Rapam Limited & another v Kazungu & another [2023] KEELC 16794 (KLR)

Rapam Limited & another v Kazungu & another (Environment & Land Case 186 of 2013) [2023] KEELC 16794 (KLR) (9 February 2023) (Judgment)

Neutral citation: [2023] KEELC 16794 (KLR)

Republic of Kenya

In the Environment and Land Court at Mombasa

Environment & Land Case 186 of 2013

LL Naikuni, J

February 9, 2023

Between

Rapam Limited

1st Plaintiff

Rapam Limited

2nd Plaintiff

and

Keith Ngala Kazungu

1st Defendant

Keith Ngala Kazungu

2nd Defendant

Judgment

I. Preliminaries 1. The Judgment before this Honorable Court emanates from the Suit filed by the Plaintiff under Certificate of Urgency, the Notice of Motion Application and Plaint dated 22nd August, 2013 and filed on 23rd August, 2022 against the Defendant herein.

2. Upon being served with the Summons to enter appearance dated 27th August, 2013, the Defendant through his Advocate on record filed his Memorandum of Appearance on 9th September, 2013 and Written Statement of Defence on 25th September, 2013. On 13th February, 2014 the Defendant formally applied to amend its Defence. On 3rd July, 2014, the application was allowed by consent. Hence, the Amended Defendant’s Statement of Defence and Counter Claim dated 13th February, 2014 was deemed to be duly admitted. Upon full compliance with the Provisions of Order 11 of the Civil Procedure Rules, 2010 on 6th December, 2021, the matter was fixed for hearing whereby the Plaintiff and the Defendant summoned their Witnesses and who testified accordingly.

II. The Plaintiff’s case 3. From the filed Plaint, the Plaintiff averred that it was the registered owner of all that parcel of land known as Land Reference Number 2129/1/MN (Original Number 1244/3/ (Hereinafter referred to as “the Suit Land”) measuring 0. 3453 Hectares or thereabouts situate in Shanzu area while the Defendant was the previous registered owner of the Suit Land. The Plaintiff stated that it bought the suit land at a Public Auction. The auction was conducted by an Auctioneer firm trading in the names and style of M/s. Garam Investments Auctioneers. It was outside the main Post Office in Mombasa city on 22nd day of May, 2009. It emerged as the highest bidder with a bid of a sum of Kenya Shillings Four Million One Hundred Thousand (Kshs.4,100,000. 00).

4. That prior to the auction, the said Auctioneers had advertised the Public Auction in one of the local dailies of “The Daily Nation” Newspaper twice on 4th and 18th May, 2009. According to the Plaintiff, the auction was conducted in exercise of a Statutory Power of Sale on the part of Kenya Tourist Development Corporation – KTDC - (Hereinafter referred to as “The Chargee”) as a duly registered Chargee of the Suit Plot. This was done after the Defendant herein defaulted in repaying a loan advanced to him by the said Chargee. The Suit Plot was transferred by the Chargee to the Plaintiff herein vide a transfer dated 30th October, 2020 and registered in the Plaintiff’s name on 24th November, 2020. However, despite having acquired the Suit Land but the Plaintiff had been prevented by the Defendant from taking vacant possession of it. As a result, it suffered loss and damages. The Defendant had now embarked on erecting structures on the Suit property and threatened the Directors of the Plaintiff from setting their foot on the land.

5. Thus, the Plaintiff instituted this suit making a claim against the Defendant for vacant possession and Permanent Injunction restraining the Defendant from trespassing it. Specifically, the Plaintiff prayed for Judgment against the Defendant for:-a.An Order compelling the Defendant and his authorized agents and/or servants to remove and/or demolish any building and/or structures on the Suit Land.b.Alternatively, to prayer (a) hereinabove, the Court Bailiff to remove and/or demolish any building and/or structures and evict the Defendant and his authorized agents and/or servants and give the Plaintiff vacant possession of the Suit Land.c.That the OCS, Bamburi Police Station or any other Police Station with jurisdiction to provide Security during the eviction of the Defendant and his servants from the Suit Land.d.A Permanent Injunction restraining the Defendant and/or his servants from trespassing into the Suit Land.e.Cost of the Suit and interest.

III. The Defendant’s Case 6. Based on the Amended Defence and Counter Claim filed on 13th October, 2016 and dated 11th October, 2016, the Defendant averred that he was not aware of the advertisement of the intended Sale and the subsequent sale of the Suit Land to the Plaintiff at the Public Auction held on 22nd May, 2009 at a consideration of Kenya Shillings Four Million One Hundred Thousand (Kshs.4,100,000. 00).

