Triple Four Arrows Holdings Ltd v China National Overseas Engineering Corporation (Kenya) Ltd & 4 others

JUDGMENT Background 1. Vide an Originating Summons dated 12th March 2026, brought pursuant to the provisions of Section 40(5) of the Tax Procedures Act Cap 469B and Order 37 Rule 3 of the Civil Procedure Rules, the Applicant seek the following reliefs: a. That a declaration be issued in favour of the Applicant, Triple Four Arrows Holdings Limited, vesting title and ownership of the property in Land Registration Number 1160/606 (now known as Title Number Nairobi/Block 148 (Galleria)/333) in the Applicant absolutely. b. That an Order do issue requiring and directing the 4th Respondent to register the Vesting Order, and thereby register the Applicant, Triple Four Arrows Holdings Limited, as Lessee for the residue of the term of Title Number Nairobi/Block 148 (Galleria)/333, and dispense with the requirement for the surrender of the title in possession of the 1st Respondent. c. That the Deputy Registrar of this Honourable Court be and is hereby authorized and directed to execute all necessary instruments of transfer and/or any other relevant documents in respect of Land Registration Number 1160/606 (now known as Title Number Nairobi/Block 148 (Galleria)/333) in favour of the Applicant, Triple Four Arrows Holdings Limited, to facilitate prayer (a) above. d. That an Order do issue compelling the 4th Respondent to take or to facilitate all steps that will lead to the issue to the Applicant, Triple Four Arrows Holdings Limited, a Certicate of Title as Lessee for the residue of the term of Title Number Nairobi/Block 148 (Galleria)/333. e. That such other or further orders as may meet the ends of justice in this case. f. That the costs of this application be paid by the 1st Respondent. 2. The Originating Summons is supported by the adavit of Richard Kipkorir Cheruiyot, the Applicant’s sole shareholder and director who deponed that he had represented the Applicant in all its dealings with the 2nd Respondent concerning the transaction giving rise to the suit and is therefore competent and duly authorized to swear the adavit. 3. He averred that the 3rd Respondent is a body corporate established under Section 3(1) of the Kenya Revenue Authority Act and is empowered under Section 5(1) of the Act to collect revenue on behalf of the Government. In furtherance of that mandate, the 3rd Respondent is empowered under Section 40 of the Tax Procedures Act to register a restraint against the property of a defaulting taxpayer and dispose of it by public auction or private treaty to recover unpaid taxes. 4. The Applicant’s Director deponed that on 19th January 2026, he saw an advertisement placed by the 2nd Respondent in the Daily Nation newspaper notifying the public that the property known as L.R. No. 1160/606, now Title No. Nairobi/Block 148 (Galleria)/333(hereinafter the suit property), would be sold by public auction on 3rd February 2026. Having developed an interest in the property, he contacted the 2nd Respondent for further particulars regarding the intended auction. 5. It was disposition that he established that the 2nd Respondent was a duly licensed auctioneer in 2025 and 2026, while the 1st Respondent was a limited liability company carrying on business in Kenya and liable to pay taxes to the 3rd Respondent; that by a letter dated 25th November 2024, the 2nd Respondent https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/6029/eng@2026-10-01 2

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was informed that the 1st Respondent had an outstanding tax liability of Kshs. 180,751,755 and that consequently, the 3rd Respondent registered a restraint against L.R. No. 1160/606, registered in the name of the 1st Respondent, and, by a letter dated 10th December 2024, instructed the 2nd Respondent to sell the property by public auction. 6. He deponed that the 2nd Respondent conrmed that all the requisite notices had been served both personally and by registered post and the auction duly proceeded as advertised on 3rd February 2026 and that before participating in the auction, the Applicant deposited two banker’s cheques, nos. 276578 and 276579, both dated 2nd February 2026 and each for Kshs. 500,000 making a total deposit of Kshs. 1,000,000 as required. 7. At the fall of the hammer, it was deposed, the Applicant emerged as the highest bidder with a bid of Kshs. 131,200,000; that the Applicant was consequently issued with a certicate of sale and executed the conditions and memorandum of sale, both dated 3rd February 2026 and that under the terms of sale, the Applicant was required to pay 25% of the purchase price, being Kshs. 32,800,000, immediately after the auction, and the balance of Kshs. 98,400,000 within 90 days and that the Applicant paid the deposit on the same day and cleared the outstanding balance of Kshs. 98,400,000 before the expiry of the 90-day period. 