Kenya Anti-Corruption Commission v Ali Bunow Korane, Adroit Developers Ltd, Barclays Bank of Kenya, Wilson Gachanja, Rainydays Ltd, Ashok Labshanker Doshi & Mahesh K. Doshi [2020] KEELC 3792 (KLR)

REPUBLIC OF KENYA

IN THE ENVIRONMENT & LAND COURT

AT MOMBASA

ELC NO. 37 OF 2009

KENYA ANTI-CORRUPTION COMMISSION..........................................PLAINTIFF

VERSUS

ALI BUNOW KORANE.........................................................................1ST DEFENDANT

ADROIT DEVELOPERS LTD.............................................................2ND DEFENDANT

BARCLAYS BANK OF KENYA...........................................................3RD DEFENDANT

WILSON GACHANJA..........................................................................4TH DEFENDANT

RAINYDAYS LTD..................................................................................5TH DEFENDANT

ASHOK LABSHANKER  DOSHI.........................................................6TH DEFENDANT

MAHESH K. DOSHI.............................................................................7TH  DEFENDANT

RULING

(Application seeking orders that suit against some defendants be dismissed; assertion that no cause of action exists against them; claim being over land which the plaintiff claims was part of airport land that was irregularly allocated; original allottee having sold his interest which was later sold to one of the applicants a limited liability company; the other applicants said to be directors of the company; applicants claiming that the suit against them is frivolous and vexatious; issues raised in opinion of the court being issues that ought to be determined at trial; application dismissed)

1.  The application before me is that dated 10 July 2019 filed by the 5th, 6th and 7th defendants. It is an application brought pursuant inter alia to the provisions of Order 2 Rules 10 (1) (a) and 15 (1) (a) (b) and (d) of the Civil Procedure Rules, 2010. The application seeks orders that the 5th, 6th and 7th defendants be struck out and the suit against them be dismissed with costs. It is  the argument of the applicants that the suit does not disclose any cause of action against them. The application is opposed.

2.  This suit was originally commenced on 17 February 2009 against Ali Bunow Korane, Adroit Developers Limited, Barclays Bank of Kenya, and Wilson Gacanja, named respectively as the 1st, 2nd, 3rd and 4th defendants. It was pleaded that the land in dispute, MN/VI/3746, was part of Moi International Airport and was thus fraudulently excised and title issued to the 1st defendant. The 1st defendant then transferred it to the 2nd defendant who charged the title to the 3rd defendant. The 4th defendant was at the material time the Commissioner of Lands. In the original plaint, the plaintiff (respondent in this application) sought orders inter alia to cancel the title and a permanent injunction against the defendants. The 2nd and 3rd defendants filed an application to have them struck out of the case for reason inter alia that they no longer have an interest in the suit land as the same had been transferred to Rainydays Limited and the security in favour of the 3rd defendant had already been discharged. That application was allowed and the suit against Adroit Developers Limited and Barclays Bank was struck out through a ruling made by Ibrahim J (as he then was) on 11 October 2012.

3.  On 20 September 2018, the respondent amended the plaint to now include Rainydays Limited, Ashok Labshanker Doshi and Mahesh K. Doshi as the 5th, 6th and 7th defendants respectively. It is pleaded inter alia in the amended plaint that the 1st, 2nd and 5th defendants assumed wrongful ownership of the suit property as the whole purported alienation of it was a sham. The prayer for cancellation of title was retained and the prayer for a permanent injunction was expanded to include the 5th, 6th and 7th defendants. It is this amended plaint which the applicants want struck out.

4.  The application is premised on the grounds inter alia that the amended plaint does not disclose any reasonable cause of action; that it is scandalous and vexatious against the applicants; that it is an abuse of the court process; that it is based on fraud the particulars of which are not pleaded; that the 6th defendant is not a director of the 5th defendant and therefore has nothing to do with this suit; that the 7th defendant is deceased; that directors of a company cannot be sued without first lifting the corporate veil; the plaintiff has abandoned its challenge to the title of the suit land by consenting to the removal of the 1st defendant from the case. The application is supported by the affidavit of Anish Doshi, a director of the 5th defendant. He has deposed inter alia that the 7th defendant died on 25 December 2009 and he has annexed a Certificate of Death. He has further deposed that the 6th defendant is not a director of the 5th defendant and therefore this suit cannot be sustained against him despite the description in the plaint that the 6th and 7th defendants are directors of the 5th defendant. He contended that even if they were directors they cannot be sued without lifting the veil of incorporation. He averred that no allegation of fraud have been pleaded against the 5th, 6th and 7th defendants and he argued that allegations of fraud must be pleaded in order for the suit against them to be sustained. He further stated that the suit cannot be sustained against them because the plaintiff has consented to the removal of the 1st defendant who was the original allottee. He has averred that the title is with an innocent purchaser and the same cannot be challenged or revoked on ground of fraud unless the purchaser is proved to be a party to the fraud and no fraud can be sustained without particulars being disclosed. He deposed that the title of the 5th defendant cannot be challenged because Adroit Developers Limited, who sold the property to the 5th defendant was removed from this suit.

