[2019] KECPT 16 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL AT NAIROBI

TRIBUNAL CASE NO. 167 OF 2018

BORESHA SACCO SOCIETY LIMITED............................................CLAIMANT

VERSUS

JOHN WAITHAKA CHEGE.............................................................RESPONDENT

JUDGMENT

The Claimant has moved the Tribunal Vide the statement of claim dated 2. 5.2018. seeking in the main, the following reliefs:-

(a) Payment of outstanding loan and interest amounting to Kshs.1,325,426/=;

(b) Costs; and

(c) Interest from 30. 4.18.

The Respondent has opposed the suit by filing a response to the claim dated 18. 6.18.

Claimant’s Case

CW1- FREDRICK LAGAT stated that he was the Manager –Corporate Affairs and previously the Branch Manager of the claimant. That the Respondent joined the Sacco and applied for a loan of Kshs.1 Million. His savings were Kshs.350,000/=. He was therefore eligible for a loan 3 times the amount.

That the Respondent provided an affidavit, proposed a security for the loan and stated that he would submit the said titles later for purposes of charging. That he never submitted the same.

That the loan was issued through his FOSA account and that he only repaid Kshs.29,000/=. That on default, it notified the member and did two reminders demanding to recover the amount plus interest. He (CW-1) adopted his witness statement dated 2. 5.18 and filed on 23. 8.18.

CW2- AFFRED CHERONO, the Branch Manager of the Claimant stated that they filed documents dated 17. 9.2018 and filed on 21. 9.18 (exhibits 7,8,9 and 10). That the Respondent had cleared his first loan and applied for the 2nd loan of Kshs.960,000/= plus security of Kshs.20,000/= and application fees of Kshs.20,000/=. A total of Kshs.1 Million was disbursed. That the amounts were withdrawn from the account as shown in exhibit No. 8. He also produced a bankers cheque request form for Kshs.600,000/= and there was only one deposit of Kshs.29,000/= as payment.

Respondent’s Case

RW1- JOHN WAITHAKA CHEGE stated that he filed a list of documents dated 13. 8.18 and filed on 15. 8.18. (exhibits 1,2,3). That he was issued a loan of Kshs.960,000/= and security was household items since he had proposed land as security but it was declined. That the auctioneers took household items worth Kshs.800,000/= and yet they were still claiming the money. That he never received notice and he prayed for the value of the household items and his savings he used to offset the loan.

Parties filed their written submissions on 26. 9.19 and 11. 10. 19 respectively.

Claimant’s written submissions

The Claimant in its written submissions confirmed that the Respondent was its member. That he opened an account on 5. 9.14 and was given a membership number 68902039. That he applied for the loan and his cumulative savings is Kshs.335,407/=

That the Respondent applied and received the loan which was deposited into his account number 50410206701. That he withdrew the amounts from the said account. Thereafter, he defaulted after making a payment of Kshs.29,000/=.

That the Respondent overestimated the household goods’ value and it was the reason why he was requested to furnish additional security. That the proposal to offset the loan from the savings is not viable since the loan application and agreement form has expressly stated that no member is allowed to withdraw part of the savings against the loan unless they are cleared and ceases to be a member.

That they served the Notices which were ignored. That the error in the affidavit is an inadvertent mistake of the advocate who was Commissioning and wrote his name instead of that of the respondent.

The Claimant therefore prayed for the payment of the loan at Kshs.1,325,426/= plus interest at prevailing commercial rates.

Respondent’s written submissions

The Respondent disputes membership on account that there is no evidence tendered to demonstrate an application as a member or membership number but only an account number.

That there was no material evidence presented to show that the Claimant was entitled to advance loans. That they did not qualify to give loans and thus not entitled to claim loan on an illegality.

That the claim of Kshs.1 Million is disputed since the only amount credited was Kshs.960,000/= and the rest is not justified. That therefore the claimant does not have any claim of Kshs.1 Million. That the claimant alleged to have paid a sum of Kshs.600,000/= through a bankers cheque for Baringo Teachers Sacco Society Limited and this has not been proved that Boresha and Baringo are one and the same thing.

Auctioneers

The Respondent alleged that the Claimant instructed Sakame Auctioneers who proclaimed and seized the respondent’s household goods.

That this fact has not been disputed. That the Claimant ought to have ensured that the said household items were sold and how much realized before instituting this claim.

That they were not issued with Statutory Notices before commencing process of recovery and no such evidence was prosecuted. Therefore, the recovery process was illegal and unlawful.

That the said affidavit was defective in nature and the said Nathan Kitiwa ought to have been called to disclose the capacity in which he swore the affidavit. The Respondent therefore seeks for the dismissal of the suit since the Claimant has not been dismissed on a balance of probability.

Decision

We have carefully considered the evidence on record and render our determination as follows:

Membership

On the issue of membership, we are satisfied that the Respondent was a member of the Claimant owing to the fact that he was saving his money with it and neither he had account number and a membership number which qualified his membership with the Claimant.

Loan

On the issue of whether or not he took a loan, we have seen the Loan Application and Agreement Form duly signed by the Respondent for a sum of Kshs.1,000,000/= applied for on 10. 3.2016. We have also seen the affidavit dated 10. 3.2016.

