Wanjala v Progressive Credit Ltd (Commercial Case E358 of 2026) [2026] SCC 129 (KLR)
The bottom line
#A Mombasa court blocked the sale of a repossessed tuktuk, ruling the lender's Kshs. 66,828 arrears claim breached the rule capping interest at the loan principal.
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 Applicant established a prima facie case warranting injunctive relief over the repossessed tuktuk
- 2.Whether the Applicant would suffer irreparable harm not compensable by damages
- 3.Whether the claimed arrears were compounded contrary to the in duplum rule
- 4.Whether penalty charges not provided for in the loan agreement could lawfully be levied
Key legal issues
#Prima facie case for injunction
The Applicant established a prima facie case based on exploitative accounting, wrongful repossession and unconscionable penalty charges
The court perused the loan agreement and found the amount advanced was Kshs. 39,693 with weekly installments and 7% monthly interest. The Respondent claimed arrears of Kshs. 66,828.37 while admitting the Applicant had paid Kshs. 38,130, leaving a small balance. The arrears were compounded contrary to the in duplum rule, and penalty fees of 2% were charged despite absence of any penalty provision in the loan agreement, rendering the charging unconscionable and the repossession wrongful.
In duplum rule
The claimed arrears contravened the in duplum rule; interest should be based only on the outstanding balance, not the original principal
The court found that the Applicant had paid Kshs. 37,928 per the M-Pesa and loan statements, leaving a balance of Kshs. 1,765. The Respondent's claim of Kshs. 66,828.37 in arrears far exceeded the principal of Kshs. 39,693, breaching the rule that interest and penalties cease to accrue once they equal the principal. Reliance was placed on Faulu Microfinance Bank Limited v Kilonzo, which applied Mwambeja Ranching, holding that the rule protects borrowers from exploitative accumulation of interest.
Irreparable harm
Deprivation of the tuktuk, essential to the Applicant's livelihood, would cause losses not easily quantifiable; damages would not be an adequate remedy
The Applicant relied on the motor-vehicle to generate income for sustenance. The court agreed that deprivation of the vehicle, essential for livelihood, particularly before reconciliation of disputed accounts, would result in losses not easily quantifiable, relying on Fairbanks Limited v Alliance Leasing Limited. It therefore found a likelihood of irreparable harm if injunctive relief was denied.
Legal principles established
#- Under the in duplum rule, interest and penalties must stop growing once they equal the principal
- The Giella v Cassman Brown principles for injunctive relief are applied sequentially; failure of the first limb disposes of the inquiry
- Charges not provided for in the loan agreement, such as penalty fees, are unconscionable
Court orders
#- 1.A temporary injunction restraining the Respondent from selling or transferring motor-vehicle registration number KTWB 800D (TUK-TUK) to any 3rd party pending hearing and determination of the suit
- 2.Parties to file and exchange full pleadings by 29th May 2026
- 3.Hearing of the main suit to proceed on 8th June 2026
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Small Claims Court Act (interlocutory application in a claim; provision not specified in judgment)
Relief refused
#Mandatory injunction compelling immediate release of the motor-vehicle to the Applicant
The court granted instead a temporary injunction restraining sale or transfer pending the suit; the mandatory release limb was not ordered
Costs
No costs order made in the judgment
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.
A temporary injunction hereby issues restraining the Respondent from selling, transferring the Applicant's motor-vehicle registration number KTWB 800D (TUK-TUK) to any 3rd party pending the hearing and determination of this suit.
The arrears of Kshs. 66,828.37/- have thus clearly been compounded contrary to the induplum rule which stipulates that interest and or penalties must stop growing once they equal the principal.
the Applicant was not liable to penalty fees as the same are not provided for in the loan agreement and their charging is thus unconscionable.
the three principles set out in Giella v Cassman Brown are to be applied sequentially, and that if a prima facie case is not established, the court need not proceed to consider the other two limbs.
The duplum rule is concerned with public interest and its key aim was to protect borrowers from exploitation by lenders who permit interest to accumulate to astronomical figures.
Issues in the judgment
#Internal date inconsistencies: demand notice dated 15th July 2025 precedes the loan recount of arrears 'as at 10th May 2026', and repossession on 14th April 2026 precedes that arrears date; timeline is confusing
Conflicting figures on amounts paid: Respondent admits Kshs. 38,130/- paid while the court's perusal of statements established Kshs. 37,928/- paid
Typographical errors in the judgment ('prima fascie', 'sufiering', 'A regards irreparable harm', 'Kshs. 3.178/-')
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Wanjala v Progressive Credit Ltd (Commercial Case E358 of 2026) [2026] SCC 129 (KLR)", Case Analysis (2026). not_stated_in_judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/scc/2026/129/eng@2026-05-11
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.