Altaf Abdulrasul Dadani v Amin Akberali Manji,Hemanth Kumar,Musikland & Millenium Ltd & Musikland Ltd (under Receivership) [2004] KEHC 1282 (KLR)

REPUBLIC OF KENYA IN THE HIGH COURT OF KENYA AT NAIROBI MILIMANI COMMERCIAL COURTS CIVIL CASE NO. 913 OF 2002

ALTAF ABDULRASUL DADANI………………………….…………PLAINTIFF

VERSUS

AMIN AKBERALI MANJI …………………….…..……..…..1ST DEFENDANT

HEMANTH KUMAR …………………….………...………….2ND DEFENDANT

MUSIKLAND MILLENIUM LIMITED ………...…………..3RD DEFENDANT

MUSIKLAND LIMITED …….……...….4RD DEFENDANT

RULING

The 1st, 2nd and 3rd Defendants have come to court by an application by way of Notice of Motion dated 14th July 2004. The application is under Section 3A of the Civil Procedure Act and Order XLI Rule 4 of the Civil Procedure Rules.

The application has 5 substantive prayers but only prayer No. 4 was argued before me. The prayer was in the following terms: -

* That there be a stay of execution of the Ruling and Orders made on the 5th of February 2004 (Honourable Justice Mwera) pending the hearing and determination of the Civil Appeal No. 101 of 2004.

The grounds supporting that application are as follows: -

The 1st, 2nd and 3rd defendants being aggrieved by the ruling delivered on 5th February 2004 by the Honourable Justice Mwera filed a notice of appeal on 11th February 2004 and lodged a record of appeal (Civ. App. NO. 101 of 2004) on 26th May 2004.

The Respondents hereof filed a Civil Application No. 162 of 2004 seeking to strike out the 1st, 2nd and 3rd defendants aforesaid appeal on the account that the said defendants have disobeyed or there is non-compliance with the ruling of Mwera J, of 5th February 2004.

The 1st, 2nd and 3rd defendants will suffer substantial irreparable loss if stay is not granted.

That the pending appeal is meritorious and raises several serious issues of Law.

Mr. Ochieng Oduol argued in support of the application. He said that unless stay is granted the appeal will be rendered nugatory and the applicants will suffer irreparable loss as they will be denied the opportunity to challenge the ruling of Justice Mwera at the court of appeal. He said that the appeal raises several issues of Law for determination and accordingly, he argued; the high court had a duty to see that if the appeal is granted it will not be rendered nugatory. Counsel said that the court had this power under Order 41 to stay these orders.

Counsel also argued that when a party exercises its constitutional right of appeal the court had to see to it that the intended appeal was not lost or rendered nugatory; he quoted the case of KENYA SHELL LTD – V – BENJAMIN KARUGA KIBIKU & RUTH WAIRIMU KARUGA (1982 – 1988) IKAR 1018.

Counsel highlighted the following passage on page 1022: -

“It is usually a good rule to see if Order 41 Rule 4 of the Civil Procedure Rules can be substantiated. If there is no evidence of substantial loss to the applicant, it would be a rare case when an app eal would be rendered nugatory by some other event. Substantial loss in its various forms, is the corner stone of both jurisdiction for granting stay.”

Applicants counsel submitted that the order issued by Mwera J, was not in monetary terms but it was determination of certain rights within the context of company law, but those determination, he argued, determined the entire suit. For these reasons counsel argued that the applicants should be given a chance to ventilate the appeal. Applicant’s counsel argued that the Respondent’s application at the Court of Appeal namely Civil Application No. 162 of 2004 was misconceived in Law because the court of appeal has an appellant jurisdiction and ought not, therefore, to hear an application to strike out an appeal on the basis of disobedience of high court orders. He argued that such disobedience ought to have been brought in the High court before being taken to the court of appeal.

The applicant relied on the case, MITCHELL AND OTHERS V DPP & ANOTHER (1968) LRC 127 and to quote part of what counsel laid reliance on: -

“………..there is the inherent jurisdiction of every court of justice to prevent an abuse of its process and its duty to intervene and stop the process, or put an end to it.”

Counsel in this vein also relied on the case of RAFIKI ENTERPRICES LTD – V – KINGWAY TYRES LTD. CIV. APP. No. NAI 375 OF 1996 (unreported). Page 61 of that authority states:

“It is clear from the provision of the appellant Jurisdiction Act that the only jurisdiction the court of appeal has is to hear appeals from the High Court and the powers it has can only be exercised during the hearing of an appeal from the High Court. Section 3 (2) above opens with the words

“For all purpose of and incidental to the hearing and determination of any appeal………”

And though the section concludes by saying that the court shall have

“The power, authority, and jurisdiction vested in the High court.”

that cannot mean that the court, for example, has original and unlimited jurisdiction like the high court. If Section 3 (2) of the Appellant jurisdiction Act were to purport to confer original jurisdiction on the court of appeal, it (section) would be in conflict with Section 64 (1) of the Constitution…….”

Counsel for the Respondent started his argument by saying that the application was hopeless.

