Kenya Power & Lighting Company Limited v Kagongwe Women Electricity Group

5. That the Learned trial Magistrate failed to appreciate the fact that the law on limitation of actions is intended to protect the Appellant against unreasonable delay in bringing suits against it and that the Respondent ought to have taken reasonable diligence and to take reasonable steps in its own interest. 6. That Learned Magistrate erred in law and fact by allowing the Respondent to institute a suit without seeking leave of court, when a party is outside the mandatory statutory time. 7. That the Learned Magistrate erred in law and fact by failing to acknowledge that the court is divested of jurisdiction to make a determination of the matter as it was filed outside the six-year limitation period. 8. That the Learned Magistrate erred in law and fact by failing to appreciate that the Respondent failed to demonstrate how fraud was occasioned by the Appellant therefore as it is the particulars of fraud are mere inferences. 9. That the Learned Magistrate erred in law and fact by failing to appreciate the fact that the particulars of fraud were never proven by the Respondent. 10. That the Learned Magistrate erred in Law and fact by failing to appreciate the contract between the parties was specific in the sense that for the Appellant to perform its end of the contract the Respondent ought to have paid the whole quoted amount and the Appellant could not proceed with connecting the electricity as the Respondent failed to meet its obligations. 11. That the Learned magistrate failed to appreciate the submissions of the Learned Counsel for the Appellant. 12. That the Learned magistrate erred in law and fact by failing to appreciate the Appellant's Statement of Defence. 13. In all the circumstances of the case, the findings of the learned magistrate are insupportable in Law or on the basis of the evidence adduced. Brief facts The Plaintifi ’s case 2. The plaintiff filed this suit vide a plaint dated 7th November, 2017. It is the plaintiff case that on or about 7th February 2011 the plaintiff paid Kshs. 833,000 into the defendant account at Equity Bank, Kerugoya branch using a bankers cheque pursuant to a quote dated 23rd August, 2010 Customer Application No. C2521009040001. According tot the Plaintiffs The said amount was to secure power connection to the plaintiff premises in Nduini, which the appellant failed to do to done to date. The plaintiff's representatives made various necessary follow ups and visits to the defendant’s office in Embu and Nyeri, but received no assistance, advise or explanation causing them to lose interest in the power connection. The plaintiff raised the following particulars of fraud: i. Failing to connect power to the Plaintiff’s premises upon initial payment of Ksh.833,000. ii. Failing to explain failure to connect power to the premises. iii. Failing to refund the sum of ksh.833,000, to the plaintiff despite numerous demands. https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/6542/eng@2026-04-16 2

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iv. 3. Unfairly withholding the sum of ksh.833,000 from the plaintiff without any justifiable reasons. Consequently, the plaintiff prays for judgement to be entered against the defendant for: a. The sum of 833,000/= (b) Interest on (a) above at court’s rate. (c) Cost of the suit and interest thereon. The Defendant’s case 4. The defendant, filed a defence dated 7th July, 2021. It is the defendant case that the plaintiff was issued with a provisional quotation of Kshs. 1,701,720 dated 23rd August, 2010 which the plaintiff paid Kshs. 833,000 on 7th February, 2011. The defendant denies that the said amount was to secure power connection to the plaintiff premises in Nduini. The defendant avers that the full amount of Kshs. 1,701,720/= was to be paid within 90 days from the 23rd August, 2010 i.e by 23rd November, 2010 to enable the defendant carryout initial survey to issue a firm quotation towards the power connection process was to be done upon the plaintiff paying the whole quoted amount of Kshs. 1,701,720/= within 90 days from the date of quotation failure to which the terms may be revived and the plaintiff failed to pay the full amount. The plaintiff made the payment way after the 90 days. 5. The defendant states that the said Kshs1,701,720 appearing in the letter dated 23rd August, 2010, was not to secure power connection, but to enable the defendant commence the initial survey and provide the plaintiff with a firm quotation, for purposes of starting and completing the power connection. 6. The parties agreed by consent that all the witness statements and documents be admitted as evidence. The court considered the evidence on record and submissions, and on 13th September, 2023 the court entered judgement in favour of the plaintiff. Appellant submissions Whether the respondent’s suit was Statute-Barred 7. The cause of action arose in 2009, as per the Respondent’s own pleadings and evidence. However, the suit was filed in 2017, eight years later. 8. Section 4(1) (a) and (d) of the Limitation of Actions Act provides: “ The following actions may not be brought after the end of six years from the date on which the cause of action accrued — (a) actions founded on contract and (d) actions to recover a sum recoverable by virtue of a written law, other than a penalty or forfeiture or sum by way of penalty or forfeiture” 9. The Judgment makes no mention of addressing or ruling on the critical issue of limitation or jurisdiction, which the Appellant submits was an error by failing to strike out the suit at the preliminary stage. However, it is urged that in Rawal v Rawal [1990] KLR 275, the Court stated: “ A suit instituted outside the prescribed period of limitation is a nullity and ought to be struck out even if limitation is not pleaded in the defence.” https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/6542/eng@2026-04-16 3

