REPUBLIC OF KENYA IN THE HIGH COURT OF KENYA AT KISUMU CIVIL CASE NO. 90 OF 2003 NARENDRA CHAGANLAL SOLANKI............:cc0eeeeee coed PLAINTIFF VERSUS NEEPU AUTO SPARES LTD. .18T DEFENDANT DHANESWAR MONuI PANDYA. 280 DEFENDANT ULLAS DHANESWAR PANDYA...........:2scseeeeee 382 DEFENDANT THE ATTORNEY GENERAL OF KENYA........4..++++ 47 DEFENDANT JUDGMENT Narendra Chaganlal Solanki, is a resident of Kisumu Town and the plaintiff herein. He resides with his family in a house situated at the Milimani area of Kisumu erected on a parcel of land described as Kisumu Municipality/Block 10/124. The house and the land it stands on are the subject of the plaintiff's claim against the first defendant Neepu Auto Spares Ltd, a limited liability company incorporated in Kenya and having its registered office in Kisumu, the second defendant, Dhaneswar Monji Pandya, the third defendant, Ullas Dhaneswar Pandya, both residents of Kisumu and the fourth defendant, The Attorney General of the Republic of Kenya.The plaintiff's case against the four defendants is set out in the amended plaint dated 25'" May 2005. It is thus alleged that, the plaintiff and his family have lived in and occupied the suit premises for over fifteen years. The parent or original title of the suit land comprises three separate and distinct parcels each with own residential development inclusive of the suit premises and even though the parent title is currently registered in the name of the first defendant company, it was until the month of March 2003 registered in the joint names of the second and third defendants who are directors of the first defendant and the plaintiffs neighbours. The plaintiff alleges that sometime in the early 1990’s he entered into a sale contract with the second and third defendants for the purchase of the suit premises at a price of Kshs.250,000/= together with additional sums to facilitate the costs of having the parent title sub- divided into three separate and distinct titles to enable construction by the second and third defendants of an independent sewerage system.The sale agreement was drawn by a Mr. Pate! of Messrs Kholi, Patel and Raichura Advocates and was collected by the second or third defendant for purposes of execution but was never returned duly executed. The agreement therefore remained unexecuted by the parties. Nonetheless, the second defendant and third defendants received the due consideration in the sum of Kshs.331,406/= paid by banker’s cheque No. 144362 issued on the 12 February 1990 by the East African Building Society Ltd. The amount comprised the purchase price in the sum of Kshs.250,000/= and Kshs.81,460/= for the facilitation of the intended sub-division. In furtherance of the transaction, the second and third defendants took the necessary steps and effected the sub-division. New certificates of lease were issued on 17 May 1994 on which date the surrender of lease executed by the second and third defendants on 5‘ April 1994 was registered thereby extinguishing the original title No. Kisumu Municipality/Block 10/124 (suit land) in terms of section 63 of the Registered Land Act (RLA).The plaintiff alleges that sometime in November 1994, the second and third defendants purporting to have changed their minds with regard to the sale agreement attempted to abort the sale by claiming that they had failed to effect the sub-division on the basis that it was prohibited by the law thereby frustrating the sale of the entire suit property (house and land) to the plaintiff. The plaintiff avers that the actions and omissions by all the defendants amounted to acts of fraud in that, the second and third defendants failed to notify the plaintiff that the sub-division process had been completed and fresh titles issued, the second and third defendants misrepresented to the plaintiff that the sub-division process could not be completed as the same was prohibited by law, the second and third defendants misrepresented to the plaintiff that the contract for the sale of the suit property to the plaintiff was frustrated by the alleged prohibition of the sub-division, the second and third defendants effected a transfer to the first defendant of a lease which had been surrendered nine years previously and over which their interests had ceased in terms of section 63 (1) (d) of theRegistered Land Act, the first defendant acquired a non existent lease knowing through its officers that it had surrendered, the fourth defendant accepted the transfer of a non existent lease from the first, second and third defendants for which (fourth defendant) had accepted its surrender nine years previously, the fourth defendant issued a fresh certificate of lease in favour of the first defendant a lease for which registration was or ought to have been cancelled. It is further averred and contended by the plaintiff that the purported transfer of the parent title to the first defendant by the second and third defendants sometime in March 2003 was fraudulent and malicious intended and designed to alienate the plaintiff from the suit property, further, having failed to construct an independent sewerage system on the suit property, the second and third defendants are using the existing shared sewerage system maliciously to create undue hardships for the plaintiff and his family and to extort from the plaintiff monies purportedly for costs of servicing of the septic tank serving the shared sewerage system wherefore the plaintiff has been compelled to pay the second andthird defendants the sum of Kshs.19,714/= without any or proper justification. Notwithstanding the failure of registration of his interest, the plaintiff claims ownership of the suit property on account of completion of the sale agreement from which circumstances a resulting trust was created over the suit property in his favour which resulting trust