Kilimanjaro Carvings Exports Limited v Diamond Trust Bank Limited [2022] KEHC 17034 (KLR) | Statutory Power Of Sale | Esheria

Kilimanjaro Carvings Exports Limited v Diamond Trust Bank Limited [2022] KEHC 17034 (KLR)

Full Case Text

Kilimanjaro Carvings Exports Limited v Diamond Trust Bank Limited (Civil Suit E016 of 2021) [2022] KEHC 17034 (KLR) (15 July 2022) (Ruling)

Neutral citation: [2022] KEHC 17034 (KLR)

Republic of Kenya

In the High Court at Mombasa

Civil Suit E016 of 2021

MN Mwangi, J

July 15, 2022

Between

Kilimanjaro Carvings Exports Limited

Plaintiff

and

Diamond Trust Bank Limited

Defendant

Ruling

1. The application before me is a Notice of Motion dated 16th February, 2021 brought under the provisions of Order 40 Rule 1 of the Civil Procedure Rules, 2010, Sections 3A and 63 of the Civil Procedure Act, Cap 21 and other enabling provisions of the law. The plaintiff seeks the following orders-1. Spent;2. Spent;3. That an interim injunction do issue against the defendants (sic) by themselves, their servants and/or agents from selling, offering for sale, advertising, alienating, transferring by public auction or private treaty, disposing of or otherwise completing by conveyance, transfer of any sale concluded by public auction or private treaty, taking possession, appointing receivers or exercising any power conferred by Section 90 (3) of the Land Act, 2012, leasing, letting, charging or otherwise interfering with all that parcel known as Subdivision No. 1207 (Original No. 1121/3) and Subdivision No. 1208 (Original No. 1121/4) both of Section VI, Mainland North, Mombasa pending the hearing and determination of this suit; and4. That the costs of this application be provided for.

2. The application is brought on the grounds on the face of it and is supported by an affidavit sworn on 16th February, 2022 by Ravindra Shah, a director of the plaintiff company herein. In opposition to the application, the defendant filed a replying affidavit sworn on 11th March, 2021 by Amaan Kassam, a Legal Manager of the defendant company herein.

3. The application was canvassed by way of written submissions. The plaintiff’s submissions were filed on 22nd November, 2021 by the law firm of Waziri Omollo & Company Advocates while the defendant’s submissions were filed on 11th November, 2021 by Madhani Advocates LLP.

4. In the plaintiff’s submissions, Mr. Waziri, learned Counsel for the plaintiff relied on the case of Robert Mugo wa Karanja v Ecobank (Kenya) Limited & another [2019] eKLR, where the Court held that before granting a temporary injunction under Order 40 Rule 1 of the Civil Procedure Rules, the Court requires proof that any property in dispute in a suit is in a danger of being wasted, damaged or alienated by any party to the suit or wrongfully sold in execution of a decree or that the defendant threatens or intends to remove or dispose of the property.

5. In submitting that the defendant did not issue a statutory notice as per Section 90 (1) and (2)(b) and Section 96(2) and (3) of the Land Act, Laws of Kenya and that the intended sale by way of public auction is illegal, null and void. Mr. Waziri cited the case of David Ngugi Ngaari v Kenya Commercial Bank Limited [2015] eKLR. He further relied on the case of Raila Amolo Odinga & another v IEBC & 2 others [2017] eKLR and submitted that paragraphs 26, 27 and 28 of the defendant’s submissions is nothing but a mere afterthought for reasons that the same were not pleaded by the defendant in the first place.

6. Mr. Waziri submitted that the plaintiff is the registered owner of all that parcel of land known as Subdivision No. 1207 (Orig. No. 1121/3) and Subdivision No. 1208 (Original No. 1121/4) both of Section VI, Mainland North, Mombasa. That a first legal (continuous) charge dated 27th January, 2012, and a further legal (continuous) charge dated 18th February, 2013 were created against the plaintiff’s suit properties to secure several financial facilities of Kshs. 50,000,000. 00. He submitted that the applicant trades in carvings for export and its main client is based in the United States of America and that it was also a supplier to Nakumatt Holdings Limited.

