ADM. NO: 2010204


bills of lading among others which show transfer of the documents. This is because the property does not qualify as an instrument under section 2 of the Act. and includes machinery. some of the securities that the Grantors wish to rely on to secure payment of the loan do not qualify as chattels under the said Act. This is because shares do not fall within the definition of chattels as given in the Chattels Transfer Act 1. under clause (h). 1 Chapter 28. Laws of Kenya. Thus from the above section of the law.  The Safaricom shares purchased on 1st march 2009 cannot be added on the chattel instrument.  The Toyota Premio Grey in colour cannot be added on the chattel instrument. stock and the natural increase of stock but does not include under clause c of section 2 of the act. shares and interests in the capital or property of any company or other corporate body. Section 2 of the Chattels Act cap 28 Laws of Kenya 2 defines chattels to mean any movable property that can be completely transferred by delivery. it expressly excludes shares from their inclusion in the chattels instrument. (1) From the facts given in the question. 2 . An instrument does not include. 2 Herein refered to as the act.


200. 1. In pursuance of the said agreement and in consideration of the said sum of Kenya Shillings One Million Two Hundred Thousand (Kshs. JUMA and S.M.T. the Grantors HEREBY ASSIGNS AND TRANSFERS the chattels to the Company by way of Mortgage to secure payment of the sum of Kenya Shillings One Million 4 . Westlands Nairobi (hereinafter called “the Company” which expression shall where the context so admits include its successors and assigns) of the second part. 1. REPUBLIC OF KENYA THE CHATTLES TRANSFER ACT (CHAPTER 28) INSTRUMENT THIS CHATTEL MORTGAGE is made the 1ST Day of APRIL the year Two Thousand and Ten BETWEEN J.00) upon having the repayment thereof with interest as hereinafter mentioned secured in manner hereinafter appearing.200.000. WHEREAS: 1) The Grantor is the absolute owner of the chattels specified in the Schedule hereto annexed (hereinafter called “the Chattels” which expression shall where the context so admits include or refer to it or any more of them). NOW THESE PRESENTS WITNESS as follows: 1. 2) The Company has agreed to grant to the Grantors a loan facility and or other financial accommodation for the sum of Kenya Shillings One Million Two Hundred Thousand (Kshs. MUTUA t/a Juma Mutua and Associates Engineers of Post Office Box Number 6785 0056 Adams Arcade in the Republic of Kenya (hereinafter called “the Grantors” which expression where the context so admits shall include their personal representatives and assigns) of the one part and Tuungane Tujenge Kenya Limited a limited liability company incorporated in Kenya and of Post Office Box Number 56789 0600. 3) The Grantors have further agreed to execute a Chattels Mortgage in favour of the Company as Security thereof the Company having agreed to grant to the Borrower the said loan facility.00) lent and / or advanced to the Grantors by the Company.000.

Two Hundred Thousand (Kshs. 1. c) The Grantors shall keep the Company notified of the Grantor’s address and the address of the premises where the Chattels are kept and any change of the same as soon as possible. The Grantors hereby further covenants with the Company as follows: a) That the Grantors have got right and full power to assign the chattels to the Company and that the chattels are free and clear from any encumbrances.000. b) The Grantors shall pay to the Company as well after as before any judgment interest at the rate hereinafter provided for on the principal sum and on all installments in arrears and on all other monies due until actual payment thereof.00) together with interest as provided for in the schedule endorsed herein. 2. 28 Laws of Kenya) conferred on the Company. But this provision shall not in any way affect or prejudice the exercise of any right or remedies of the Company provided herein. The Grantors HEREBY COVENANTS with the Company as follows: a) The Grantors will repay the principal sum plus interest at the times and in the manner hereinafter stated PROVIDED ALWAYS that if any installment shall not be paid by the Grantors to the Company on its due date for payment the total amount of principal sum and interest then remaining shall thereupon immediately become due and the Company shall be entitled to exercise all or any of the rights hereby and by the Chattels Transfer Act (Cap. b) That the Grantors will at their own costs do and execute all such acts deeds matters and things for the better assigning the chattels to the Company as the Company may from time to time reasonably require. 5 .200. 3.