He advanced his argument by saying that the affidavits in support of the application were not signed above the endorsement of the drawer. Counsel relied on the cases HCCC 1587 of 2001 BARCLAYS BANK OF KENYA LTD – V – DR. SOLOMON OTIENO ORERO(Unreported)and HCCC 1587 OF 2003 JOHANN DISTELBER – V – JOSHUA KIVINDA MUINDI & ANOTHER(Unreported). Those two cases dealt with Sections 34 and 35 of the Advocates Act where there was lack of endorsement of the drawer’s name on legal documents. They did not deal with the failure of maker to sign above on top of such endorsement.

The Respondent then vehemently argued that this court had no jurisdiction to hear the present application because it was misconceived because, firstly it was filed after the filing of the civil application No 162 of 2004; and secondly because it was tantamount to the high court being asked to determine the application filed in the court appeal.

The Respondent’s counsel was loathed by the applicant’s attempts to say that this court should find fault in the ruling delivered by Justice Mwera and argued, quite correctly, that, that was out of the province of this court.

Although the Respondent’s counsel was heard to argue that the applicants failed to disclose at the ex parte stage, that the Respondent had a pending application in the court of appeal, I find no basis for that argument because if one looks at the applicant’s application, the supporting affidavit there is repeated mention of Civil Application No. 162 of 2004.

Respondent’s counsel’s final argument was that although we all have our constitutional right of appeal such right is regulated by rules in court and other enabling provisions of law. One such rules, counsel argued, is that if a party does not obey court orders, however serious, the court should not hear them.

As I begin to consider my ruling I am very clear in my mind that what is before me is an application brought under Order 41 Rule 4 of the Civil Procedure rules and which application I have jurisdiction to entertain. The Respondent’s counsel’s argument that the present application is meant to circumvent an application in the court of appeal I am unable to comment on the same because neither party found it necessary to attach that application to their papers in this matter. How then can I determine such an issue in abstract, all I can do is entertain the present application on the basis of the power donated by order 41.

The case of VISHRAM RAVJI HALAI & ANOTHER – V – THORNTON & TURPIN (1963) LTD C.A. NO. 15 OF 1990 reaffirms the jurisdiction of Order 41 rule 4 as follows: -

“The supervisor court’s discretion is fettered by three conditions. Firstly, the applicant must establish a sufficient cause, secondly the court must be satisfied that substantial loss would ensue from a refusal to grant a stay; and thirdly the applicant must furnish security. The application must of course be made without unreasonable delay.”

The Respondent in ground No. 4 of its grounds of opposition argued that the applicants had failed to adduce evidence to show or prove that the applicant will suffer substantial loss if they comply with the said order before the appeal. The applicant in response said that the effect of the orders of 5th February 2004 were to determine in its entirety the whole suit. The applicant’s counsel further said that No. 4 of the said ruling was an injunction which injunction had not been prayed for in the application and No. 5 of that ruling sought the production of accounts from 1995 to 2001 and yet accounts for 1995 to 1999 were before the court.

In considering that the applicants in the court of appeal are challenging the right of the plaintiff/respondent to take out a derivative claim I am of the view that to have the applicant’s obey particularly No. 4, 5 and 6 of that ruling would lead to substantial loss if the appeal were successful. I must say that the applicant’s submission that the injunction granted by the ruling of 5th February 2004 was contrary to the prayers before court and that the orders granted by the aforesaid ruling led to the determination of the entire suit was not at all controverted by the respondent.

The applicant quite correctly argued that the Respondent ought to have moved this court seeking the obedience of order of 5th February 2004, before going to the court of appeal. I do agree with argument for indeed the Respondent could have moved the court for contempt to ensure compliance and it is only thereafter that he could have moved to the court of appeal. The fact that the Respondent did not move this court under the contempt powers means he was satisfied with the status quo, that is, non-compliance of the Orders. I do not agree with the argument that the hearing of this application is tantamount to determining that application before the court of appeal because this court is exercising its rightful jurisdiction.

The argument that the application has been brought after much delay I think is not correct. The application was filed 5 months after the order of this court and 2 months after the appeal was lodged. To my mind that is not inordinate delay to defeat this application.

Finally the argument that the affidavits in support of the application were invalid for lack of signature of the maker I think has no basis. The authorities relied upon by the Respondent related to violation of Sections 34 and 35 of the Advocates Act that is they did not have endorsement of the maker.

There is no requirement that I could find the Advocates Act or the Civil Procedure Act requiring the signature of the maker over the endorsement. That argument therefore fails.

I am of the view that the application ought to succeed and I am also of the view that it is not one where security can be ordered since the order is not a monetary one.

When this matter was heard by my brother Justice Mutungi on 14th July 2004 an order was made in respect to the prayer of costs whereby it was ordered that the costs of the application was to await the outcome of the appeal.

That to my mind was a final order and I shall not disturb it.

The order of this court is: -

That stay of execution of the ruling and orders made on the 5th February 2004 (Honourable Justice Mwera) is hereby granted pending the hearing and determination of Civil Appeal NO. 101 of 2004, AMIN AKBERALI MANJI, HEMANTH KUMAR; MUSIKLAND MILLENIUN LTD – V ALTAF ABDULRASUL DADANI, MUSKLAND LTD(under Receivership).

Dated and delivered this 16th day of November 2004

MARY KASANGO

AG JUDGE