Anthony Stephen Gathara & 1 other v I & M Bank Limited & 1 other

2. The application was premised upon Articles 47 and 50 of the Constitution of Kenya 2010, Section 1A, 1B, 3A of the Civil Procedure Act, Section 21, 23 and 26 of the Auctioneers Act, Rule 15(d) and Rule 16 of the Auctioneers Act (Cap 526), Order 25 Rule 1, Order 51 Rule 1, Oder 40 Rules 1, 2, 3, 4 & 5 of the Civil Procedure Rules 2010 and all enabling provisions of law and was supported by the affidavit of even date sworn by the 2nd Applicant. 3. The Defendant/Respondents I & M Bank (1st Respondent) and Onesmus Macharia T/a Watts Auctioneers Ltd (the 2nd Respondent) filed Grounds of opposition dated 27th October 2025. The 1st Respondent filed a Replying Affidavit dated 17th November 2025 sworn by Flaviah Wambui the Debt Recovery Officer with the Bank. 4. The application was canvassed by way of written submissions. The Applicants filed the written submissions dated 10th March 2026 whilst the Respondents relied upon their written submissions dated 14th April 2026. Background 5. The Applicants are the registered proprietors of the parcels of land known as Aguthi/Gatitu/5782 and Nyeri Municipality /Block 1/1156 (hereinafter jointly referred to as the ‘suit properties’) 6. Sometime on or about 6th September 2018 and 10th March 2021, the applicants charged the suit properties in favour of I & M Bank to secure a loan facility obtained by Prolific Works Limited. The loan fell into arrears and on 15th January 2025 the 1st Respondent issued a statutory notice to realize the securities in order to recover the outstanding arrears. The applicants claim that after receiving the said statutory notice they proceeded to negotiate with the bank and paid the outstanding arrears. That on 3rd September 2025 a Sale notification was delivered to the applicants. The applicants allege that this notification for sale was mischievous as they had actively been servicing the mortgage. 7. The applicants fault the Bank for failing to re-issue the statutory notice of sale on view of the intervening fact i.e the discussions held between the parties. The applicants now seek a temporary injunction to restrain any sale by auction of the suit properties pending the hearing and determination of the main suit. 8. The 1st Respondent concedes that they advanced a loan to Prolific Works Limited which credit facility was secured by a charge of the suit properties which were registered in the names of the applicants. 9. That the borrower (Prolific Works Limited) defaulted in payment of the loan and the Bank proceeded to issue a demand and statutory notices to the Applicants. The 1st Respondent avers that the Applicants ignored the statutory notice dated 18th July 2024 necessitating the issuance of the forty (40) day redemption notice on 15th November 2024 calling for payment of the outstanding amount of Kshs. 16,416,077.90 as at 4th November 2024. That the applicants and the borrower still failed to act so the Banks right of sale crystallized and they instructed the 2nd Respondent M/S Watts Auctioneers to sell the suit properties by way of Public auction. 10. The 2nd Respondent issued a Notification of Sale dated 15th January 2025 and proceeded to advertise the suit properties for sale by public auction. 11. The Respondents assert that they have complied with all the relevant provisions of law in realizing their security and urge that the application for a temporary injunction be dismissed with costs. https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/12415/eng@2026-07-31 2

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Analysis And Determination 12. I have considered the submissions filed by the parties in this case. The plaintiff/Applicants are seeking interim interlocutory orders. The principles for granting injunctive orders were established in the case of Giela -vs- Cassman Brown & Company Ltd. [1973] E.A. 358 where it was held as follows: “ 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 injury, which would not adequately be compensated by an award of damages. Thirdly, if the court is in doubt, it will decide an application on the balance of convenience…” 13. Likewise, in Suleiman -vs- Amboseli Resort Ltd (2004) KLR as Honourable Justice J. Ojwang (as he then was) relied on the principle as set out in Giella vs. Cassman Brown and Company Ltd (1973) EA 358 and stated that an interlocutory injunction will issue in the following situations:a. Where the applicant has established a prima facie case with a probability of success; b. Where the applicant stands to suffer irreparable loss which cannot be compensated by an award of damages; and c. Where the court is in doubt the application will be decided on a balance of convenience. Prima Facie Case 14. In the case of Nguruman Limited vs. Jan Bonde Nielsen & 2 Others [2014] eKLR, the Court of Appeal stated as follows:“ 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. Positions of the parties are not to be proved in such a manner as to give a final decision is discharging a prima facie case. The Applicant need not establish title, it is enough if he can show that he has a fair and bona fide question to raise as to the existence of the right which he alleges. The standard of proof of that prima facie case is on a balance or, as otherwise put, on a preponderance of probabilities. This means no more than that the court takes the view that on the face of it the applicant’s case is more likely than not to ultimately succeed.” [Own emphasis] 15. The definition of what constitutes a prima facie case was set out in Mrao Vs. First American Bank Of Kenya & 3 Others [2003] KLR where it was held:“ ….it is 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 as to call for an explanation or rebuttal from the latter…. A prima facie case is more than an arguable case. It is not sufficient to raise issues. The evidence must show an infringement of a right, and the probability of the applicant’s case upon trial. That is clearly a standard which is higher than an arguable case.” 16. The Applicants do not deny that they offered up their properties as security to guarantee a credit facility taken by Prolific Works Limited. A copy of the letter of offer as well as the legal change in favour of I & https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/12415/eng@2026-07-31 3

