JUDGMENT
This appeal is based on the part of the judgment of Aganyanya J delivered on 23rd September 1983 which states:
“In any event, this transaction seems to be tainted with illegality, hence unenforceable in law, as 2 Kenya residents entered into an agreement for the advance of Kenya money on Indian Currency in India contrary to section 3 (1) of the Exchange Control Act.”
The appellant had accumulated funds on various deposit accounts in India. Such funds were remitted periodically to India through various banks in Nairobi and Mombasa.
The appellant and the respondent while residents of Kenya entered into a contract of lending that part of the money held by the appellant in India. The money was to be lent in foreign currency (Indian Currency), Rupees 40,000 equivalent to Kshs.38,000 interest free to be repaid within a short time. At the time of inception of the contract, both parties were in Kenya but both were at the same time proceeding to India. On 29th December 1966 while they wer…