5.  The plaintiff opposed the application by filing Grounds of Opposition and a Replying Affidavit of Dedan Okwama. Inter alia, it is averred that the 5th, 6th and 7th defendants are necessary parties to the suit so  as to enable the court effectively and completely adjudicate all questions and triable issues. The affidavit of Mr. Okamwa more or less gives reasons why the plaintiff feels that the land is still Government land and was irregularly allocated and that the 5th, 6th and 7th defendants all participated in the transactions.

6. Both Mr. Oluga, learned counsel for the applicants and Mr. Makori learned counsel for the respondent filed written submissions and referred me to various authorities all of which I have taken into account.

7.  The first issue as framed by Mr. Oluga is whether this suit is proper as against the 7th defendant who it is said died on 25 December 2009. Mr. Makori in his submissions submitted that the Certificate of Death exhibited is one of Maheshkumar Kishorkumar Doshi and contended that there is no scintilla of evidence that Mahesh K. Doshi is deceased. It is actually correct that the Certificate of Death bears the name Maheshkumar Kishorkumar Doshi and the name given in respect of the 7th defendant is Mahesh K. Doshi. Now, it is not easy for me to determine at this stage of the proceedings whether the Certificate of Death refers to the same person named as Mahesh K. Doshi in these proceedings. I assume that the parties when they are giving evidence will elaborate on whether or not the 7th defendant is deceased and a determination can then be made on the veracity of the suit against the 7th defendant at that stage in time. I see absolutely no prejudice to the parties.

8.  The second issue is whether the suit can be sustained against the 6th defendant and Mr. Oluga submitted that the 6th defendant is not a director of the 5th defendant. He referred me to a search of the company dated 24 June 2019. Mr. Makori in his submissions averred that it is concealed that the 6th defendant was a director of the 5th defendant at the time the transactions in issue were done. Again it would not be wise for me to determine, at this stage of the proceedings,  that simply because the 6th defendant is not currently a director of the 5th defendant then no cause of action exists against him. Maybe at trial the plaintiff may tender evidence showing that the 6th defendant is culpable and it would be unfair for me to judge the plaintiff’s case even before it has commenced.

9.  Thirdly, it is contended that because no particulars of fraud are pleaded against the 5th, 6th and 7th defendants then they need to be struck out. I would hesitate to make that conclusion. I am aware of decisions where the title of one who may not have participated in fraud is cancelled and again I do not want to prejudge that simply because no particulars of fraud are pleaded against the 5th 6th and 7th defendants, then the suit against them should be struck out. That again will need to await a full trial. In any event, I have seen that in their Reply to Defence, the plaintiff has outlined some particulars of fraud against the 5th, 6th and 7th defendants. It can be argued that this ought to have been in the plaint, but given that the plaintiff has stated them in the Reply to Defence, we cannot rule out the possibility of amendment of the plaint to plead the same in the plaint.

10. The fourth issue is whether the 6th and 7th defendants can be sued as directors of the 5th defendant. Again, it will not be fair for me to make a decision whether the plaintiff can only sustain the suit as against the 5th defendant and not its directors. These are matters that can only be considered once evidence is taken.

11.  There was an issue raised that the suit is unsustainable because the plaintiff has entered into a consent with the 1st defendant to withdraw the suit against the 1st defendant. I have noted from the record that the plaintiff withdrew that consent before it was adopted as an order of the court and nothing arises out of it.

12.  From the above, it will be seen that I am not persuaded as to the merits of this application.  I see no prejudice that will be caused to the applicants for they will have their day in court. The application is hereby dismissed with costs to the plaintiff.

13. Orders accordingly.

DATED, SIGNED and DELIVERED at MOMBASA this 6th day of February, 2020.

_______________________

MUNYAO SILA,

JUDGE.

IN THE PRESENCE OF:

Mr. Waziri holding brief for Mr Oluga for the applicants.

Mr Makori present for the respondents.

Ms. Abdi holding brief for Mr Hussein for the 1st defendant.

Other parties; Absent.

Court Assistant; David Koitamet.