Ellegant Credit Ltd v Kamundia (Commercial Case E17396 of 2024) [2026] SCC 51 (KLR) (26 June 2026) (Judgment)

Ellegant Credit Ltd v Kamundia (Commercial Case E17396 of 2024) [2026] SCC 51 (KLR) (26 June 2026) (Judgment) Neutral citation: [2026] SCC 51 (KLR) Republic of Kenya In the Milimani Small Claims Court Commercial Case E17396 of 2024 GW Kiamah, RM June 26, 2026 Between Ellegant Credit Limited Claimant and Joan Wangui Kamundia Respondent Judgment 1.The claimant instituted this suit via the statement of claim dated 4/11/2024 seeking judgment against the claimant for Kshs. 170,000.00/= on the basis that it loaned the respondent Kshs. 150,000/= payable within 12 months at 5% monthly interest and the same was secured by the respondent’s motor vehicle KAQ 241Y. That the balance stood at Kshs. 170,000/=. 2.The respondent filed a response dated 15/8/2025 and admitted to receiving the sums. It was however pleaded that she had repaid Kshs. 140,000/= within 6 months yet the claimant inflated the loan to a total of Kshs. 310,000/=. 3.The matter proceeded under Section 30 of the Small Claims Act and the claimant filed submissions dated 4/3/2026 whereas the respondent’s were dated 7/3/2026. 4.I have seen and considered the pleadings, testimonies, evidence and submissions before court. The main issue for determination is whether the outstanding sum of Kshs. 170,000/= is legally recoverable considering repayments and interest terms. 5.The standard of proof in civil claims is on a balance of probabilities. See the Court of Appeal in Mumbi M'Nabea v David M.Wachira [2016] eKLR. 6.Sections 107, 108 and 109 of the Evidence Act, Chapter 80 of the Laws of Kenya places the burden of proof of a fact on the person who wishes the court to believe in the existence of such fact. 7.It is not denied that the respondent took out the loan of Kshs. 150,000/= as pleaded. I was also not in contest that the respondent had repaid a substantial amount. Indeed, the claimant’s statement of account indicated that she had re-paid Kshs. 140,000/=. What was in contention was whether the claimed amount of Kshs. 170,000/= over and above the repayment was payable. 8.I do note that the claimant was loaned a total of Kshs. 150,000/=. The claimant charged interest at 5% per month which is translates to approximately 60% per annum. The interest rate charged is highly inordinate and unconscionable noting that the principal would attract interest of approximately Kshs. 7,500/= within a month. 9.Indeed, the total amount claimed in addition to that paid totals to Kshs. 310,000/= which is more than two times the principle sum. This offends the in duplum principle as a result of application of the excessive interest rates. The object of the rule is to restrain excessive accumulation of interest and penalties to prevent unfair enrichment of a lender at the expense of the borrower. 10.While parties are generally bound by the terms of their contract, this Court retains discretion to decline enforcement of terms that result in unjust, oppressive, or unconscionable outcomes. In the circumstances, the Court finds the claimed interest and penalties to be disproportionate and inequitable. The Court therefore declines to enforce them. 11.In the end, the Court shall allow interest on the principal amount of Kshs. 150,000/= at 18% per annum for a period of twelve (12) months. The same totals to Kshs. 177,000/=. Noting that the respondent has repaid Kshs. 140,000/=, the pending balance is Kshs. 37,000/= and the same is awardable. 12.From the foregoing, I do find that the claimant has partially proven the claim as against the respondent. To that end, I hereby order as follows: -1.Judgment is hereby entered in favour of the claimant as against the respondent for the sum of Kshs. 37,000/=2.The claimant is awarded costs Kshs. 10,000/= 13.The respondent is awarded 30 days stay of execution. It is so decreed. DATED AND DELIVERED AT NAIROBI VIA CTS THIS 26TH DAY OF JUNE 2026HON. GLADYS .W. KIAMAHRESIDENT MAGISTRATE/ADJUDICATOR