The High Court in Eldoret has dismissed an application by Mediheal Hospital and Fertility Centre to block the auction of its properties over a Sh701 million debt owed to Bank of India (Kenya).
The court ruled that the hospital and its director, Swarup Ranjan Mishra, had failed to prove that they had not been served with statutory notices before the bank initiated recovery proceedings.
The court also found no merit in the claims that the suit was frivolous or that the lender had violated auction rules.
In May 2023, Mediheal Hospital secured banking facilities totalling Sh1 billion from Bank of India, using multiple properties as collateral.
The properties tied to the loan include 17 parcels of lands in Eldoret, Iten and Kisii, which are registered in the names of Mr Mishra and the hospital.
Mediheal Group of Hospitals' founding chairman, Dr Swarup Mishra, during a press conference in Eldoret City, Uasin Gishu County on April 23, 2025.
Photo credit: Jared Nyataya | Nation
However, Mediheal defaulted on the loan, accumulating arrears of Sh701 million by October 2024.
The bank issued statutory notices, including a 90-day default notice, a 40-day intention-to-sell notice and redemption notices, before scheduling auctions.
“Despite several reminders by the bank to the borrower to make repayments and regularise their account, the borrower continued to be in default and failed to pay the outstanding amount,” said the lender’s Eldoret branch chief manager.
Mediheal contested the process, arguing that they had never received the notices and that Bank of India had failed to provide account statements.
The company sued, seeking to block the bank from proceeding with the intended auction. It claimed that the requisite notices had been served to a former employee whose interests were opposed to those of the hospital at the time of service.
But, the court dismissed Mediheal’s claims, noting that there was proper service of notices. The bank presented stamped acknowledgment copies showing that Mediheal employees had received the notices, and that Mr Mishra himself acknowledged the debt in an April 2024 letter requesting a repayment extension.
“This (service of statutory notices) was also evidenced by the signatures of their employees and the stamps of the office on the dates the notices were received. The court is therefore satisfied that service was properly effected,” it ruled.
Since the statutory notices had been validly issued earlier, the court ruled that the bank was not obligated to restart the process after a related injunction was lifted in an earlier suit filed in 2024.
The judgment found that Mediheal had failed to demonstrate irreparable harm or provide evidence of loan repayments. The judge emphasised that injunctions require strong proof of wrongful conduct by lenders.
“The applicants have not made out an unusually strong and clear case to warrant the issuance of a permanent injunction at this interlocutory stage,” ruled the court.
Mediheal's lawyer had argued that auctioning the hospital’s properties would disrupt healthcare services.
However, the court noted that financial disputes must be resolved through repayment, not injunctions, especially when lenders follow due process.
The court upheld the rights of lenders under Kenya’s Land Act, ruling that banks are not required to restart recovery processes if initial notices were lawfully served. It also highlighted the risks faced by borrowers who delay repayments despite receiving clear default warnings.
