Case ID:174625

Soy Developers Limited v Kenagri Products Limited & 4 others [2021] eKLR

Case Metadata

Case Number:

Environment and Land Case Civil Suit 132 of 2015

Parties:

Soy Developers Limited v Kenagri Products Limited, Deposit Protection Fund Board (as Liquidators of Post Bank) Credit Limited (In Liquidation), ASL Limited, Chief Lands Registrar & Cyperr Project International Limited

Date Delivered:

15 Apr 2021

Case Class:

Civil

Court:

Environment and Land Court at Nairobi

Case Action:

Ruling

Judge(s):

Elija Ogoti Obaga

Citation:

Soy Developers Limited v Kenagri Products Limited & 4 others [2021] eKLR

Advocates:

Mr Munyua for Plaintiff/Applicant

Mr Githua for M/s Odari for 3rd Defendant/Respondent

Mr Koyyoko for 1st and 5th Respondents

Mr Maina for 2nd Defendant/Respondent

Court Division:

Environment and Land

County:

Nairobi

Advocates:

Mr Munyua for Plaintiff/Applicant

Mr Githua for M/s Odari for 3rd Defendant/Respondent

Mr Koyyoko for 1st and 5th Respondents

Mr Maina for 2nd Defendant/Respondent

History Advocates:

Both Parties Represented

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 ENVIRONMENT & LAND COURT

AT MILIMANI

ELC SUIT NO.132 OF 2015

SOY DEVELOPERS LIMITED...................................................PLAINTIFF

VERSUS

KENAGRI PRODUCTS LIMITED..................................1

ST

DEFENDANT

DEPOSIT PROTECTION FUND

BOARD ( as liquidators of POST BANK)

CREDIT LIMITED (In liquidation).................................2

nd

DEFENDANT

ASL LIMITED...................................................................3

RD

DEFENDANT

CHIEF LANDS REGISTRAR..........................................4

TH

DEFENDANT

CYPERR PROJECT INTERNATIONAL LIMITED....5

TH

DEFENDANT

RULING

1. This is a ruling in respect of a notice of motion dated 16

th

February 2021 which seeks a temporary injunction against the Respondents in respect of LR No.209/11151 (suit property). In the alternative, the Plaintiff/Applicant seeks an order of maintenance of status quo pending hearing and determination of this suit. This suit is set down for hearing on 5

th

May 2021.

2. The Applicant moved to Court and filed this application following instructions by the 3

rd

Respondent who instructed its Advocates to advertise the suit property for sale. The Applicant contends that the suit property belongs to it but that the same was fraudulently charged to the 2

nd

Respondent by the 1

st

Respondent and that the 2

nd

Respondent fraudulently transferred it to the 3

rd

Respondent. The Applicant therefore contends that if the suit property is sold before the suit is determined, it will suffer irreparable loss which may not be compensated in damages.

3. The Applicant argues that in 1991, it intended to sale its shares to the 1

st

Respondent but that the sale did not go through for non-payment of the purchase price. The sole asset of the Applicant was the suit property. The Applicant then cancelled the sale and called for the title which it had surrendered to the 1

st

Respondent. The Applicant was unable to conduct a search on the suit property due to the missing file at the Lands Office. When a reconstructed file was availed in 2015, the Applicant discovered that the suit property had been charged to City Finance Limited in 1991 and the same was discharged in 1992. The suit property was thereafter charged to Post Bank Credit Limited in October 1992.

4. The Applicant contends that it never consented to the charge of the suit property and that the subsequent sale on allegations that there was default in repayment of a loan allegedly taken by the 1

st

Respondent was fraudulent as the directors of the Applicant never signed any charge documents or authorized the same.

5. The 3

rd

Respondent opposed the Applicant’s application based on a replying affidavit sworn on 26

th

February 2021. The 3

rd

Respondent contends that it is the registered owner of the suit property the same having been transferred to it by the 2

nd

Respondent following sale as a result of default in repayment of a loan which had been taken by the 1

st

Respondent. The 3

rd

Respondent further contends that there is a judgement which was delivered on 29

th

May 2015 in which it was held to have purchased the suit property from the 2

nd

Respondent who were realizing the security offered by the 1

st

Respondent. The 3

rd

Respondent therefore argues that if an injunction were to be issued by this court, it will be tantamount to this court sitting in a judgement from a court of concurrent jurisdiction.

