LALCHAND FULCHAND SHAH & ANOTHER v INVESTMENTS & MORTGAGES BANK LIMITED [2000] KECA 21 (KLR)
The bottom line
#Kenya's Court of Appeal refused to stop a bank from selling charged land, ruling that vague claims of harm and dishonesty disqualify borrowers from injunctions.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the intended appeal would be rendered nugatory if the threatened sale of the suit property is not stayed
- 2.Whether the intended appeal is arguable
- 3.Whether the Applicants, coming with unclean hands, are entitled to the equitable relief of an injunction pending appeal
Key legal issues
#Whether the intended appeal would be rendered nugatory if the sale of the charged property proceeds
The Applicants failed the nugatory-ness test because their sworn averment was bare and unsubstantiated, and any loss could be met by pecuniary compensation.
The only deposition on the nugatory ground was a verbatim belief that the appeal would become nugatory if the property was sold. The court held such a formulaic averment insufficient to deny the respondent bank the fruits of its success in the superior court. Since the respondent is capable of paying damages, satisfactory pecuniary compensation can be awarded, and land is no longer a 'sacred cow', the sale proceeding would not render a successful appeal nugatory.
Whether the Applicants were entitled to equitable relief of injunction
No. Having been less than candid in certifying that statutory provisions of the charge had been explained to them, the Applicants came to court with unclean hands and were barred from equitable relief.
The Applicants had certified that sections 69(1) and 100A of the Indian Transfer of Property Act 1882 as amended had been explained to them, yet asserted the explanation was never given, despite their own certification pointing to the advocate who drew the charge. The learned Judge was right to find them less than candid. Equity bars relief to a litigant with dirty hands, and that bar carried through to the application before the Court of Appeal.
Whether the charge was properly executed
The court agreed with the High Court's exposition of the law on the effect of section 73 of the Evidence Act and the authorities to the effect that the charge was properly executed by the Applicants.
Akiwumi JA, while careful not to usurp the role of the bench that would eventually hear the intended appeal, stated that he agreed with the learned Judge's exposition of the law concerning the effect of section 73 of the Evidence Act and the authorities considered, to the effect that the charge was properly executed. This undermined the arguability of the intended appeal on that ground.
Legal principles established
#- A bare, formulaic assertion that an appeal will be rendered nugatory, without justifying facts on oath, does not satisfy the nugatory-ness test for an injunction or stay pending appeal.
- Land is no longer a special category; where the respondent is capable of paying pecuniary compensation, the nugatory-ness test will generally not be met.
- A litigant who comes to court with unclean hands is barred from obtaining the equitable relief of an injunction.
- A mortgagee will not be restrained from exercising the power of sale merely because the amount due is in dispute; he will be restrained if the mortgagor pays the amount claimed into court.
Court orders
#- 1.The Applicants' application for relief in the intended appeal is dismissed with costs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- On appeal from
- High Court of Kenya at Nairobi
- H.C.C.C. No. 2533 of 1997
- Jurisdiction invoked
- Rule 5(2)(b) jurisdiction of the Court of Appeal over intended appeals (injunction/stay pending appeal)
Relief refused
#Injunction/stay restraining the sale of the suit property pending the intended appeal
The averment that the appeal would become nugatory was feeble and insubstantial; satisfactory pecuniary compensation could be awarded; and the Applicants came to court with unclean hands, disentitling them to equitable relief
Costs
The application is dismissed with costs (costs to the Respondent)
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
I am afraid that this sort of feeble and insubstantial averment on oath is not good enough.
But satisfactory pecuniary compensation can be awarded and as this court has had occasion to observe, land is no longer a "sacred cow".
They have come to this Court with the same dirty hands which alone, bars them from the granting of the equitable relief of injunction that they now seek.
In the result, since Shah, JA agrees that the Applicants' application be dismissed, it is hereby dismissed with costs. It is so ordered.
Issues in the judgment
#The judgment refers to a separate Ruling by Shah, JA which is not contained in the text supplied; only the Ruling of Akiwumi, JA is available, so the full coram and Shah JA's reasoning cannot be verified from this text.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "LALCHAND FULCHAND SHAH & ANOTHER v INVESTMENTS & MORTGAGES BANK LIMITED [2000] KECA 21 (KLR)", Case Analysis (2000). Civil Application No. 165 of 2000. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2000/21/eng@2000-07-07
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.