7. It was stated by Mr. Waziri that the collapse of Nakumatt Holdings Limited occasioned the plaintiff to lose a lot of money that would have been channeled towards the facility. He stated that as a consequence of the Covid-19 pandemic and consequential lock down of most countries and businesses, the plaintiff’s export business was adversely affected thus limiting its ability to settle its liability. He stated that the predicament led the plaintiff to engage the defendant in disposing of the property through private treaty so as to offset the loan and that the plaintiff introduced a serious purchaser, Kenpetrogas Limited. He further stated that despite the negotiations, and intended purchase, the plaintiff received a letter from Dalali Traders Auctioneers dated 2nd January, 2021 informing it that the suit properties would be sold via public auction on 19th March, 2021.

8. In submitting on whether the plaintiff should be granted an order for temporary injunction, the plaintiff relied on the case of Giella v Cassman Brown & Co. Ltd [1973] E. A. 358. On whether the plaintiff has established, a prima facie case, Mr. Waziri cited the case of Mrao Limited v First American Bank of Kenya [2003] KLR 125. He contended that since the plaintiff is the registered owner of the suit properties, it has a legal right over the said properties by dint of Article 40 as read together with Article 64 of the Constitution of Kenya, 2010.

9. He submitted that the plaintiff with the knowledge of the bank had engaged Kenpetrogas limited to purchase the suit properties via private treaty, and Kenpetrogas had sent a commitment letter dated 1st February, 2021 indicating that it intended to complete the purchase of the property. Mr Waziri submitted that the plaintiff had established the existence of a right as contemplated in the Mrao case. He further submitted that the plaintiff’s property rights are not only at risk of being infringed since the defendant has set in motion the process of realizing the security offered by the plaintiff for the debt.

10. He contended that the statutory notices stipulated under the Land Act are mandatory requirements and the right to exercise the statutory remedies accrues only after full compliance with the legal framework on statutory notices. He stated that in this case, the defendant did not serve the plaintiff with notices as required under Section 90(1) and (2)(b) and Section 96(2) and (3) of the Land Act. He asserted that the plaintiff had proved and established a prima facie case with a probability of success.

11. On the issue of irreparable harm, he relied on the case of Pius Kipchirchir Kogo v Frank Kimeli Tenai [2018] eKLR, where the Court held that irreparable injury means that the injury must be one that cannot be adequately compensated for in damages and that the existence of a prima facie case is not itself sufficient. Mr. Waziri submitted that the plaintiff had demonstrated that the defendant’s actions are illegal, null and void. He relied on the case of Stars & Garters Restaurant & another v National Bank of Kenya Limited [2019] eKLR, where the Court when dealing with a similar application held that a chargor whose security is sold without compliance with the statutory provisions and the terms of the mortgage would suffer irreparable loss.

12. On the issue of monetary compensation, he submitted that land is unique and no parcel can be equated in value to another thus it would not be right to state that the applicant can be compensated by way of damages as damages are not always suitable where the applicant has established a legal right. He further submitted that the applicant had entered into a sale agreement with Kenpetrogas Limited, hence in the event that the injunction was not granted, the plaintiff risks losing the property, thus being sued for breach of contract.

13. Mr. Waziri cited the case of Pius Kipchirchir Kogo v Frank Kimeli Tenai (supra) where the Court in defining the concept of balance of convenience held that in other words, the plaintiff has to show that the comparative mischief from the inconvenience which is likely to arise from withholding the injunction will be greater than that which is likely to arise from granting the order. He submitted that the balance of convenience lies in favour of the party that stands to suffer most by the outcome of the motion.

14. Mr. Kisinga, learned Counsel for the defendant submitted that a reading of the pleadings filed demonstrate that the facts of the matter are largely undisputed. He submitted that the plaintiff had benefited from facilities aggregating to Kshs. 57,060,681. 00 as at October, 2019 but in breach of the terms of the various letters of offer, the plaintiff defaulted in payment of the monthly instalments of the financial facilities when the same became due leading to arrears of Kshs. 41,938,632. 19 as at 30th June, 2020. He further submitted that the defendant in exercising its statutory power of sale over the plaintiff’s properties, followed the procedure laid down under Section 90(3) and 96(2) of the Land Act when the plaintiff refused to attend to the default.