8. According to Mr. Cheruiyot, he has since established that the register for L.R. No. 1160/606 was closed following the property’s conversion and subsequent registration as Title No. Nairobi/Block 148 (Galleria)/333. He contended that, despite the Applicant having paid the full purchase price, the 1st Respondent remains in possession of the property and continues to be registered as its proprietor, leaving the Applicant with nothing to show for the substantial expenditure incurred. 9. He therefore urged the court to grant the orders sought, maintaining that they were just, equitable and necessary to avert undue prejudice to the Applicant. He added that the orders are consistent with public policy, as they will facilitate the 3rd Respondent’s eective collection of taxes on behalf of the Government. 10. In response to the Motion, the 1st Respondent, through Mr. Liu Haoran, its Chief Financial Ocer led a replying adavit sworn on 26th June 2026, stating that the 1st Respondent was, at all material times, the registered proprietor of L.R. No. 1160/606, now known as Title No. Nairobi/Block 148 (Galleria)/333. 11. He deponed that the 1st Respondent is opposed to the grant of the vesting order on the ground that the process culminating in the purported sale was unlawful, improper, unfair and invalid. In his view, since the conduct of auctioneers is strictly regulated by the Auctioneers Act, 1996 and the Auctioneers Rules, 1997, any departure from those provisions rendered the purported sale invalid. 12. In particular, he alleged that the 2nd Respondent neither provided nor served the 1st Respondent with a forced-sale valuation report before the auction. He relied on rule 11(b)(x) of the Auctioneers Rules, which requires the reserve price for each separate parcel of land to be based on a professional valuation undertaken not more than 12 months before the proposed sale. 13. He further relied on Section 97(2) of the Land Act, which requires a chargee, before exercising a power of sale, to ensure that a forced-sale valuation of the property is undertaken by a valuer. According to Mr. Haoran, the absence of such a valuation report prevented the 1st Respondent from ascertaining whether the suit property had been sold at a fair value and in accordance with the law. 14. He also challenged the manner in which the auction was conducted. He contended that neither the Applicant nor the 2nd Respondent had produced a bid register, bidding records, the auctioneer’s https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/6029/eng@2026-10-01 3

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return or any other primary records demonstrating that the auction had been conducted lawfully, competitively and transparently and that they had similarly failed to disclose the bids received, the progression of the bidding process or how the alleged purchase price of Kshs. 131,200,000 had been arrived at. 15. Mr. Haoran stated that Section 23 of the Auctioneers Act required the 2nd Respondent to maintain proper records and observe high standards of accountability and transparency. In his view, the 2nd Respondent had failed to demonstrate compliance with those obligations and the other statutory requirements governing the sale of immovable property by public auction. 16. He further deponed that the 1st Respondent had obtained an independent valuation of the suit property, which assessed the property’s current market value at approximately Kshs.307, 000,000, whereas the Applicant alleged that it had purchased the property for Kshs. 131,200,000 and that the dierence between the two gures exceeds Kshs.175,000,000, raising serious questions regarding the legality, propriety and fairness of the auction. 17. He maintained that a forced-sale valuation is intended to establish the fair market value and reserve price of immovable property, guard against its disposal at an undervalue and secure the best price reasonably obtainable for the benet of the owner. 18. In the Respondent’s Director’s view, unless the circumstances surrounding the sale are fully interrogated, there remains a real risk that the suit property was sold at a gross undervalue to the 1st Respondent’s detriment and that neither the Applicant nor the 2nd Respondent had demonstrated that the bid of Kshs. 131,200,000 represented the best price reasonably obtainable in the circumstances. 19. Mr. Haoran further averred that a vesting order is a discretionary remedy which should not issue where the legality of the underlying transaction remains contested. Accordingly, granting the order without rst undertaking a full inquiry into the validity of the auction will amount to the compulsory deprivation of the 1st Respondent’s property and expose it to substantial prejudice and irreparable loss contrary to Article 40 of the Constitution. 