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Whether the Respondent proved fraud as alleged 10. The Judgment notes that the plaintiff raised several particulars of fraud but does not explicitly state that fraud was proved to the required standard, instead focusing on the defendant's admission of receiving funds and the lack of a default clause. The Appellant submits that the trial court erred in making findings of fraud where the same was neither pleaded with particularity nor strictly proved, and cites Vishram Ravji Halai v Thornton & Turpin (Civil Appeal No. 89 of 1990), where the Court of Appeal held: “ Allegations of fraud must be pleaded and strictly proved. The standard of proof is higher than on a balance of probabilities but not beyond reasonable doubt.” 11. It was further urged that the particulars of fraud as pleaded by the Respondent were vague, speculative, and unsupported by any documentary or oral evidence. The trial court’s reliance on mere inferences was legally unsustainable. Whether the Respondent fulfllled on its contractual obligation 12. The Judgment acknowledges that the provisional quotation was for Kshs. 1,701,720 and that the plaintiff paid Kshs. 833,000. It also states that the commencement of the power connection process Was contingent upon the plaintiff paying the whole quoted amount within 90 days, which the plaintiff failed to do. However, the trial court then found that, due to the absence of a default clause in the letter, the Appellant ought to have refunded the deposit. They submit that this misinterprets the contractual obligations, as the Respondent's failure to pay the full amount constituted a breach of a condition precedent, absolving the Appellant of further obligations, not creating a duty to refund immediately. 13. They urged National Bank of Kenya Ltd v Pipe plastic Samkolit (K) Ltd & Another [2001] eKLR, where the Court of Appeal reaffirmed that: “ A court of law cannot rewrite a contract between the parties. The parties are bound by the terms of their contract, unless coercion, fraud, or undue influence is pleaded and proved.” 14. On the issue of costs, the appellants submit they should be awarded the costs for having to the appeal. Respondent submissions Whether the suit should have been dismissed for being statute barred 15. The Respondent urged that it was imperative to note that whilst it is true that the Agreement and/or contract between the Appellant and the Respondent was entered into way back in February, 2011, the cause of action did not arise and/or accrue until the 6th June, 2015, when the Respondent complained to the Applicant after the Appellant had failed to honour the agreement. In the Respondent's Witness statement, the Respondent on the 6th day of June, 2015, wrote a letter to the Appellant expressing their frustration due to the Appellant's unresponsiveness and requesting and/or demanding the Appellant's compliance on the matter. 16. It is after the Appellant failed to respond to the said Letter and/or honour the terms as per the quotation, that is, install the electricity that the Respondent herein was prompted to institute the suit before the trial Court. The period between 6th June, 2015 to 8th day of November, 2017, when the suit was filed, is not six (6) years and therefore the claims are not statute barred. The respondent further submits that the Appellant attempts to implore this Honourable Court to make findings on the issue of https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/6542/eng@2026-04-16 4

