Energy Regulated NON-WDT Society Ltd v Mwangi (Tribunal Case 323/E 405 of 2023) [2026] KECOPT 266 (KLR) (15 June 2026) (Judgment)

Energy Regulated NON-WDT Society Ltd v Mwangi (Tribunal Case 323/E 405 of 2023) [2026] KECOPT 266 (KLR) (15 June 2026) (Judgment) Neutral citation: [2026] KECOPT 266 (KLR) Republic of Kenya In the Cooperative Tribunal Tribunal Case 323/E 405 of 2023 J Mwatsama, Ag Chair, B Sawe, F Lotuiya, M Chesikaw & PO Aol, Members June 15, 2026 Between Energy Regulated NON-WDT Society Ltd Claimant and Teresiah Mwihaki Mwangi Respondent Judgment Background 1.The Respondent became a member of the Claimant on 27th March 2012 and was allocated membership No.1565. 2.That on 3rd April 2012, she made her first saving of Ksh.100,000/= and continued to deposit more savings in her account in line with the objectives of the Claimant/Sacco. 3.It is the practice of most Savings and Credit Cooperative Societies in Kenya to encourage their members to save and borrow from their Saccos’. The Claimant state in paragraph 4 of their Statement of Claim dated 10th May 2023 that it is the Claimants’ policy to lend to their borrowers three (3) times the savings of a member. 4.Subsequently, having deposits of Ksh.500,950, the Respondent applied on 3/3/2016 for a loan of Ksh.1,500,000/= which was approved on 9/3/2016.i.Again, with a cumulative deposit of ksh751,488 she applied for a second loan of Ksh.2,250,000/= on 5/2/2018 which was approved on 14/2/2018.ii.The third Loan of Ksh.350,000/= was applied on 13/11/2018 and was approved on 14/11/2018.iii.These three (3) loans are secured by the Respondents shares and guarantors listed in the application forms.iv.There is another loan of Ksh.2,272,600/= which was applied for by the respondent and the Claimants advanced it on 7/2/2017, details of which are not in record. 5.Equally, the Claimants state that the Respondent applied for mobile loan and she was advanced a total of Ksh.220,000/= through her mobile no. 0721-137-192 on various dates as follows.2017- Total Ksh. 70,000/=2018- Total Ksh. 70,000/=2019 – Total ksh. 80,000/= 6.The cumulative loan advanced to the Respondent is Ksh.6,592,600/= according to the Claimants’ statements and documents filed. The Claim 7.Vide a Statement of Claim dated 10th May 2023 filed in the Tribunal on 12th June 2023, the Claimant instituted a suit against the Respondent which was triggered by her failure to repay the loan despite various demands. 8.That the Respondent applied for normal loan and Emergency loan which the Claimant advanced on various dates as follows:i.On 10/3/2016 she was advanced Ksh.1,500,000/=ii.On 7/2/017 she was advanced Ksh.2,272,600/=iii.On 26/11/2018 she was advanced Ksh.350,000/=iv.On 4/4/2018 she was advanced Kshs.2,250,000/=Emergency loan.v.In 2017 Ksh.70,000/=vi.In 1018 Ksh.70,000/=vii.In 2019 Ksh.80,000/= 9.In the Statement of Claim, the Claimant prays for Judgement to be entered against the Respondent for the following reliefs:a.Payment of Ksh.7,865,550.11 with interest at the prevailing commercial ratesb.General damages for inconvenience and frustration caused by the Respondent.c.Cost of the claim together with interest thereon at such rate and at such period of time as the Tribunal may deem fit to grant.d.Any such other or further relief as the Tribunal may deem appropriate. The Respondent’s Response. 10.The Claimant’s claim is traversed by the Respondent through a Statement of Defence dated 14th July 2023 in which the Respondent inter alia denies that she owes Ksh.7,865,550.11 to the Claimant and went ahead to state:i)That she applied and received the loan facility on 10th March 2016.ii)Further, on 5th February2018, she topped up the loan of 10th March 2016 and the total outstanding facility became Ksh.2,250,000/=.iii)That by communication made to the Respondent on 21st June 2022 by the claimant the alleged outstanding facility was Ksh.841,061.95.iv)That she denied not to have applied for the loan issued on 17th February 2017, 26th November 2018 and 4th April 2018.v.That all mobile loan facilities that she applied for were fully paid in line with the Claimants’ policy. Hearing 11.During the hearing held on 14/4/2026, the Claimant through the chief executive officer told the Tribunal that they are claiming for Kshs. 4.4 million plus Kshs. 3.4 million interest from the Respondent.That all the mobile loans which were taken by the Respondent has not been paid as per the terms of the Sacco.In conclusion the Claimants witness stated that the Respondent had savings of Ksh.767,948 in her savings account which was used to repay the loan before coming to the Tribunal. 12.On her part, the Respondent confirmed that she applied and was granted four (4) loans from the Claimant of which two (2) were top ups. She stated that she applied for the 1st Loan of Kshs.1,500,000/= on 10th March 2016 and topped it up in 2017 to Ksh.2,272,600/= and topped it again on 5th February 2018 to Ksh.2,250,000/= 13.Although she admitted that she did not file repayment receipts in the Tribunal, she however admitted that she owed the Claimant Ksh. 1,297,099/= and intend to pay the amount. 