4. b) Insure and keep insured Chattels in the joint names of the Grantor and the Company with such insurance company as the Company may in writing require and unless the Company otherwise agrees in writing such insurance shall be fully comprehensive to its full replacement value without excess or restriction AND will not without prior consent in writing of the Company make any change either in such insurance policy or from such insurance company as aforesaid and deposit the same with the Company and will dully pay all premiums and other sums of money payable in accordance therewith AND will immediately after every such payment deposit with the Company the receipts of the same PROVIDED ALWAYS THAT if default shall be made in keeping the Chattels so insured the Company may keep insured the Chattels and all expenses thereby incurred together with interest hereinafter provided for in the Schedule from the date of the same becoming due until actual payment thereof and the same shall be considered included in this security. The Grantors covenant with the Company that he will at all material times during the continuance of this instrument: a) Keep and maintain the chattels in good order and condition (fair wear and tear only excepted) AND will be fully responsible for any loss thereof or damage thereto however occasioned AND will give immediate notice in writing of any such loss or damage to the Company which may in its absolute discretion require the Grantors to have at the Grantors’ expense any necessary repairs by a person or company approved by it in writing. e) That all such other covenants and obligations as are implied under the Chattels Transfer Act shall apply to this instrument. 6 . d) All existing and future claims and rights to be set off by the Grantors against moneys payable under this instrument are waived. c) Not use the Chattels nor permit the same to be used for any purpose not permitted by the terms and conditions of the hereinbefore mentioned insurance policy nor permit to be done any act or thing by reason of which the same may be invalidated.

change or interfere with any identification number. without the written consent of the Company first had and obtained. f) Punctually pay all licenses. h) Permit the Company or its duly authorized agent at all reasonable times to enter upon the premise where the chattels may for the time being be kept for the purpose of inspecting and examining the condition thereof and shall forthwith execute all repairs and works required to be done to the chattels or any of it or any component part thereof in accordance with written notice given to the Grantors and if the Grantors shall not within fourteen (14) days 7 . duties. g) Not sell let assign or otherwise dispose of the Chattels or any of it or any component part thereof and not remove. e) Not remove any parts of the Chattels without consent of the company in writing first had and obtained except where such removal shall be in the opinion of the Grantors rendered necessary by reason of the same having been worn out or damaged and in such case replace the parts so worn out or damaged (unless no longer required) by others if similar nature and of at least equal value and necessary renew and replace all such parts and effects of a like nature now comprised in the Chattels as and when the same shall be worn out or destroyed. fees and registration charges payable in respect of the chattels as and when the same fall due provided always that if the Grantor shall fail to make any such payments as aforesaid the Company may without being bound so to do pay the same to the proper authorities and all expenses incurred by it in so doing shall be a debt due from the Grantors to the Company and the same shall be considered included in this security.d) Keep the Chattels in the Grantors’ actual possession and control properly sheltered and protected AND will not take the chattels or permit the same to be taken outside the Republic of Kenya. trade mark or other identification mark upon the Chattels or any of it or any part thereof and will not create any lien on the Chattels or pledge the company’s credit either for the repairs thereto to otherwise whatsoever and will at all times keep the Chattels freed and expected from any distress for rent execution or other legal process.