20. The 2nd Respondent led a replying adavit dated 8th May 2026. Ms. Mungai stated that she is not opposed to the application, having lawfully and successfully conducted the public auction of the property known as Title No. Nairobi/Block 148 (Galleria)/333. She averred that she was duly licensed to practice as an auctioneer in 2025 and 2026 respectively. 21. She deponed that the 2nd Respondent received a letter dated 25th November 2024 from the 3rd Respondent indicating that the 1st Respondent had an outstanding tax liability of Kshs. 180,751,755. Consequently, the 3rd Respondent registered a restraint against the suit property. 22. It was deposed by the 2nd Respondent that by a letter dated 10th December 2024, the 3rd Respondent instructed her to sell the suit property by public auction; that upon receipt of those instructions, she issued the requisite notices, which were served both personally and by registered post. Ms. Mungai stated that the intended sale was advertised in the newspapers on 19th, 30th and 31st January 2026; that the auction subsequently proceeded as advertised on 3rd February 2026, at which the Applicant emerged as the highest bidder at the fall of the hammer with a bid of Kshs. 131,200,000 and that the Applicant was issued with a certicate of sale and executed the conditions and memorandum of sale. 23. According to the 2nd Respondent, under the conditions of sale, the Applicant was required to pay 25% of the purchase price immediately after the auction and the balance within 90 days. Accordingly, the Applicant immediately paid Kshs. 32,800,000, representing 25% of the purchase price, and was issued https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/6029/eng@2026-10-01 4

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with a payment slip dated 3rd February 2026 and that before the expiry of the stipulated 90-day period, the Applicant paid the outstanding balance of Kshs. 98,400,000. 24. She maintained that the Applicant fully complied with the terms and conditions of the sale and was therefore a bona de purchaser for value of L.R. No. 1160/606, now Title No. Nairobi/Block 148 (Galleria)/333 and that having successfully conducted the auction in accordance with the 3rd Respondent’s instructions, she has no objection to summons. 25. Vide a further adavit dated the 3rd July 2026, the 2nd Respondent reiterated her assertions as set out in the adavit of 8th May 2026. She explained that pursuant to the instructions issued to her by the 3rd Respondent, she issued the 1st Respondent with a 45-day notice and a notication of sale, which were initially served by registered post; that on 18th December 2024, at approximately 11.30 a.m., the notices were personally served upon the 1st Respondent at the suit property situated o Ndege Road in Karen and that the 1st Respondent accepted service and acknowledged receipt by signing the 2nd Respondent’s copies. 26. It was deposed by the 2nd Respondent that a certicate of service dated 21st January 2026 was subsequently prepared in accordance with Rule 15(c) of the Auctioneers Rules, 1997, conrming service of the requisite notices; that the 45-day notice and notication of sale initially scheduled the public auction for 20th March 2025 and that they also indicated that the property had a market value of Kshs171,000,000 and a forced-sale value of Kshs. 128,250,000. 27. According to the 2nd Respondent, before the scheduled auction could proceed, the 3rd Respondent instructed her to suspend it because the 1st and 3rd Respondents were engaged in discussions aimed at resolving the outstanding tax liability. 28. On the 5th December 2025, she explained, the 3rd Respondent issued further instructions requiring her to proceed with the advertisement and sale of the suit property; that a current valuation report was forwarded to her together with those instructions and that following the renewed instructions, she issued the 1st Respondent with a courtesy notice dated 19th January 2026, which scheduled the auction for 3rd February 2026 and indicated that the outstanding amount was Kshs. 180,751,755. 29. Ms. Mungai explained that Icon Valuers Limited prepared an updated valuation report dated 3rd December 2025, within 12 months preceding the auction, which assessed the property’s market value at Kshs. 171,000,000 and its forced-sale value at Kshs. 128,250,000. 30. Regarding the conduct of the auction, she averred that all the bidders in attendance registered their names in an attendance register. She maintained that the valuation report subsequently obtained by the 1st Respondent and annexed as “LH-1” had been overtaken by events. Relying on Rule 10 of the Auctioneers Rules, she asserted that a debtor may apply to the court for an independent valuation at any time before the sale of seized or repossessed property. Since the suit property had already been sold, the subsequent valuation could not, in her view, assist the court. 31. Ms. Mungai denied that the property had been sold at a gross undervalue, stating that the highest bid exceeded the reserve price and represented the best price obtained at the auction. She maintained that the process was transparent and conducted in accordance with the Auctioneers Act and the applicable Rules. 32. The 2nd Respondent maintained that the auction conducted on 3rd February 2026 was lawful and valid, and that the Applicant, having submitted the highest bid, was a bona de purchaser for value entitled to a vesting order. She urged the court to dismiss the 1st Respondent’s grounds of objection and replying https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/6029/eng@2026-10-01 5

