Mohammed Iqbal Dawood Antulay v Co-op Bank of Kenya Mumias Branch, Josrick Merchants Auctioneers & Leakeys Auctioneers [2016] KEHC 5219 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT BUNGOMA

CIVIL CASE NO. 7 OF 2015

MOHAMMED IQBAL DAWOOD ANTULAY………...…………………… PLAINTIFF

VERSUS

CO-OP BANK OF KENYA MUMIAS BRANCH

JOSRICK MERCHANTS AUCTIONEERS ...........................................DEFENDANTS

LEAKEYS AUCTIONEERS

RULING

Before the court is an application dated 26th day of January, 2015 brought by way of Notice of Motion pursuant to Order  40 Rules 1,2,3 & 9 of the Civil Procedure Rules and sections 82,90, 84 & 104 of the Land Act and Article 75 Section 35 of the Constitution. Prayers 6 & 2 of the said application are spent.  The consideration are prayers 3 & 4 as follows

“3. THAT pending the hearing and determination of the suit an injunction do issue directing the defendants, their agents, servants, employees and/or assigns restraining them from selling, disposing, further advertising and/or any way excusing the 1st defendant’s statutory power of sale over the plaintiffs land parcel number E.Bukusu/S. Kanduyi/11306,E.Bukusu/S.Kanduyi/11326 and E.Bukusu/S. Kanduyi/11441 and costs

2.     The application is based on the grounds that the defendants are purporting to exercise power of sale of change which is nonexistent; no memorandum of increase of interest was issued to the plaintiff; no notice of the intended sale has been issued to the plaintiffs spouse; the plaintiff has paid a substantial amount of the loan; the plaintiff has been denied the right to know the amount due that the reserve price has not been set.

3.     In his supporting affidavit the applicant states that he has enjoined various loans with the respondent’s bank including over drafts that were initially secured by land parcel E. Bukusu/S. Kanduyi/11306 E.Bukusu/S.Kanduyi/11326 and E.Bukusu/S. Kanduyi/11441, he paid  off the  facilities and was granted a further loan facility for kshs. 5,125,000 and an overdraft in May 2011.

4.     That  on obtaining  the above loan he never signed  any further change nor obtained the Land Control Board consent and that even  on obtaining the  initial loan it was not  explained to him in  taking the loan the  right to  change to  property included the  mortgagers right to sell the property. According to him therefore no change exists.

5.     The applicant have stated further that he has been ill necessitating treatment abroad. And that the respondent has   severally declined to supply him with the loan statement, he does not agree with the sums being demanded, notice of intended sell has not been served on his spouse, two auctioneers were appointed to sell various of the properties, and therefore the intended auction is premature and malicious.

6.     The application is opposed by way of a reply affidavit sworn by one Joseph Irungu a credit officer with the respondent who deponed to the fact that the respondent herein advanced to the applicant  loan facility and  overdraft between the year 2010 and 2011 amounting to Kshs. 6,150,000/- and 2,00,000/- against title number E. Bukusu/S. Kanduyi/11306 E. Bukusu/S.Kanduyi/11326 and E.Bukusu/S.Kanduyi/11441 and N.Wanga/Matungu/1773 and  changes were created in  favour of the respondent for  and aggregate amount of kshs. 7,254,000/=.

7.     The applicant is  in breach of the terms entered into  since  2012 and  as a result the respondent issued a  notification of default under the  CRB regulations; a statutory notice dated 10th September, 2013, a  final 40 days notice dated 20th February, 2014 after which the bank exercised its statutory power of sale and  instructed the  2nd and 3rd respondents who also issued the  requisite  statutory notices; the respondent has  furnished the respondent  with statements when the same were  demanded, the change documents were duly  executed and relevant Land Control Board consent issued prior to  registration of the  change documents and therefore the applicant has not proved a prima facie case with probability of  success.

8.     Having considered the above and the authorities cited by the parties the issue for determination is whether or not to grant the  orders  injuncting the 1st respondent from exercising  statutory power of sale pending hearing and  determination of the suit.

9.     the  law in regard to this issue is well  pronounced in the  notable case of Giella vs. Cassman  Brown  and Co. Ltd. [1973] E.A 353 where the court  laid down the principles to  be considered in granting an injunction  as  firstly an applicant must  show a prima facie case with a probability of  success, secondly that  such an injunction will not normally be granted unless the applicant might otherwise suffer irreparable  injury, thirdly where the court is in  doubt it will decide the application on a balance of  convenience.

10.    The applicant does not dispute having enforced the loan and even  draft  facilities and the fact  that he has defaulted in his obligation to pay the debt due to what he says was occasioned by  his illness.  What he disputes is   the amount being claimed. He has also raised issues as follows, lack of notice to his spouse, the facility now due and owing was not secured and that the Land Control Board consent was not obtained.

11.    The courts have stated severally the mere fact of a dispute as to the amount owing cannot be a sole reason to stop a mortgage from exercising his right of sale unless the amount claimed to be excessive has been deposited in court.

See case  on John  Nduati Kariuki t/a Jonester Merchants  vs. National Bank of Kenya Ltd. Civil appeal no. 306 of 2005.

12.    Was there a requirement to issue a notice to the applicant’s spouse?

Section 28 (a) of the Land Registration Act No. 30  ( Act no. 23 of 2015) gives an overriding spousal  interest over matrimonial property.  The applicant did not prove or indicate which of the properties intended to  be sold is matrimonial property. He who  asserts must proof.  The  court has therefore  no proof of the  assertion.

13.    Were the facilities secured by way of a change?

There is an admission by the respondent that indeed the properties intended  for sale  had been changed but he argues that he paid off the loan and draft facilities and that   for the 2011 loan   and over draft facility no further change was created.

The letter of offer dated 21st December, 2010 for an overdraft facility of kshs. 1,000,000/- and a  loan facility of kshs. 5,150,000/= indicates that the same were secured by,

Exercising legal change for kshs. 2,075,000/= over LR. No. E. Bukusu/S. Kanduyi/11306

Exercising legal change of kshs. 1,100,00 over L.R. No. E. Bukusu/S.Kanduyi/1136 .

Existing legal change for kshs. 1,100,000/= over L.R. NO. E. Bukusu/S. kandugi/11441.

Personal  ……. By Sarumari Hidayat Ullah Khan by excising legal change of kshs. 3,025,000/- over L.R.No. N. Wanga/Matungu/1773.

The letter of offer dated April 2011 for an overdraft facility for kshs. 2,000,000/= was secured by all the properties above.

The applicant acknowledged and signed the offer letter meaning that   even if he  had paid off the earlier   or apportion of the earlier loan the bank  granted him further facilities based on the  existing  changes.

14.    Were Land Control Board Consent obtained?

There is no indication that the parcels in question required consent of the  board. Secondly the changes were registered with the assumption that all requirements were met.  Yet again the applicant has not proved that this was not the case.  In any event he ought to have together with the respondents sought for the consent. Can he enjoy the facilities and in default sought to run away due to an error  he  equally perpetuated?

15.    It is evident also that the respondent  signed the  changes and the  redemption clause  Section 74 and 79 of the  Registered Land Act was  acknowledged and understood by the applicant.

16.    All the requisite notices were issued and not disputed by the applicant. Consequently with the above I am of the considered view that the application does not merit the threshold, lacks merit and the same dismissed with costs to the respondent.

Datedat Bungomathis 19th day of May 2016.

ALI-ARONI

JUDGE