The cash-strapped Kamuthi Housing Co-operative Society has lost control of 176 acres worth Sh10 billion in Kahawa West, Nairobi, after an appeals court upheld an earlier ruling in favour of Nairobi City County, declaring it the rightful owner of vast tracts of land and property in a case that has been in court for over 33 years.
The cash-strapped Kamuthi Housing Cooperative Society has lost control of 176 acres worth Sh10 billion in Kahawa West, Nairobi, after an appeals court upheld an earlier ruling in favour of Nairobi City County, declaring it the rightful owner of vast tracts of land and property in a case that has been in court for over 33 years.
The contested property hosts schools, commercial and residential property, public market, and unutilised land, and the Sh10 billion value is based on court filings by a government land valuer.
The fallout between the latter started in 1973 when the City Council of Nairobi purchased 154.5 acres under L.R No.71/7 at Sh135,000 and on March 26, 1980, a further 21.238 acres at Sh425,000 from Kahawa Farmers’ Cooperative Society.
The first parcel was developed into a housing scheme while the second parcel was developed into a sewage plant to serve the housing estate, court documents Nation.Africa has seen shows.
Kamuthi, in its filings, claims that it is the registered proprietor of the property known as L.R No. 71/7 measuring 415 acres being the successor of Kahawa Farmers’ Co-operative Society Limited which was liquidated vide a Gazette Notice No.3864 by the commissioner of Co-operatives.
Upon liquidation, the suit property was handed over to the plaintiff (Kamuthi) through a conveyance dated December 20, 1989, to hold the same in trust.
After liquidation, Kahawa Farmers’ Co-operative Society was split into two: Kiamumbi Farmers’ Co-operative Society and Kamuthi Farmers’ Co-operative Society who later lodged a suit in court seeking to evict Nairobi City Council and by extension the third parties who had purchased houses in the contested land through a rent-to-own scheme.
Kamuthi had moved to court on December 24, 1991, seeking to evict the Nairobi City Council from the contested land measuring 415 acres claiming they were demanding more than agreed in the sale agreement entered.
It claims the contested acreage was hived off illegally from 415 acres.
After numerous appearances in court, the matter finally entered into a full trial on November 5 and 7 of 2018 where Justice L.Komingoi ultimately delivered the judgement on June 4, 2020, in favour of the Nairobi City Council.
In her ruling, the judge found that Kahawa Farmers’ Co-operative Society had sold the two portions of 154.5 and 21.238 acres to the then City Council of Nairobi and the transfer of the two parcels to Kamuthi Farmers’ Co-operative Society was illegal and void and that Kamuthi Farmers’ Co-operative Society Limited held the two portions in trust for the city council, now the Nairobi City County.
The Court ordered Kamuthi to transfer the two parcels to the county.
Unsatisfied, Kamuthi Farmers’ Co-operative Society Limited filed an appeal in the Court of Appeal seeking to stop the transfer of the two parcels of land pending the hearing and determination of the Appeal.
The appeal was heard on July 1, 2024, and the Judgement was delivered on January 24, 2025, by a bench of three judges; Judge Daniel Musinga, Judge Asike-Makhandia, and Sankale Ole Kantai.
In their ruling, the Judges said there was sufficient evidence to uphold an earlier ruling delivered on June 4, 2020, by Justice L.Komingoi in favour of Nairobi City County citing the agreement as binding.
The Judges affirmed that the parties to the suit entered into a sale agreement whereby the plaintiff was to sell the defendant 154.50 acres.
The Judges also relied on witness statements and affidavits from senior managers of Kahawa Farmers’ Co-operative Society, the chief county officer for lands, land valuers, surveyors who were part of the transaction deal, a company secretary from the plaintiff side, and dozens of witnesses who unanimously in their affidavits maintained that there was mischief from the plaintiff side to shortchange the respondent in the deal.
''It is evidence of a situation where parties, most likely friends, in good faith, enter into certain agreements, documents are not perfected, the parties leave the scene either by being replaced in office by others or through natural attrition; that successors lose sight of the original good intentions of the parties and pursue causes that the original parties would not have contemplated,’’ the three Judges ruled when they dismissed the Appeal from Kamuthi with costs.
The Judges also said that there were documents produced in evidence to show the correspondence exchanged between Kahawa Farmers’ Co-operative Society and Nairobi City Council (Respondent) and the minutes in respect of both parcels of land.
''That under clause 3 of the agreement, the defendant was pending completion of the conveyance authorised to enter the land and do all manner of things necessary for the proposed development of LR/71/7 as a housing estate provided that unless the parties agreed otherwise such activity would be confined to an area not exceeding 154.5 acres. The trial judge analyzed all the pieces of the evidence produced and found that the agreement dated January 2, 1973 was properly executed by the parties who made it; that there was no challenge to the fact that the President of Kenya(the late Mzee Jomo Kenyatta) had exempted the transaction and that involving 21.238 acres from the provisions of the Land Control Act; and that the full purchase price had been paid for both parcels of land,’’ the three Judges noted in their ruling dated January 24, 2025.
Kamuthi Housing Co-operative Society Limited which has its main operations in Kiambu County with expanded land and housing investment in neighbouring counties has been in a row with its investors who both bought land or houses from them and have never been issued with any title deeds or houses.
So bad is their financial situation that some local lenders keep inviting bidders to auction the property that it had offered as collateral to secure funding among them Buffalo Project in Kiambu county, a multi-billion mixed-use development that has left investors vulnerable holding worthless agreement papers since the project technically never kicked off.