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adavit with costs or, alternatively, expunge them from the record for having been led outside the period prescribed by the court. 33. The 3rd Respondent led a replying adavit dated 7th July 2026, sworn by Alice Marigo, its Advocate. She explained that the 3rd Respondent is established under the Kenya Revenue Authority Act and is, by virtue of Section 5(1) thereof, the Government agency responsible for the collection and receipt of revenue and that under Section 5(2) of the Act, it is further mandated to administer and enforce the written laws specied in Parts I and II of the First Schedule for purposes of assessing, collecting and accounting for revenue. 34. Regarding the genesis of the 1st Respondent’s tax liability, she deponed that the 3rd Respondent conducted an audit of the 1st Respondent’s operations for the years 2015 to 2020 in respect of Corporation Tax, Pay As You Earn, Withholding Tax and Value Added Tax; that upon conclusion of the audit, the 3rd Respondent exercised its powers under Section 31 of the Tax Procedures Act and issued additional assessments totaling Kshs.266,950,758 comprising principal tax of Kshs.201,066,629, penalties of Kshs.9,813,624 and interest of Kshs.56,070,505 and that the assessments were communicated to the 1st Respondent through a letter dated 23rd October 2019. 35. She averred that the 1st Respondent neither objected to the assessments nor settled the outstanding tax liability. Consequently, the assessed taxes crystallized and became due and payable to the 3rd Respondent and that despite several demands, the 1st Respondent failed, refused or neglected to settle the outstanding tax arrears. 36. As a result, the 3rd Respondent invoked Section 40(1) of the Tax Procedures Act, which empowers it to notify the Registrar of Titles to register a restraint against a taxpayer’s interest in property as security for unpaid taxes. By a letter dated 2nd June 2023, the 3rd Respondent notied the Registrar of Titles of the 1st Respondent’s outstanding tax liability and requested the registration of a restraint against the suit property. 37. Ms. Marigo stated that the Registrar subsequently registered the restraint against the property; that the same was communicated to the 1st Respondent through a letter dated 7th June 2023, which also notied it of the consequences of failing to settle the outstanding tax liability within the stipulated period and that notwithstanding the registration of the restraint, the 1st Respondent failed to settle the taxes due. 38. She further deponed that a post-registration search conducted on 5th December 2023 revealed that, as at 28th November 2000, the suit property was registered in the name of China Overseas Engineering Corporation (Kenya). Thereafter, by a letter dated 1st March 2024, the 3rd Respondent sought conrmation from the Business Registration Service as to whether China National Overseas Engineering Corporation (Kenya) and China Overseas Engineering Group Company Limited were one and the same entity and that he Business Registration Service conrmed that position on 19th April 2024. 39. It is the 3rd Respondent’s case that by a letter dated 3rd September 2024, the 3rd Respondent instructed Icon Valuers Limited to value the suit property and prepare a valuation report; that the property was inspected on 25th September 2024 and valued on 27th September 2024; that the valuer assessed its current market value at Kshs. 171,000,000, comprising Kshs. 146,700,000 for the land and Kshs. 24,300,000 for the improvements and that its mortgage value was assessed at Kshs. 136,800,000, its forced-sale value at Kshs. 128,250,000 and its insurable value at Kshs 27,900,000. 40. According to the 3rd Respondent, a further valuation was undertaken on 3rd December 2025. The updated report retained the market value at Kshs. 171,000,000 and the forced-sale value at Kshs. https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/6029/eng@2026-10-01 6

