Moses Mwita Mahiri v Momentum Credit Limited

2. The application is based on the grounds on the face of the application and the supporting affidavit of MOSES MWITA MAHIRI. The grounds are that applicant is the absolute owner of motor vehicle KDJ 293V Subaru Impreza as evidenced by annexures marked MMM-1 being a bundle of purchase documents and sale agreements. 3. That in July 2024 the defendant’s sales agent passed by his store on the road advertising loans and he gave one of them his phone number. Thereafter a lady called him and informed him that he required a business loan of Kshs. 1,000,000/= and that he possessed the subject motor vehicle which he had purchased in Kisumu on credit terms with an outstanding balance of Kshs. 250,000/=. The agents proposed to clear the balance and advance him a loan of Kshs. 500,000/= using the vehicle as collateral. 4. The defendant cleared the balance of Kshs. 250,000/= and advanced him a loan of Kshs. 300,000/=, bringing the principal calculation to Kshs. 516,571/=. They however claimed undisclosed “other charges” loaded the total advanced sum to Kshs. 630,000/=. 5. The defendant admitted to creating an insurance premium financing (IPF) facility of Kshs. 73,369/= in 2024 and automatically renewing another on 29th August for Kshs. 73,329/= without the plaintiff’s knowledge or written consent since the vehicle had private car insurance cover in 2024. The defendant took advantage of his illiteracy and presented complex contracts for his signature without reading out the hidden IPF charges thereby artificially bloating his baseline to Kshs. 678,000. 6. That the plaintiff has demonstrated through Mpesa ledger that the plaintiff has paid a total of Kshs. 1,584,109/=. That the defendant’s financial extractions directly violate the In Duplum Rule under Section 44A of the Banking Act, as the total interest and penalties charged have far exceeded KEHANCHA SPMC COMMSU NO. E004 OF 2026 (RULING) 2

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the principal amount, making the loan legally fully settled. That because of his illiteracy the plaintiff gave the defendant his son’s email address karanbaraka@gmail.com, 7. That the applicant by August 2025 had faithfully cleared payments for a full year without missing a single installment. Upon receiving the statement in August 2025, the plaintiff requested to settle the entire outstanding balance at once, but the 1st defendant refused, insisting the contract was for 24 months. The 2nd defendant Vintage Auctioneers issued a proclamation notice dated 11th April 2026 demanding for Kshs. 325,000/=, totally ignoring all subsequent payments made after August 2025. 8. That on 6/3/2026 the defendant’s agents showed up at the plaintiff’s door with a demand notice and an intention to proclaim for Kshs. 74,000/= dated 3rd October, 2025. That they had a meeting with the OCS Isebania and the representatives of the 1st respondent who insisted that the total amount due was a sum of Kshs. 91,200/= inclusive of auctioneers fees, reassuring the applicant that he had only three monthly installments left to completely clear the loan, which money the applicant paid as evidenced by Mpesa statement marked “MMM-4. 9. That on 28/7/2026 the auctioneers maliciously returned to his business premises to repossess his car. That on 29/7/2026 his advocate successfully applied before the Honourable Court in Milimani for interim stay orders halting any repossession or interference with any vehicle on the grounds above which orders were duly served on the respondent. The respondent has refused to halt all repossession actions as per the penal notice of 14 days. The suit in Miliman was not a substantive suit thus the doctrine of subjudice is legally inapplicable. KEHANCHA SPMC COMMSU NO. E004 OF 2026 (RULING) 3

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10.That the proclamation was illegal as the applicant had not been served with a statutory demand notice for the proclaimed amount of Kshs. 325,000/=, no proclamation notice after the letter of instructions dated 7 th July 2026 and he had no outstanding arrears. That the auctioneers did not issue a 7 days proclamation notice after receipt of instructions dated 20/7/2026, contrary to Rule 12 of the Auctioneers Rules. That the respondent has not specified the exact month, period or contractual basis of the alleged default. That according to the Mpesa statement the applicant has paid a staggering total of Kshs. 1,584,109/= to the respondent. That the respondent has been unjustly enriched by overcharging the applicant by under hidden lines and by passing mandatory processes like the 7 days proclamation notice under Rule 12 of the Auctioneers Rules. 11.The respondent filed a replying affidavit sworn by SHEILA IMALI a legal officer with the respondent sworn on 7th August, 2026 in opposing the application. 12.The grounds in opposition are that the application is made in bad faith, it is an afterthought and the same ought to be dismissed forthwith. That on 30/8/2024, the respondent advanced the applicant a 24 moth logbook financing facility in the sum of Kshs. 636,000/= plus a capitalized amount of Kshs. 42,000/= making a total of Kshs. 678,000/= which was secured by the suit vehicle as evidenced by annexure marked SI-2. The respondent at the applicant’s behest advanced him an Insurance Premium Financing (IPF) facility to the tune of Kshs. 73,369/= which was paid to Pioneer General Insurance Ltd who issued an insurance sticker for the security vehicle as evidenced by annexure marked SI-3 (a-e). 13.That to secure the respondent’s interest the suit vehicle was jointly registered in the names of the applicant and respondent as evidenced by annexure KEHANCHA SPMC COMMSU NO. E004 OF 2026 (RULING) 4

