JUDGMENT OF TUNOI, J.A.
The main issue in this appeal is whether the right by the appellant to appoint a Receiver had become exercisable under the terms of the Debenture dated 3rd July, 1997, which was issued pursuant to the agreement on credit facilities between the appellant and the respondent.
The appellant, on or about 6th February, 1997, agreed to grant to the respondent a term loan of Shs.20 million and an overdraft of Shs.55 million. As security the respondent would create in favour of the appellant firstly, legal charges over L.R.Nos.209/3467; 209/3803, 37/724, 209/11894, 209/10544/16 and Kisumu Block 11/80 all valued at Shs.77 million; secondly, a Debenture for Shs.75 million over all the assets of the respondent, and; thirdly, a joint and several guarantee for a similar sum by the two directors of the respondent company.
Both facilities attracted such rate of interest as the appellant in its sole and absolute discretion may decide from time to time but with an initial rate of 3…