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128,250,000. Ms. Marigo averred that, by a letter dated 10th December 2024, the 3rd Respondent instructed Rachael Wanja Mungai, trading as Toplink Auctioneers and the 2nd Respondent herein, to sell the suit property by public auction. 41. It was deposed that pursuant to those instructions, the 2nd Respondent served the 1st Respondent with a 45-day notice dated 16th December 2024 requiring it to redeem the suit property failing which the property would be advertised for sale by public auction. Upon the expiry of the 45-day period and the 1st Respondent’s continued default, the 2nd Respondent issued a further notice dated 19th January 2026 informing it that the property would be sold by public auction on 3rd February 2026 unless the default was remedied. 42. She stated that the intended sale was advertised in the Daily Nation newspaper on 19th January 2026 and it indicated that the suit property would be sold by public auction on 3rd February 2026 at 10.30 a.m. at Agip House, 3rd Floor, Room 301, Haile Selassie Avenue, Nairobi and that following the 1st Respondent’s continued default, the auction proceeded as scheduled on 3rd February 2026. 43. The 3rd Respondent’s legal ocer deposed that the Applicant emerged as the highest bidder at the fall of the hammer, having oered Kshs. 131,200,000 for the property and was consequently issued with a certicate of sale and executed the conditions and memorandum of sale. 44. Ms. Marigo maintained that the 3rd Respondent complied with all the applicable legal requirements in enforcing and recovering the taxes owed by the 1st Respondent. She added that the entire purchase price had been applied towards reducing the 1st Respondent’s outstanding tax liability. Having received and applied the purchase price, the 3rd Respondent no longer had any claim over L.R. No. 1160/606 and had issued a letter conrming that it had no objection to the transfer of the property to the Applicant. 45. She therefore urged the court to grant the orders sought by the Applicant, contending that they were just, equitable and consistent with the interests of justice and public policy. She further maintained that failure to grant the orders would prejudice both the Applicant and the 3rd Respondent. Submissions 46. The Applicant’s Counsel led submissions dated 2nd July 2026. Counsel submitted that the 3rd Respondent, in exercise of its statutory powers under Section 40 of the Tax Procedures Act, caused a restraint to be registered against the suit property following the 1st Respondent’s failure to settle its outstanding tax liability or agree on a payment plan. The restraint remained in force and entitled the 3rd Respondent to sell the property by public auction. 47. It was submitted that the Applicant learnt of the intended sale through an advertisement published in the Daily Nation on 19th January 2026, scheduling the auction for 3rd February 2026. Despite having been served with the requisite notices, the 1st Respondent neither challenged nor sought to restrain the sale and that the auction proceeded as advertised, and the Applicant emerged as the highest bidder. 48. Counsel maintained that the 2nd Respondent complied with Rule 15 of the Auctioneers Rules, 1997 by serving the notication of sale and the 45-day redemption notice, and by advertising the property more than 14 days before the auction. The sale was therefore conducted in accordance with the prescribed procedure. 49. On jurisdiction, counsel submitted that the court is properly seized of the matter under Article 162(2) (b) of the Constitution, Section 13 of the Environment and Land Court Act, Section 101 of the Land Registration Act and Order 37 rule 3 of the Civil Procedure Rules. https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/6029/eng@2026-10-01 7

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50. It was submitted that Order 37 rule 3 permits a vendor or purchaser of immovable property to institute an originating summons for the determination of questions arising out of or connected with a contract of sale, provided that the existence or validity of the contract is not in issue. 51. According to counsel, the dispute did not concern the validity of the contract of sale or any competing interest in the property. Rather, having fullled its obligations under the sale, the Applicant sought orders to facilitate its registration as proprietor following the registered owner’s failure or refusal to eect the transfer. The matter therefore fell within the scope of Order 37 Rule 3 of the Civil Procedure Rules. Cited in support was Patel & another vs Greenview Developers Limited [2025] KEELC 5595 (KLR). 52. Counsel submitted that the Applicant complied with all the conditions of sale by depositing the requisite Kshs. 1,000,000/= before the auction, emerging as the highest bidder at Kshs. 131,200,000/ =, and executing the certicate, conditions and memorandum of sale. It was submitted that although the payment receipts bore the 1st Respondent’s name, the payments were made by the Applicant in satisfaction of the 1st Respondent’s outstanding tax liability. Counsel therefore maintained that the Applicant had fullled all its obligations under the sale and was entitled to the reliefs sought. 