15. While relying on Nairobi HCCC No. 1044 of 2001 Moses Ngenye Kahinda v Agricultural Finance Corporation, he submitted that the overriding principle in considering whether or not to grant an injunction is that the Court will look into the circumstances of the case, including the conduct of the parties. On what constitutes a prima facie case, he relied on the case of Mrao Ltd v First American Bank of Kenya Ltd & 2 others [2003] KLR 125 and submitted that the plaintiff had not established a prima facie case. Mr. Kisinga submitted that the sale of the charged properties began way back in May 2019.

16. He stated that up to the time the suit herein was filed, there had been no communication from the plaintiff regarding the progress of the sale and that there was also nothing concrete from Kenpetrogas Limited to show a commitment to purchase the plaintiff’s charged properties since the sale agreement had only been signed by the plaintiff. Mr. Kisinga submitted that subsequently, the plaintiff approached the defendant and a deed of settlement was prepared by the defendant’s Advocate, who shared it with the plaintiff for signing but it failed to respond to the deed of settlement thereby frustrating the negotiations. He stated that plaintiff’s conduct shows a serious lack of commitment to follow through with the sale by private treaty.

17. Mr. Kisinga submitted that the defendant has demonstrated service of all the statutory notices in its replying affidavit and therefore, the burden of proof shifted to the plaintiff to show that the service was improper. In addition, he stated that the plaintiff had not filed anything to impeach service by the defendant. He indicated that the plaintiff’s facilities were in arrears of Kshs. 41,938,632. 19 as at 30th June, 2020 which amount continues to accrue interest. He submitted that the plaintiff has on several occasions admitted the default which has been blamed on the Covid-19 pandemic and the collapse of Nakumatt Supermarket Limited, thus it cannot be disputed that the defendant’s right to exercise its statutory power of sale has arisen.

18. He referred to the Mrao Limited Case (supra) relied on by the plaintiff’s Counsel, where the Court held that the mortgagee will be restrained from exercising its statutory power of sale if the mortgagor pays the amount claimed in Court, that is, the amount the mortgagee claims to be due to him, unless on the terms of the mortgage, the claim is excessive. He submitted that where there is a clear case of default, there exists no basis for grant of an injunction to prevent a chargee from exercising its statutory power of sale unless the sum due to the chargee is paid in Court.

19. He cited the case of Nguruman Limited v Jan Bonde Nielsen & 2 others [2014] eKLR and submitted that once a property is given to a bank as security, the same becomes a commodity that can be subjected to sale based on the fact that properties are charged for specific sums of money. He stated that was also the holding by the Court in Andrew Ouko v Kenya Commercial Bank & 3 others [2005] eKLR, where Azangalala J., in dismissing a similar application held that turning to the second condition for the grant of an interlocutory injunction, the record showed that both sides to the dispute put a valuation to the suit property therefore, the plaintiff could be adequately compensated in damages.

20. Mr. Kisinga submitted that the above line of reasoning had been codified into law under Section 99(4) of the Land Act, 2012. He further submitted that the plaintiff had not stated what irreparable loss it would suffer if the properties were sold to offset the outstanding sums. He stated that there is no basis for granting an injunction since any loss occasioned to the plaintiff by dint of the defendant’s exercise of its statutory power of sale could be adequately compensated by an award of damages. He stated that the defendant is a financially stable bank capable of meeting an award of damages.

21. In closing his arguments, he submitted that the balance of convenience tilts in favour of the defendant since it had been kept in limbo on the loan instalments for a period of more than two years, and as a result, the defendant is prejudiced by the fact that it cannot recover the sums due and owing from the plaintiff under the currently subsisting facilities noting that the plaintiff has not paid any money to the defendant since the default.

