Wepukhulu v Sidian Bank Ltd & others (Civil Suit E052 of 2026) [2026] KEMC 553 (KLR)

servants, attorneys or any other person from selling whether by private treaty or public auction, transferring or conveyancing or in whatever way alienating, Plaintiff/Applicant’s land wasting parcel or interfering number East with the Bukusu/South Kanduyi/14837 pending the hearing and determination of this suit 4. That the first defendant be directed to render and deliver to the Plaintiff true and correct account in respect of the loan account 5. That this Honourable court be pleased to grant an order allowing the Plaintiff/Applicant to liquidate the outstanding loan arrears if any by way of reasonable monthly installments of Kshs. 50,000/= 6. That the costs of this Application be borne by the Defendants/Respondents 3. The instant Application was premised on the grounds on its face, which grounds were reiterated in the Applicant's Supporting Affidavit sworn on 09th February 2026. 4. The Applicant averred that he used his land parcel number East Bukusu/South Kanduyi/14837 (“the suit property”) to secure a loan facility of Kshs. 1,000,000/= from the 1st Respondent, leading to a charge being executed over the suit property. 5. He added that he had repaid the loan of Kshs. 1,000,000/= advanced to him by the 1st Respondent to a tune of Kshs. 700,000/= leaving a balance of Kshs. 300,000/=. 6. It was also averred by the Applicant that he was surprised to learn that the 1 st Respondent had advanced loans to the 2nd and 3rd Respondents using the suit property’s title without his consent, thereby making the loan amount advanced to him by the 1st Respondent to rise from Kshs. 1,000,000/= to

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Kshs. 3,471,145.45/= which the 1st Respondent was seeking to recover from him in breach of the in duplum rule under section 44A of the Banking Act. 7. The Applicant further stated that he would suffer irreparable damage if the suit property is sold by the 1st Respondent to a third party. 8. In addition to the above, the Applicant took issue with the 1 st Respondent’s forced valuation of the suit property at Kshs. 7,500,000/= as set out in the Notification of Sale dated 19th November 2025 herein. 9. The 1st Respondent opposed the instant Application through a Replying Affidavit sworn on 26th February 2026 by their Legal Officer one Edwin Karume. 10.Mr. Karume averred that the Applicant’s Application was fraught with non – disclosure of material facts and suppression of facts meant to mislead this court. 11.He added that in 2023, the 1 st Respondent advanced to the Applicant and the 2nd Respondent (“jointly referred to as the borrowers”) a Retail Business Loan of Kshs. 2,500,000/= at an interest rate of 16.97% to be repaid through 48 equal monthly installments of Kshs. 72,098.81/= as evidenced by the Offer Letter dated 12th June 2023. 12.The said loan was reportedly secured by the suit property as evidenced by the charge dated 05th July 2023. 13.It was further averred by Mr. Karume that on 28 th February 2024, the 1st Respondent advanced to the borrowers another Retail Business Loan of Kshs. 3,000,000/= to offset the initial loan, and the balance to be used in running the borrowers’ business. This loan was also secured by a third-party legal charge over the suit property. He placed before this court a further charge dated 18th March 2024 and a consent dated 18th March 2024 for 2nd or

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subsequent charge executed by the Applicant to support his averments above. 14. Mr. Karume added that the borrowers having defaulted in repaying the loan advanced to them by the 1st Respondent, the 1st Respondent set in motion the process of realizing the security by following all the laid down legal procedures. 15.It is against this backdrop that the 1 st Respondent urged this court to dismiss the instant Application with costs. Parties’ Written Submissions 16.On 03rd March 2026, this court issued directions on filing and service of a further affidavit by the Applicant if need be, as well as the filing and service of the parties’ respective written submissions. 17.However, as of 25th March 2026, none of the parties had complied with the orders/directions above. ANALYSIS & DETERMINATION 18.This court has given due regard to the parties’ pleadings and annexures on record. It is this court’s humble view that the only issue for determination is whether the instant Application is merited. Whether the Application and the Orders sought are merited 19. Before proceeding to determine whether the instant Application is merited, this court warns itself of the dangers of making definitive findings of fact or law at this interlocutory stage. This is in line with the Court of Appeal’s guidance in Mrao Ltd v First American Bank of Kenya Ltd & 2 Others [2003] KLR 125, where the Court stated:

