was auctioned by the bank in 2008. b) Whether the 1st defendant acted fraudulently by selling the suit property to the 2nd defendant and in recording a consent Judgement in Mombasa ELC No. 301 of 2017. c) Whether the plaintiffs are entitled to the suit property. d) Whether the plaintiff is entitled to the reliefs sought in the suit. e) Who will bear costs of the suit. 12. The court has considered the material and submissions on record on the first issue. Although the 1st defendant admitted that he charged the suit property to secure repayment of a loan he had taken from the bank, he denied that the property was ever sold by the bank in exercise of its statutory power of sale. 13. During cross–examination by the Plaintiffs’ advocate the 1 st defendant stated as follows: MOMBASA ELC CASE NO. 149 OF 2021 (JUDGMENT) Page 5

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“It is true that I had given the suit property as security to KCB for a loan. I am aware that I defaulted on the loan. I do not know to whom the land was sold. I dispute that there was any valid auction. No, I did not file any suit to dispute the auction.” 14. The court is satisfied on the basis of the oral and documentary evidence of PW2 who was the advocate acting for the bank at the time of the action that the suit property was in fact sold by public auction. The 1st defendant conceded at the trial that he defaulted on the loan facility and that he did not know the person to whom the property was sold by the bank. He appeared only to dispute the validity of the auction. Since the 1st defendant did not file a suit to challenge the validity of the auction the court is of the view that the sale by the bank remains valid to date. As such, the first issue is answered in the affirmative. 15. The evidence on record on the second issue is quite straightforward. The 1st defendant conceded that he defaulted on the loan facility and that the bank sold the property to an unknown person. He also conceded that he did not legally challenge the said sale. The material on record shows that at all material times the title document was in the custody of the bank where it eventually got lost or misplaced. MOMBASA ELC CASE NO. 149 OF 2021 (JUDGMENT) Page 6

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16. There is no evidence on record to show that the bank ever discharged the suit property in favour of the 1 st defendant. On the contrary, the evidence shows that upon the public auction being conducted the bank issued a discharge of charge and transfer in favour of the deceased who was the purchaser at the auction. The material on record further shows that upon the bank being notified of the demise of the purchaser they issued a transfer form in favour of the administrators of his estate. 17. The court takes the view that the 1st defendant’s action of obtaining a provisional title on the basis of alleged loss of his title and the consequent sale of the property to the 2 nd defendant were clearly fraudulent. The 1st defendant had no valid title to the suit property. He could not bypass the bank which was the chargee and obtain a provisional title for the same property. The court takes the view that the 1 st defendant’s proprietary interest in suit property ceased on 12.06.2008 upon the fall of the hammer. He had absolutely no legal interest which he could sell to the 2nd defendant in 2013. 18. The court is satisfied that the 1 st defendant’s action of purporting to sell the suit property after the auction by the bank was both fraudulent and illegal. The court is also satisfied MOMBASA ELC CASE NO. 149 OF 2021 (JUDGMENT) Page 7

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that the subsequent action of recording a consent in Mombasa ELC 301 of 2017 was done in furtherance of the fraudulent scheme. As a result, the second issue is answered in the affirmative. 19. Since the main issues for determination have been answered in favour of the plaintiffs, it would therefore, follow that the Plaintiffs are entitled to the reliefs sought in the suit. The court is, however, not inclined to grant the prayer of permanent injunction since it would not serve any useful purpose in the circumstances. In order to bring the litigation to an end and to give full effect to the overriding objective of the Civil Procedure Act (Cap 21) the court is inclined to issue an eviction order against the 2nd defendant in lieu of the injunction sought. 20. The general rule on costs is that costs shall follow the event in accordance with the proviso to section 27 of the Civil Procedure Act. The court finds no good reason why the successful litigants should not be awarded costs of the suit. As a consequence, the Plaintiffs shall be awarded costs of the suit to be borne by the 1st defendant who was the main architect of the fraud the subject of the proceedings. 21. The upshot of the foregoing is that the court finds and holds that the Plaintiffs have proved their claim against the MOMBASA ELC CASE NO. 149 OF 2021 (JUDGMENT) Page 8

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Defendants to the required standard. As a consequence, Judgment is hereby entered for the Plaintiffs against the Defendants in the followings terms: a) A declaration is hereby made that the 1st defendant had no proprietary interest in subdivision No. 2830/1/MN (CR 26826) at the time he sold the same to the 2nd defendant. b) A declaration is hereby made that the consent Judgment record in Mombasa ELC No. 301 of 2017 between the 1st and 2nd defendants over the suit property was fraudulent, null and void. c) The registration of the 2nd defendant as the proprietor of subdivision No. 28301/1/MN (CR 26826) is hereby cancelled. d) The 2nd defendant shall hand possession of the suit property to the plaintiffs within 14 days from the date hereof in default of which she shall be forcibly evicted. e) The plaintiffs are hereby awarded costs of the suit to be borne by the 1st defendant. It is so decided. DATED, SIGNED AND DELIVERED VIRTUALLY AT THIKA ON THIS 17TH DAY OF SEPTEMBER 2026 Y. M. ANGIMA MOMBASA ELC CASE NO. 149 OF 2021 (JUDGMENT) Page 9

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JUDGE ` In the presence of: No appearance for the Plaintiff No appearance for the 1st Defendant No appearance for the 2nd Defendant Court Assistant: Hinga MOMBASA ELC CASE NO. 149 OF 2021 (JUDGMENT) Page 10

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