Case ID:162970

Rashmikant Bwagwandas Kanabar v Highgrove Holdings Limited & another [2020] eKLR

Case Metadata

Case Number:

Civil Case181 of 2019

Parties:

Rashmikant Bwagwandas Kanabar v Highgrove Holdings Limited & I & M Bank Limited

Date Delivered:

12 Jun 2020

Case Class:

Civil

Court:

High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)

Case Action:

Ruling

Judge(s):

Maureen Akinyi Odero

Citation:

Rashmikant Bwagwandas Kanabar v Highgrove Holdings Limited & another [2020] eKLR

Court Division:

Commercial Tax & Admiralty

County:

Nairobi

Case Outcome:

Application dismissed

Disclaimer:

The information contained in the above segment is not part of the judicial opinion delivered by the Court. The metadata has been prepared by Kenya Law as a guide in understanding the subject of the judicial opinion. Kenya Law makes no warranties as to the comprehensiveness or accuracy of the information

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

COMMERCIAL & TAX DIVISION

CIVIL CASE NO.181 OF 2019

RASHMIKANT BWAGWANDAS KANABAR………….PLAINTIFF

VERSUS

1. HIGHGROVE HOLDINGS LIMITED…………1

ST

DEFENDANT

2. I & M BANK LIMITED………………………….2

ND

DEFENDANT

RULING

1. Before this Court is the Notice of Motion dated

30

th

July 2019

by which the Plaintiff/Applicant

RASHMIKANT BHAGWANDAS KANABAR

seeks the following Orders:-

“1. SPENT

2. SPENT

3. THAT pending the hearing and determination of the suit herein an interim injunction order do issue to restrain the 2

nd

Defendant herein either by itself or its agents and/or servants from interfering, alienating or otherwise howsoever dealing with the House No.19 situated at L.R NO.2998, lower Kabete Road Nairobi.

4. THAT in any event the costs hereof be awarded to the Plaintiff.”

2. The Application was premised upon

Order 40 Rules 1 & 2 of the Civil Procedure Rules, Section 3A Civil Procedure Rules Section 3A Civil Procedure Act Cap 21 laws of Kenya

and all enabling provisions of law. It was supported by the Affidavit of even date sworn by

LEWIS KALIA KYENGO

an Advocate of Court of Kenya.

3.

I & M BANK LIMITED

, the 2

nd

Defendant (hereinafter “

the Bank

”) opposed the application through the Replying Affidavit dated

31

st

August 2019

, sworn by

ANDREW MUCHINA

, a Legal Manager in the Recoveries Department of the 2

nd

Defendant Bank. In their Replying Affidavit the Bank raised a Preliminary Objection to the suit. The application was canvassed by way of written submissions. The Plaintiff/Applicant filed his written submissions on

25

th

September 2019

whilst the 2

nd

Defendant/Respondent filed its submissions on

9

th

October 2019

.

BACKGROUND

4. The Plaintiff/Applicant is the registered proprietor of

House

No.19

within

L.R NO.2998

along lower Kabete Road in Nairobi County, having purchased the same from

HIGHGROVE HOLDINGS LIMITED

(the 1

st

Defendant/Respondent). The payment of the purchase price for the house was effected by way of a transfer of

Kshs.193,495,000

from

ASL Credit

into the account of the 1

ST

Defendant which transfer was effected between

15

th

July 2013

to

20

th

February 2014.

5. The Plaintiff/Applicant fell ill after purchasing the said house and this necessitated his re-location to Australia in pursuit of better medical facilities. The Plaintiff/Applicant claims that while he was away the 2

nd

Defendant advertised

House No.19

for sale by auction on

30

th

July 2019

without serving upon the Plaintiff/Applicant the requisite statutory notices of sale or the Redemption notice.

6. It is the Plaintiff/Applicant’s contention that the intended sale was the result of a disagreement between the 1

st

and 2

nd

Defendants over reconciliation of the Highgrove Village development accounts which was a joint venture development undertaken between the 1

st

and 2

nd

Defendants and in which the Plaintiff/Applicant had no involvement at all. The Plaintiff/Applicant avers that the intended sale is null and void and illegal given that the suit property had already been transferred to himself. Hence the present application.