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M Bank dated 6th September 2018 appear as Annextures FW1 and FW2 to the Replying Affidavit dated 17th November 2025. The 1st Respondent proceeded to offer to Prolific Works Limited a Second credit facility as evidenced by the letter of offer dated 15th December 2020 (Annexture ‘FW3’). This facility was also guaranteed by the applicant and a legal charge dated 10th March 2021 (Annexture ‘FW4’) was duly executed and registered. 17. The Applicants also do not deny that at some point the loan facility fell into arrears. At paragraph 4 the Supporting affidavit dated 17th September 2025 the Applicants admit to having received the 90day statutory notice dated 15th January 2025. A copy of the demand and statutory notice appear as Annextures ‘FW 7(a) and (b)’ to the Replying Affidavit. 18. Thereafter the 1st Respondent issued the 40 day redemption notice (Annexture FW8 (a) and (b) after which the 2nd defendant acting on instructions from the Bank proceeded to issue the Notification of Sale (Annextures ‘FW9 a, b, c & d’ 19. From the above it is quite clear that the Bank did issue to the Applicants all the required statutory legal notices before advertising the suit properties for sale. The applicants conceded to having received all the legal notices sent to them by the Bank and by the auctioneer. The applicants by their action of charging the suit properties in order to guarantee the credit facility taken by Prolific Works Limited must have been fully aware of the fact that in event the loan fell into arrears then the bank had the right under Law to sell the suit properties in order to recover any arrears owed to them. 20. The applicants state that upon receiving the 90-day statutory notice they entered into negotiations with the Bank after which all the outstanding arrears were settled. The applicants argue that due to this intervening event the statutory notice dated 18th July 2024 became ‘Stale’ and that in order to realize its security the Bank was obliged to issue a fresh statutory notice. 21. The statutory notice dated 24th July 2024 claimed arrears of Kshs. 2,436,439.42. The Bank states that the applicants ignored this statutory notice and by 4th November 2024, the arrears had risen to Kshs. 16,416,077.90. 22. It is trite law that he who alleges must prove. If according to the applicants they negotiated with the Bank and settled the outstanding arrears where is the proof of this payment. The applicants have not annexed to this supporting affidavit minutes of any meetings they held with the Bank after receiving the statutory notices nor have the applicants annexed any copies of e-mails, letters, phone messages to support their claim that they entered into any negotiations and/or agreements with the Bank after the statutory notice had been issued. Neither have the applicants annexed any evidence by way of a cheque, credit slip or transfer to prove that they settled the outstanding arrears as it has been alleged. These therefore remain unproven allegations. 23. I find that there was no intervening event to interrupt the running of the 90 day notice issued on 24th July 2024. 24. From the evidence available it is clear that the applicants were issued with and have confirmed receipt of all statutory notices. The fact that the loan in arrears is not disputed. 25. I find that the applicants have failed to establish a prima facie case and as such are not entitled to the injunctive orders sought. Having found that no prima facie case has been established the court need not delve into questions of irreparable injury and/or the balance of convenience. Accordingly I do hereby dismiss in its entirety the Notice of Motion dated 17th September 2025. Costs to be met by the Applicants. https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/12415/eng@2026-07-31 4

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DATED IN NYERI THIS 31ST DAY OF JULY 2026. ……………………… MAUREEN A. ODERO JUDGE https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/12415/eng@2026-07-31 5

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