7. The Defendant further averred that according to the Valuation Report prepared by Mr. A.W Khaemba (B.A Land Econ) Hons M.I.S.K of Fairlane Valuers Limited on 7th March 2002, it revealed that the market value of the said property by then was a sum Kenya Shillings Nine Million (Kshs. 9,000,000. 00) and not the above under valued price. He further asserted that the said Auctioneers sold the said property at a throwaway price with the intention of defrauding him. He gave detailed particulars of the said fraud allegation.Additionally, the Defendant raised a Counter Claim whereby he held that the Plaintiff’s claim as the registered owner of the Suit Land through the Garam Investments Auctioneers and official Court brokers was fraudulent as the land was sold at a sum of Kenya Shillings Four Million One Hundred Thousand (Kshs.4,100,000. 00) instead of a sum of Kenya Shillings Twenty Two Million (Kshs. 22,000,000. 00) being the current market value. He prayed for the Plaintiff’s Suit be dismissed and Judgment entered against the Plaintiff as follows: -a.A declaration that the transfer of the Suit land from its original owner was wrong, illegal and fraudulently obtained and the same should be cancelled and registered in the names of the Defendant as the rightful legal owner.b.Costs of the Counter Claim and interest.On 6th December, 2021, the Plaintiff summoned one Witness- PW-1 who testified as follows:

Examination in Chief of PW – 1 by Mr. Lewa Advocate. 8. PW – 1 is sworn and testifies in the English language. He identified himself by name as Muchiri Wahome. He lived and worked in Nairobi. He was a business man. He was the Director of a company by limited guarantee trading in the names and style of RAPAM LIMITED – the Plaintiff and the Sponsor herein. He stated having the permission and Directors’ Resolution to institute this suit on their behalf dated on 30th March, 2013. He informed Court having recorded his witness statement dated 22nd August, 2013 and wished to adopt and have it admitted as his evidence in this case.He further stated that there were two (2) lists of documents he wished to rely on in support of his case. These were the first list dated 22nd August, 2013 and the Supplementary list of Documents dated 9th July, 2014. In total, there were 17 exhibits in all.These were Plaintiff’s Exhibits numbers 1 to 17 respectively. PW – 1 stated that effectively on 4th May, 2009, Messrs. Auctioneers published the suit property known as Land Reference Number 2129/1/MN (Original Number 1244/3/(Refer to the Statement) with intention of having it sold off at a public auction. His business got interested in the advertised offer. He attended the public auction which was held at Mombasa on 22nd May, 2009.

9. During the public auction, PW – 1 made an offer of Kenya Shillings Four Million One Hundred Thousand (Kshs. 4,100,000/=) and which offer was accepted as the highest bidder upon the fall of the hammer as required by law. He paid up 25% and later on completed the payment. Eventually, he received a Certificate of title deed already registered in the names of the Plaintiff’s Company herein.After several attempts, PW – 1 was unable to physically access the suit property due to the interference by the Defendant. He approached the past owner who was now deceased. They alleged the property had been acquired through forgery. Thus, due to these difficulties, PW – 1 stated that the Plaintiff decided to approach the Court for its assistance.PW – 1 testified that there had been allegation that the property was acquired through fraud. Further, that the Defendant were never served with the statutory notice of sale of the suit property as required by law. However, as the PW – 1 was concerned, the deceased received the Notice and signed on it. He averred that it was not true that the property was undervalued. He testified that a Land Valuation company trading in the names and style of “The Prestige Valuers Management Limited” valued the suit property and provided a market value of Kenya Shillings Five Million Seven Hundred Thousand (Kshs. 5,700,000/=). The Plaintiff purchased it at a sum of Kenya Shillings Four Million One Hundred Thousand (Kshs. 4,100,000/=) at a public auction and being the highest bidders at the fall of the hammer and fully complying with all the required conditions precedents thereof. He refuted there being any fraud as alleged. He stated that he participated in the open process.

10. Finally, PW – 1 averred that he was seeking for unfettered access to the property and a declaration of ownership to it. He urged Court to grant the prayers sought by having the estate to be restrained from access and the costs incurred.

Cross Examination of PW1 by M/s. Arika Advocate 11. PW – 1 stated that he undertook due diligence on the suit property. He conducted an official search and the valuation of the suit property which was done by his Co - Director at a market value.

12. PW – 1 stated that he had never met the owner of the property. He is not the one who conducted the valuation of the property. This was not his first purchase of property. The actual notification of the sale had his signature. The financier selling the property was Kenya Tourism Development Authority. There was no evidence to show that they ever met with the financiers.

Re – Examination – by Mr. Lewa Advocate. 13. The family wanted to purchase the property. There has existed incumbrances and lack of peace in taking possession of the property.

IV. The Defendant’s case 14. On 19th September, 2022 the Defendant’s Witness (DW-1) and (DW-2) testified as follows: -

Examination in Chief of DW – 1 – M/s. Arika. 15. DW – 1 was sworn and testified in Swahili language accordingly. He identified himself as being Mr. Keith Ngalia Kazungu. He held a national identity card bearing numbers 0658788. He was a businessman. On 7th November, 2018 he recorded his witness statement. He wished to have the statement adopted. He also filed a bundle of Documents numbers 1 to 31 (He left out document No. 32). Thus, the Defence Exhibit No.1 to 32 were adopted by Court there being no objection.

16. DW – 1 stated that in the year 1990 his father Mr. Kazungu Ngalia Kasunji borrowed some finances as loan from the KTDC being a sum of Kenya Shillings One Million Six Hundred (Kshs. 1,600,000/=) to continue with the development he had initiated on the suit land. But later on he received a demand letter from some auctioneers trading in the names and style of Stella Auctioneers demanding a sum of Kenya Shillings Three Million (Kshs. 3, 000,000. 00). He wondered how this was arrived at as he had been paying off the loan to a tune of Kenya Shillings Two Million Four Hundred Thousand (Kshs. 2,400,000/=). The auctioneers threatened to sell off the land in order to recover the outstanding sum.