Analysis And Determination. 22. I have considered the application filed herein, the grounds on the face of it and the affidavit filed in support thereof, the replying affidavit as well as the written submissions by Counsel for the parties. The issue that arises for determination is whether the plaintiff has met the threshold for the grant of an order of injunction.

23. The plaintiff in its supporting affidavit deposed that it is the registered owner of the land parcel known as Subdivision No. 1207 (Original No. 1121/3) and Subdivision No. 1208 (Original No. 1121/4) both of Section VI, Mainland North, Mombasa. A first legal (continuous) charge dated 27th January, 2012 and a further legal (continuous) charge dated 18th February, 2013 were created against the plaintiff’s suit properties to secure several financial facilities of Kshs. 50,000,000/= advanced to the plaintiff.

24. The plaintiff stated that it trades in carvings for export and its main client is based in the United States of America but due to the Covid-19 pandemic, its business was adversely affected thus limiting its ability to settle its liabilities. It further stated that it was also a supplier to Nakumatt Holdings and the collapse of the mega store also occasioned it to lose a lot of money that would have been channeled to service the facility with the defendant.

25. It was stated by the plaintiff that it engaged the defendant on whether the suit properties could be disposed of by private treaty and the negotiations became protracted with the plaintiff introducing a serious purchaser Kenpetrogas Limited. That Kenpetrogas Limited had made substantial contractual obligations to secure funding to finance purchase of the suit properties and had made a commitment by their letter dated 1st February, 2021. The plaintiff contended that justice would be best served if the plaintiff was allowed to dispose of the suit property by private treaty to enable it fully repay the outstanding loan and recoup some money to enable it revive its business.

26. It deposed that the defendant served it with a letter from Dalali Traders Auctioneers dated 12th February, 2021 informing the plaintiff that the suit properties will be sold by public auction on 19th March, 2021. The plaintiff stated that it had not been issued with any notices by the defendant over the non-payment of monies due under the charge so as to give it an opportunity to redeem or rectify the same as required under Section 90(1) and (2)(b) of the Land Act, 2012. In addition, the plaintiff stated that the defendant did not issue a statutory notice of at least forty-five (45) days as required under Section 96(2) and (3) of the Land Act, 2012, Laws of Kenya.

27. The plaintiff averred that the defendant does not stand to suffer any prejudice since the suit property is charged in its favour and its still holding the title documents, and in the event that it suffers prejudice, the same can be adequately compensated by an award of damages.

28. The defendant in its replying affidavit deposed that pursuant to a letter of offer dated 26th September, 2011, the defendant advanced at the plaintiff’s request several financial facilities aggregating to Kshs. 25,500,000/=. The said facilities were secured by a first legal charge over the unexpired term of the lease over property known as Subdivision No. 1208 (Original number 1121/4) Section VI Mainland North (C.R. 13693) and Subdivision No. 1207 (Original number 1121/3) Section VI Mainland North (C.R. 12929) both registered to the plaintiff and joint, several and personal guarantees of the plaintiff’s directors; Messrs. Ravindra Shah and Mohamed Hussein Shah.

29. That the foregoing culminated to the drawing of a first legal charge which was drawn over the plaintiff’s properties and executed by both the plaintiff and the bank on 27th January, 2012. It was stated that the said charge was registered on 31st January, 2012 and thereafter the facilities were disbursed to the plaintiff. It was further stated by the defendant that sometime in 2012, the plaintiff requested for additional facilities which the bank obliged to and pursuant to a letter of offer dated 20th November, 2012, the bank offered the plaintiff additional financial facilities which were also secured by the securities under the initial letter of offer and additional securities.

30. The defendant deposed that the plaintiff approached the bank in January, 2014 requesting for additional facilities and a restructuring of the continuing facilities, the bank acceded to the plaintiff’s request and issued a letter of offer dated 20th January, 2014. The defendant averred that the only additional securities required under the third letter of offer were post-dated cheques aggregating Kshs. 15,000,000/=. It was stated by the defendant that on four other occasions, the plaintiff requested the bank to renew existing facilities and offer additional facilities which the bank agreed pursuant to letters of offer dated 28th January, 2015, 2nd April, 2016, 29th November, 2017 and 31st October, 2019. He further stated that the plaintiff has benefited from facilities aggregating Kshs. 57,060,681. 00.