53. It was urged that the 1st Respondent’s proprietary interest and equity of redemption were extinguished upon the fall of the hammer and payment of the purchase price, whereupon the Applicant acquired an equitable interest in the property as espoused in Joyce Wairimu Karanja vs James Mburu Ngure & 3 others [2018] KEHC 7877 (KLR) and Simon Njoroge Mburu vs Consolidated Bank of Kenya Ltd [2014] KEHC 7407 (KLR). 54. It was argued that the principle applies equally to a statutory sale under Section 40 of the Tax Procedures Act. Further, that under Sections 99(2)(c) and 99(4) of the Land Act, any irregularity in the sale does not defeat the purchaser’s title but leaves the aggrieved party to pursue damages. 55. Counsel further submitted that the 3rd Respondent did not hold title to the suit property and therefore had no title to convey to the Applicant and that the sale was undertaken pursuant to a statutory power, with title passing to the purchaser by operation of law. In support of that submission, counsel cited Satwant Singh Dhanjal & 2 others vs Kenya Revenue Authority [2005] KEHC 3178 (KLR), where the court held that, in a sale conducted pursuant to a statutory power, title passes by operation of law and not because the person exercising the power of sale holds title to the property. 56. Relying on Patel & another vs Greenview Developers Limited [2025] KEELC 5595 (KLR) and Caperina Enterprises Limited vs Davca Services Limited & another [2018] eKLR, counsel argued that a purchaser who has acquired a benecial and equitable interest is entitled to a vesting order under Order 37 Rule 3 where the registered proprietor’s failure to execute the necessary documents frustrates an otherwise lawful transaction. 57. The 2nd Respondent’s Counsel led submissions dated 3rd July 2026. Counsel submitted that pursuant to instructions issued by the 3rd Respondent, the 2nd Respondent sold the suit property to recover the 1st Respondent’s outstanding tax liability. It was submitted that the auction complied with Rules 15, 16 and 17 of the Auctioneers Rules, 1997. 58. It was submitted that the 1st Respondent was served with the notication of sale on 18th December 2024 but failed to redeem the property within the prescribed 45 days, following which the intended sale was advertised in the Standard and Star newspapers and that the auction consequently proceeded on 3rd February 2026, when the Applicant emerged as the highest bidder at Kshs. 131,200,000/=, executed https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/6029/eng@2026-10-01 8

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the conditions and memorandum of sale, paid the requisite 25% deposit and settled the balance within 90 days. 59. Counsel submitted that the property was not sold at an undervalue, as the successful bid exceeded both the forced-sale value and the reserve price of Kshs. 128,250,000 established by Icon Valuers Limited. Relying on Zum Zum Investment Limited vs Habib Bank Limited [2014] KEHC 6207 (KLR). It was urged that the 1st Respondent had not established a basis for disregarding the valuation. Having satised the conditions of sale, the Applicant was therefore a bona de purchaser for value, and the court was urged to allow the Originating Summons with costs against the 1st Respondent. 60. No other submissions were led as at 21st August, 2026. Analysis and Determination 61. Having considered the pleadings and submissions, the sole issue that falls for consideration is whether the Applicant is entitled to the vesting and registration orders sought as pleaded in the Originating Summons. 62. The Applicant has invoked Order 37 Rule 3 of the Civil Procedure Rules, which permits a vendor or purchaser of immovable property to seek the determination of questions arising out of or connected with a contract of sale, save for a question aecting the existence or validity of the contract. 63. In this regard, it is the Applicant’s case it is the legitimate proprietor of the suit property having purchased the same at a public auction at which it emerged as the highest bidder. It maintains that it fully complied with the conditions of sale by paying the requisite deposit and the balance of the purchase price within the stipulated period. Having fullled its obligations under the sale, the Applicant contends that it acquired an enforceable interest in the suit property and is entitled to the vesting and registration orders sought. 64. This position is supported by the 2nd and 3rd Respondents, who assert that the sale was undertaken pursuant to the 3rd Respondent’s statutory mandate to recover the 1st Respondent’s unpaid tax liability. The 3rd Respondent maintains that its power of sale had crystallized following the registration of a restraint over the suit property and the 1st Respondent’s failure to settle the outstanding taxes within the prescribed period, while the 2nd Respondent contends that the public auction was lawfully conducted pursuant to the instructions issued by the 3rd Respondent. 