6. The 3

rd

Respondent further states that it is a bonafide purchaser for value after it conducted due diligence before purchasing the suit property. The 3

rd

Respondent accuses the Applicant of non-disclosure of material facts and giving contractionary information. The 3

rd

Respondent also accuses the Applicant of failure to disclose the fact that it had withdrawn a similar application for injunction which it had filed in 2015 and that one of the directors of the Applicant has sworn an affidavit to the effect that the title to the suit property was lost when the truth is that the title had been given to the 1

st

Respondent who purchased the Applicant company's shares.

7. In a supplementary affidavit sworn on 8

th

March 2021, The Applicant asserts that it was not party to the suits which culminated in the judgement of 29

th

May 2015 and that the 3

rd

Respondent is not an innocent purchaser for value as there were indicators which the 3

rd

Respondent would have noticed which showed that the title to the suit property and the sale were not genuine. The charge document was defective.

8. I have considered the Applicant’s application as well as the opposition to the same by the 3

rd

Respondent. I have also considered the submissions filed by the parties. The only issues for determination is whether an injunction should issue as prayed or an order of maintenance of status quo. This is an interesting case where the parties were operating in secrecy. Right from the allocation of the suit property all through to the sale to the 3

rd

Respondent, everything appears to have been done in an opaque manner.

9. Whereas the directors of the Applicant were named as Sammy Boit Arap Kogo and his wife Antonette Boit, the real owner of the Applicant Company was Jonathan Moi. When there was an attempted sale of the suit property to 1

st

Respondent money was paid to the various parties who were operating behind the curtains. It is not clear on how the suit property was charged and finally sold to the 3

rd

Respondent. Whereas the Applicant claims that the sale of the Applicant company did not go through, Cyrus Jirongo the man behind the 1

st

and 5

th

Respondents claims that the sale of the Applicant company was completed and that he is the managing director of the Applicant company. He however faults the sale of the suit property to the 3

rd

Respondent which he terms fraudulent and wants the same to be set aside.

10. There are serious conflicts of facts in this matter. It appears that the directors of the Applicant, the 1

st

Respondent and the 5

th

Respondent are not coming out clearly on the position as regards the Applicant Company. What complicates the whole issue is that there is a Judgement from a court of concurrent jurisdiction which has adjudged the suit property to have been properly purchased by the 3

rd

Respondent from the 2

nd

Respondent which was exercising its statutory power of sale. Even though the Applicant was not a party to either ELC 24 of 2008, or ELC 567 of 2008 there is still a valid judgement arising from the two consolidated suits. The judgement in ELC 24 of 2008 found that it is the 3

rd

Respondent who is the registered owner of the suit property having purchased it from the 2

nd

Respondent.

11. The Applicant is seeking an equitable remedy. It should have come to court with clean hands. The Applicant had previously attempted to mislead the court that its title was lost. It later changed tune and stated that it had indeed given the title to the 1

st

Respondent pursuant to a sale agreement. It is almost impossible for a court of law to take such an Applicant seriously. It is difficult in the circumstances to exercise favourable discreation to such an Applicant. In Civil Application No.32 of 2018 (VR 30/2018) between

Maxwell Hudson Kaduki Diggs & Another Vs I.M Bank & 2 Others ,

the Court of Appeal stated as follows:-

“ A party who by deliberate falsehood or calculated ambivalence or attempts to mislead the court is not deserving of favourable discretion. He who comes to equity must do equity , and equity demands absolute candour”.

12. There is competing evidence whether the 1

st

Respondent purchased the Applicant company or not. On this ground alone and given that there is judgement recognizing the 3

rd

Respondent as the registered owner of the suit property, there is no basis upon which this court can make a finding that the Applicant has a prima facie case with probability of success.

13. Even on consideration of loss which the Applicant may suffer, the Applicant states that the suit property is over Kshs.700,000,000/=. If this be the case, if the Applicant succeeds, then it can get compensated. In such case, an injunction cannot issue. Even on consideration of balance of convenience, it is the 3

rd

Respondent which has a judgement in its favour. This judgement has not been set aside. I do not see how a court of concurrent jurisdiction can issue orders of maintenance of status quo in the circumstances. I therefore find that the Applicant’s application lacks merit. The same is dismissed with costs to the 3

rd

Respondent.

It is so ordered.

Dated, Signed and delivered at Nairobi on this 15

th

day of April 2021.

E.O.OBAGA

JUDGE

In the Virtual Presence of :-

Mr Munyua for Plaintiff/Applicant

Mr Githua for M/s Odari for 3

rd

Defendant/Respondent

Mr Koyyoko for 1

st

and 5

th

Respondents

Mr Maina for 2

nd

Defendant/Respondent

Court Assistant: Okumu

E.O.OBAGA

JUDGE