31. The defendant deposed that in breach of the terms of the various letters of offer, the plaintiff defaulted in payment of the monthly instalments of the financial facilities when the same became due and owing to the bank, leading to arrears of Kshs. 41,938,632. 19 as at 30th June, 2020, which the plaintiff failed to attend to, despite the defendant asking it to regularize the same. He further deposed that in accordance with the provisions of Section 90(3) of the Land Act, the bank issued the plaintiff with a three months’ statutory notice dated 30th June, 2020 which was sent to the plaintiff through its address disclosed in the charges as P. O Box 88439-80100, Mombasa and also copied the said notices to the plaintiff’s directors.

32. The defendant averred that despite service of the statutory notice, the plaintiff failed to regularize its accounts prompting the bank to issue a chargee’s notification of sale dated 2nd October, 2020, in accordance with the provisions of Section 96(2) of the Land Act which was also sent to the plaintiff through its address disclosed in the charges, and copied to the plaintiff’s directors. That after the lapse of the 40 days’ period, the bank instructed Dalali Traders Auctioneers to sell the charged properties via public auction, and on 14th January, 2021, Dalali Traders Auctioneers served the plaintiff with the 45 days’ Auctioneer’s redemption notice.

33. The defendant deposed that sometime in May, 2019, the plaintiff informed the bank that it had secured a purchaser for the properties for Kshs. 110,000,000/= but the sale did not proceed. That in September, 2019, the bank was approached by the plaintiff who had allegedly found another buyer, Kenpetrogas Limited and requested the bank to avail to the firm of Sachdeva, Nabhan & Swaleh Advocates the outstanding loan amounts which was done through a letter dated 20th September, 2019. The defendant stated that the alleged sale to Kenpetrogas Limited has been pending since the year 2019 and the plaintiff has failed to update the bank on the progress of the sale.

34. The defendant further stated that the bank’s interest is severely prejudiced because the agreement for sale does not recognize the bank’s interest and there is a real risk that in the event an injunction is granted, the plaintiff will not apply the proceeds of the alleged sale to clear its debt with the bank. It was averred that the sale agreement with Kenpetrogas Limited that was annexed to the plaintiff’s supporting affidavit had been executed by the plaintiff alone hence not a valid binding and enforceable contract.

Whether the plaintiff has met the threshold for the grant of an order of injunction. 35. The application herein is founded on Order 40 Rule 1 of the Civil Procedure Rules, 2010 which provides as hereunder-“1. Where in any suit it is proved by affidavit or otherwise: -a.that any property in dispute in a suit is in danger of being wasted, damaged, or alienated by any party to the suit, or wrongfully sold in execution of a decree; orb.that the defendant threatens or intends to remove or dispose of his property in circumstances affording reasonable probability that the plaintiff will or may be obstructed or delayed in the execution of any decree that may be passed against the defendant in the suit,

2. The court may by order grant a temporary injunction to restrain such act, or make such other order for the purpose of staying and preventing the wasting, damaging, alienation, sale, removal, or disposition of the property as the court thinks fit until the disposal of the suit or until further orders.”

36. The principles applicable in an application for an injunction were laid down in the case of Giella v Cassman Brown & Co Ltd [1973] EA 358, where the Court held that in order to qualify for an injunction-i.The applicant must show a prima facie case with a probability of success;ii.An interlocutory injunction will not normally be granted unless the applicant might otherwise suffer irreparable harm which would not be adequately compensated by an award of damages; andiii.If the court is in doubt, it will decide an application on a balance of convenience.

37. The Court of Appeal in Mrao Ltd vs First American Bank of Kenya Ltd & 2 others [2003] eKLR while dealing with a similar application defined what constitutes a prima facie case as hereunder: -“a prima facie case in a civil application includes but is not confined to a genuine and arguable case. It is a case 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 by the opposite party as to call for an explanation or rebuttal from the latter.”

