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Uhuru kin lose bid to salvage Sh3 billion land auctioned by KCB

Captain Kung’u Muigai. [Mose Sammy, Standard]

Kenya Commercial Bank (KCB) has won a protracted legal battle against former President Uhuru Kenyatta’s cousins, Captain Kung’u Muigai and Ngengi Muigai over 443 acre piece of land the duo used as security for a loan 29 years ago.

KCB auctioned the land in 2007 and Kung'u and Ngengi moved to court seeking to salvage it.

Court of Appeal judges Justice Asike Makhandia, Francis Tuiyott, Sankale Ole Kantai, Kathurima M’inoti and John Mativo, unanimously agreed with the bank’s lawyer Phillip Nyachoti that the case was fatally defective.

The Judges said it was clear that Kung’u and Ngengi were seeking to re-open an issue of consent which had been determined on December 15, 2017, by Court of Appeal Judges Roselyn Nambuye Asike Makhandia and Kathurima M’inoti.

They further observed that even after appealing the judgment by the three judges, Supreme Court Judges unanimously agreed that Benjoh Amalgamated Enterprise, a firm owned by Ngengi, was bound by the consent of its then-lawyer.

The five judges questioned why Kung’u stayed quiet for 32 years about their then-lawyer Gideon Kiambuthu Meenye's involvement in the case.

In their judgment, they agreed with Nyachoti that there was no error or grave miscarriage of justice that would have warranted the court's intervention.

In the case, the KCB lawyer argued that all courts were consistent about the consent at the heart of the case and it was unclear why it took decades for Benjoh Amalgamated to claim that Meenye never signed the document.

The Judges said the claim that Meenye had not signed a consent for the sale of the land on behalf of their company, Benjo Amalgamated Enterprise was untrue.

“One wonders why during the numerous cases the applicant filed in the High Court and in this Court including the above application and also the application we alluded to earlier in which the applicant sought to set aside the consent, the applicant never, even in the slightest manner alluded to the issues now being canvassed before us. The applicant now wants this Court to believe that it took all those years to discover that it never instructed Mr Meenye to represent it,” the bench headed by Justice Makhandia ruled.

The Judges were of the view that Kung’u was, on one hand, claiming that the lawyer never signed the crucial document.

On the other, they said, the captain was admitting that there was a consent, but claimed it was without Benjo’s authority. The Judges found that Kung'u's conflicting submissions created doubt about his claims.

“The applicant is suggesting that Mr Meenye emerged from nowhere and actively represented it in court without its instructions. Such assertions are in our view the hallmark of dishonesty which should not find its way into the corridors of justice. Further, the applicant appears to be approbating and reprobating. On one hand, it suggests that there was no consent recorded, yet on the other, it seems to suggest there was consent but it was entered into by counsel whom they had not instructed and without its blessing,” the judges observed.

Kung’u told the court that he came to learn that Meenye did not sign consent for the sale of land on behalf of Benjo on May 4, 1992.

According to his lawyer Kyalo Mbobu, the Court of Appeal sealed Kung’u’s fate by overturning High Court Judge Joyce Khaminwa's judgment requiring KCB to fully disclose information about the account.

Mbobu said that Meenye swore an affidavit indicating that he was neither hired by Kung’u and he did not appear in the case as he was no representing Benjo.

Ngengi lamented that his land was auctioned at Sh70 million to recover the loan while the same would have cost Sh3 billion.

Mbobu said that his client wants the court to right a wrong, as there was no record from the High Court indicating there was consent.

“It is a travesty of justice to allow a judgment of this court to stand if there is no record. Why has it not been produced?” He posed.

The lawyer argued that the then High Court Judge Erastus Githinji issued orders on the consent while his client was unaware that it did not exist.

Asked by Justices Kantai, Kathurima and Makhandia why it took more than 20 years to raise Meenye’s issue, Mbobu said that it was in the interest of justice for the court to re-open the case even if the discovery was late.

Kung’u’s onslaught targeted the judgment by Justices Nambuye, Makhandia and M’inoti dated December 15, 2017.

Mbobu said that the captain risks being jailed over the issue and it is only fair for the court to intervene.

Already, Commercial Court Judge Frida Mugambi has ordered Kiambu county commander to assist Bidii Kenya Ltd in evicting Uhuru's cousin from the farm within seven days.

Bidii bought the property in 2007 in an auction but has never gained access to the same 17 years later.

Nyachoti urged the five judges to dismiss the application.