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“…..It is true that the Court is not required at that stage to decide finally whether the evidence is worthy of credit, or whether if believed it is weighty enough to prove the case conclusively: that final determination can only properly be made when the case for the defence has been heard…” 20.Similarly, in Lucy Nungari Ngigi & 4 Others -vs- National Bank of Kenya Limited & Anor (2013) eKLR, the court stated as follows on this issue: “....I am also aware that the 1 st Defendant has raised issues in respect of the mortgage herein, their right to exercise the statutory power of sale, breach of the addendum, default of repayment of the loan etc. They have also raised some accountability issues from the 2nd Defendant on the purchase price. But even these queries should be reserved for and determined at the trial. These issues are in direct conflict with issues raised by the Plaintiffs and the 2 nd Defendant. At this stage I should not make any comments or findings, or express opinions on the substantive issues in controversy in order to avoid hurting the trial herein...” (Emphasis added) 21.Be that as it may, the authorities above do not in any way prevent this court from making definitive findings at this stage on issues which are not contested by the parties. 22.The Applicant herein seeks injunctive orders. The principles guiding the grant of an interlocutory injunction in this jurisdiction were set out in East African Industries vs. Trufoods [1972] EA 420 and Giella vs. Cassman Brown & Co. Ltd [1973] EA 358. Those principles were restated

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in Nguruman Limited vs. Jan Bonde Nielsen & 2 Others [2014] eKLR, where the court rendered itself thus: “In an interlocutory injunction application, the applicant has to satisfy the triple requirements to; (a) establish his case only at a prima facie level, (b) demonstrate irreparable injury if a temporary injunction is not granted, and (c) ally any doubts as to (b) by showing that the balance of convenience is in his favour. These are the three pillars on which rests the foundation of any order of injunction, interlocutory or permanent. It is established that all the above three conditions and stages are to be applied as separate, distinct and logical hurdles which the applicant is expected to surmount sequentially. See Kenya Commercial Finance Co. Ltd V. Afraha Education Society [2001] Vol. 1 EA 86. If the applicant establishes a prima facie case that alone is not sufficient basis to grant an interlocutory injunction, the court must further be satisfied that the injury the respondent will suffer, in the event the injunction is not granted, will be irreparable. In other words, if damages recoverable in law is an adequate remedy and the respondent is capable of paying, no interlocutory order of injunction should normally be granted, however strong the applicant’s claim may appear at that stage. If prima facie case is not established, then irreparable injury and balance of convenience need no consideration. The existence of a prima facie case does not permit “leap-

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frogging” by the applicant to injunction directly without crossing the other hurdles in between. It is where there is doubt as to the adequacy of the respective remedies in damages available to either party or both that the question of balance of convenience would arise. The inconvenience to the applicant if interlocutory injunction is refused would be balanced and compared with that of the respondent, if it is granted.” 23. A reading of the authority above reveals that an Applicant must surmount the pillars for the grant of the injunctive orders sequentially. Simply put, failure by an Applicant to surmount the first hurdle for the grant of injunctive orders renders the consideration of the other hurdles moot. 24.This court will now proceed to determine whether the Applicant has satisfied the principles for the grant of injunctive orders sequentially. 25.On whether the Applicant has established a prima facie case, this court notes that the Applicant disputed the amount he owes the 1 st Respondent. The Applicant also alleged that the 1st Respondent had advanced a loan facility to the 2nd and 3rd Respondent using the suit property as security without his consent. 26.The Applicant also took issue with the 1 st Respondent’s claim of Kshs. 3,471,145.45/= arising from a loan of Kshs. 1,000,000/=, he admitted having obtained from the 1st Respondent. He termed the sum of Kshs. 3,471,145.45/= the 1st Respondent seeks to recover from him as an affront to the in duplum rule set out in section 44 of the Banking Act. 27.In addition to the above, the Applicant disputed the 1st Respondent’s valuation of the suit property at Kshs. 7,500,000/=.

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28.The 1st Respondent maintained that the money they were seeking to recover from the borrowers arose from two Retail Business Loans they advanced to the borrowers between 12th June 2023 and 18th March 2024, secured by the suit property with the 1st Respondent’s consent as evidenced by the 1st charge dated 05th July 2023 and the further charge dated 18th March 2024. 29.The 1st Respondent further stated that they had complied with all the legal requirements imposed on them by the law before setting in motion the process for realizing the security offered by the borrowers. They added that they would conduct a valuation of the suit property before the intended auction, thus the Applicant’s fears regarding the alleged undervaluation of the suit were unfounded. 30.In the Mrao Ltd Case (supra), the Court of Appeal defined a prima facie case as follows: ‘…It may not be easy to define what is meant by “prima facie case”, but at least it must mean one on which a reasonable tribunal, properly directing its mind to the law and the evidence could convict if no explanation is offered by the defence...The terms “prima facie” case, and “genuine and arguable” case do not necessarily mean the same thing, for in using another term, namely a sustainable cause of action, the words “prima facie” are frequently used to refer to a case which shifts the evidential burden of proof, rather than as giving rise to a legal burden of proof in the manner of considering, which was in relation to the pleadings that had been put forward in the case…In civil cases a prima facie case 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