17. In the month of July 2002 they were to sell the land but we obtained a court to stop the planned sell. But later on we received a letter from another auctioneers trading in the names and style of Messrs. Garam Auctioneers. However, DW – 1 testified that the auctioneers never served them with notices for the intended sale as required by law. It was later on that they found out that someone called Rapam Company Limited alleging to have bought it. Its Plot No. 2129/1/MN. They asked us to leave the suit property. DW – 1 stated that they refused to leave the land and filed the case. He urged the Honorable Court to give them back their land for it having been taken away through illegal and irregular means by the Plaintiffs.

Cross Examination of DW – 1 by Mr. Lewa Advocate:- 18. DW – 1 confirmed that the auctioneers trading in the style and names of Stella Auctioneers wanted to sell the land but they went to Court where they managed to obtain a Court order to stop it. He stated that The Plaintiff - Rapam Limited, was not involved in that case. Instead, they filed a civil case being “Garam Auctioneers – Civil Case No. 359/2002 – Kazungu Kasunji Ngala – Versus - KTDC & Garam Dickson T/A. Stella Auctioneers. The Court order was only for 14 days. There was no Judgment delivered from the case. DW – 1 averred that he knew Rapam Limited as the ones who bought the suit land.

19. He further stated knowing that it was Rapam Limited who were the current registered as the owners to the suit land, though he insisted it was by an error. DW – 1 stressed that it was his father who had been the registered owner of the land. He testified that KTDC lend money to his father who was now deceased. He stated knowing for a fact that KTDC was demanding an outstanding loan from the deceased, but he paid. He refuted his father having received any notices, before the sale took place. That is all.

Re – Examination of DW - 1 by M/s. Arika Advocate 20. DW – 1 stated that his father fully involved him in all his matters. His father died in the year 2015. Hence, from that time he applied and continued as the Legal administrator of the estate. He was never served with any notices for the sale of the suit property. He was not aware that Rapam Limited bought the suit land. They were never involved at all in this transaction.

Examination in Chief of DW – 2 – M/s. Arika Advocate 21. DW – 2 was sworn and testified in the English language. He identified by names himself as Mr. Daniel Mutinda Mwangawa. He was a holder of the national identity card bearing numbers 21200106. He was a registered Land Valuer. He stated recognizing the Land Valuation Report dated 3rd December, 2013 by Desma Valuers Limited. He produced it as Defendants Exhibit No. 32. He stated having visited the suit property land after conducting an official search following instructions by Mr. Keith Ngala. They inspected the building and the land. They considered the size of plot. They measured everything. DW – 2 stated that there was a bar, restaurant known as “Bush Bar”, a Clinic building.

22. He noted all the current rents collected and the names of the tenants. They concluded the valuation and noted that the building was poorly maintained. DW – 2 stated that the land measured 0. 3453HA (0. 83 acres). They valued the property for a sum value of Kenya Shillings Fifteen Million Three Hundred Thousand (Kshs. 15,300,000/=) per the square made. They gave it a sum of Kenya Shillings Fifteen (Kshs. 15/=) per square metre. Hence, they came up with a total sum of Kenya Shillings Twenty Two Million Five Hundred and Fifty Thousand (Kshs. 22,550,000/=) and the sale value of Kenya Shillings Eighteen Million (Kshs. 18,000,000/=) at a rate of 75%. That was all.

Cross Examination of DW1 by Lewa Advocate. 23. DW – 1 informed Court that he was not Mr. Edwin Oduor the author of the report. He admitted that he was not the author of the Valuation report produced. DW – 2 also stated that even the certificate attached to the Valuation report belonged to Mr. Edwin Oduor and they were not his own. DW – 1 testified that he conducted a personal search. From the search, it confirmed that the registered owner was Mr. Kazungu Ngala but it changed to that of KTDC in the year 2013. He did the search for purposes of Court. The valuation was done by them in December, 2013.

24. He was referred to an official search dated 24th May, 2011 which indicated the suit land was registered to Rapam Limited. It was put to him that the Valuation was not done in favour of the client which he denied. He stated that they relied on the copy of the Certificate of title given by the client. DW – 2 stated that the value of the suit land was lower as the buildings on it were dilapidated.

Cross Examination of DW – 2 by M/s. Arika Advocate. 25. DW – 2 averred that the valuation of the Report was genuine. The issue was on the ownership of the suit land. It did not change the size of the land. That is all.

V. Submissions 26. Upon the Closure of both the Plaintiff’s and the Defendant’s case on 19th October, 2022, the Parties were directed with clear time frame to file their Written Submissions accordingly. Pursuant to that all the Parties complied and the Honorable Court reserved a Judgment date on 22nd February, 2013.