38. It is noteworthy that from the pleadings before this Court, there is no dispute as to the outstanding amount. The plaintiff’s main issue is that the defendant failed to issue a statutory notice as per Section 90(1) and (2)(b) and Section 96(2) and (3) of the Land Act, Laws of Kenya. It therefore contends that the intended sale by way of public auction is illegal, null and void, and that the said sale of the suit properties shall deny the plaintiff an opportunity to dispose of the said properties by way of private treaty to Kenpetrogas Limited, so as to offset the loan.

39. On whether the plaintiff has established a prima facie case, it contended that as the registered owner of the suit properties, it has the right to charge, lease, and transfer the property. It stated that in exercising its property rights under Article 40 of the Constitution of Kenya and with the knowledge of the bank, it engaged Kenpetrogas Limited to purchase the suit properties by way of private treaty. That Kenpetrogas Limited sent a commitment letter dated 1st February, 2021 indicating that it intended to complete the purchase of the property.

40. The plaintiff further stated that there is a laid down procedure to be followed by a chargee prior to the exercise of his statutory power of sale which includes service upon the chargor of a notice under Sections 90(1) and (2)(b), Section 96(2) and (3) of the Land Act, 2012, and a forty-five days’ notice from the Auctioneers. The plaintiff’s Counsel’s submission was that these are mandatory legal requirements and since the defendant did not serve the plaintiff with the requisite notices, its action in seeking to exercise its statutory power of sale is not only unprocedural but also unlawful.

41. The defendant on the other hand stated that it had accommodated the plaintiff to dispose of the suit properties by private treaty so as to pay off the financial facilities which are due and owing to the defendant. However, the sale of the charged properties began in May, 2019 in an email regarding the sale for Kshs. 110,000,000/= but there had been no communication from the plaintiff regarding the progress of the sale. The defendant contended that it was informed by the plaintiff that it had another buyer Kenpetrogas Limited, but as at the time of filing its response in Court, there had been nothing concrete from Kenpetrogas Limited to show commitment to purchase the plaintiff’s charged properties.

42. It was stated by the defendant that it prepared a deed of settlement and shared it with the plaintiff for signing but the plaintiff failed to respond to it and it was for that reason that the respondent decided to exercise its statutory power of sale. The defendant averred that it issued the 90 days’ and 40 days’ statutory notices as provided under Sections 90 and 96 of the Land Act, respectively, and that Dalali Traders Auctioneers issued the plaintiff with the 45 days’ redemption notice pursuant to Rule 15 of the Auctioneers Rules, 1997.

43. It is my considered view that this Court cannot compel the defendant to accommodate the plaintiff’s request to dispose of the suit properties via private treaty. The defendant cannot be faulted for insisting on exercising its statutory power of sale over the suit properties as a result of the plaintiff defaulting in its monthly instalments to repay the financial facilities advanced to it by the defendant.

44. The plaintiff annexed a sale agreement between itself and Kenpetrogas Limited over the suit properties. The said sale agreement is however not dated and has only been executed by the plaintiff, it is thus not binding on the parties thereon. The plaintiff also annexed a letter dated 1st February, 2021 from Kenpetrogas Limited seeking sixty days to seek financing to purchase the suit properties. There is no evidence that this information was ever communicated to the defendant for consideration yet there was nothing preventing the plaintiff from doing so.

45. In Premier Flour Mills Ltd & 2 others v Standard Chartered Bank Kenya Ltd [2019] eKLR, the Court held as follows on the issue of sale by private treaty-“Indeed the arrangement for a sale by private treaty might sound attractive but then the discretion lies with the chargee to decide whether to allow the chargor to dispose the properties by private treaty.”

