<p class="ql-align-center">JUDGMENT OF THE COURT</p><p>In a plaint dated 31^st August 2001 and filed at the High Court of Kenya at Milimani on 4^th September 2001, the respondent in this appeal, National Bank of Kenya Limited (respondent) sued Nuru Chemists Limited and James Isaboke, the first and second appellants respectively, alleging as follows, <em>inter alia</em>:</p><p>“4. Sometimes in 1996, the plaintiff Bank took over all debts, liabilities, obligations and duties of Standard Chartered Bank Kenya Limited, Kisii Branch.</p><p>5. The 1^st defendant maintains and operates a current account and a loan account with the plaintiff Bank.</p><p>6. By an agreement dated 16^th August 1993, the 1^st defendant applied for and was granted a loan of Kshs.2,000,000/= by Standard Chattered Bank Kenya Limited, Kisii Branch.</p><p>7. It was a term <em>inter alia</em> of the said agreement that the said:</p><p>(a) Sum would accrue interest at the rate of 37% per annum.</p><p>(b) Sum would be repaid on demand at any time at the Banks discretion.</p><p>8. By an instrument of guarantee and indemnity da…</p>