7. On its part the 2

nd

Defendant Bank avers that pursuant to a letter of Offer dated

10

th

January 2017

, the Bank extended to the 1

st

Defendant a credit facility. As security for that credit facility to the 1

st

Defendant, the Plaintiff/Applicant executed a first legal charge dated

4

th

April 2017

over town

House No.19 Highgrove village

situated on

LR NO.2998,

lower Kabete in favour of the Bank (hereinafter the suit property)

8. The 1

st

Defendant defaulted in settling the outstanding debt and the Bank issued the 1

st

Defendant with a demand letter dated

25

th

July 2017

calling for settlement of the outstanding amount. The Demand letter was also copied to the Plaintiff. Neither responded to the demand letter therefore the Bank issued requisite statutory notices under the Land Act. A redemption notice was also issued to the Plaintiff by way of registered post.

9. A 45 days’ Notification of Sale was issued in respect of

L.R 209/4892

(original

4639/8

) and

L.R 29998

(Original

4928/5

and

2951/54

) to the 1

st

Defendant and the guarantors on

8

th

February 2018

. After the issuance of the notices, the Bank discovered that

villas No.6,13,14,17,20,25 and 26

of

L.R Number 29998

(Original

4928/5

and

2951/54

) had been sold to third parties without the Bank’s consent, necessitating issuance of 45 days’ notices to the sub lessees of the said villas on

19

th

July 2019

.

10. The Bank maintains the Plaintiff and the 1

st

Defendant are truly and justly indebted to the Bank for the sum of

Kshs.1,547,374,147.57

outstanding on the 1

st

Defendant’s account as at

30

th

June 2019

. It is alleged that the said debt was admitted by the borrower in

HCCC E073 OF 2019 Highgrove Holdings Limited V I&M Bank & Another

.

ANALYSIS AND DETERMINATION

11. I have carefully considered the written submissions filed by both parties in this matter. The following issues arise for determination.

(i) Is the Preliminary Objection dated

31

st

July 2019

merited?

(ii) Is the Application for injunctive Orders merited?

i.

Preliminary Objection

12. The 2

nd

Defendant Bank filed in Court a Notice of Preliminary Objection dated

31

st

July 2019

seeking to have the Plaintiff’s entire suit struck out “

in limine

” on grounds that:-

“The suit is Res Judicata as the issues raised therein have been conclusively determined by this Honourable Court in HCCC E 073 OF 2019, Highgrove Holdings Ltd –Vs- I & M Bank & Another.”

13. Additionally vide their Replying Affidavit dated

31

st

August 2019,

the 2

nd

Defendant Bank raised a Preliminary Objection seeking the dismissal of the suit as well as the application dated

30

th

July 2019

on grounds that:-

“(a) The Supporting Affidavit is fatally defective.

(b) The Verifying Affidavit is fatally defective.

(c) The Application is Res Judicata as the bank’s right to exercise its statutory power of sale over the charged property has been determined by a court of competent jurisdiction.”

14. For good order this court will deal first with the Preliminary Objection. The definition of what constitutes a Preliminary Objection was set out in the case of

MUKHISA BISCUIT MANUFACTURING CO. LTD VS WEST END DISTRIBUTORS LTD [1969] EALR 696,

where it was held:-

“a preliminary objection consists of a point of law which has been pleaded or which arises by clear implication out of, pleadings, and which if argued as a preliminary point may dispose of the suit. Examples are an objection to jurisdiction of the court, or a plea of limitation of a submission that the parties are bound by the contract giving rise to the suit to refer the dispute to arbitration

.”

15. The 2

nd

Defendant Bank submits that both the Supporting Affidavit as well as the Verifying Affidavit accompanying the Notice of Motion dated

30

th

July 2019

are fatally defective as they were sworn not by the Plaintiff/Applicant himself but by the Plaintiff’s Advocate acting upon a Power of Attorney granted to him by the Plaintiff/Applicant.

16. It is a general principle in law that an Advocate should not enter into the arena of the dispute between the parties. It is averred for the Bank that Counsel for the Plaintiff/Applicant has in the Supporting Affidavit deponed regarding contentious matters of fact thus making himself a potential witness for cross-examination on a case he is handling which is irregular and is contrary to

Section 9

of

the Advocates Practice Rules.