8 . after service of such notice aforesaid commence the execution of repairs and the cost thereof together with interest thereon at the Company sole discretion from the date of the same becoming due until actual payment shall be a debt from the Grantors to the Company and same shall be considered included in this security. No relaxation forbearance delay or indulgence by the Company in enforcing any of the terms and conditions of this instrument nor the granting of time by the Company to the Grantors shall produce affect or restrict the rights of the powers of sale of the Company hereunder nor shall any waiver of any breach thereof operate as a waiver of any subsequent breach thereof. 5. 7. 6. If and so often and so long as more than one chattel is the subject of this instrument either alone or along with any other agreement between the Company and the Grantors for lease hire or hire purchase:- a) Any payment whatsoever made from time to time by the Grantors to the Company shall notwithstanding any direction by the Grantors to the contrary (subject only to the provisions of Section 28 of the Hire Purchase Act where applicable) be appropriated by the Company in or towards satisfaction of any such liability of the Grantors then the outstanding in respect of any of such chattels under this instrument or ay other agreement or mortgage on any account as the Company may at its discretion elect. IT IS HEREBY AGREED AND DECLARED that the terms and conditions contained in this instrument shall be in addition to and not substitution for terms and conditions implied herein by virtue of Section 41 and 42 of the Chattels Transfer Act except so far as such implied terms and conditions are inconsistent with the terms and conditions herein of which case the terms and conditions herein shall prevail. and b) Clause 5 hereof shall apply also in the event of the Grantors defaulting in due and punctual payment of any other of the obligations in respect of any other of such chattels or in any other event which entitles the Company under the terms of the relevant agreement or mortgage to take possession of any other such chattels.

It is hereby agreed and declared that any notice. 9 . at the cost of the Grantors. 9. Upon the final balance of the said principal sum having been paid off by the Grantors together with all interests due to the Company and upon payment by the Grantors of all costs and expenses incurred by the Company in relation to this instrument the Company shall forthwith deliver to the Grantors the Registration books and relating to the Chattels in the name of the Grantors and shall. For avoidance of doubt. c) This clause shall apply as between any assignee of this instrument by the Grantors and the Grantors but shall not extend to al agreements and/or mortgages by the Grantors which are at any time held by such assignee whether originally made with or given to such assignee or acquired by way of assignment.M. In these presents where the context do admits words importing the masculine gender only include the feminine gender and the words importing singular number only include the plural number and vice versa and under these presents Grantors shall be deemed to be liable according to the ratio they use to share profits and liabilities in their partnership . MUTUA is 6: 4 respectively. the liability of J.T. letter or other document from the Company to the Grantors shall be deemed to have been received by the Grantors at the time when it should in the ordinary course of post have been delivered to him at his known address and vise versa. JUMA and S. 8. execute a memorandum of satisfaction in respect of this instrument and cause the same to be registered in accordance with the Chattels Transfer Act. 10.

MUTUA.000 2. Room 2.Bicycles repairer. JUMA----------------------------------------------- S.T. Business Address: Adams Arcade Plaza. CHATTEL/ITEM SERIAL No. MUTUA------------------------------------------- In the presence of. SCHEDULE ‘C’ Grantors’ names: J. Chattels will be kept at :(1)motor vehicle-Parking bay No.T.000 SCHEDULE ‘B’ PRINCIPAL SUM: Kenya Shillings One Million Two Hundred Thousand only (kshs. Postal Address: 6785 0056 Adams Arcade. BITUL SHAH------------------------------------------ Who resides at NAIROBI. REPUBLIC OF KENYA 10 .000/= INTEREST ON PRINCIPAL SUM: 10% TERM: 72 Months INSTALMENTS TO BE PAID FROM: 30TH OF APRIL 2010 AND ON EVERY ANIVERSARY MONTH THEREAFTER UNTILL PAYMENT IN FULL. Occupation: Businessmen. 2nd floor. 2 in the basement of Adams Plaza (2)Printer-In the Office.) 1.M. Residential Area: Nairobi. SCHEDULE ‘A’ No. JUMA and S. Motor Vehicle (Toyota Premio) KBK 099J 650.200. Nashuatec Heavy Duty Printer MP C400/MP CF00 950.M.(figures)) 1. VALUEB (Kshs. Signed by the Grantors: J. Occupation: Motor. IN WITNESS WHEREOF the Grantors have hereunto set their hands this 1ST day of APRIL 2010.