46. On whether the defendant complied with the laid down procedure to be followed by a chargee prior to the exercise of his statutory power of sale provided under Sections 90(1) and(2)(b),and 96(2) and (3) of the Land Act, 2012, and a forty-five days’ notice from the Auctioneers, the defendant exhibited to its replying affidavit several notices including a statutory notice dated 30th June, 2020 addressed to the plaintiff notifying the plaintiff that it had three months from the date of service of the said notice to rectify the default pursuant to the provisions of Section 90(3) of the Land Act, 2012.

47. After the elapse of three months, the defendant issued the plaintiff with a notification of sale dated 2nd October, 2020 as provided under Section 96(2) of the Land Act, 2012, notifying the plaintiff that after the expiry of forty days from the date of service of the said notice, the bank shall proceed to exercise any of the remedies referred to under Section 90(3) of the Land Act. This was followed by a forty-five days’ notice from the Dalali Traders Auctioneers dated 12th January, 2021 and a notification of sale. It is evident from the aforementioned notices that they were all sent to the plaintiff’s postal address of P. O Box 88739-80100, Mombasa which address has also been captured on the various charge documents and on the plaintiff’s supporting affidavit as its official postal address.

48. It is my finding that the defendant complied with the mandatory legal requirements provided under Section 90(1) and (2)(b) and Section 96(2) and (3) of the Land Act, Laws of Kenya and issued the plaintiff with all the requisite notices. In Executive Curtains & Furnishings Ltd vs. Family Finance Building Society [2007] eKLR, Warsame, J (as he then was) stated as follows-“The purpose of the notice is to warn the borrower that due to his default and due to the outstanding debt, the charged property is susceptible to a sale if he fails to redeem it within the 90 days after service of the notice. The period of 90 days is meant to give the borrower sufficient time within which to make arrangement to redeem his charged property. Any time after the expiry of the 90 days, the charge property is out of the hands of the borrower."

49. It is my finding that since the requisite notices were properly served, the defendant cannot hide behind the excuse of non-service of statutory notices.

50. The plaintiff contended that it would be in the interest of justice for this Court to allow it sell the suit properties by private treaty so that it can pay off the financial facilities and use part of the proceeds to revive its business. It is my considered view that if this Court was to grant such an order it will be interfering with the defendant’s statutory right of sale as well as its contractual relationship with the defendant. Further, it may lead to the stripping of the value of the properties due to the piling of the loan arrears.

51. In Muhani & Another vs. National Bank of Kenya Ltd [1990] KLR 73, the Court held as follows regarding the statutory power of sale-“The mortgagor who has given an express power of sale cannot by starting a suit perhaps a perfectly hopeless suit derogate from that which it has in express terms conferred upon the mortgagee by the instrument namely a statutory power of sale and to hold otherwise would be simply to tear up the instrument which contains the contract agreed upon by the parties...The very object of the legislation granting a chargee a statutory power of sale would be negated if the courts interfere with his statutory or contractual powers unless, of course there is an allegation of fraud or improper exercise of the power of sale.”

52. This Court has noted that the financial facilities have been in arrears since the year 2019 and the plaintiff has not made any payments since then. All the plaintiff has done is tried to sell the suit properties by way of private treaty. In the absence of the said sale, there is no indication that the plaintiff is capable of servicing the existing facilities even if it was given time to do so.

53. My finding is that the plaintiff has failed to establish a prima facie case with any probability of success. That being the case, the Court need not consider the other limbs of the Giella v. Cassman Brown Case (supra) as was stated in the case of Nguruman Limited vs. Jan Bonde Nielsen & 2 Others (supra), where the Court held that;“If prima facie case is not established, then irreparable injury and balance of convenience need no consideration.”

54. The upshot is that the application herein is devoid of merit and the same is dismissed with costs to the defendant.

55It is so ordered.

DATED, SIGNED AND DELIVERED AT MOMBASA ON THIS 15TH DAY OF JULY, 2022. RULING DELIVERED THROUGH MICROSOFT TEAMS ONLINE PLATFORM.NJOKI MWANGIJUDGEIn the presence of:No appearance for the plaintiff/applicantMs Wangui h/b for Mr. Kisinga for the defendant/respondentMr. Oliver Musundi – Court Assistant.