65. At the outset, the court notes that the 1st Respondent does not dispute its outstanding tax liability to the 3rd Respondent or the latter’s statutory power to recover that liability through the sale of restrained property. That power is conferred by Section 40 of the Tax Procedures Act, which permits the Commissioner, where a taxpayer fails to settle the notied liability within two months, to dispose of property subject to a restraint, mortgage or charge by public auction or private treaty. 66. It is also undisputed that, pursuant to that power, the suit property was oered for sale by public auction on 3rd February 2026. The Applicant emerged as the highest bidder with an oer of Kshs. 131,200,000, executed the certicate, conditions and memorandum of sale, paid the required deposit of Kshs. 32,800,000 on the date of the auction and settled the balance of Kshs. 98,400,000 within the stipulated 90 days. 67. The 1st Respondent’s challenge is directed at the legality, transparency and procedural fairness of the auction. It contends that compliance with the mandatory requirements governing the sale has not been demonstrated, particularly regarding the forced-sale valuation, the bidding records and the price obtained. It further asserts that the signicant disparity between the purchase price of Kshs. https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/6029/eng@2026-10-01 9

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131,200,000 and its subsequent valuation of approximately Kshs. 307,000,000 raises a serious question as to whether the property was sold at a gross undervalue. 68. The starting point is the burden of proof. Under Sections 107, 108 and 109 of the Evidence Act, the party asserting a fact bears the burden of proving it. Accordingly, while the Applicant must establish its entitlement to the vesting and registration orders sought, the 1st Respondent bears the evidential burden of substantiating its allegations that the auction was unlawful, procedurally defective or conducted at a gross undervalue. 69. It is trite that auctioneers are governed by the Auctioneers Act and the Rules made thereunder. Section 23 of the Act requires a licensed auctioneer to act in a manner betting an ocer of the Court, comply with the prescribed rules when repossessing, attaching, storing or selling property under any written law or contract, and maintain the prescribed books, accounts, records and other documents. 70. The applicable procedure is set out in Part III of the Auctioneers Rules, which, by virtue of Rule 5, applies to the sale of immovable property pursuant to court warrants or letters of instruction from third parties. Of relevance to the 1st Respondent’s objections, Rule 11(1)(b)(x) requires the letter of instruction to specify a reserve price based on a professional valuation undertaken not more than 12 months before the proposed sale. 71. Rule 15 requires the auctioneer to record the instructions, prepare and serve a notication of sale, allow the owner at least 45 days to redeem the property and, upon continued default, advertise the sale at least 14 days before the auction. Rules 16, 17 and 18 respectively regulate the advertisement, conduct of the auction and receipt and recording of the purchase price.Bottom of Form 72. The documentary evidence produced by the Applicant and the 2nd and 3rd Respondents traces the process leading to the sale. By a letter dated 10th December 2024, the 3rd Respondent instructed the 2nd Respondent to sell the suit property. The 3rd Respondent had initially commissioned Icon Valuers Limited to value the suit property in September 2024. 73. Following renewed instructions dated 5th December 2025, the 2nd Respondent was directed to proceed with the sale at a reserve price of Kshs. 128,250,000 based on an updated valuation dated 3rd December 2025. The valuation was therefore undertaken within the 12-month period prescribed by Rule 11(1) (b)(x) of the Auctioneers Rules. 74. The 1st Respondent relies on a subsequent valuation assessing the property at approximately Kshs. 307,000,000. That valuation was, however, undertaken after the auction and reects the property’s value at a dierent date. Although the disparity between the two valuations is substantial, it does not, without more, establish that the earlier valuation was fraudulent or fundamentally erroneous. 75. No evidence was presented identifying any defect in Icon Valuers Limited’s qualications, methodology or assessment as at the date of sale. Further, despite Rule 10 of the Auctioneers Rules permitting a debtor, at any time before the sale, to apply to the court for an independent valuation, the 1st Respondent did not exercise that right before the property was auctioned. 76. Further, although the 1st Respondent invoked Section 97(2) of the Land Act, that provision regulates a chargee’s exercise of the statutory power of sale. The sale in this case was undertaken by the 3rd Respondent under Section 40 of the Tax Procedures Act, rather than by a chargee under the Land Act. In any event, the valuation referenced also set out the forced sale valuation. 77. As regards notice, the record contains a 45-day redemption notice and notication of sale dated 16th December 2024, served upon the 1st Respondent on 18th December 2024. Although the auction https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/6029/eng@2026-10-01 10