and saw J.M.M. The said J. MUTUA is in the proper handwriting of me. 6. 2010. as made and given and executed by J. BITUL SHAH of Post Office box 6892 – 0056 NAIROBI IN in the REPUBLIC OF KENYA make Oath and say as follows:- 1.M. and they are businessmen trading as Juma Mutua and Associates Engineers. 4. JUMA and S. I was present.M.T.M. The paper writing hereto annexed “A” is a true copy of an instrument under the above-mentioned Act. MUTUA duly execute the said instrument on the 1ST day of APRIL. 2.T. this deponent. 3. MUTUA reside at NAIROBI. 2010. JUMA and S. and of every schedule or inventory thereon endorsed or thereto annexed or therein referred to. JUMA and S.T. JUMA and S. I am a motor-bicycles repairer at Ground Floor of Adams Arcade Plaza and reside at NAIROBI within the REPUBLIC OF KENY Sworn by the said BITUL SHAH 11 . The name subscribed to the said instrument as that of the witness attesting the due execution thereof by the said J. IN THE MATTER OF CHATTELS TRANSFER ACT CHAPTER 28 LAWS OF KENYA AFFIDAVIT ON REGISTRATION OF AN INSTRUMENT I. MUTUA. at NAIROBI. JUMA and S.T. and of every attestation of the execution thereof.T. 5. MUTUA on the 1ST day of APRIL. The said instrument was made and given by the said J.


The mode of registration of instruments is regulated by the Chattels Transfer Act. and shall take effect from the time of its registration. All schedules endorsed thereon. an instrument must.) 6 Section 4 of the Act 7 Section 2 defines Registrar to mean Registrar General 8 Section 5 9 Section 17 13 . an instrument must contain or have endorsed on it a schedule of Chattels (inventory). laws of Kenya. 3 Cap 28. be attested by at least one witness who must add to his signature his residence and occupation.Dharamshi Vallabhji and others 5 it was held that an unattested instrument is valid between the parties but incapable of registration and ineffective against other persons. Good to title is given only to the Chattels described in that schedule9. Upon registration. or a true copy of the instrument and the schedules and an affidavit in Form 1 in the First Schedule or to the same effect must be filed together with the instrument8. Pursuant to Section 17 of the Act. 2. 4 Ibid 5 (1966) EA 186 (Privy Council decision. affect the validity of an instrument. An instrument is registered by filing in the department of the Registrar on payment of prescribed fee7. all persons are deemed to have notice of the instrument and its contents6. It is important to note that an instrument can only be registered after it has complied with the requirements of the Act. under section 15. annexed thereto or referred therein. In National and Grindlays Bank Ltd –V. however. Steps and procedural requirements for registration of the Chattels Mortgage and any necessary annextures under the Chattels Transfer Act. Lack of sealing does not. Consequently. 3 Under Section 16 of the Act4 an instrument shall be deemed to be made on the day on which it is executed.

the date of execution of the instrument shall be deemed to be the date of execution by the grantor who last executes the instrument13.14This means that the parties to the chattels mortgage must renew it at the expiry of five (5) years. This is provided for by Section 38 of the Stamp Duty Act10.) Under Section 6(1) of Chapter 28. See also Fidelity 12 Ibid at p. This was reiterated in Nyali Chemicals Limited –V-Thudi River Estate Limited and 2 Others12 If there are more grantors than one. 14 .) at p. an instrument must be registered within twenty one (21) days from the day of execution provided that when the time for Registrar’s office is closed the registration shall be on the next following on which the office is open. court held that no instrument shall be registered under the Chattels Transfer Act unless the original duly stamped. Upon registration.Milimani Commercial courts. 134 OF 1999 (Emukule J. An instrument must be stamped before it may be registered.) 10 Chapter 480. a Chattels Mortgagee has a life of five (5) years after which it expires unless renewed. 11 Milimani Commercial Courts HCCC CIVIL SUIT NO. but the instrument may be registered on that day.4 13 Section 6(2) 14 Per Ombija j. in John Patrick Macharia –v.MDC Holdings Ltd and 2 Others. 1549 of 2001.4.In the case of Nyali Chemicals Limited –V-Thudi River Estate Limited and 2 Others11. Laws of Kenya. This is because their agreement runs to six (6) years (72 months. The day on which the instrument is executed shall not be included in the period for registration. is produced to the Registrar ( of Chattels Mortgage.HCCC No.