Kenya Anti-Corruption Commission v Online Enterprises Limited and 4 others [2019] eKLR

Case Caption:

In the Environment and Land Court at Kisumu; ELC No. 708 of 2015; Kenya Anti-Corruption Commission -Vs- Online Enterprises Limited Ejai Nobala Amoyi, Shiraz Mohamed Nanji, Zeenat Shiraz and Wilson Gachanja (1st – 5th Defendants respectively)

Case URL:

http://kenyalaw.org/caselaw/cases/view/168085/

Summary Significance:

Under Section 8 of the Land Registration Act, the court has the authority to order for the rectification of the land register to cancel entries pertaining to fraudulently acquired titles.

Applicable laws:

Article 40 of the Constitution of Kenya, 2010
The Kenya Railways Act Cap 397; Laws of Kenya
The State Corporations Act, Cap 446; Laws of Kenya
Sections 3 and 7 of the Government Land Act Cap 280; Laws of Kenya (Repealed)
Sections 8 and 26 of the Land Registration Act No. 3 of 2012

Brief Facts:

The 5th Defendant, in his capacity as the Commissioner for Lands, issued a certificate of lease over property number Kisumu Municipality Block 7/474 to the 1st Defendant who further transferred the leasehold interest to the 2nd Defendant. The 2nd Defendant further conveyed the same to the 3rd and 4th Defendants. The Plaintiff contended that the suit land vested in the Kenya Railways Corporation as a railway reserve. It sought orders declaring that the lease by the 5th Defendant to the 1st Defendant and any rights belonging to the 3rd, 4th and 5th Defendants under the lease were void, that the land register be rectified by deleting the Defendants’ interests in the suit land and that the Defendants be permanently injuncted from interfering with the suit land.

Issues for Determination:

I. Whether the suit land vested in the Kenya Railways Corporation
II. Whether the 5th Defendant acted contrary to the Government Lands Act (Cap 280), the Kenya Railways Corporation Act (Cap 397) and the State Corporations Act (Cap 446) when he purported to issue a lease over the suit property
III. Whether the 1st and 5th Defendants passed a good title to the 2nd Defendant
IV. Whether the 3rd and 4th Defendants were bona fide purchasers for value without notice of defect in title
V. Whether the Plaintiff was entitled to the reliefs sought

Holding:

The court held that the suit land was at all times vested in the Kenya Railways Corporation as a Railway Reserve. It also found that the 5th Defendant (Commissioner for Lands) acted illegally in granting the lease as he alienated the suit land for purposes other than for education, sports, or charitable purposes contrary to Section 3 of the Government Land Act. In light of this, the 5th and 1st Defendants did not pass good title to the 2nd Defendant, and consequently, the 3rd and 4th Defendants also acquired a defective title. The 3rd and 4th Defendants could not be bonafide purchasers as they did not prove that they were unaware of the fraud as required in the case of Katende v Haridar & Company Limited [2008]. Finally, the court held that the Plaintiff had proved its case and was therefore entitled to the reliefs. It relied on Section 8 of the Land Registration Act which empowers a court to order for the rectification of the Land registers where it is proved that title was obtained fraudulently. Consequently, the court granted the Plaintiff’s prayers.

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