17. However, it is also a fact that there would be no error where by affidavit of an Advocate raises issues of law and fact which are within his knowledge as an advocate handling the particular suit on behalf of the party on whose behalf he has sworn the affidavit. In

V.K Construction Co. Ltd Vs Mpata Investment Ltd HCC 257 OF 2003 where Hon. Ringera J

pronounced himself thus:-

“…

the jurisdiction to strike out pleadings is to be exercised cautiously and sparingly and only where the cause of action is so obviously bad and almost incontestably bad. For the remedy is a draconian one and where life can be injected in the plaint by an amendment the plaintiff should be given a chance to do so

, that further the discretion of the court in such a scenario is unfettered and the learned magistrate should have exercised that discretion in favour of the Plaintiffs/Applicant and failure to revive the suit occasioned a traversity of justice.”

[own emphasis]

18. Similarly in

Kamlesh M.A Pattni – VS – Nasir Ibrahim Ali & 2 Others CA 354/2004,

the Court of Appeal in dealing with a serious objection on the admissibility of an affidavit sworn by Senior Counsel

Paul Muite

held inter alia:-

…”There is otherwise no express prohibition against an advocate who, of his own knowledge can prove some facts, to state them in an affidavit on behalf of his client

, so too an advocate who cannot readily find his client but has information the sources of which he can disclose and state the grounds for believing the information…”

[own emphasis]

19. In this present case the Plaintiff’s Advocate has produced a Power of Attorney dated

24

th

July 2019

(Annexture “

LKKI

” to the Supplementary Affidavit dated

16

th

August 2019

). By this Power of Attorney the Plaintiff gave his advocate power to act on his behalf. In the case of

BEN NJUGUNA EIA PROPENSITY PROPERTIES & CONSULTANTS –VS- STANLEY M. GITHUNGURI & Another [2019] eKLR,

the court held that:-

“

For a party to authorize another to appear in court over a matter, that party must guarantee the “assignee” legal authority to represent the assignor. In case of an individual, the authority usually takes the form of a power of attorney

. A power of attorney is a legal document giving one person, usually (an agent) the power to act for another, (the principal) to make legal decisions on behalf of the principal. The power is usually used when the principal is ill or under a disability or when the principal cannot be present to sign necessary legal documents (usually in financial transactions).

In my considered opinion the deponent required at least a power of Attorney to depone to the averments in the Supporting Affidavit.

That is lacking herein.”

[own emphasis]

20. I therefore find that the Power of Attorney dated

24

th

July 2019

authorized the Advocate to act for his client who was away in Australia for treatment. Accordingly, I find that the Supporting Affidavit as well as the Verifying Affidavit dated

30

th

July 2019

are not defective and I dismiss this limit of the Preliminary Objection.

ii.

Res-Judicata

21. The 2

nd

Defendant/Respondent submits that the present application and the entire suit ought to be struck out on grounds that there exists before the High Court another suit being

HCCC E073 OF 2019 Highgrove Holdings Ltd Vs I & M Bank and Another

, in which the Plaintiff/Applicant filed a similar application seeking to injunct the Defendant Bank from exercising its statutory power of sale over the suit property. That vide a Ruling dated

11

th

July 2019

in

HCCC E073 OF 2019, Hon Lady Justice Wilfrida Okwany,

dismissed the application for an injunction and upheld the right of the Bank to exercise their statutory power of sale over the suit property. A copy of that Ruling is annexed (Pages 1-6) to the Replying Affidavit dated

31

st

August 2019

.

22. On its part the Plaintiff/Applicant denies that the present suit and application are res judicata. The Applicant submits that the issues raised in the present application are yet to be decided by a court of competent jurisdiction. That the matters arising in

HCCC E073 OF 2019

currently pending before

Hon Lady Justice Okwany

concerned different matters i.e interest payable in repayment of the facility advanced by the Defendant Bank for the development of

House No.3,7 and 19

situated

on LR NO.29998

, whilst in the instant suit the subject matter is the purchase by the Plaintiff of

House No.19

vis-à-vis the developer and the financing Bank.

23. The doctrine of Res judicata is encapsulated in

Section 7

of the

Civil Procedure Act, Cap 21

, laws of Kenya which provides:-

“7. No court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decide by such court.”