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marked SI-4 (a & b). That the applicant executed the loan application forms freely and willfully accepting to be bound by the terms and conditions thereof. That following disbursement of the logbook financing facility payable within 24 months, the applicant paid 19 installments out of 24 installments and fell into arrears on the 20th and 21st installments. 14.That due process was followed by the respondents prior to repossession of the vehicle including service of demand letters, notices of intent to proclaim and proclamation notice as evidenced by annexures marked SI-7(a, b & c). That as at 4th August 2026 the applicant was indebted to the respondent to the tune of Kshs. 359,791/= which amount continues to accrue interest rates until payment in full see the loan statement marked SI-8. That the applicant concealed to the court some crucial facts which led the court to granting final orders without hearing the respondent. 15.That the applicant has failed to disclose to the court that he was advanced several facilities which he has not cleared and is still indebted to the respondent. That the allegation that the applicant is illiterate is misleading and unsubstantiated. That since due process was followed and the applicant is in default, the respondent should be allowed to proceed with recovery of its security. 16.The application was canvassed by way of written submissions which both parties filed. Analysis and Determination 17.The conditions that have to be fulfilled before the court can exercise its discretion to grant a temporary injunction have been well laid out as follows: The Applicant has to show a prima facie case with a probability of success; the likelihood of the Applicant suffering irreparable damage which would not be adequately compensated by an award of damages and where the court KEHANCHA SPMC COMMSU NO. E004 OF 2026 (RULING) 5

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is in doubt in respect of the two considerations, then the Application will be decided on a balance of convenience (see Giella vs. Cassman Brown & Co Ltd (1973) EA 358 and Fellowes and Son v. Fisher [1976] I QB 122). Whether a prima facie case has been established. 18.What amounts to a prima facie case, was explained in Mrao vs. First American Bank of Kenya Ltd & 2 Others [2003] KLR 125 case as follows: “...In civil cases, it is a case in which on the material presented to the Court a tribunal properly directing itself will conclude that there exists a right which has apparently been infringed by the opposite party as to call for an explanation or rebuttal from the latter.” 19.In Nguruman Limited vs. Jan Bonde Nielsen & 2 Others [2014] eKLR the Court of Appeal restated the law as follows: “In an interlocutory injunction application, the applicant has to satisfy the triple requirements to; (a) Establish his case only at a prima facie level, (b) Demonstrate irreparable injury if a temporary injunction is not granted, and (c) Ally any doubts as to (b) by showing that the balance of convenience is in his favour. These are the three pillars on which rests the foundation of any order of injunction, interlocutory or permanent. It is established that all the above three conditions and stages are to be applied as separate, distinct and logical hurdles which the applicant is expected to surmount sequentially. See Kenya KEHANCHA SPMC COMMSU NO. E004 OF 2026 (RULING) 6

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Commercial Finance Co. Ltd V. Afraha Education Society [2001] Vol. 1 EA 86. If the applicant establishes a prima facie case that alone is not sufficient basis to grant an interlocutory injunction, the court must further be satisfied that the injury the respondent will suffer, in the event the injunction is not granted, will be irreparable. In other words, if damages recoverable in law is an adequate remedy and the respondent is capable of paying, no interlocutory order of injunction should normally be granted, however strong the applicant’s claim may appear at that stage. If prima facie case is not established, then irreparable injury and balance of convenience need no consideration. The existence of a prima facie case does not permit “leap-frogging” by the applicant to injunction directly without crossing the other hurdles in between. It is where there is doubt as to the adequacy of the respective remedies in damages available to either party or both that the question of balance of convenience would arise. The inconvenience to the applicant if interlocutory injunction is refused would be balanced and compared with that of the respondent, if it is granted.” 20.In Dr. Simon Waiharo Chege vs. Paramount Bank of Kenya Ltd. Nairobi (Milimani) HCCC No. 360 of 2001, Ringera J (as he was) then held as follows: “The remedy of injunction is one of the greatest equitable relief. It will issue in appropriate cases to protect the legal and equitable rights of a party to litigation which have been, or are being or are likely to be violated by the adversary. To benefit from the remedy, at an interlocutory stage, the applicant must, in the first instance show KEHANCHA SPMC COMMSU NO. E004 OF 2026 (RULING) 7

