Douglas Muchui Nturangi & 2 others v Progressive Credit Limited & 1 other

property, L.R. No. KIANDJA/KIANDJA/2432 that a stay of proceedings be issued in respect of subordinate court case CMCC E5080 of 2024 and that the Respondents be restrained from withdrawing Kshs.200,000.00/- that was deposited in court pending the hearing and determination of this appeal. The Appellants also seek to review, vary, and/or set aside the ruling of 1st December 2025 which had dismissed their earlier application for injunctive relief. 2.The application is supported by the grounds on its face and the affidavit sworn on 29th December 2025 by the 1st Appellant and it is opposed by the Respondents through the replying affidavit of the 1st Respondent’s Legal Officer, Faith Konchellah sworn on 12th January 2026. The application was canvassed by way of written submissions which are on record and I have considered the same together with the pleadings and I will be making relevant references to them in my analysis and determination below. Analysis and Determination 3.From the parties’ submissions, the issues for the court’s determination are whether the Appellants have met the threshold for the grant of an injunction pending the appeal and whether they have demonstrated sufficient grounds for review. I propose to first deal with the issue of review as my determination will dispose of the issue 2|Page

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of the injunction pending appeal. As submitted by the Appellants, under section 80 of the Civil Procedure Act and Order 45 of the Civil Procedure Rules, an applicant is required to show either that there was an error apparent on the face of record or that there has been discovery of new and important matter which was not available despite the exercise of due diligence or for any other sufficient reason for the court to review. 4.The Appellants submit that their application is anchored on the grounds of a mistake and/or error on the face of the record and any other sufficient reason. They rely on the case of the Court of Appeal in National Bank of Kenya Limited v Ndungu Njau [1996] KLR 469 which explained what constitutes an error of law apparent on the face of the record and the scope of review: A review may be granted whenever the court considers that it is necessary to correct an apparent error or omission on the part of the Court. The error or omission must be self-evident and should not require an elaborate argument to be established. It will not be a sufficient ground for review that another Judge could have taken a different view of the matter. Nor can it be a ground for review that the Court proceeded on an incorrect exposition of the law and reached an erroneous conclusion of law. 3|Page

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Misconstruing a statute or other provision of law cannot be ground for review. 5.In Republic v Advocates Disciplinary Tribunal Ex parte Apollo Mboya [2019] KEHC 6379 (KLR), Mativo J., (as he was then) held as follows on the ground of "sufficient reason": 27. A court can review a judgment for any other sufficient reason. In the case of Sadar Mohamed vs Charan Signh and Another it was held that any other sufficient reason for the purposes of review refers to grounds analogous to the other two (for example error on the face of the record and discovery of new matter. Mulla in the Code of Civil Procedure (writing on Order 47 Rule 1 of the Civil Procedure Code of India), (the equivalent of our Order 45 Rule 1), states that the expression 'any other sufficient reason’...means a reason sufficiently analogous to those specified in the rule. Any other attempt, except an attempt to correct an apparent error or an attempt not based on any ground set out..., would amount to an abuse of the liberty given to the tribunal under the Act to review its judgement. 6.As such, “sufficient grounds” must be analogous to the other grounds of error on the face of the record and discovery of new matter for the court to review a decision. The Appellants’ case is that the court’s ruling of 1st December 2025 contains errors apparent on the face of the record as the court dismissed the 4|Page

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injunction Appellants, solely because without damages properly could considering compensate the the constitutional protection of property under Article 40 and the irreversible nature of land sale. That the appeal would be rendered nugatory if the property is sold before it is heard and that the court did not adequately consider the Appellants' evidence that the loan had been fully repaid or that interest charges were unlawful and inflated. That the court ordered the release of Kshs.200,000.00/- to the Respondents, but no party had requested or pleaded for this order which was a suo motu decision made without an inquiry into liability or giving the Appellants a chance to be heard. The Appellants also aver that the application for review was filed promptly after the ruling was delivered. 7.In response, the Respondents depone that the Appellants voluntarily entered into a loan agreement for Kshs.1,128,470.00/- on 4th July 2022 which was secured by the suit property belonging to the 3 rd Appellant. That they defaulted multiple times through bounced cheques between November 2022 and February 2024 and that as from March 2024 to date, no regular instalments were paid with only Kshs.15,000.00/- in April and Kshs.50,000.00/- in May being paid. 5|Page

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8.The Respondents contend that the outstanding loan amount now stands at Kshs.1,513,804.00/-, that the Appellants have not demonstrated a prima facie case because they are clearly in breach of contract, all statutory notices regarding the auction of the suit property were properly served, the loan agreement explicitly provides for interest, default penalties and bounced cheque charges and that the Appellants cannot claim irreparable loss when they are the ones in default. The Respondents state that they are the ones suffering financial harm due to the Appellants' failure to repay the loan and that the Appellants are unjustly enriching themselves by delaying the repayment process while litigation continues. 9.The Respondent assert that the suit property is a saleable asset in the event of default and the Respondents have incurred significant costs in preparing for the auction and litigation. On the costs of Kshs.200,000.00/-, the Respondents aver that the court was lenient in ordering only Kshs.200,000.00/- as security, whereas they had asked for Kshs.500,000.00/-. That the court has the power to order security for costs on its own motion in cases involving vexatious or frivolous claims and the Appellants are described as frivolous litigants who are using the courts to avoid their contractual obligations. They state that the Appellants voluntarily agreed to the interest rate of 4.5% per month, default interest of 6|Page

