Directors of Good Earth Group Limited, the company behind Nairobi’s popular Nyama Mama Restaurant, have lost their bid to stop Victoria Commercial Bank from recovering Sh202 million disputed loan they guaranteed the company over six years ago.
This is after the High Court lifted restraining orders issued in 2023 and dismissed their application to block the bank from making further deductions from their accounts.
The directors had also sought restitution of Sh82 million, which they claimed was unlawfully deducted from their personal accounts.
Mr Jayesh Umedlal Shanghavi and Ms Nina Jayesh Shanghavi, directors of Good Earth Group Limited, further alleged that the lender unlawfully disposed of their 265,940 shares in I&M Bank to recover Sh5.5 million.
They argued that "these actions constitute fraud, bad faith, and abuse of the banker-customer relationship."
The directors sought court intervention after the bank began enforcing disputed personal guarantees for loan facilities advanced to the company.
However, the court instead granted Victoria bank’s application to set aside the earlier injunction orders, clearing the way for the lender to proceed with recovery efforts.
The dispute stems from loans advanced by the bank to Good Earth Group Limited, which later faced financial distress. Court filings reveal that the company’s account is overdrawn by more than Sh202.8 million, with the two directors acting as guarantors for the borrowing. The guarantors accused the bank of unlawfully enforcing personal guarantees before liability was determined by the court.
They claimed the lender deducted Sh82 million from their personal accounts, including Sh76.6 million paid to lawyers, auctioneers, valuers, and other advisers.
But Victoria bank denied these claims. In an affidavit sworn by senior legal officer Clement Gitau, the bank stated that the deductions were made from the company’s account—not personal accounts—and were contractually permitted under loan agreements and general account terms.
The bank further argued that the I&M Bank shares were pledged securities under a deed dated February 7, 2018, and were lawfully realized following the company’s default.
It also accused the directors of "material non-disclosure" when obtaining the earlier ex parte injunction order.
In his ruling, Justice Peter Mulwa held that the guarantors failed to meet the legal test for an interlocutory injunction.
“The dispute is ultimately contractual and monetary in nature,” the judge stated in the December 11, 2025 ruling, adding that monetary claims are compensable by damages.
The court found that the guarantors had not demonstrated irreparable harm and ruled that the burden of proving wrongful deductions lay with the directors at this stage of proceedings.
Additionally, the court noted that the deductions were presented as coming from personal accounts when they were actually debits from a company account governed by separate contracts.
The court also found that the sold shares were pledged securities.
“Non-disclosure of the true nature of an account, the securities, and the governing contractual terms constitutes material non-disclosure, going to the heart of the injunction granted. On this basis alone, the ex parte orders cannot stand,” Justice Mulwa ruled.
The court set aside the injunction orders issued on February 2, 2023, dismissed the guarantors’ application, and allowed the bank’s motion.
Allegations of contempt against the bank collapsed once the injunction was vacated.
The directors had argued that the bank’s actions were oppressive and intended to deplete their assets before liability under the guarantees was determined.