survived the fraudulent transfer of the parent title to the first defendant by the second and third defendants. The plaintiff alleges that on 8 May 2003, auctioneers instructed by the first defendant purported to levy distress for rent arrears in the sum of Kshs.15,000/= and in the process the plaintiff was compelled to pay them a sum of Kshs.5000/=. Further, on the 4! June 2003, the auctioneers returned and threatened to seize the plaintiffs property purportedly for recovery of rent. They left after being informed that there was a restraining order from the court and only after being paid a sum of Kshs.1,600/= by the plaintiff. The plaintiff also alleges that on the 7p May 2005 the second defendant acting in his personal capacity or as an agent of the firstdefendant maliciously severed the electric cable supplying electricity to the plaintiffs house and caused an eighteen hour disruption of power supply to the plaintiff thereby requiring the intervention of the Kenya Power and Lighting company Ltd emergency team and the Kenya Police. For all the forgoing reasons, the plaintiff prays for judgment as follows:- (i) __ In terms of a declaration of a resulting trust of the propriety interest in the suit property in favour of the plaintiff and an order that the sub-division of the parent title be duly completed and a transfer of the title comprising suit property be duly executed and registered in favour of the plaintiff. (ii) | Special damages in the sum of Kshs.6,600/= against the first, second and third defendants jointly and severally and in the sum of Kshs.19,714/=against the second and third defendants jointly and severally.(iii) (iv) (v) A permanent injunction against the first defendant restraining it from trespassing onto the suit property and from attempting or purport to attach, distrain or otherwise alternate the plaintiffs property purportedly to recover any rent or other monies from the plaintiff. The plaintiff claims damages for unlawful trespass and nuisance from the first defendant. Specific performance against the second and third defendant's compelling them to undertake and complete construction of an independent sewerage system on the suit property and in the alternative damages for breach of contract and damages for unlawful trespass and nuisance against the second defendant. An order compelling the fourth defendant to create a register for and issue a lease for the suit property and the registration thereof of a transfer of lease in favour of the plaintiff and the issue of a certificate of lease in favour of the plaintiff.(vi) Costs of the suit against all the defendants together with interest thereon as well as any other or further relief as the court may deem just. In their defence, the four defendants filed respective statements of defence setting out their respective cases in answer to the claims made against them by the plaintiff. The second and third defendants filed a joint statement of defence. In the amended statement of defence by the first defendant dated 30t May 2005, it is averred that the plaintiff resided in the suit property as a tenant of the second and third defendants upto the year 2003. Thereafter, he became a tenant of the first defendant who is the owner of the suit land comprising only one parcel of land which had previously been registered in the names of the second and third defendants. The first defendant denied that a contract for the sale of the suit property had been entered between the plaintiff and the second and third defendants and contends that in any event, an unexecuted contract in a sale of land is unenforceable both due to law and time.The first defendant also denies that any steps were taken by the second and third defendants to effect the alleged sub-division of the suit property such that a surrender of lease was executed by the second and third defendants and registered on 17% May 1994. The alleged change of mind by the second and third defendants in an attempt to abort the alleged sale of the suit property is also denied and so is the alleged refusal by the second and third defendants to transfer the suit property to the plaintiff and undertake the construction of an independent sewerage system. The allegations of fraud and malice made by the plaintiff against the first defendant, second and third defendants are denied with the first defendant contending that no resulting trust was created as there was enforceable contract. In admitting the action taken against the plaintiff by the auctioneers, the first defendant contends that the action was lawful and in furtherance of lawful distress for rent and other payments. The first defendant's prayer is for the dismissal for the plaintiff's case with costs.In their joint statement of defence dated 10 February 20085, the second and third defendants deny that the suit property Kisumu Municipality Block 10/124 is comprised of three separate and distinct parcels. They admit that an offer to sell a portion of the property was made to the plaintiff and that it was agreed that the portion would be sold at a purchase price of Kshs.250,000/= together with additional sums to facilitate the costs of the sub-division of the original title to create three separate and distinct titles. The second and third defendants however deny that the entire suit property was to be sold at the said amount of Kshs.250,000/= and that they were to construct an independent sewerage system on the suit property. Also denied is the allegation that there was an agreement of sale drawn by Messrs. Kholi, Patel & Raichura Advocates which was collected by them (second and third defendants) for execution but was never returned or executed by all three parties. The second and third defendants admit the receipt of Kshs.250,000/= and not Kshs.331,406 but denies that it was the purchase price of the suit