JOSEPH KAARA MWETHAGA vs THABITI FINANCE COMPANY LIMITED (In Liquidation),MUGUNANDU FARM LIMITED,CHRIS M. GATURU t/a CRIMA ENTERPRISES,JOEL GATIMU KIBUCHI & MUCHOHI GIKONYO [1998] KECA 275 (KLR)

REPUBLIC OF KENYA

IN THE COURT OF APPEAL

AT NAIROBI

(CORAM: OMOLO, AKIWUMI & LAKHA, JJ.A.) CIVIL APPLICATION NO. NAI. 120 OF 1998

BETWEEN

JOSEPH KAARA MWETHAGA................................APPLICANT

AND

1. THABITI FINANCE COMPANY LIMITED (In Liquidation)

2. MUGUNANDU FARM LIMITED

3. CHRIS M. GATURU T/A CRIMA ENTERPRISES

4. JOEL GATIMU KIBUCHI

5. MUCHOHI GIKONYO .................................RESPONDENTS

(An application for an injunction following the refusal to grant the same in the Ruling of the High Court at Nairobi (Milimani Commercial Court) (The Honourable Mr. Justice Kuloba) given on the 26th March, 1998

in

H.C.C.C. NO. 453 OF 1998)

***************

RULING OF THE COURT

This is an application by the plaintiff under rule 5(2)(b) of the Rules of this Court for an injunction against the defendants seeking to restrain them from alienating, transferring, leasing, offering for sale, charging or otherwise dealing with or parting with the title of all that piece of land known as Title Number MUTIRA/KAGUYU/ 839 Kirinyaga District (the suit property) and further ancillary orders of consequential nature until the hearing of the plaintiff's suit filed in the superior court or further orders.

The facts giving rise to this application may be briefly stated. The plaintiff was at all material times the registered proprietor of the suit property and had charged it to the first defendant to secure the advancement of a loan or overdraft facilities by the first defendant to the plaintiff.

The first defendant is sued while undergoing involuntary liquidation (paragraph 2 of the plaint). The plaintiff in due course allegedly defaulted in the repayment of the loan and the first defendant in exercise of a chargee's power of sale conferred under S.74 of the Registered Land Act (Cap. 300) advertised the suit property for sale by the third defendant, an auctioneer. In or about October 1996 the second and fourth defendants moved into the suit property upon acquisition of the title to the property. The plaintiff filed a suit on the 25th February 1998 and moved for an injunction on the 26th February, 1998. It was the plaintiff's case that the said sale was irregularly and fraudulently held and in breach of the first and second defendants' duty of care to the plaintiff and accordingly the sale was null and void and of no effect whatsoever.

The superior court (Kuloba, J.) after hearing the application for an injunction declined to grant one holding, inter alia, that the suit property had changed hands, that damages would be an appropriate remedy and that there was delay in making the application to the court.

Undeterred, the plaintiff renewed his application before this Court. Before we deal with the merits of the application, we mention one matter that goes to the jurisdiction of the court. As stated earlier, the first defendant is described by the plaintiff in his plaint as being a limited company registered under the Companies Act and is currently undergoing involuntary liquidation. This is not disputed. In such a case the plaintiff required leave of the Court to proceed with the suit against the first defendant.

It is not in dispute that such leave has not been obtained in breach of the mandatory provisions of sections 228 and/or 241 of the Companies Act (Cap. 486) and/or section 35 of the Banking Act (Cap. 488). This renders the suit incurably defective and incompetent in law. It follows that an application for an injunction made in such a suit must also fail as must an application made to this Court.

That notwithstanding, Mr. Kihara on behalf of the plaintiff, in a valiant attempt to save the day, argued that if that was right, then the reliefs sought against the other defendants are not affected. We do not agree. The basis of the suit and the application for an injunction was the claim against the first defendant from whom the second and fourth defendants derived title. Inevitably, claims against these defendants for an injunction made in proceedings which are incompetent must also fail.

In view of our decision on this issue, it is unnecessary for us to express any views on the other issues adumbrated before us. Accordingly and, for the reasons above stated, the application fails and is dismissed with costs.

Dated and delivered at Nairobi this 5th day of June, 1998.

R.S.C. OMOLO

.................

JUDGE OF APPEAL

A.M. AKIWUMI

.................

JUDGE OF APPEAL

A.A. LAKHA

.................

JUDGE OF APPEAL

I certify that this is a true copy of the original.

DEPUTY REGISTRAR