24. Vide the application dated

15

th

May 2019

in

HCCC E073 OF 2019

the Plaintiff/Applicant who is the 1

st

Defendant in the present suit sought the following orders.

“4.

THAT pending the hearing and determination of this application interpartes, this Honourable court be pleased to issue temporary order of injunction against the 1

st

and 2

nd

Respondents restraining them from entering, interfere, advertise for sale or sell that property known as House No.19, House No.7 on LR NO.29998 situated at Highgrove Village lower Kabete road in Nairobi County.”

25. In the present the Plaintiff/Applicant seeks for orders:-

“3 THAT pending the hearing and determination of the suit herein an interim injunction order do issue to restrain the 2

nd

Defendant herein either by itself or its agents and/or servants from interfering, alienating or otherwise howsoever, dealing with the House No.19 situated at LR.NO. 29998 Lower Kabete Road, Nairobi.”

26. It is clearly manifest that in both suits the order being sought are the same to wit an injunction to prevent the advertisement or sale of

House No.19

situated at

LR NO.29998 Lower Kabete

.

27. In

HCCC E037 OF 2019, Hon Justice Okwany

found that the Plaintiff in that case (the 1

st

Defendant in the present suit) had failed to establish a prima facie case and the Hon Judge dismissed the application for injunctive Orders:-

In the present case the Plaintiff/Applicant claims to have fully paid for the suit property. However, no documentation has been annexed as proof of such payment. On the other hand the 2

nd

Defendant bank has annexed to its Replying Affidavit dated

31

st

August 2019

a charge duly executed over the suit property by the Plaintiff/Applicant and the 1

st

Defendant in favour of the 2

nd

Defendant Bank.

28. In

JOHN MICHAEL WANJAO VS GEORGE KIMETTO & 2 OTHERS [2014] eKLR

, the Court stated as follows:-

“I am aware that Section 7 talks of litigation by the same parties. I agree that there are two additional parties to this suit and the parties appear to be different from the previous suit which had only one defendant. However, it is clear that the whole substratum of the case is the registration of the 2

nd

Defendant as owner of the suit land.

I do not think that a party can be allowed to argue that his subsequent case is not res judicata, merely by a mischievous addition of parties

. Does it mean that if one sues party X, on a contract which suit is later dismissed, then he can sue party X and Y, in a subsequent suit touching on the same contract, where even party Y was not involved in the contract and yet claim that the suit is not res judicata for the reason that there is an additional party who was not a party in the previous suit? My answer is no, for that would be a cheeky attempt to disguise the latter matter as a different matter, which is clearly not so, and this cannot be permitted as it would avoid the mischief sought to be captured by the doctrine of res judicata. in our instance, I fail to see any cause of action that the Plaintiff has with the 1

st

Defendant and the 3

rd

Defendant which can be sustained in the absence of the 2

nd

Defendant. my own view of this matter therefore is that although the issues being raised appear different, and the parties seem different, those issues could and/or ought to have been a ground of attack in the previous suit, and in my view the addition of the other two parties is a disguise to pass off this suit as a suit raising new issues. There is no new issue which would not have been raised in the former suit. This suit in my view is clearly caught up by the doctrine of “Res Judicata”.

[own emphasis]

29. Similarly in this case what comes out clear is that although the Plaintiff/Applicant is not a party in

HCCC E073 OF 2019,

the

subject matter

and the

issues

being raised in the two suits are the same. Accordingly, I find that this suit is indeed Res judicata. I further find that it was mischievous and amounts to an abuse of court process for the Plaintiff to file this suit without disclosing to the court that a similar suit is pending before another court of equal and concurrent jurisdiction. Given those circumstances and given the fact that my sister judge had already declined to grant the injunctive orders sought in respect of

House No.19

, I decline to grant the injunctive orders sought by prayer (3) of the present application. To do otherwise would be tantamount to reviewing or sitting on appeal over a decision of a court of concurrent jurisdiction.

30. Finally based on the foregoing I hereby dismiss in its entirety the Application dated

30

th

July 2019

with costs to the 2

nd

Defendant/Respondent. The instant suit is transferred to High Court

Number 38

to be mentioned before

Justice Okwany

for further directions.

Dated in Nairobi this 12

th

day of June 2020

…………………………………..

Justice Maureen A. Odero