property. They contend that the additional Kshs.81,460/= was_—_——$—_—$ $$ — rT OO money belonging to the plaintiff and was returned to him as he was closing his account with East African Building Society. The second and third defendants aver that they took no steps to sub- divide the suit property and if the same was sub-divided, then it was so done fraudulently by the plaintiff and officials of the Ministry of Lands. They (second and third defendants) deny that they failed to notify the plaintiff of the completion of the alleged sub-division process and the issuance of fresh titles. They also deny that they represented to the plaintiff that the alleged sub-division process could not be completed as it was prohibited by law. They further deny the alleged ownership of the suit property by the plaintiff and the alleged creation of a trust contending that the prayer for a resulting trust is incapable of being granted and therefore, incompetent. The second and third defendants aver that if there was any transaction, then it was unenforceable as it was not in writing as required by the law of contract. It is also averred by the second and third defendants that the transfer of the parent title by themselveswas not fraudulent as sections 28 and 29 of the Registered Land Act gives the proprietor the right to transfer at will. There is denial by the second and third defendants of the allegations of fraud and malice made against themselves by the plaintiff. They aver that they were wrongly joined in this suit as the property was legally transferred to a third party. The second and third defendants contend that the prayers by the plaintiff against them are misplaced and misconceived and that they will support the efforts by the first defendant to forcefully evict the plaintiff from the suit property. As for the fourth defendant, it is averred in the statement of defence dated 20'n January 2006, that the fourth defendant is a stranger to the allegations made by the plaintiff with regard to the occupation of the suit property, the sale of the property, the sub-division of the property and the issuance of new certificates of lease on the strength of a surrender of lease. The fourth defendant also avers that he is a stranger to the allegations of fraud and malice made by the plaintiff and denies that the suit property comprises of three separate and distinct parcels. 13It is further averred by the fourth defendant that in or about the month of January 1990, the second and third defendants applied to the commissioner of lands for the sub-division of the suit property into three parcels. The sub-division was approved subject to the conditions that the original title be surrendered, the legal fees be paid and the new rent for the new plots be paid. Pursuant to the sub- division, the survey department amended the registry index map (RIM) thereby creating three parcels namely Block 518, 519 and 520 vide survey plan No. F/R 208/78. The fourth defendant goes on to aver that on or about June 1991, the second and third defendants surrendered the original title No. Kisumu/Municipality Block 10/124 to facilitate preparation of the surrender lease. They paid a sum of Kshs. 2,360/= on 3'4 October 1992 for conveyancing, stamp duty and registration fees. Three lease documents for Kisumu Municipality/Block 10/518, 519 and 520 anda surrender lease were prepared, executed and stamped before being transmitted to the District Land Registry-Kisumu for registration in about May 1994.The fourth defendant contends that prior to the registration of the instrument, the second and third defendants were required to execute the instrument but they neglected, failed and/or refused to do so. Instead, in or about the year 1996, they returned the unexecuted instruments to the commissioner of lands with the reason that they were no longer interested in the sub-division. Consequently, the fourth defendant was unable to effect any registration. The fourth defendant denies that he acted fraudulently and prays for the dismissal of the suit against him. From the pleadings, it is apparent that prior to the year 1990, the suit property, Kisumu Municipality Block 10/124, existed as a single parcel of land on which stood three residential houses, one of which is occupied by the plaintiff who claims to have purchased it together with the portion of the land it stands on from the second and third defendants in the year 1990. The plaintiff also claims ownership of that portion of the land and prays for a declaration to that effect on account of the sale agreement entered between him and the second and third defendants which agreement was completed but remained formally unexecuted due to alleged fraudulent and malicious activitiesof the second and third defendants in collusion with the first and fourth defendants. The plaintiff claims that it was in furtherance of the said agreement that the entire suit property was sub-divided into three parcels and three new certificates of lease issued upon surrender of the original title by the second and third defendants. These claims by the plaintiff raises for determination the issue whether the suit property was sub-divided into three portions and whether there was a contract for the sale of part of the suit property between the plaintiff and the second and third defendants and if so, whether the contract was lawful and enforceable. With regard to sub-division, the contention by all the defendants is that the suit property is intact as a wholesome parcel of land known as Kisumu Municipality Block 10/124. The first defendant claims that the whole property was transferred to itself in the year 2003 by the second and third defendants, its original owners. In accepting that there was an offer made to the plaintiff to purchase a portion of the property and that a sum of Kshs. 250,000/= was 16