The Court of Appeal has dismissed an attempt by a Thika businesswoman to block Faulu Microfinance Bank from auctioning her property over a disputed loan.
In a ruling delivered on October 3, 2025, a three-judge bench comprising Justices Daniel Musinga (President), Kairu M’Inoti, and George Odunga declined to grant Mary Muthoni Kihoi an injunction pending appeal, ruling that there was no positive order capable of being stayed since the High Court had merely dismissed her earlier appeal.
Ms. Kihoi had moved to the appellate court seeking to suspend the execution of a judgment issued by Justice Muchemi on April 3, 2025, which upheld Faulu’s right to exercise its statutory power of sale over her charged property.
She claimed that although she had fully repaid the first loan, the bank unlawfully advanced further sums without registering a new charge and instead relied on a clause in the loan offer letter to treat the old charge as security for the fresh borrowing. When she defaulted, the bank began the process of selling her property, prompting her to seek court intervention.
Her case was first dismissed by the Ruiru Magistrate’s Court in 2021 and later by the High Court, which found that she had not proved repayment of the loan or shown that the bank’s reliance on the earlier charge was illegal.
In her fresh application before the Court of Appeal, Ms. Kihoi argued that her intended appeal raised weighty legal issues, including whether a bank can rely on a discharged charge to secure new lending without complying with the Land Act. She cited section 85(1) of the Act, which guarantees a chargor’s right to discharge upon repayment, and relied on precedents restraining banks from selling property without proper registration.
She further pleaded that her home was family land and that selling it to a third party would cause irreparable loss that could not be compensated by damages.
However, Faulu Bank, through its legal officer Frederick Nyabuti, opposed the motion, accusing her of engaging in protracted litigation to frustrate the recovery of its money. The bank maintained that both the trial and appellate courts had conclusively addressed the issues and found in its favour.
In dismissing the application, the Court of Appeal reiterated the settled principle that negative orders — such as dismissals of suits or appeals — cannot be stayed. “The judgment of the High Court did no more than dismiss the applicant’s appeal. It did not direct her to do or refrain from doing anything save for payment of costs. In those circumstances, the order under challenge is a negative one that cannot be stayed,” the judges ruled.
The court concluded that Ms. Kihoi’s motion was without merit and dismissed it with costs to Faulu Bank.
