[2020] KECPT 1 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL AT NAIROBI

TRIBUNAL CASE NO.185 OF 2020

ABEDNEGO OMUKUBA ................................................................1ST CLAIMANT

MOSES GATERE............................................................................2ND CLAIMANT

JUMA MWACHOYO......................................................................3RD CLAIMANT

MUSA RONO...................................................................................4TH CLAIMANT

PAUL MACHARIA..........................................................................5TH CLAIMANT

BORU ALAKE.................................................................................6TH CLAIMANT

VERSUS

SAMSON CHIRCHIR KIPKEMOI........................................1ST RESPONDENT

NSSF CO-OPERATIVE .........................................................2ND RESPONDENT

RULING

What is before us for consideration and determination is the Claimant’s Application dated 21. 7.20. It seeks for the following Orders:

a. Spent;

b. That pending hearing and determination of this case, the 2nd Respondent by itself, its servants, agents, employees and/or anybody whatsoever deriving under it be restrained from making any further deductions against the Applicant’s accounts in a bit to offset the 1st Respondent’s loan;

c. That pending the hearing and determination of this Application, an injunction do issue compelling the 1st Respondent to refund the Claimant’s all the monies deducted by the 2nd Respondent from the Claimant’s together with interests at court rates;

d. That in alternative to prayer ( c), an order be issued for the attachment of the 1st Respondent immovable and or movable property in satisfaction of the Claimant’s obligation;

e. That warrants of arrest do immediately issue against the 1st Respondent in the event of failure to immediately start the repayment of the said loan;

f. That an officer from the nearby police station be and is hereby directed and/or ordered to enforce and oversee compliance of the orders issued herein; and

g. That costs of the Application be provided for

The Application is supported by the grounds on its face and the following Affidavits:

a. Supporting Affidavit sworn by the 1st Claimant on 21. 7.2020; and

b. Further Affidavit sworn by the 1st Claimant on 14. 9.2020

The Respondent has opposed the Application by filing a Replying Affidavit sworn by Malingi Nzombo on 21. 8.2019.

Claimant’s Contention

Vide the instant Application, the Claimant contend that the 1st Respondent took a loan of Kshs.445,500/= from the 2nd Respondent in October, 2017. That they guaranteed the said loan. That the guarantee was duly conditional upon the 1st Respondent fulfilling his obligations towards the 2nd Respondent. That upon being advanced the said loan, the Respondent only paid for a few months and stopped in April, 2018. That subsequently, they were issued with demand letters dated 19. 4.18. That the 2nd Respondent has not taken steps to recover the said loan from the 1st Respondent. That it has instead, opted to attach their salaries without giving them reasonable Notice. That as a consequence, they have suffered underserving costs and prejudice.

2nd Respondent’s Case

On its part, the 2nd Respondent has opposed the Application on grounds that:

a. The claim and the Application are frivolous and amount to outright abuse of the court process;

b. Whilst the 1st Respondent borrowed a loan of Kshs.445,500/= from itself, he subsequently defaulted;

c. Being his guarantors, and as per the loan policy and by laws, the 2nd Respondent recovered the said loan from the Claimants; and

d. In terms of the loan Application forms, the Claimant committed to repay the loan in case of default on the part of the Respondent.

That in the circumstances, it prays of for the Application to be dismissed with costs.

Claimant further Affidavit sworn on 14. 9.2020

Vide this Affidavit, the Claimant’s controverted the averments raised by the 2nd Respondent in the Replying Affidavit and reiterated that the process of attaching their salaries is questionable. That the 2nd Respondent had a fiduciary duty to inform them about the status of the Claimant’s loan. That nodemand or default Notice was issued to them as guarantors.

Disposal of the Application

Vide the directions given on 26. 8.2020, the Application was canvassed by way of written submissions. The Claimant’s filed theirs on 26. 8.2020 while the 2nd Respondent did so on 15. 9.2020. We will consider the same while determining the issues in controversy in the Application.

Issues for determination

We have framed the following issues for determination:

a. Whether the Claimant has established a proper basis to warrant the grant of the injunctive Orders sought; and

b. Who should meet the costs of the Application.

Injunction

The Claimants have sought two types of injunctions; prohibitory and mandatory. While prayer (b) is a prohibitory one, prayer ( c) is a mandatory injunction.

The principles to be considered before granting the said injunctions are settled. For a prohibitory injunctions, the principles were enunciated in the case of Giella vs Cassman Brown. They are as follows;

a. That a party must demonstrate existence of a prima facie case with a probability of success;

b. That a party must demonstrate that he will suffer irreparable loss if the Order is not granted; and

c. That if the court is in doubt, then it determines the matter in the balance of convenience.

As regards a mandatory injunction, the principles are set out in the case of Nation Media Group and 2 others – vs- John Harun Mwau [2014]eKLR. The pertinent part provides thus;

“It is trite law that for an interlocutory mandatory injunction to issue, an Applicant must demonstrate existence of special circumstances- a different standard higher than in prohibitory injunctions....”

Having appreciated the foregoing principles the question we pause is whether the current Application has been brought within the ambit of the said principles. What we hear the Claimants to be saying is that they guaranteed the 1st Respondent a loan of Kshs.445,500/=. That the said Respondent has defaulted in repayment and that the 2nd Respondent has pursued them to recover the loan. That the 2nd Respondent’s actions are illegal as it has not pursued the 1st Respondent as required. That they were not issued with proper Notices before the said loan was recovered from them.

On its part, the 2nd Respondent contend that it followed its loan policies and by-laws when recovering the loan from the Claimants. That as per the loan Application forms, the Claimants were duly bound to repay the loan.

From the foregoing, it is not in dispute that the Claimant’s guaranteed the 1st Respondent a sum of Kshs.445,500/=. It is not also in dispute that the 1st Respondent defaulted in repaying the loan. What the Claimants contest is the procedure used by the 2nd Respondent to recover the loan.

We find that having guaranteed the 1st Respondent, the Claimants committed themselves to repay the loan upon default. An event of default has occurred and they have now been called upon to do so. We find that a dispute in the manner in which the 2nd Respondent recovered the loan from them is not sufficient to warrant the Tribunal to grant the Orders sought. The matter should be heard on merits and in the event the claim succeeds, that the Claimants have recourse against both Respondents.

Conclusion

The upshot of the foregoing is that we do not find merit in the Claimants Application and hereby dismiss it with costs in the cause. We give the following further directions.

a. The Respondent to file and serve a Response to the claim as well as witness statements and list and bundle of documents within 21 days herein;

b. The Claimant to file a Reply to the Response as well as additional compliance documents within 21 days of service; and

c. Mention for Pre- trial on 3. 3.2021.

Ruling signed, dated and delivered virtually this 29th day of October, 2020.

Hon. B. Kimemia Chairperson Signed 29. 10. 2020

Hon. F. Terer Deputy Chairman Signed 29. 10. 2020

P. Gichuki member Signed 29. 10. 2020

Mr. Gitonga for 2nd Respondent

Miss Mbaye for Claimant

Hon. F. Terer Deputy Chairman Signed 29. 10. 20