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2% per month and bounced cheque charges, that courts cannot rewrite contracts unless fraud, coercion, or undue influence is proven but that none of which have been pleaded. That the interest rate is fair considering the 1st Respondent is a non-deposit-taking lender bearing high risk and that the Appellants’ argument that the appeal would be rendered nugatory is far-fetched because the appeal itself is frivolous and not brought in good faith. The Respondents state that the Appellants have had two courts, that is the subordinate court and this court dismiss their applications, confirming the lack of merit. 10.The Respondents claim that the Appellants deliberately omitted the Respondents’ subordinate court documents from their filings in this court, forcing the Respondents to file them separately, which is cited as further evidence of bad faith. The Respondents thus pray that the court dismisses the Appellants' application for review and awards costs of the same to the Respondents. 11.I have gone through the pleadings and submissions of the parties. I have also carefully examined the record and note that the Notice of Motion dated 14th February 2025 sought substantive orders of stay of execution of the subordinate court's ruling, stay of proceedings in the subordinate court and an injunction pending appeal restraining the Respondents from dealing with the suit property. The Appellants 7|Page

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never sought a prayer for the release of the Kshs.200,000.00/deposited in court and the Respondents, in their replying affidavit and submissions, did not seek such an order either. The Respondents have submitted that at para. 10 of the Replying Affidavit, the security of costs that was expected to be deposited was Kshs.500,000.00/-, and that the court was lenient in ordering Kshs.200,000.00/- instead. However I am in agreement with the Appellants, the issue is not whether the amount was mentioned or negotiated during proceedings, but whether a formal prayer for the release of those funds to the Respondents was ever placed before the court for determination. The Respondents have not pointed to any pleading, any application, or any submission where they formally sought the release of the said sum. The court's own ruling of 1st December 2025 indicates that the issue was not canvassed by either party. The Court simply stated: "The interim orders in force are vacated and discharged and the amount of Kshs.200,000.00/= deposited in court shall be released to the Respondents on account of any charges incurred as a result of the aborted auction." 12.I find such an order to have been made in error, suo moto without any prayer, without any evidence of liability and indeed without affording the Appellants an opportunity to be heard on the specific question of who bears the costs of an aborted auction. Since the 8|Page

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court made a prayer for an order that was never made, I find this to be an error apparent on the face of the record that is self-evident and stares one in the face. One needs only to look at the pleadings and the ruling to see that no prayer for the release of the said sum was ever made and this does not require a long-drawn process of reasoning or the resolution of conflicting opinions. This decision by the court therefore warrants review. 13.Even if I were to find that the error does not strictly qualify as an error apparent on the face of the record, I would still find that there exists "any other sufficient reason" to warrant review. The order for release of Kshs.200,000.00/- was made without affording the Appellants an opportunity to be heard on the question of who bears the costs of an aborted auction. This offends the rules of natural justice and amounts to a procedural irregularity that cannot be allowed to stand. The right to a fair hearing is enshrined in Article 50 of the Constitution and is a fundamental pillar of our justice system. The continued enforcement of this order will occasion irreparable prejudice to the Applicants, who stand to lose Kshs.200,000.00/- without any determination on the merits of the claim for auction expenses. I hereby review, vary and set aside and court’s order of 1st December 2025 that the sum of Kshs.200,000.00/- deposited in court shall remain in court pending 9|Page

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the hearing and determination of the appeal or until further orders of this Court. 14.Having found that the Appellants have demonstrated sufficient grounds for review, I now turn to the question of whether they have met the threshold for grant of an injunction pending appeal. As stated in the previous ruling, the principles for grant of an injunction pending appeal are well settled. In Patricia Njeri & 3 Others v National Museum of Kenya [2004] KEHC 1614 (KLR), Visram J., (as he was then) outlined the following principles: "(1) That an order of injunction pending appeal is discretionary. The discretion must, however, be 'exercised judicially and not in whimsical or arbitrary fashion and will be exercised against an applicant whose appeal is frivolous. (2) That the discretion should be refused where it would inflict greater hardship than it would avoid and (3) that the court should consider whether the appeal would be rendered nugatory if the injunction is not granted." 15.In Nguruman Limited v Jan Bonde Nielsen& 2 others [2013] KECA 347 (KLR), the Court of Appeal emphasized that an applicant for an injunction must establish a prima facie case with a probability of success, show that irreparable harm would be suffered and demonstrate that the balance of convenience favors the grant 10 | P a g e