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by the opposite party 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 but the evidence must show an infringement of a right, and the probability of success of the applicant’s case upon trial. That is clearly a standard, which is higher than an arguable case.’ 31.Guided by the authority above, it follows that the question at this stage is whether the Applicant has demonstrated that there exists a right which has been apparently infringed by the Respondents to call for an explanation from the latter. 32. The uncontroverted evidence placed before this court by the 1 st Respondent in opposition to the instant Application proves on a balance of probabilities that they advanced to the borrowers a Retail Business Loan of Kshs. 3,000,000/= through a Letter of Offer dated 28 th February 2024. The said evidence also shows that the said loan was secured by a third-party legal charge over the suit property with the Applicant’s consent. 33.The statement of loan account placed before this court by the 1 st Respondent also shows that the outstanding loan as at 29th January 2016 was Kshs. 3,765,676.32/=. This shows that even if this court was to believe the Applicant’s assertion that he has already paid Kshs. 700,000/= to the 1 st Respondent in partial settlement of the initial loan of Kshs. 2,500,000/= and a further loan of Kshs. 3,000,000/= advanced to him and the 2 nd Respondent, the amount the 1st Respondent seeks to recover from the sale of the suit property cannot be said to be in contravention of the in duplum rule.

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34.In any event, a dispute as to the amount outstanding is not a basis for an injunction to restrain a lender from recovering its money from a borrower unless the amount claimed by the lender is excessive per the terms of the agreement between the parties (see Sammy Japheth Kavuku v Equity Bank Limited & Another (2014) eKLR). 35.It is evident from the evidence on record that the borrowers have defaulted in servicing the loan advanced to them by the 1st Respondent. This in effect means that the 1st Respondent’s statutory power of sale has crystallized. 36.This court further notes that the Applicant has not disputed the fact that the 1st Respondent set in motion the process of realizing the security by issuing to the him all the relevant notices under the Land Act and the Auctioneers Rules. 37.On whether this court can order the Applicant to defray the loan arrears through equal monthly installments of Kshs. 50,000/= as requested by the Applicant, this court takes the position that such a request can only be granted by this court by consent of the parties. That is a matter that is a preserve of discussions between a lender and a borrower. 38.Granting the Applicant, the prayer to defray the loan arrears through equal monthly installments of Kshs. 50,000/= will be akin to this court rewriting the loan agreement between the Applicant and the 1st Respondent. 39.The law in this jurisdiction is that this court cannot rewrite a lawful contract voluntarily entered into between parties (see National Bank of Kenya Ltd v Pipeplastic Samkolit (K) Ltd & Another [2002] 2 EA 503). 40.The Applicant has not demonstrated at this stage a prima facie case of illegality of the loan agreement between him and the 1 st Respondent. Therefore, this court cannot rewrite the lawful contract between the

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Applicant and the 1st Respondent herein by ordering the Applicant to defray the loan arrears through equal monthly installments of Kshs. 50,000/=. 41.The Applicant was also apprehensive that the suit property had been undervalued at Kshs. 7,500,000/= by the 1st Respondent. The 1st Respondent rightfully responded that the alleged undervaluation of the suit property was a mere apprehension given that they were to do a forced valuation of the suit property before auctioning the suit property as demanded by the law. 42.Be that as it may, it is not enough for a party to simply allege that their property has been undervalued. Such a party must lead evidence to prove on a balance of probabilities that the property in question has been undervalued by the lender. This court finds support from Palmy Company Limited vs Consolidated Bank of Kenya Limited [2014] eKLR, where the court held:“The onus of establishing on prima facie basis, that the applicant’s right has been infringed by the respondent by failing to discharge the duty of care under Section 97(1) of the Land Act lies on the applicant…The court needs cogent evidence and material in order to say that prima facie, there has been an undervaluation of the suit property which is an infringement of Section 97(2) of the Land Act by the respondent as to entitle the court to call for an explanation or rebuttal from the respondent.” 43.Given the reasons above and the authority above, it is my considered view that the Applicant has not tendered evidence to prove on a balance of probabilities that the suit property has been undervalued or will be undervalued before the intended auction.

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44.The upshot of the foregoing is that the Applicant has failed at this interlocutory stage to establish a prima facie case of the likelihood of the 1 st Respondent infringing any of his rights to call for an explanation from the 1 st Respondent. 45.The Applicant having failed to surmount the first hurdle for the grant of an injunction, this court’s consideration of the other pillars for the grant of an injunction has been rendered moot. Therefore, this court declines to deploy the scarce judicial resources in an academic exercise. 46.In the circumstances, this court declines the Applicant’s invitation to stand in the 1st Respondent’s exercise of its statutory power of sale which has already crystalized. DETERMINATION 47.The Applicant’s Application dated 09th February 2026 is bereft of merit. The same is dismissed with costs to the 1st Respondent. Read, signed, and delivered in open Court at Bungoma this 26th day of March 2026 T.O. OMONO SENIOR RESIDENT MAGISTRATE In the presence of: C/A: Mr. Rioba

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