We have also looked at the Respondent’s savings cumulated last dated 7. 4.16 being a commitment to make monthly savings of Kshs.5000/= per month as he continues to repay the loan.

There is also the Respondent affidavit undertaking to sub-divide register and deposit his title deed for securing the loan. We have also looked at the statement of account of the claimant filed on 2. 9.18. the same indicates a deposit of Kshs.960,000/= on 21. 4.16 as a new loan (corporate business loan) for member number 6890.

The statement of account of the Respondent reflects the same loan of Kshs.960,000/= security Kshs.20,000/= and Kshs.20,000/=processing fees. This was deposited on 21. 4.16.

We have also seen bankers cheque request for dated 21. 4.16 for Kshs.600,000/= in favour of the respondent together with the withdrawal voucher for the same amount.

The Respondent purports to have been issued a loan of Kshs.960,000/= as opposed to Kshs.1 Million.

We claim that Kshs.960,000/= was disbursed to his account plus processing fees of Kshs.20,000/= as per the statement produced before the Tribunal. We therefore find that claimant owes Kshs.1 Million being the loan and attendant fees.

Whether the Respondent defaulted in repayment of the loan

It is the Claimant’s case that upon receipt of the loan the respondent only made a repayment of Kshs.29,000/= as per the deposit slip produced before us dated 7. 10. 16 and reflected in the statement of accounts of the Claimant. No further evidence was availed by the respondent that he repaid this loan.

We note that the proclamation dated 20. 5.17 and the value of household goods estimated at approximately Kshs.85,000/= and indicates auctioneers fees at Kshs.100,000/= together with the letter confirming proclamation by Sakame Auctioneers dated 20. 5.17.

We have also noted the notification of same dated 2. 6.17 with an estimated forced sale value of the goods at approximately Kshs.50,000/=.

The Respondent alleges that his property was worth over Kshs.800,000/= yet no evidence was availed to justify this value.

We also note the savings of Kshs.335,470/= as per his statement.

We find that the Respondent has not demonstrated having offset the loan as issued.

The only evidence of payment is Kshs.29,000/= therefore in essence the Respondent defaulted.

We note that the amount of savings of Kshs.335,470/= would not have been used to offset the loan since the would terminate his membership with the claimant.

It has not been disclosed whether the said goods were valued and what happened after the notification of sale.

Whether the attachment of the Respondent’s household goods was legal.

From the evidence on record it is apparent that the claimant did not follow the proper procedure in enforcing its right after default. They proclaimed and attached the respondent’s household goods without following the process.

We have noted the loan application and agreement form filed is the claimant indicating the house goods placed as security for the loan and the estimated value which total to an approximate amount of Kshs.905,000/- as per their own valuation . we note that proclamation done returned a figure of Kshs.85,000/= and a forced sale value of Kshs.50,000/=.

We note that the loan date of the loan application and agreement form is 10. 3.16 whereas the proclamation is dated 20. 5.2017. This is a period of one (1) year and two month (15 months). It is questionable that the value of the same household goods depreciated by over Kshs.7000/=within the 15 months. It is not clear why, after proclamation and notification of sale, other said household goods were not sold. The Claimants perpetuated an illegality by proclaiming illegally. It has therefore not come to the seat of justice with clean hands.

This Tribunal cannot perpetuate an illegalities. Even though the Respondent did not offset the loan, except for Kshs.29,000/= the claimant went ahead took the law unto their own hands illegally proclaimed and attached securities of the Respondent, undervalued the said household goods, did not give accounts of the proclaimed/attached goods but lets them to lay get wasted. They cannot therefore preferred to be innocent after punishing the respondent and continue seeking repayment of the loan despite perpetuation of illegal process.

In this case therefore, we find that the respondent has suffered immeasurably in the hands of the claimant. The value of the proclaimed goods was estimated at Kshs.905,000/= the value of the savings is Kshs.335,470/= this totals to Kshs.1,240,470/=.

The Claimant is claiming the sum of Kshs.1,325,426/= less Kshs.29,000/= admitted. This leaves a figure of Kshs.1,296,426. When this is subtracted from Kshs.1,240,470/= the Respondent owes it Kshs.55,956/=.

Having found that the Claimant took the law unto its hands by illegally proclaiming and attaching the household goods of the Respondent and leaving to waste, without having sold them, or returning them, we find that the Respondent has suffered irreparable damage and hereby offset the outstanding loan of Kshs.55,956/= against this suffering.

Accordingly, the Respondent discharged from any liability over the loan.

For avoidance of doubt, we state that the claimant can accordingly utilize the savings of Kshs.335,470/= to offset the loan. The suit is accordingly dismissed having not been established on a balance of probability. Each party to bear own costs.

Judgment read and delivered in open court, this 5th day of December2019

In the presence of:

Claimant : Mr. Shifusuka holding brief for Obaka for Claimant

Respondent : Mr. Vwaya holding brief for Mr. Mathenge forRespondent

Court Assistant :

Hon.B.Kimemia - Chairman:

Hon.F. Terer – Deputy Chairman:

P.Swanya - Member: