[2025] KECPT 118 (KLR)
The Tribunal found that the claimants voluntarily guaranteed two loans for the respondent, who defaulted after losing her job. The Sacco lawfully deducted Kshs. 351,265 from the claimants as guarantors. The respondent admitted default and willingness to refund the claimants, though she disputed the exact amount. The...
Source-derived case information.
- Citation
- [2025] KECPT 118 (KLR)
- Parties
- Applicant: Jane Njeri Chacha & 5 others; Respondent: Jacquiline Wanjiru Kibugi; Interested Party: Stima Deposit Taking Sacco Limited
- Court
- Cooperative Tribunal
- Jurisdiction
- Kenya
- Case Number
- Tribunal Case 233/E273 of 2022
- Procedural Posture
- Tribunal Case / Judgment
- Outcome
- judgment for the claimants
- Judges
- Janet Mwatsama, B Sawe, F Lotuiya, P. Gichuki, M Chesikaw, PO Aol
- Legal Topics
- Loan Guarantees, Guarantor Liability, Loan Default Recovery, Sacco Member Rights
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Jane Njeri Chacha & 5 others
Applicant
Jacquiline Wanjiru Kibugi
Respondent
Stima Deposit Taking Sacco Limited
Interested Party
Procedural Posture
Tribunal Case / Judgment
Legal Issues
- 1 Whether the respondent defaulted on the loan guaranteed by the claimants and the extent of her liability to refund amounts deducted from the claimants' accounts.
- 2 Whether the interested party (Sacco) was entitled to recover the outstanding loan from the guarantors before exhausting remedies against the principal debtor.
- 3 Whether the claimants are entitled to the full amount claimed or a lesser sum as admitted by the respondent.
Ratio Decidendi
The Tribunal found that the claimants voluntarily guaranteed two loans for the respondent, who defaulted after losing her job. The Sacco lawfully deducted Kshs. 351,265 from the claimants as guarantors. The respondent admitted default and willingness to refund the claimants, though she disputed the exact amount. The Tribunal held that, while the Sacco is entitled to recover from guarantors, it should first exhaust remedies against the principal debtor. However, given the respondent's admission and lack of sufficient evidence to support a lower figure, the Tribunal accepted the claimants' tabulation. Judgment was entered for the claimants for Kshs. 351,265, with costs and interest from the...
Court Disposition
judgment for the claimants
Orders
- The respondent shall refund the claimants Kshs. 351,265.
- The refund shall be apportioned as per the claimants' tabulation and prayers in the Statement of Claim.
Full Case Text
Judgment text and source record
53 paragraphs
Chacha & 5 others v Kibugi; Stima Deposit Taking Sacco Limited (Interested Party) (Tribunal Case 233/E273 of 2022) [2025] KECPT 118 (KLR) (30 January 2025) (Judgment)
Neutral citation: [2025] KECPT 118 (KLR)
Republic of Kenya
In the Cooperative Tribunal
Tribunal Case 233/E273 of 2022
Janet Mwatsama, Vice Chair, B Sawe, F Lotuiya, P. Gichuki, M Chesikaw & PO Aol, Members
January 30, 2025
Between
Jane Njeri Chacha & 5 others & 5 others
Claimant
and
Jacquiline Wanjiru Kibugi
Respondent
and
Stima Deposit Taking Sacco Limited
Interested Party
Judgment
1. The Claimant’s case is based on the following:-a.Statement of Claim dated 11/4/2022. b.Documents bundle dated 11/4/2022. c.Hearing on 13/3/2024. d.Written submissions dated 14/6/2024.
2. In the Statement of Claim, the Claimants state that they were members of Stima Sacco, the Interested Party. They have given their membership numbers.
3. The claim is for Kshs. 351,265/= being the amount allocated and paid by the Claimant. This amount was for deductions made on the Claimant account for being guarantors to the Respondent.
4. The Claimants have tabulated the amounts due for each of the Claimants.
5. The 3rd Claimant Mr. Kamau Karanja Kamau made the statement on his behalf and in behalf of the 1st, 2nd, 4th ,5th, and 6th Claimants.
6. The witness has tabulated how the claim amount of Kshs. 351,265/= was calculated.
7. The witness avers that the Respondent has failed or refused to respond to their requests.
8. The Claimants have filed relevant documents in support of their case vide bundle dated 11/4/2022. Among the documents filed are:-a.Consent to plead.b.Interested Party by laws.c.Loan against form.d.Loan statements of Respondent’s loan.e.Demand letter.
9. The matter came up for hearing on 13/3/2024 wherein the 3rd Claimant confirmed that the other Claimants are his colleagues and member of Stima Sacco and the Interested Party.
10. He adopted his statement of 11/4/2022 and documents dated 11/4/2022 as his evidence in chief.
11. In their written submissions the Claimants aver that the Respondent defaulted on the loan they had guaranteed and that the Interested Party did not pursue the loanee before reverting to pursue the Claimants.
