Jackson Machogu Bagwasi & Lydia Moraa Bagwasi v Bank of Baroda (Kenya) Limited [2017] KEELC 751 (KLR)

REPUBLIC OF KENYA

IN THE ENVIRONMENT AND LAND COURT AT KISUMU

ELC CASE NO.130 of 2017

JACKSON MACHOGU BAGWASI...............................1ST PLAINTIFF

LYDIA MORAA BAGWASI……………………….......2ND PLAINTIFF

VERSUS

BANK OF BARODA (KENYA )LIMITED .........................DEFENDANT

RULING

1. Jackson Machogu Bagwasi and  Lydia Moraa Bagwasi,the Plaintiffs,  seeks vide notice of motion dated 31st March 2017 for Bank of Baroda (Kenya) Limited, the Defendant, to be restrained from interfering with, selling, disposing, transferring any interest in Kisumu Municipality/Block 10/287 pending the hearing and determination of this suit.  They also seek for the notices of 8th March 2017 and 21st November 2016 declared null and void, reconciliation of account number [Particulars withheld] by a neutral competent entity and that costs be in the cause.  The application is based on the ten grounds on its face and is supported by the affidavit sworn by 1st Plaintiff on the    31st March 2017.

2. The application is opposed by the Defendant through the replying affidavit of Barnambar Behera, the branch head, sworn on unspecified date in April 2017.

3. That on the 4th May 2017 Mr. Awino and Menezes, for the Plaintiffs and Defendant respectively, appeared before the court and directions on filing of written submissions among others were given.  The counsel for the Plaintiffs filed their written submissions and further submissions dated 18th May 2017 and 12th June 2017 while counsel for the Defendant filed their undated submission on the 30th May 2017.

4. The following are the issues for the court’s determination;

a) Whether the Plaintiffs have made a prima facie case with a probability of success for temporary injunction order to issue at this stage.

b) Whether the Plaintiffs have made a reasonable case for an order of taking of accounts to issue.

c) Who pays the costs.

5. The court has carefully considered the grounds on the notice of motion, the affidavit evidence by both parties, written submissions and various decisions of superior courts cited by both counsel and come to the following determination;

a) That as per the letter of offer and charge document dated 9th May 2011 and 23rd May 2011 respectively, and which both sides have provided copies of,  the 1st Plaintiff was given financial facilities totaling Ksh.20,000,000/=  to be repaid within 84 monthly installments.  The financial facility was secured with a charge over land parcel Kisumu Municipality/Block10/287 belonging the 1st Plaintiff.

b) The charge was duly registered on the 23rd May 2011 as confirmed by the certificate of official search dated 27th March 2017.

c) That the Plaintiffs basis of contesting the Defendant action of advertising to auction the said land is that the amount claimed to be outstanding is not correct in view of the advice the Plaintiffs have received from Interest Rates Advisory Centre vide their reports dated 23rd March 2015 and 24th February 2017.  The report of 23rd March 2015 indicates a difference of Ksh.3, 811,877/29 between their balances and that demanded by the Defendant.  The report of 24th February 2017 contains a difference of Ksh, 4,784,610/32 on the balance demanded by the Defendant and the one found to be due.  That the available affidavit evidence confirms that the 1st Plaintiff is in arrears and the Defendant cannot be faulted for commencing the process to realize the security.

d) That the findings in the reports refered to in (c) above have been disputed by the Defendant who in paragraph 36 of the replying affidavit have set out details of other financial facilities requested for by the 1st Plaintiff from the Defendant and disbursed which have not been considered in the reports.  The particulars of the overdrafts and other correspondence set out in the said replying affidavit have not been disputed by the Plaintiffs by filing a further affidavit.  The court finds the explanation given by the Defendant to be sufficient in explaining the differences noted in the two reports.

e) That the finding in (d) above leads the court to the conclusion that the 1st Plaintiff has been in arrears and default of his obligation under the loan agreement and the Defendant was therefore in order to issue and serve him with a statutory notice under Section 90 (2) of the Land Act No.3 of 2012as they did.  The copy of the statutory notice dated 21st September 2016 and notice to sell under Section 96 (2) of the said Act have been annexed to the 1st Plaintiff’s affidavit and marked JMB 11 and 16 respectively.

f) The 1st Plaintiff complains that the 2nd Plaintiff, who is his wife, was not served with the statutory notices.  The Defendant has responded that the charged property is registered in the name of the 1st Plaintiff only and that they were never informed that the charge property was a matrimonial home.  The court has perused the copy of the certificate of lease for KisumuMunicipality/ Block 10/287 and noted that it was issued on the 16th May 2011, which is the same date the 1st Plaintiff got registered as proprietor.  The certificate of official search dated 27th March 2017 confirms that the charge was registered on 23rd May 2011, which is about eight (8) days after the 1st Plaintiffs got registered as proprietor.  The short period between the 1st Plaintiff becoming the registered proprietor and the date the charge was registered leaves doubt as to whether the Plaintiffs had established the matrimonial home on the said land by the time the transaction between the 1st Plaintiff and Defendant were processed and completed.

g) That the suit property (charged property) appears to have been acquired through the loan facility, subject matter of the suit and then used as security.  The agreement having been executed in May 2011 was obviously before the enactment of the Land Act No.3 of 2012 which commenced on 2nd May 2012.  The Defendant was therefore not obligated to get the 1st Plaintiff’s spouse’s consent before registering the charge.

h) That it follows that as the 1st Plaintiff was a sole registered owner of the suit land, and there is no evidence that he had notified the Defendant that he had established his matrimonial home with 2nd Plaintiff on the said land, the Defendant was not obligated to serve the 2nd Plaintiff with any of the statutory notices issued in the exercise of their power of sale.

i) That for reasons set out above the Plaintiffs notice of motion dated 31st March 2017 is without merit and is dismissed with costs.

Orders accordingly.

S.M. KIBUNJA

ENVIRONMENT & LAND – JUDGE

DATED AND DELIVERED THIS 22ND DAY OF NOVEMBER 2017

In presence of;

Plaintiffs               Absent

Defendant            Absent

Counsel               M/S Oketch for Odeny for Plaintiff

Mr. Maganga for the Defendant

S.M. KIBUNJA

ENVIRONMENT & LAND – JUDGE

22/11/2017

22/11/2017

Efore S.M. Kibunja Judge

Oyugi court assistant

Parties absent

M/S Oketch for Odeny for Plaintiff/Applicant

Mr. Maganga for Defendant/Respondent

Court:  The Ruling dated and delivered in open court in the presence M/S Oketch for Odeny for Plaintiff and Mr. Maganga for Defendant.

S.M. KIBUNJA

ENVIRONMENT & LAND – JUDGE

22/11/2017