A. The Written Submissions by the Plaintiff

27. On 11th October, 2022 the Learned Counsel for the Plaintiff, the Law firm of Messrs. Lewa & Associates filed their Written Submissions dated even date. M/s. Katama Advocate holding brief for Mr. Lewa Advocate submitted by providing a detailed background of the case filed by the Plaintiff herein.He referred to the evidence of Plaintiff Witness (PW-1) Mr. Muchiri Wahome a duly authorized Director of the Plaintiff’s Company. From the Evidence by Plaintiff Witness (PW-1), stated that a Valuation of the Suit plot was undertaken by M/s. Prestige Management Valuers Ltd and a report dated 27th September, 2008 prepared. In their report the Valuers did value the Suit plot at: -i.fair open market value of Kenya Shillings Five Million Seven Hundred and Fifty Thousand (Kshs. 5,750,000. 00); andii.forced sale value of Kenya Shillings Three Million Five Hundred Thousand (Kshs. 3,500,000. 00).

28. Prior to the Sale on 22nd May, 2009, Kazungu Ngale (Deceased)- the Chargor was duly served with a notice dated 5th March, 2009 and a notification of sale by M/s Garam Investments Auctioneers who conducted the auction. They were both served physically on the Chargor on the 5th March, 2009 and were also sent to him via Registered Mail to his Postal Address, P. O Box No. 85389 Mombasa.

29. The Learned Counsel held that the proposed sale of the Suit plot by Public Auction was advertised in one of the local dailies- “The Daily Nation” Newspaper twice on 4th and 18th May, 2009 with a wide national circulation and readership to boot. The Public Auction was conducted on 22nd May, 2009. Plaintiff Witness (PW-1) attended the Public Auction for and on behalf of the Plaintiff and the fall of the hammer his bid of Kenya Shillings Four Million One Hundred Thousand (Kshs.4,100,000. 00) was the highest bidder. The Plaintiff paid the Purchase Price in full as required by law and after which the Suit Property was transferred to the Plaintiff upon the registration of the transfer by Chargee dated 30th October, 2010 in favour of the Plaintiff. The Plaintiff was registered as a proprietor of the Suit Property on 24th November, 2010. The Learned Counsel argued that the Plaintiff’s case was not disturbed by the Cross- Examination of the Counsel by the Defendant in any way or at all.The Learned Counsel noted that the Defendant’s case was whereby they summoned two (2) Witnesses (DW-1) and DW-2 one Mr. Daniel Mutinde Mwangangi a Proprietor Valuation Officer. The Counsel summarized their evidence as follows: -a.Defendant Witness (DW-1) admitted that indeed the Suit Plot had been charged in favour of KTDC to secure a loan facility advanced to the Chargor.b.As far as Defendant Witness (DW-1) is concerned: -i.The monies advanced to the Chargor was Kenya Shillings One Million Six Hundred Thousand (Kshs.1,600,000. 00) only and that the Chargee allegedly paid KTDC Kenya Shillings Two Million Four Hundred Thousand (Kshs. 2,400,000. 00) this according to him was the full repayment of the loan.ii.Prior to the sale of the Suit Land to the Plaintiff through the Public Auction on 22nd May, 2009, the Chargor was allegedly not served with a Statutory Notice, Advertisement and Notification of Sale as required.iii.The Suit Plot was fraudulently sold at an alleged throw away price of Kenya Shillings Four Million One Hundred Thousand (Kshs.4,100,000. 00) instead of Kenya Shillings Nine Million (Kshs. 9,000,000. 00) as per the Valuation Report dated 7th March, 2002. iv.Defendant Witness (DW-2) did produce the Valuation Report of the Suit plot dated 13th December, 2013 a period more than 31/2 years after the sale of the Suit Plot to the Plaintiff through Public Auction.c.From a personal search that Defendant Witness (DW-2) alleged to have conducted, the Chargor was the registered owner of the Suit in year 2013. Based on the above pleadings the Counsel submitted on the following three (3) issues: -Firstly, whether the Plaintiff had proved its case against the Defendant and which he answered in affirmative on a balance of probabilities. He submitted that in exercise of its Statutory Power of Sale, KTDC did sale the Suit property to the Plaintiff on 22nd May, 2009 through a Public Auction conducted by M/s. Garam Investment Auctioneers. He stressed that prior to the sale of the Suit Property, the Chargor was duly served with Notice and Notification of Sale personally and also via registered post and the sale duly advertised in one of the local dailies “The Daily Nation” Newspaper.

30. He held that the Defendant never disputed that the signature appearing on the Notification of Sale produced as Plaintiff’s Exhibit No. 14 and 16 respectively to be that of the Chargor. Similarly, the Defendant Witness –(DW-1) when he testified he never disputed that the signature appearing on the Notice and Notification of Sale to be that of the Chargor. Based on this facts, the Counsel held that the allegation that the Chargor was not served was an afterthought. In any event, the Counsel argued that there were instances where a notice need not issue prior to a Chargee exercising its Statutory Power of Sale. To support this argument he cited the case of “Nancy Kahoya Amadira -Versus- Expert Credit Limited and Anor (2015 eKLR” where the Court of Appeal held: -“There are instances where a notice need not issue, where interest for more than two (2) months in due and remains unpaid……………….”