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the suit having been statute barred, an issue which was never raised at all in their Statement of Defence before the trial Court. Whether the respondent proved it case as the trial court 17. In respect of the claims in the suit, the Respondent adopted the witness statement and produced evidence and established that indeed they paid to the Appellant the sum of Kshs.833,000/= through a Bankers Cheque drawn in the name of the Appellant, Kenya Power & Lighting Company Limited, dated 7th February, 2011. The said cheque was deposited into the Appellant's Account and a receipt was issued in acknowledgement of the same. The Appellant herein does not dispute and/or contest having received the said amount in the Bank account. In fact, this position is confirmed in the Statement of Defence as well as the Appellant's witness statement, where at paragraph 10 it admits their indebtedness to the Respondent, as follows: “ 10. 18. The Defendant has always been willing to refund the stated amount and had even requested for supporting documents to effect the refund but the Plaintiff chose to ignore the same and instead rushed to Court to fraudulently seek for interests and costs.” As regards interest on the amount, the Respondent submits that the general principle is for payment of interest on recovered debts from the date of filing of suit. Issues 19. The issues that arise for determination in he appeal are: a. Whether the respondent’s suit was Statute-Barred. b. Whether the Respondent proved fraud as alleged. c. Whether the Respondent fulfilled on its contractual obligation. d. Costs of the suit. Analysis 20. This being a first appeal, this Court is obligated to re-evaluate and re-analyse the evidence on record and arrive at its own independent conclusion, bearing in mind that it did not see or hear the witnesses. See Selle v Associated Motor Boat Co. Ltd [1968] EA 123 Whether the suit was statute-barred 21. This Court respectfully agrees that an issue limitation, as that of jurisdiction, can be raised at any stage as held in Rawal v Rawal [1990] KLR 275, and this court as well as the trial court are mandated to consider whether, on the facts of the case, the jurisdiction of the Court in the matter is affected by a provision of the limitation of action. The Court must, therefore, reject the submissions by the Respondent that the appellant’s objection on statute of limitation was raised in the Submissions before this Court and not before the trial court by pleadings or evidence in support of the allegation. 22. The Appellant contends that the cause of action arose in 2010 or 2011 when payment was made and that the suit filed in 2017 was outside the six-year limitation period prescribed under Section 4(1)(a) of the Limitation of Actions Act. https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/6542/eng@2026-04-16 5

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23. Section 4(1)(a) provides that actions founded on contract may not be brought after the end of six years from the date the cause of action accrued. 24. When did the cause of action accrue? The cause of action in contract arises upon breach. In Divecon Ltd. v Samani [1995–1998] EA 48 the Court of Appeal held that limitation runs from the date the cause of action accrues and courts have no jurisdiction to extend time in contractual claims unless expressly provided by statute. 25. In the present case, the breach of contract became evident when the Appellant failed to perform its obligation within a reasonable time and ignored the Respondent’s demand of 6th June, 2015. The Respondent paid Kshs.833,000/= on 7th February, 2011. The Respondent’s evidence shows that it made follow-ups and formally demanded compliance by a letter dated 6th June 2015. The Appellant neither connected electricity nor refunded the amount. 26. The case does not render itself to neat ascertainment of the date of breach of contract as, on the evidence, the contract for the supply of electricity was never crystallized. In the appellant’s own evidence, the respondent failed to comply with the payment of the full amount required for the survey upon which full costing of the supply of electricity contract would have been established. 27. There was, on the appellant’s evidence, a breach on the part of the respondent of a provisional agreement to pay for the survey fees constituting “a breach of a condition precedent, absolving the Appellant of further obligations.” The appellant must, therefore, have kept a hold on the money outside the period prescribed for the payment of the survey money on the expectation that the respondent would pay the balance before the survey works commenced. 28. On both sides of the contracting parties no one treated the arrangement as breached and frustrated, until it became obvious that the appellant would not supply the electricity that the respondent thought it had contracted for after the follow-up and eventual when a demand for a refund. Upon default, the question was whether the money could be refunded, and the timelines for limitation commenced upon neglect or refusal by the appellant to refund. 29. There having been no date of performance of the survey upon payment of money, upon which a cause of action on such breach would arise, the cause of action would arise upon a demand for refund of the money. The suit was filed on 7th November 2017, well within six years limitation of action period from 2015 when the cause of action arose. Whether fraud was proved 30. The Appellant argues that fraud was neither specifically pleaded nor strictly proved and relies on Vishram Ravji Halai v Thornton & Turpin (Civil Appeal No. 89 of 1990), where the Court of Appeal held that allegations of fraud must be strictly proved to a standard higher than a balance of probabilities. 31. Upon re-evaluating the record, it is clear that although the Plaint contained allegations of fraud, the trial magistrate did not base the judgment on a finding of fraud. The judgment was grounded primarily on the admitted receipt of Kshs.833,000/= and the failure to either provide service or refund the money. 32. Indeed, paragraph 10 of the Appellant’s witness statement expressly admits willingness to refund the money. As fraud was not the determinative issue, the appeal cannot succeed on that ground. https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/6542/eng@2026-04-16 6

