Rai & another v Heritage Flowers Limited & another [2024] KEELRC 2419 (KLR)

Rai & another v Heritage Flowers Limited & another (Cause E992 of 2023) [2024] KEELRC 2419 (KLR) (3 October 2024) (Ruling)

Neutral citation: [2024] KEELRC 2419 (KLR)

Republic of Kenya

In the Employment and Labour Relations Court at Nairobi

Cause E992 of 2023

L Ndolo, J

October 3, 2024

Between

Shailesh Kumar Rai

1st Claimant

Gideon Kariuki

2nd Claimant

and

Heritage Flowers Limited

1st Respondent

Punjani Riyaz Mahammadali

2nd Respondent

Ruling

1. By their Notice of Motion dated 1st December 2023, the 1st and 2nd Claimants seek and order compelling the 2nd Respondent to sign cheques in respect of the Claimants’ salaries as per their employment contracts dated 1st April 2019 and 1st November 2023, respectively.

2. The Claimants also seek an order substituting the 2nd Respondent as a signatory to bank accounts held by the 1st Respondent.

3. The application is supported by an affidavit sworn by the 1st Claimant, Shailesh Rai Kumar, and is based on the following grounds:a.The 2nd Respondent has unlawfully refused to sign the relevant cheques in respect of payment of salaries due to the Claimants, which action is in breach of the terms of the employment contracts between the Claimants and the 1st Respondent;b.The 1st Claimant and the 2nd Respondent are directors of the 1st Respondent and are signatories to various bank accounts held by the 1st Respondent and are thus obligated to sign cheques to aid in the day to day operations of the 1st Respondent, among them being payment of salaries of employees, including the Claimants;c.The 1st and 2nd Claimants are employees of the 1st Respondent, having been employed via employment contracts dated 1st April 2019 and 1st November 2023 at salaries of Kshs. 999,999 and 100,000 respectively;d.Since the commencement of their employment, the Claimants have been diligently performing their duties as required under their respective employment contracts;e.In September 2023, the 2nd Respondent unilaterally varied the terms of the employment contract between the 1st Claimant and the 1st Respondent by reviewing the 1st Claimant’s salary downwards;f.The 2nd Respondent has refused to sign cheques in respect of the 1st Claimant’s salary;g.There is no lawful justification for the 2nd Respondent’s action in failing to sign cheques in respect of the Claimants’ salaries;h.No prejudice will be occasioned to any of the parties if the orders sought are granted.

4. The Respondents’ response to the Claimant’s application is by way of a replying affidavit sworn by the 2nd Respondent, Punjani Riyaz Mahammadali on 15th February 2024.

5. Mahammadali who describes himself as a majority shareholder of the 1st Respondent, depones that the application is replete with falsehoods and is intended to cover illegalities and fraudulent activities being conducted by the 1st Claimant.

6. Mahammadali accuses the Claimants of failing to disclose the existence of a shareholder dispute pending before the High Court, where the 1st Claimant’s allegation of being a managing director is under challenge. He adds that the appointment letter dated 1st April 2019 was not authorised by the Board of Directors, pointing out that it was signed by the 1st Claimant and witnessed by his wife.

7. The 1st Claimant is further accused of irregularly appointing his wife, Ranjeeta Rai as a director and Anne Nelima Otunga t/a Bellmac Consulting LLP as company secretary, an action that was challenged before the Registrar of Companies, who effected a rectification of the company register.

8. In addition, the 1st Claimant is alleged to be engaged in a business in direct competition with the 1st Respondent.

9. Regarding the 2nd Claimant, Mahammadali states that the contract dated 1st November 2023 was not sanctioned by the Board of Directors.

10. In his further affidavit sworn on 18th March 2024, the 1st Claimant, Shailesh Rai Kumar admits the existence of a suit filed by the 2nd Respondent being, HCOMM E894 of 2021: Punjani Riyaz Mahammadali v Shailesh Rai Kumar, Ranjeeta Pandey Rai & Anne Otunga t/a Bellmac Consulting LLP. Kumar however asserts that the case pending before the High Court has nothing to do with these proceedings.

11. The orders sought by the Claimants fall within the province of mandatory injunctions and the conditions upon which such an order may be granted are well established.

12. In support of their case, the Claimants relied on the decision in Nation Media Group & 2 others v John Harun Mwau [2014] eKLR where the Court of Appeal held that for an interlocutory mandatory injunction to issue, an applicant must demonstrate the existence of special circumstances.

13. On his part, the 2nd Respondent relies on the persuasive decision in Locabail International Finance Ltd v Agroexport & others [1986] 1 ALL ER 901 where it was held that:“A mandatory injunction ought not be granted on an interlocutory application in the absence of special circumstances, and then only in clear cases where the court thought that the matter ought to be decided at once or where the injunction was directed at a simple and summary act which could be easily remedied or where the defendant had attempted to steal a match on the plaintiff. Moreover, before granting a mandatory interlocutory injunction, the court had to feel a higher degree of assurance that at the trial it would appear that the injunction had rightly been granted, that being a different and higher standard than was required for a prohibitory injunction.”

14. Reading from the pleadings and submissions filed by the parties in this case, it is evident that there are many issues in controversy; ranging from whether the present case is intertwined with the shareholders’ dispute pending before the High Court to the veracity of the employment contracts upon which the Claimants base their claims.

15. In my considered view, these controversies cannot be determined at the interlocutory stage. Further, to grant the orders sought by the Claimants would be to determine the entire claim, without the benefit of hearing the parties, viva voce. The Claimants have not demonstrated any special circumstances to warrant such a summary procedure.

16. For the foregoing reasons, the Claimants application dated 1st December 2023 is declined with costs in the cause.

17. Orders accordingly.

DELIVERED VIRTUALLY AT NAIROBI THIS 3RD DAY OF OCTOBER 2024LINNET NDOLOJUDGEAppearance:Mr. Githiri for the ClaimantsMr. Gakunga for the 2nd RespondentNo appearance for the 1st Respondent3