31. In the instance case, the Counsel held that when Defendant Witnesses (DW-1) testified he confirmed that indeed the Chargor was advanced a sum of Kenya Shillings One Million Six Hundred Thousand (Kshs. 1,600,000. 00) way back on 6th September, 1990 by KTDC and the Suit plot used as Security. Defendant Witness (DW-1) stated that the Chargor paid KTDC Kenya Shillings Thirty Thousand (Kshs. 30,000. 00) per month up to January, 2002 in servicing the loan. However, Counsel averred that Defendant Witness (DW-1) did not produce any proof of the said payments. He held that by May, 2009, when in exercise of its Statutory Power of Sale, KTDC sold the Suit Land to the Purchaser by Public Auction by which time the Chargor had not made any payments to KTDC toward servicing the Loan and the accrued interest.The Counsel averred that from a loan statement for the period July 2005 to June 2006 which was included in the documents produced as Defence Exhibit No. 31 indicated that by June 2006 the Chargor had interest arrears adding up to Kenya Shillings Twenty Four Million Four Hundred and Ninety Five Thousand and Twenty Six (Kshs. 24,495,026. 00) thus he argued that by May 2009 when the Suit Plot was sold the interest payable, the loan was for a duration of more than two (2) months. In view of the foregoing the Counsel invoked the Provision of Section 69A of the Indian Transfer of Property Act 1882 to wit: -69A. (1) “A mortgagee shall not exercise the mortgagee’s statutory power of sale unless and until-(a)notice requiring payment of the mortgage-money has been served on the mortgagor or one of two or more mortgagors, and default has been made in payment of the mortgage money, or of part thereof, for three months after such service; or(b)some interest under the mortgage is in arrear and unpaid for two months after becoming due; or

32. The Learned Counsel emphasized that the Plaintiff was an innocent Purchaser of the Suit Land for Value without notice. The Plaintiff had no Knowledge of any fraudulent acts which might have been committed by KTDC as alleged. Their law was that there was no duty cast on an intending Purchaser at an Auction Sale, property advertised to inquire into the rights of the Charge/ Mortgage to sell. Therefore, the Counsel argued that the Plaintiff herein was not obligated to inquire into the rights of KTDC to sell the Suit Land after it was advertised in the newspaper.Regarding the allegation by the Defendant the Suit Land was sold on alleged throw away price and thereby fraudulently; the Counsel held that it was telling the fact that the Defendant failed to add either M/s. Garam Investments Auctioneers or KTDC as Parties to the Counter Claim raised by the Defendant. Additionally, the Defendant never reported the alleged fraud to the police to be investigated or lodged a complaint before the Auctioneers Licensing Board against M/s. Garam Investments Auctioneers.Regarding the allegation that the Suit Plot having been sold at a throwaway costs the Counsel submitted: -i.It was sold out at more than the forced sale value as per the Valuation Report dated 27th September, 2008 the price indicated was a sum of Kenya Shillings Three Million Five Hundred Thousand (Kshs. 3,500,000. 00);ii.The Valuation Report dated 7th March, 2002 was the open market value and not forced marked value was Kenya Shillings Nine Million (Kshs. 9,000,000. 00).iii.The Property sold to the Plaintiff was at a properly conducted Public Auction; furthermore the Defendant has not specifically pleaded nor proved fraud as required by law. No evidence has been addressed to that effect.He further relied on the Provisions of Section 69 B (1) of the Transfer of Property Act and decision of “Euro Bank Limited (In Liquidation) –Versus- Twic for Investments Limited & 2 Others”.In summary, the Counsel averred that the Plaintiff had proved its case against the Defendant as pleaded and therefore he was entitled to the relief sought in the Plaint.On the second issue, the Counsel submitted that the Defendant had failed to prove its Counter Claim against the Plaintiff on the following grounds: -a.The allegation that the selling of the Suit plot at the Auction was done fraudulently and throw away costs of Kenya Shillings Four Million One Hundred Thousand (Kshs. 4,100,000. 00) instead of a sum of Kenya Shillings Twenty Two Million (Kshs. 22,000,000. 00) being the current market value has been demonstrated above.b.The Counter Claim failed to comply with the requirement of Order 7 Rule 5 of Civil Procedure Rules, 2010 for not being accompanied with a Verifying Affidavit and hence should be struck out for being fatally defective. He relied on the Cases of “Galerius Investments Limited – Versus- County Government of Mombasa & Another [2020] eKLR” and “Priska Onyango Ojwang –Versus- Henry Ojwang Nyabenda (2018) eKLR”

33. He held that the Counter Claim lacked merit for holding that the sale was marred with fraud for selling it at Kenya Shillings Four Million One Hundred Thousand (Kshs. 4,100,000. 00) instead of Twenty Two Million (Kshs. 22,000,000. 00) the alleged current Market Value, from the Valuation Report by M/s. Basemark Realtor Valuers Ltd of 3rd December, 2013 gave both the current market value and forced sale (Reserve Price) value. It was noted that this report was prepared 31/2 years after the sale had already taken place. He insisted the sale was above board and in the unlikely event it was not the Defendant ought to be seeking for damages against the Auctioneers and KTDC and not the Plaintiff.Finally, the Counsel’s contention since the Plaintiff had proved its case against the Defendant and it’s the Defendant who had refused to settle the matter prior to Suit being instituted, who should meet the costs of the Suit.He urged Court to enter Judgment for it against the Defendant as prayed in the Plaint and strike out and/or dismiss the Defendant’s Counter Claim.