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initially scheduled for 20th March 2025 was suspended to allow discussions between the 1st and 3rd Respondents, the outstanding liability remained unpaid. 78. Upon receiving renewed instructions, the 2nd Respondent issued a courtesy notice dated 19th January 2026 informing the 1st Respondent that the auction would proceed on 3rd February 2026. The 1st Respondent neither redeemed the property nor sought an order restraining the sale. 79. The intended sale was rst advertised in the Daily Nation on 19th January 2026, and the auction was held more than fourteen days thereafter, in compliance with Rule 15(e) of the Auctioneers Rules, 1997, which requires the sale to take place not earlier than fourteen days after the rst newspaper advertisement. 80. The advertisement identied the property, its location and developments, the date, time and venue of the auction, the viewing arrangements and the conditions of sale, including the requirement for a 25% deposit and the fact that the sale was subject to a reserve price in compliance with Rule 16 of the Auctioneers Rules. 81. The allegation by the 1st Respondent that the auction was not conducted transparently is similarly unsupported by sucient evidence. The 2nd Respondent produced the attendance register dated 3rd February, 2026. The conditions and memorandum of sale dated 3rd February 2026 further record that the Applicant was declared the highest bidder at the fall of the hammer with a bid of Kshs. 131,200,000. 82. Having considered the evidence before this court, it is the nding of the court that the successful bid of Kshs. 131,200,000 exceeded the forced-sale value and reserve price of Kshs. 128,250,000. The evidence further shows that the Applicant thereafter paid the required deposit of Kshs. 32,800,000 on the date of the auction and the balance of Kshs. 98,400,000 on 25th February 2026, well within the stipulated 90 days. 83. Against that documentary trail, the 1st Respondent’s objections remain assertions. It has not demonstrated that the requisite notices were not served, that the valuation relied upon was invalid, that the auction did not occur, that the Applicant was not the highest bidder, or that the purchase price was not paid. The 1st Respondent has therefore failed to discharge the evidential burden of establishing the alleged illegality or procedural impropriety. 84. Although Article 40 of the Constitution protects the 1st Respondent against arbitrary deprivation of property, it does not preclude a disposition authorized by law to recover an established tax liability, provided the prescribed safeguards are observed. 85. Ultimately, the court nds the Originating Summons dated 12th March 2026 to be merited in the following terms: a. A declaration does hereby issue vesting title and ownership of the property in Land Registration Number 1160/606 (now known as Title Number Nairobi/Block 148 (Galleria)/333 in the Applicant absolutely. b. An order does hereby issue directing the 4th Respondent to register the Vesting Order, and thereby register the Applicant, Triple Four Arrows Holdings Limited, as Lessee for the residue of the term of Title Number Nairobi/Block 148 (Galleria)/333, and dispense with the requirement for the surrender of the title in possession of the 1st Respondent. c. The Deputy Registrar of this Honourable Court be and is hereby authorized and directed to execute all necessary instruments of transfer and/or any other relevant documents in respect of Land Registration Number 1160/606 (now known as Title Number Nairobi/Block 148 https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/6029/eng@2026-10-01 11

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(Galleria)/333 in favour of the Applicant, Triple Four Arrows Holdings Limited, to facilitate prayer 1 above. d. An order does hereby issue compelling the 4th Respondent to take or to facilitate all steps that will lead to the issue to the Applicant, Triple Four Arrows Holdings Limited, a Certicate of Title as Lessee for the residue of the term of Title Number Nairobi/Block 148 (Galleria)/333. e. The 1st Respondent shall bear the costs of the summons. DATED, SIGNED AND DELIVERED VIRTUALLY IN NAIROBI THIS 1ST DAY OF OCTOBER, 2026. O. A. ANGOTE JUDGE In the presence of; Ms Chepkurui for Applicant Mrs Ndolo for 1st Respondent Mrs Mugure for 2nd Respondent Court Assistant: Tracy https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/6029/eng@2026-10-01 12

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