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of the injunction. The Respondents stated that the Appellants are in default of the loan agreement and that the appeal is frivolous. I have considered this argument, however, I note that the Appellants have raised serious triable issues in their appeal, including whether the loan was fully repaid, whether the interest levied by the 1st Respondent was lawful and unconscionable and whether the Respondents strictly complied with the law on issuance and service of statutory notices. 16.As submitted by the Respondents, the late Onguto J., in Cieni Plains Company Ltd & 2 others v Ecobank Kenya Ltd [2017] KEHC 5977 (KLR) held that "When it comes to injunctions sought to restrain mortgagees and chargees from realizing their security additional care and consideration of the circumstances of the transaction is very relevant with the focus being on whether the payment of the debt is being made and further that a dispute as to the amounts due was not good enough reason to halt the realization process even if the dispute had been occasioned by alleged illegal and contested interest." While I am mindful of this caution, I note that the Appellants' appeal raises issues that go to the root of the dispute, including the legality of the interest charged and whether the loan was fully repaid. These are not frivolous issues and the appeal is arguable and not a sham. 11 | P a g e

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17.The Appellants have also submitted that if the suit property is sold before the appeal is determined, third-party rights will crystallize, reversal will be impractical, and the appeal will be reduced to a mere academic exercise. The Court of Appeal, in Reliance Bank Ltd vs. Norlake Investments Ltd [2002] 1 EA 227 emphasized that courts must guard against actions that would render an appeal nugatory. I agree with the Appellants' submission that the suit property is the only known immovable property of the 3rd Appellant and is family land. Once sold and transferred to third parties, it will be beyond the reach of this Court. The loss of land through a forced sale, where the legality of the debt and interest is contested, cannot be adequately remedied by damages. 18.In In Esso Kenya Ltd v Mark Makwata Okiya [1992] KECA 53 (KLR), the Court of Appeal held that hardship could be compensated by damages. However, I agree that this because in case is distinguishable on its facts the present case, the dispute revolves around the legality of the debt itself and the unconscionable nature of the interest charged. This is not merely a dispute about the amount due but a challenge to the very foundation of the debt and I find that the appeal would be rendered nugatory if the suit property is sold before the appeal is heard. 12 | P a g e

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19.It is also my finding that the balance of convenience tilts in favor of preserving the suit property. The Respondents are a credit institution and can be compensated by way of damages or interest if the appeal ultimately fails. On the other hand, if the suit property is sold and the appeal succeeds, the Appellants would have lost their family land and recovery would be impractical. I agree that although a charged property is deemed a commodity for sale, the charge must strictly comply with the law and equity before exercising the power of sale. I therefore find that the balance of convenience favors the grant of an injunction pending appeal. 20.Therefore, having carefully considered the principles for grant of an injunction pending appeal and having weighed the competing interests of the parties, I am satisfied that the Appellants have met the threshold for the grant of an injunction pending appeal. The Appeal is arguable and not frivolous, the appeal would be rendered nugatory if the suit property is sold before the appeal is heard and the balance of convenience favors the preservation of the suit property. I therefore grant a temporary injunction pending appeal, restraining the Respondents, whether by themselves, servants, agents, or auctioneers, from advertising, selling, transferring, charging, or in any manner interfering with L.R. No. 13 | P a g e

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KIANJAI/KIANJAI/2432, pending the hearing and determination of the appeal. 21.On stay of proceedings, having granted the injunction pending appeal and having reviewed the order for release of Kshs.200,000.00/-, I find that it is in the interests of justice to stay the proceedings in the subordinate court pending the hearing and determination of the appeal. This will prevent parallel proceedings and the possibility of conflicting orders. I therefore grant a stay of proceedings in Milimani CMCC No. E5080 of 2024 pending the hearing and determination of the appeal. Conclusion and Disposition 22.In the foregoing, I now issue the following dispositive orders: 1) The application dated 29th December 2025 is hereby allowed. 2) The order directing Kshs.200,000.00/- to the the release of Respondents, as contained in the ruling of 1st December 2025, is hereby reviewed, varied and set aside. The sum of Kshs.200,000.00/- deposited in court shall remain in court pending the hearing and determination of the appeal, or until further orders of this Court. 3) A temporary injunction pending appeal is hereby issued restraining the Respondents, whether by themselves, servants, agents, or auctioneers, from 14 | P a g e

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advertising, selling, transferring, charging, or in any manner interfering KIANJAI/KIANJAI/2432, pending with the L.R. No. hearing and determination of the appeal. 4) A stay of proceedings is hereby granted in Milimani Chief Magistrates Court Civil Suit No. E5080 of 2024 pending the hearing and determination of the appeal. 5) The costs of this application shall abide the outcome of the appeal. DATED SIGNED and DELIVERED virtually at NAIROBI this 17TH DAY OF JULY 2026 ............................................................................ J.W.W. MONGARE JUDGE IN THE PRESENCE OF 1. Mr. Hasea for the Appellants/Applicants. 2. Mr. Musamali for the Respondents. 3. Amos- Court Assistant 15 | P a g e

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