B. The Written Submissions by the Defendant 34. On 14th October, 2022, the Learned Counsel for the Defendant the Law Firm of Messrs. Asige, Keverenge & Anyanzwa Advocates filed their Written Submissions dated 12th October, 2022. M/s. Arika Advocate commenced by providing a detailed background to this case.This covered the ownership of the Suit Property, the Charging of it with the KTDC and the servicing of the advanced loan, the processes of attempt to dispose it through Public Auction, the filing of this Suit by the Plaintiff and the Defences by the Defendant; the adduced both oral and documentary evidence in Court by all the Witnesses thereof.The Counsel submitted that it was not in dispute that: -a.The property was registered in the names of Kazungu Ngala the original owner; andb.Sometimes on 6th September, 1990 the original owner borrowed and was granted the sum of Kenya Shillings One Million Six Hundred Thousand (Kshs. 1,600,000. 00) from KTDC payable with interest at Bankers rates by the Plaintiff ought to be declared invalid, null and void; on this point she relied on the Provision of Section 26 (1) of Land Registration Act No. 3 of 2012 and the following particulars on how the property was acquired fraudulently and/or illegality. These were: -a.No Rates Clearance Certificate was obtained;b.No Certificate of Sale and vesting order was obtained; andc.The Transfer and Certificate of title was obtained by fraud.

35. The Counsel argued that the Defendant had been able to prove fraud from the Pleadings and the particulars Number (a), (b) and (c) brought out under Paragraph 6 of the Amended Defence and Counter Claim against the Plaintiff and hence urged Court to find that the Defendant had proved to the required standard of the law that the cancellations of the Defendant’s Title deed and issuance thereof to the Plaintiff was fraudulent and/or irregular.To buttress on this point the Learned Counsel relied on the following Authorities: -“Arthur Highway Developers Limited – Versus - West End Butchery Limited & 6 Others (2015) eKLR; “Elijah Makeri Nyangwira – Versus - Stephen Mungai Njuguna & Anor (2013) eKLR”; “Petronilla Najuna Khaemba – Versus - Attorney General & 7 Other (2019) eKLR”Where Court held:-“the Conduct of a bona fide Purchaser , - defined as “one who says something for value without notice of another’s claim to the property and without actual or constructive notice of any defects in or infirmities claims or equities against the Seller’s title one who has in good faith paid valuable consideration for the property without Notice of prior adverse claims”.Hence, the Counsel submitted that even if this Honorable Court was to find that the Plaintiff was innocent Purchaser for Value; its title was still impeachable under the Provision of Section 26 (1) of Land Registration Act particularly if it was proved as was in the instant case the title was acquired by fraudulent means, un-procedurally, illegally and/or through a Corrupt Scheme. The heavy import of Sections 26 (1) (b) was to remove protection from an innocent Purchaser or innocent person is impeachable so long as that title was obtained illegally, un-procedurally or through Corrupt Scheme. The title hold need not have contributed to these vitality factors.The Purpose of Sections 26 (I) (b) is to protect the real title holders from being deprived of their titles by subsequent transaction.

36. Hence in conclusion the Counsel held that it was crystal clear that the manner in which the Plaintiff obtained title to the Suit land was irregular, illegal and through fraudulent means. She urged Court to find that the Defendant was the lawful owner of the Suit Property and hence revoke and/or cancel the title held by the Plaintiff and have it restored to the Defendant Mr. Kazungu Ngala Kasunji and to allow the prayers sought from the filed Counter Claim by the Defendant.

VI. Issues for Determination 37. I have keenly read through the filed pleadings by both the Plaintiff and the Defendant, the documentary and oral evidence by their summoned Witnesses, the Written Submissions, the cited authorities, the relevant and appropriate provisions of the Constitution of Kenya, 2010 and the Statutes.In order to arrive at an informed, equitable, reasonable, just and fair determination the Honorable Court has condensed the Subject matter into the following three (3) salient issues. These are: -a.Whether the Plaintiff acquired the Suit land through the legal, regular and/or proper procedure manner or otherwise.b.Whether the Parties are entitled to the reliefs sought from the filed Plaint and/or Counter Claim.c.Who will bear the Costs of the Suit?

ISSUE NO. (a)Whether the Plaintiff acquired the Suit land through the legal, regular and/or proper procedure manner or otherwise.Brief facts

38. Before embarking on the issue for analysis herein, the Honorable Court wishes to extrapolate on the brief facts of the case.From the filed pleadings, initially the Suit Property was legally registered in the names of the Defendant Kazungu Ngala Kasunji. Mr. Kazungu caused the title deed to be used as a Collateral Security for a financial facility of a sum of Kenya Shillings One Million Six Hundred Thousand (Kshs. 1,600,000. 00) from KTDC. He claimed he continued servicing the loan until its completion. Nonetheless upon conducting an official search, he was shocked to find out that the Plaintiff was already registered as the owner to the Suit Land without his consent nor knowledge. He alleged having learned that the Suit Land was transferred at a Public Auction whereby he had not been notified as required by law and besides it was sold at a throwaway consideration than what was contained in the Valuation Report being the current market value. For this reason, he concluded that the whole sale process was marred with irregularities, illegalities and fraud to deprive him of his property. For that reason he instituted the Suit through the Defence and Counter Claim urging for the revocation and/or cancellation of the title deed registered in the names of the Plaintiff and it reverting to his names as the legal proprietor.