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Whether the respondent fulfllled its contractual obligations 33. It is undisputed by both parties that a provisional quotation of Kshs. 1,701,720/= was issued and that the Respondent paid only Kshs.833,000/= outside the 90-day validity period. The Appellant relies on National Bank of Kenya Ltd v Pipeplastic Samkolit (K) Ltd & Another [2001] eKLR, where the Court of Appeal held that courts cannot rewrite contracts between parties. 34. However, with respect, the issue here is not enforcement of the incomplete contract but whether the Appellant could lawfully retain the sum paid by the respondent without providing consideration of connecting the electricity to the respondent premises. 35. There was no evidence of a forfeiture clause in the quotation. There was also no contractual provision indicating that partial payment would be forfeited in the event of non-completion. Where money is paid under a contract that fails or is not performed, and no consideration passes, the law permits recovery under the doctrine of restitution to prevent unjust enrichment. It is the unconscionability of letting the appellant keepo the money paid for no work done that determines this matter. 36. It is the same consideration that appeared to move the trial court in the Judgment, with which this Court agrees, as follows: “ This court has considered the evidence on record and submissions. The issue for determination is; whether or not the defendant owes the plaintiff Kshs.833,000/=. To this court the defendant admits having received Kshs.833,000/= from the plaintiff. The issue of whether or not the plaintiff defaulted in paying the entire amount quoted of 1,701,720/= making it impossible for defendant to give a final or full quotation to this court is neither here nor there. The plaintiff was to make the full payment in 90 days. However, a reading of the letter dated 23/8/2010 there is no default clause, on what will happen in case the parties default, hence the moment the plaintiff failed to honour the payment of Kshs.1, 701,720 the defendant ought to have refunded the deposit as the agreement was frustrated. Perhaps deduct any incidentals if any, but make a refund. This is a situation where they received part payment and the plaintiff failed to honour the other part and the defendant on the other hand held the money well knowing they couldn't supply power connection, without full payment and final quotation. They ought to have refunded the said deposit having stated as above it is this court humble finding that the plaintiff was entitled to refund on the deposit. I therefore find that the plaintiff has proved their case on a balance of probability and I enter judgment in their favour, as sought in the plaint dated 7th November, 2017. It is so ordered. E.O. Wambo Principal Magistrate 13/9/2023” 37. The Appellant admitted receipt of the money and admitted willingness to refund it to the respondent. Having failed to connect electricity and having provided no evidence of expenses incurred or contractual forfeiture, the retention of the money was unjustified. This Court must find that the trial court properly entered judgment for the respondent for refund of the sum paid. https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/6542/eng@2026-04-16 7

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Costs 38. Under Section 27 of the Civil Procedure Act, costs follow the event unless the court orders otherwise for good reason. The Respondent succeeded before the trial court and has successfully defended this appeal. There is no reason to depart from the general rule. Orders 39. Accordingly, for the reasons set out above, the Court finds that the appeal has no merit and it is dismissed. 40. The appellant will pay the costs of the appeal to the Respondent. Order accordingly. DATED AND DELIVERED THIS 16TH DAY OF APRIL 2026. EDWARD M. MURIITHI JUDGE Appearances: Ms. Wambui for Mr. Raingo for the Appellant. Mr. Kipngetich for the Respondent. https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/6542/eng@2026-04-16 8

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