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he has a prima facie case with a probability of success at the trial. If the Court is in doubt as to the existence of such a case, it should decide the application on a balance of convenience. And because of its origin and foundation in the equity stream of the jurisdiction of the Courts of judicature, the applicant is normally required to show that damages would not be an adequate remedy for the injury suffered or likely to be suffered if he is to obtain an interlocutory injunction. As the relief is equitable in origin, it is discretionary in application and will not issue to a party whose conduct as appertains to the subject matter of the suit does not meet the approval of the eye of equity.” 21.In our instant case the applicant has claimed that the respondent did not follow the due process in repossession of the suit vehicle. While on the other hand the respondent maintains that they followed the due process. This is an issue that the court can only be able to determine after hearing the parties. The applicant has also claimed that the respondent have violated the In Duplum Principle. This calls for the respondent to give an explanation on the same issues. Thus I find that the plaintiff/applicant has been able to establish a prima facie case. Irreparable loss 22.On this issue the applicant counsel submitted that the subject motor vehicle is the sole transport engine for the applicant’s small scale grain trade. If the vehicle is repossessed and detained in an open commercial yard, it faces severe weather deterioration, rapid depreciation and parts cannibalization. This deprivation will destroy the applicant’s economic survival, inflicting a KEHANCHA SPMC COMMSU NO. E004 OF 2026 (RULING) 8

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catastrophic injury that cannot be adequately remedied by an award of damages. 23.Counsel for the respondent submitted that it is noteworthy that the applicant has not alleged that he will suffer irreparable harm that cannot be compensated by damages should the court decline to issue the injunction sought. The sale of the vehicle on its own is not evidence that irreparable harm will be suffered. This is a bare statement and the court cannot deduce what harm, if any, will be suffered and if the same qualifies as irreparable harm. That the applicant has failed to demonstrate the nature and extent of the injury and that the sale will occasion harm that cannot be compensated in damages since the value of the suit vehicle can be ascertained and damages quantified with exactitude. 24.In our instant case the applicant claims the repossession violates the due process and the loan facility violates the In Duplum principle. This is an irreparable loss that cannot be compensated by damages. Even if the respondent can pay damages that alone cannot be a bar to issue an injunction where the whole process is against the doctrines of law. The applicant stated that he has overpaid the loan facility. If this is the case the applicant stands to suffer emotional damage which cannot be compensated in damages. On the other hand if it will be decided in the favour of the respondent thy can recover the money due from the applicant. Balance of convenience 25.Counsel for the applicant submitted that the balance of convenience tilts in favour of the applicant as he has already repaid triple the principal amount. KEHANCHA SPMC COMMSU NO. E004 OF 2026 (RULING) 9

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The counsel for the respondent submitted that the applicant is in arrears and thus the balance of convenience does not tilt in his favour. The applicant have claimed that he has repaid triple the principal amount I find the balance of convenience tilts in his favour. Whether the respondent is in contempt of court. 26.On this issue the counsel for the applicant submitted that the Miliman Court did not have territorial jurisdiction. Thus where a court has no jurisdiction another court cannot punish a party for orders emanating from such proceedings. If there is any contempt then such proceedings ought to have been initiated in the court that issued the said orders. I decline to grant this order. Counsel for the applicant did not submit on this prayer meaning it was abandoned. 27.In conclusion I hereby find that the applicant has met the thresholds for granting the orders for interlocutory injunction. The application dated 31 st July, 2026 is hereby allowed in the following terms. a) THAT a temporary conservatory injunction order is hereby issued restraining the defendant, its agents, hired auctioneers, or proxies from proclaiming, advertising, transferring, selling or cannibalizing motor vehicle registration number KDJ 293V pending the final hearing and determination of the main suit. b) THAT the costs of this application be borne by the respondent. Dated, Signed and Delivered in open Court at Kehancha on this 30 th day of Septmember, 2026 virtually via Microsoft Teams. KEHANCHA SPMC COMMSU NO. E004 OF 2026 (RULING) 10

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J.P. NANDI SENIOR PRINCIPAL MAGISTRATE In the presence of; Mr. Kigera…….Court Assistant Applicant………..Absent Respondent……..Absent Advocate for applicant……..Ms. Robi present Advocate for respondent……Mr. Muruingi H/B for Ms. Wainanina present KEHANCHA SPMC COMMSU NO. E004 OF 2026 (RULING) 11

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