39. On the other hand, the Plaintiff has submitted having seen the property advertised in the local newspaper and he participated in the auction held outside the main Post Office in Mombasa City on 22nd day of May, 2009. Being the highest bidder upon the fall of the hammer, he paid a consideration of Kenya Shillings Four Million One Hundred Thousand (Kshs. 4,100,000. 00) being the market value and instead of the forced value instead of a sum of Kenya Shillings Twenty Two Million (Kshs. 22,000,000. 00) being the current market value as alleged by the Defendant. Subsequently, he got all the pre-requisite procedure undertaken by the Chargor KTDC and the Property was transferred to him. He indicated being aware that the Chargee was well notified by the Chargor of the Sale of the Suit Property from the notices that were published in the local newspaper as required by law. He held that by causing the property to be sold was because the Defendant had defaulted and breached the terms and conditions of the Charge. The Plaintiff categorically refuted there being any illegalities, irregularities nor fraud on how the sale of the Property was conducted by the Auctioneers and KTDC. He stressed the whole process was above board whatsoever. He held that even if there had been any fraud as alleged the Defendant though pleaded the particulars of the alleged fraud but failed to prove the existence of the fraud, a serious allegation which bordered on criminality. The Plaintiff argued that even if the alleged fraud existed then filing a Counter Claim in this Suit was the wrong forum as indeed he would have instituted a separate legal action against the Auctioneer and the KTDC.

40. Further, he never raised any complaint before the Kenya Auctioneers Licensing Board nor the Police for them to have conducted investigation on the allegations. For these reasons, he averred being the legally bona fide registered owner to the Suit Property having acquired it as an innocent Purchaser for Value notice through the Public Auction conducted above board and legally as required by law. He urged for the Counter Claim to be struck out with costs for being vexatious. That is adequate on facts.

41. Now turning to the analysis under this sub-heading, it’s not in dispute that the Suit Property was initially registered to the Defendant. Equally, it’s agreed fact that the Suit Property was Charged to the KTDC by the Defendant where the title deed was used as a Collateral Security. Although the Defendant holds to have fully settled the outstanding loan at a sum of Kenya Shillings Two Million (Kshs. 2,000,000. 00) this Court finds this argument rather difficult to fathom taking that the Defendant never produced any empirical documents on such evidence to demonstrate the said fact. For instance, a bank statement or proof of payment. It my own view that this loan was never settled. It follows and based on the Statutory Power of Sale bestowed on the Chargor, they had to exercise it through Public Auction which they did.Further to this, the Defendant argued emphatically not having been served nor notified of this sale. I wish to fully concur with the Counsel for the Plaintiff to the effect that the Defendant was properly served through Registered Post of his last known postal address. Additionally, those notices were published in the local newspaper in diverse days of 4th and 18th May, 2009. Honestly, the Defendant should never have missed knowing this. I discern that he was properly served.

42. After all the provisions of the law fail to assist the Defendant in anyway. I am persuaded by the legal ratio Provision of Section 69 (1) of Indian Transfer of Property (Refer) and the Court of Appeal decision of “Nancy Kahoya Amadura (Supra) which the Counsel for the Plaintiff over emphasized on. As regards the allegation on fraud, as both the Plaintiff and Defendant agree this allegation is serious and it has not only to be specifically pleaded but also proved by whoever that alleges. The provision of Section 107 of the Evidence Act Cap 80 makes it very clear. I am persuaded by the legal ratio founded in the decision of:- “Euro Bank Limited (in liquidation) (Supra”) to that effect. Apart from bringing out the particulars of the alleged fraud under Paragraph 16 of the Defence and Counter Claim, this Court would have expected such tangible evidence such as a report from the Division of Investigation Officer or Forensic Document Examiner to be produced in Court to support this rather serious allegation but in vain.

43. Besides, the evidence by Defendant Witness (DW-2) never assisted the Defendant’s case to this effect. Thus, the Honorable Court is left with no alternative but to conclude that the Plaintiff is the bona fide, absolute and legally registered proprietor to the Suit property with all indefeasible title, interest and rights vested in it by law thereof as provided for under the provision of Sections 24, 25 and 26 of the Land Registration Act, No. 3 of 2012. It follows that the land is no longer available to the Defendant in the given circumstances.

ISSUE NO. (b)Whether the Parties are entitled to the reliefs sought from the filed Plaint and/or Counter Claim.

44. Based on the above elaborate analysis, the Honorable Court has already arrived at a plausible conclusion that the Plaintiff is the legally and bona fide registered Proprietor to the Suit Land. Having followed all the procedures required in law to have acquired the suit property at the public auction, it has all the indefeasible title, interest and right vested on him by the provision of Sections 24, 25 and 26 (1) of the Land Registration Act No. 3 of 2012.

45. As for the Defendant the Court is not satisfied that he fully settled the owing debt to the Chargor as per the terms and conditions of the Charge. To state loosely that he paid up without any tangible proof is neither here nor there. It’s not convincing at all. The allegation that the Defendant was never notified nor served on the intention to sell the property by Public Auction is so casual and an afterthought. The Plaintiff has emphatically demonstrated before this Court that property service was effected before the Chargor exercised its Statutory Power of Sale as required by the provision of Sections 96 (1) and (2) and (3) of Land Registration Act and 69 (1) of Transfer of Property Act.

46. Additionally, on the allegation that the title by the Plaintiff was registered into its names through illegal, irregular and fraudulent scheme is means has been clearly assessed and considered by this Court. The Honorable Court finds the assertion as an afterthought, casual and baseless without being backed by any empirical evidence. As a result, and based on the provisions of Sections 107 of the Evidence Act. Cap. 80 to wit “He who alleges has to prove” the Court is not persuaded at all by the said allegations meted out by the Defendant.

47. Furthermore, the Plaintiff also sought for permanent injunction orders. Permanent Injunction orders are perpetual injunction granted by Court upon merit of case after evidence in support of and against the claim has been tendered and one which fully determines the right of the Parties before the Court. The Honorable Court is fully satisfied that the Plaintiff is the prima facie registered owner to the suit property has executed its role and duty so well as executed by the provisions of the law. I discern here that it is entitled to the Permanent Injunction sought from its filed pleadings as held in the case of:- “Kenya Power & Lighting Co. Limited –Versus - Sheriff Molana Habib (2018) eKLR”. Therefore, I will proceed to grant the permanent injunction orders sought by the Plaintiff.

48. For these reasons, in the long run, the Court finds that the Counter Claim and the Prayers sought by the Defendant be and is hereby struck out.

ISSUE NO. (c)Who will bear the Costs of the Suit?

49. It is now well established that costs are at all the discretion of Court. Cost is the award granted to the Party at the conclusion of any legal action, process and/or proceeding in any litigation.The Proviso of the provision of Section 27 (1) of the Civil Procedure Act Cap. 21 holds that costs follow the events. By events, it means the result of the legal action, proceedings and/or process of litigation. (See the Supreme Court case of “Jasbir Rai Singh Rai – Versus Tarchalon Singh (2014) eKLR; and the Court RoseMary Wambui Munene – Versus – Ihururu Dairies Co – Operative Limited (2014) eKLR and Cecilia Nyayo – Versus Barclays Bank of Kenya Limited (2016) eKLR” where Courts held that:-“The basic rule on attribution of costs is that costs follow the event……..it is well recognised that the principles costs follow the event is not be used to penalize the losing party rather it is for compensating the successful party for the trouble taken in presenting of defending the case”.In the instant case, the Plaintiff has been able to establish its case beyond all preponderance of probabilities. It had to effectively defend itself from the assertions made out in the Amended Defence and Counter Claim filed by the Defendant herein. Hence, taking that Counter Claim against the Plaintiff has been struck out, the Defendant will have to bear the costs of the entire Suit.

VII. Conclusion & Disposition 50. Consequently, having caused an in depth and elaborate analysis of the framed issues herein, the Honorable Court is fully satisfied that while the Plaintiff has been able to prove its case against the Defendant, the Counter Claim by the Defendant has been struck out for lack of merit specifically and/or avoidance of doubt the Court order: -aThat Judgment be and is hereby entered in favour of the Plaintiff with costs as the its case has merit.b.That the Counter Claim by the Defendant be and is hereby dismissed with costs for lack of merit.c.That a declaration be and is hereby made that the transfer of all that Suit land known as Land Reference Numbers Land Reference Number 2129/1/MN (Original Number 1244/3 from the original owner to the Plaintiff was legal, regular and procedural.d.That an order that the Defendant his agents, servants and/or assigns be compelled to remove and/or demolish any building and/or structures on the Suit Property known as Land Reference Number 2129/1/MN (Original Number 1244/3 within the next ninety (90) days from the date of the delivery of this Judgement and failure to do so thereafter, the Plaintiff to be at liberty to proceed in demolishing any such structures erected on the suit land at the expense of the Defendant.eThat an order directed at the offices of the Officer In Charge (OCS) of the Bamburi Police Station or any other Police Station with jurisdiction to provide Security during the eviction of the Defendant and his Servants and the demolition of the said structures belonging to the Defendant from the Suit Land.fThat there be a Permanent Injunction granted in favour of the Plaintiff restraining the Defendant and/or servants from trespassing into the Suit Land.gCosts and Interest of the Suit to be awarded to the Plaintiff to be borne by the Defendant.

it is so ordered accordingly

JUDGMENT THROUGH MICROSOFT TEAMS VIRTUAL MEANS DELIVERED, SIGNED AND DATED AT MOMBASA ON THIS …… 28TH……..DAY OF ……FEBRUARY,……. 2023. HON. MR. JUSTICE L.L. NAIKUNI (JUDGE)ENVIRONMENT AND LAND COURT ATMOMBASAIn the Presence of:-a. M/s Yumnah, the Court Assistant;b. Mr. Lewa Advocate for the Plaintiff; andc. M/s. Arika Advocate for the Defendant.JUDGEMENT ELC. 186 OF 2013 Page 9 of 9 JUSTICE L.L. NAIKUNI