12. They have cited this Tribunal case between Michael Muhunji Kivue verses IG Sacco Ltd. (2020) eKLR and held that “guarantors are constituting persons under a secondary obligation”.
13. They argue that a guarantor should not be treated as a Principal Debtor and that the Interested Party should pursue the Principal Debtor until the compelling avenue are exhausted.
Respondent’s Case 14. The Respondent case is based on the following: -a.Respondent to claim dated 18/7/2022. b.Interested Party memo of response dated 24/8/2022. c.Witness statement dated 9/10/2023. d.Interested Party documents of 23/10/2023. e.Hearing of the case on 13/3/2024. f.Respondent written submission dated 2/8/2024.
15. In the response to claim, the Respondent denies the Statement of Claim serve for that the Claimants were members of the Interested Party.
16. The 1st Respondent prays that the Claimant’s entre suit and dismissed with costs to the 1st Respondent.
17. The Interested Party did a memorandum of response wherein they admitted paragraph 5 and 6 of the claim.
18. The Interested Party refers this Tribunal to the undertaking by the Claimants in the Loan Agreement Form.
19. They state that the 1st Respondent presented the following as guarantors for the 1st loan.1st Claimant2nd Claimant3rd Claimant4th Claimant
20. 5th Claimant and Claimants 1st, 2nd, 3rd, 4th, and 6th for the second loan.
21. In the Interested Party witness statement of 25/10/2023 Ms. Ivy Irungu wrote a witness statement on behalf of the Interested Party stating that the 1st Respondent applied two loans Kshs. 500,000/= and Kshs. 250,000/= and the Claimants were the guarantors.
22. She stated that the Claimants expressly accepted joint and several liability of the Respondent’s loan in the event of default.
23. She has tabulated the apportionment of the defaulted loan to the guarantors.
24. She avers that the Interested Party was rightfully and legally right to recover the outstanding loan from the guarantors.The Interested filed documents in support of their case.
25. During the hearing of the Respondent case on 13/3/2024 the Respondent that she defaulted on her loan due to loss of a job. This occasioned guarantor to be deducted. She admits making efforts to settle the outstanding loan but the Sacco had already deducted the guarantors.
26. During clarification, the Respondent acknowledged the claim figure of Kshs. 351,265/= but indicated that the figure should be roughly less by Kshs. 70,000/=.
27. In the written submission the Respondents state that the Claimants voluntarily agreed to guarantee the Respondent’s loan.
28. The Respondent’ had indicated willingness to settle the amount recovered from the Claimant but the Sacco went ahead to recover from the guarantors.
Analysis 29. We note that the Claimants voluntarily guaranteed the Respondent two loans which fell in default when the Respondent lost her job.
30. We also observe that the Respondent is willing to refund the Claimants amounts deducted in form of loan repayments but denies the claim amount of Kshs. 351,262/= stating that it may be less by about Kshs . 70,000/=.The Claimant has filed a tabulation explain the Kshs.351,265/= claim.
31. It is noted that the Sacco went ahead to recover from the guarantors while the Respondent was willing to settle the outstanding loan.
32. While the Sacco is legally allowed to recover defaulted loan from the guarantors the question is whether they had exhausted the avenue to compel the loanee to repay her loan.
33. In the Respondent’ submissions the Respondent agrees to settle the deducted amount to the Claimants.
34. The Respondent however maintains that the amount due to the Claimants is Kshs. 302,395. 05/= and not Kshs. 351,265/= as per the Statement of Claim.We observe that the Kshs. 302,385. 05/= is not adequately qualified.
35. Based on this admission by the Respondent and taking into account the variance in the Claimants and Respondent’s figures, under the balance of probability this Tribunal is inclined to enter judgement in favour of the Claimant against the Respondent and order as follows:a.Respondent to refund Claimants Kshs. 351,265/=.b.The refund alone be refunded as follows as per prayers C in the Statement of Claim.c.Cost and interest from date of filing of the claim .d.Prayer B fails
JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 30TH DAY OF JANUARY, 2025. Hon. J. Mwatsama Deputy Chairperson Signed 30. 1.2025Hon. Beatrice Sawe Member Signed 30. 1.2025Hon. Fridah Lotuiya Member Signed 30. 1.2025Hon. Philip Gichuki Member Signed 30. 1.2025Hon. Michael Chesikaw Member Signed 30. 1.2025Hon. Paul Aol Member Signed 30. 1.2025Tribunal Clerk MutaiMr. Machaira advocate for the Interested PartyMs. Dave advocate for the ClaimantNganga advocate for the RespondentNganga advocate -We pray for stay of execution for 45 daysMs. Dave advocate - We pray they can be given 21 daysMacharia advocate – We pray for a copy of the ruling.Tribunal order-30 days stay of execution granted.Hon. J. Mwatsama Deputy Chairperson Signed 30. 1.2025