Surjit Singh Pandhal & Malkit Singh Pandhal v Bank of Baroda Kenya Limited [2017] KEELC 3222 (KLR)

REPUBLIC OF KENYA

IN THE ENVIRONMENT AND LAND COURT AT KISUMU

ELC CASE NO.157 OF 2016

SURJIT SINGH PANDHAL ..................................................... 1st PLAINTIFF

MALKIT SINGH PANDHAL………………………….…........2nd PLAINTIFF

VERSUS

BANK OF BARODA KENYA LIMITED ……...................……..DEFENDANT

RULING

1. Surjit Singh Pandhal and Malkit Singh Pandhal, the plaintiffs filed the notice of motion dated 1st July 2016 seeking for temporary injunction restraining Bank of Baroda Kenya Ltd, the Defendant from advertising for sale, selling, disposing of, transferring, alienating, auctioning, or in any other way interfering with or dealing with the Plaintiffs ownership or possession of land parcel Kisumu Municipality/Block 7/173 pending the hearing and determination of this suit.  The application is based on the eighteen (18) grounds on its face and supported by the undated affidavit sworn by Surjit Singh Pandhal that was filed with the notice of motion and the supplementary affidavit by the same deponent sworn on the 29th September 2016.

2. The application is opposed by the Defendant through the replying affidavit sworn by Banambar Behera, the Kisumu branch head to the Defendant, sworn on the 4th August 2016.

3. The application came up for hearing on the 9th February 2017 when Mr. Omondi and Ragot, learned counsel for the Plaintiffs and Defendant respectively, made their oral rival submissions.

4. The issues for determination by the court are as follows:

a) Whether the Plaintiffs have made a prima facie case with a probably of success for issue of temporary injunction orders at this interlocutory stage.

b) What orders to issue.

c) Who pays the costs.

5. That the Plaintiffs case as summarized herein below

That they are jointly registered as proprietors in common with land parcel Kisumu Municipality/Block 7/173, hereinafter refered to as the suit land.

That they charged the suit property to secure financial facilities advanced to Maruti Pharmaceuticals through the charge documents executed on 20th May 2003 and registered on 4th June 2003 and a further charge executed on 13th April 2005 and registered on the 25th June 2005.

That on the 18th May 2016 the Defendant, through M/S Garam Investments Auctioneers, served a notification ofsale on the 1st Plaintiff but did not serve the same on the 2nd Plaintiff.

That in August 2011, Plaintiffs sold land parcels Kisumu Municipality/Block 7/11, 64 and 55 to General Equipment [1978] Co, Ltd for Ksh.80,000,000/= (Eighty Million) out of which Kshs.15,000,000/= (fifteen million) was received by the Defendant.  That out of the said Ksh.15, million deposited with the Defendant, Ksh. 10 million was to go to towards reducing the loan owed by  Maruti Pharmaceuticals Ltd which was then standing at  Ksh.12. 5 million but the Defendant transferred  the amount to a third Party known as  Haulmart  Kenya unlawfully.

That the Defendant has been charging uncontractual, illegal, unconscionable and usurious rates of interest not in keeping with the letters of offer and charge documents.

6. The Defendant case is as summarized as follows:

That indeed the Plaintiffs guaranteed and secured the loan facilities advanced to M/S Maruti Pharmaceuticals with the charges on the suit property.

That the Defendant was not a party to the sale agreement between the Plaintiff and M/s General Equipment (1978) Ltd for a purchase price of Ksh.80 million and therefore had no obligations to perform under the agreements.

That on the alleged transfer of Ksh. 15 million and failure to credit Ksh. 10 million to M/S Maruti Pharmaceuticals account, the Defendant availed a  copy of bank statement showing that M/s General Equipment (1978) Limited had transferred the said Ksh.15 million from their account to the account of M/s Haulmart  Kenya Limited on 31st December 2011.

That contrary to the 1st Plaintiff contention, the 2nd Plaintiff was served with the statutory notices in accordance with the law, as the two Plaintiffs and the principal debtor’s postal address was the same, being Box 967 Kisumu.  The Defendant availed copies of the notices and certificates of posting as evidence.

That the Plaintiffs have been in perennial default in their repayment of the loan facilities and had engaged the Defendants in writing severally but failed to keep their proposals for payments to remedy the default.

That the Defendant’s power of sale has arisen and should be allowed to realize their security.

7. The court has carefully considered the grounds on the notice of motion, the affidavit evidence, the submissions by both counsel and come to the following determinations;

a) That though the 1st Plaintiff has deponed that the 2nd Plaintiff has not been served with the statutory notices before the Defendant commenced the process to realize the suit property through auction, the 2nd Plaintiff has not made out any deposition to that effect.  The 1st Plaintiff’s supporting and supplementary affidavits did not state that he was making the deposition on behalf of the 2nd Plaintiff and himself.  That in the undated supporting affidavit filed on 1st July 2016, the 1st Plaintiff deponed as follows in paragraph 1;   “ … I am the 1st Plaintiff  hence I am competent to make and swear this affidavit.”That the deponent stated as follows in the supplementary affidavit sworn on 28th September 2016 at paragraph 1;   “ That I am a male adult of sound mind and disposition and the 1st Plaintiff herein hence I am competent to swear this affidavit.”

b) That further to the finding in (a) above, the letter of offer, charge documents availed by the Plaintiffs, the copies of correspondence dated 16th December 2011, 6th March 2012 by the Plaintiffs to the Defendant, plus the  statutory notices dated 22nd October 2015, 17th February 2016 and 17th May 2016 all  carry the same postal address being 967 Kisumu.  The court finds and hold that it would be farfetched for the 1st Plaintiff to have received his copies while the 2nd Plaintiff had not.  That it is also surprising that the one who is alleged not to have received the statutory notices has not found it necessary to swear an affidavit to that effect.

c) That the explanation offered by the Defendant to the Plaintiffs claim that Ksh.15 million had been received by the Defendant and that the Defendant unlawfully credited Kshs.10 million to Haulmart Kenya Ltd is credible on the evidence so far availed to the court.  The Defendant has availed documentary evidence to show that Ksh.15 million was moved from M/s General Equipments (1978) Ltd account to the recipient Haulmart Kenya Ltd account. That  in the absence of any documentary evidence to support the Plaintiffs claim, then there is no basis for the court to hold that Ksh.10 million had been meant to go to the loan account in favour of M/S Maruti Pharmaceuticals.

d) That there is no doubt that the loan has been in arrears.  That is apparent from the affidavits of the 1st Plaintiff and the Plaintiffs letter date 18th November 2015 and that of the Defendants dated 20th August 2015 annexed to the Defendant’s replying affidavit.  That the fact that the Plaintiffs may have an issue on the interest levied by the Defendant is not enough to stop the Defendant’s right to realize the security as their power of sale has  arisen.

8. That flowing from the foregoing the court finds no merit in the Plaintiffs notice of motion dated 1st July 2016.  The notice of motion is therefore dismissed with costs and the interim orders issued exparte is herein vacated accordingly.

It is so ordered.

S.M. KIBUNJA

ENVIRONMENT & LAND – JUDGE

DATED AND DELIVERED THIS 12TH DAY OF APRIL 2017

In presence of;

Plaintiffs            Absent

Defendant        Absent

Counsel           M/S Maina for Omondi for Plaintiffs

M/S Alianatine for Ragot for defendant

S.M. KIBUNJA

ENVIRONMENT & LAND – JUDGE

12/4/2017

12/4/2017

M/S Maina for Omondi for Plaintiff

Order: Ruling dated and delivered in open court in presence of

M/S Alianatine and M/s Maina holding brief for Mr. Ragot for the Defendant and Plaintiffs respectively.

S.M. KIBUNJA

ENVIRONMENT & LAND – JUDGE

12/4/2017