Bidii’s lawyer Issa Mansur also asked the court to throw out the case.

Nyachoti told the Judges that Kung’u had improperly invoked the court’s powers as he had not identified either a clerical or mathematical issue in the 2017 judgment to review or correct.

He argued that although the captain claims that the land is worth Sh3 billion, the same could not be the same value when KCB got a right to auction it.

Nyachoti asserted that the case was an abuse of the court process as the Supreme Court had clearly issued a judgment that the consent was valid.

“They do not explain why it took all those years for them to file an application on the consent. The application before you is incompetent, lacks merit and therefore should be dismissed with costs,” he argued.

Mansur on the other hand said that the first judgment was delivered in 1998 and the second one in 2017.

He noted that there was a separate case filed before Justice Isaac Lenaola (now Supreme Court Judge) in 1999 and Ngengi should have raised Meenye’s issue then.

Mansur said that when he filed his appeal before Justices Makhandia, M’inoti and Nambuye, he did not raise Meenye issue.

In the judgement, Nambuye, Makhandia and M’inoti unanimously agreed that KCB had a right to sell the property and that the suits against it were meant to address the same issue which had been settled by the court.

“Benjoh cannot therefore argue that KCB exercised its right of sale over the wrong property. The said property had been charged to secure the loan and was sold upon default. In our view it was within KCB’s right to choose upon which property to exercise its rights over,” the judges ruled.

Ngengi through his firm Benjoh has pursued almost all possible legal avenues and has employed tremendous legal ingenuity and sophistry with his cases against the lender being heard even by the Supreme Court.

Sometimes in 1988, the United States of America International Development (USAID) offered funds by way of loans to Kenyans under the Rural Projects Enterprise Programme to be administered by the Kenya Commercial Bank (KCB) amongst other banks.

Benjoh applied for a Sh18.6 million loan through KCB to start a flower export business on April 12, 1989.

Following a feasibility study, KCB recommended the project and in 1989, granted Benjoh the loan facility secured by a 443-acre piece of land.

The guarantor of the loan was Muiri Coffee Limited also owned by Ngengi.

Benjo defaulted in the repayment of the loan which prompted the bank to order for auction of the contested property valued at Sh13. 1million.

On May 4, 1992, the lender agreed to halt the auction as Benjoh admitted its indebtedness and undertook to repay the loan in three months.

The firm however did not honour its end of the bargain in which KCB sought to auction the land on January 23 the following year.

Benjoh went back to court and stopped the auction.

Undeterred, the lender again scheduled another auction on June 26, 1996, but Muiri this time filed another suit against Benjoh and KCB. The case was dismissed based on believe that the land had already been sold.

Another auction was set in 1997 and again Benjoh rushed to court a day before auction and obtained orders blocking it.

It also revived the initial case filed in 1992 which had been settled through consent that KCB would not sell the land to allow the firm settle its debt.

Benjoh wanted the court to set aside the consent orders and at the same time order KCB to release the title as its records did not allegedly show any debt.  It lost the case.

The battle between the firm and KCB degenerated into two Constitutional cases in which Benjoh complained that its loan account had been fraudulently operated.

It sought to compel the Directorate of Criminal Investigations to institute a probe.

In the second case, Muiri complained that the auction was against its right to property. The firm asked the court to declare the auction unconstitutional and order that the titles should be returned.

Despite all the legal battles, KCB eventually on September 19, 2007, sold the property to Bidii Limited for Sh70 million.

Benjo and Muiri filed yet another suit against the lender and the new owner in a bid to nullify the sale.

After a year of legal battle, the case was again dismissed but the judge ordered KCB should furnish Benjoh with the statements showing how the debt had accrued in order to bring the legal battles to an end.

That did not happen.

Benjoh went again to court still questioning the advanced loan and statements although they had been raised in the previous suits.

In this suit, the firm sought a declaration that KCB breached the contract and further prayed for Sh2.2 billion as damages.

The bank asked the court to dismiss the case but Benjoh filed a countersuit seeking to strike out the defense.

The Court of Appeal subsequently dismissed the counterclaim as it did not prove that it had served KCB with the court papers.

After a plethora of suits in court in a bid to salvage the land worth Sh3 billion, Benjo walked away with nothing in its hands.

It is now the 15th round of a bout brought by Kung’u and his brother Ngengi in a bid to salvage the 433-acre farm in Kiambu. And 32 years later, it seems there is no end.

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