14.For the mobile loans advanced to her, she stated that she repaid all of them in full contending that it would not be possible under the system to apply for a subsequent loan whilst the earlier one was outstanding. Issues 15.Having considered the Claimants Statements, the Affidavits, the Respondents Defence, the oral hearing proceedings of both parties and the material evidence placed before the Tribunal, the issues that fall for our determination are:a)Whether the Claimant has proved their case against the Respondent?b)Who should meet the cost of the claim? 1st Issue Whether the Claimants have proved their case against the Respondent? Analysis 16.The burden to proof that the Respondent applied and took the loan lies with the Claimant as provided under Section 107(1) of the evidence Act cap 80 laws of Kenya which provide that:“Whoever desires any court to give judgement as to any legal right or liability dependent on the existence of facts which he asserts must prove that those facts exist” 17.For the Tribunal to establish the truth of the two (2) statements made by the Claimant that they granted four(4) stand alone loans to the Respondent while the Respondent state that she applied for three (3) top-up we have to retrace back to the loan application forms that were filled and signed by the Respondent. 18.On the first loan, the Respondent admitted under paragraph 3 of her Witness Statement that she applied for a loan of Ksh.1,500,000/= on 10th March 2016 which was approved and advanced on 9th March 2016. There is also on record an unclear photocopy of standing order request form by the Respondent instructing her bank to pay the Claimants bank every month for the repayment of the loan. However, since the Respondent admitted the facts of this first loan during hearing, there is nothing more for the Claimant to prove. 19.On the second of Ksh.2,272,600/= the Respondent state that this was a top up while the Claimant insist that it was a normal loan application like any other.What is a top up loan?“As commonly understood, a top up loan is an additional amount of money granted to an existing borrower with an existing active. It works out that upon approval, the old loan balance is combined with the top-up amount to form a single loan which the borrower continues to make as a one single repayment under similar terms with the old loan or new terms”. 20.With this in mind, we have examined the List of Documents filed by the Claimant and perused the records in the Tribunal’s file and have not seen the physical copy of the loan application form. Missing to file such a vital document to support such an amount of loan, may not be an ordinary oversight on the part of the Claimant, instead it is a pointer that the Respondent may not have applied for the Loan. Even if the Respondent applied for this loan on 7th July 2017 as alleged, the questions that we seek for answers are:i.why didn’t the Claimants file the copies of the loan application form for the amount like they did for the other three (3) loans?ii.Why is the application form missing in the claimants list of documents dated 10th May 2023 yet the other 3 applications are listed?iii.How much outstanding loan did the respondent have before she applied for the Ksh.2,272,600/= loan? and how was the outstanding loan balance treated in the Claimants’ records? 21.Failure by the Claimants to file the Respondents member statement account to show whether the new loan was used to deduct the old balances as a buy-off/buy-back or that it was meant to run alongside the existing loan on a separate account is the cause of the confusion that can only be cured by a reconciliation of the Respondent’s account. 22.Having noted that the amount stated as a loan of Ksh.2,272,600/= is a resultant of a top- up application which is not on record, we fault the Sacco for not providing a clear breakdown of the deducted top-up amount that was used to clear the old loan in violation of SASRA regulations which require that:“Once a borrower signs a top up loan form, the previous loan account is closed and the guarantors are discharged or their consent is sought for the new consolidated debt.” 23.Given that the Sacco hold a duty of disclosure which they have failed to discharge, it is our opinion that the Claimants have employed a dubious method of concealing certain information that would have vindicated the Respondent. For this reason, the Tribunal dismisses that the amount of Ksh.2,272,600/= is not a standalone loan but it is a result of a top-up loan. 24.Regarding the 4th loan of Ksh. 2,250,000/=applied on 5th April 2018, we note that the Respondent state under paragraph 4 (c) (ii) in her Statement of Defence stated that this was a top-up loan of the first loan of Ksh.1,500,000/=. Upon examination of the loan application form specifically paragraph 14 where it written “Total loan outstanding” it is indicated that the Respondent had no outstanding loan balance as at 14th February 2018 when the loan was approved. It is further hand written in the form that the amount currently requested and “New total loan” is the same amount of Ksh.2,250,000/=. Having noted so, we agree that the amount applied for was a new loan and not a top up loan. 25.In her List of Documents dated 19th July 2024, the Respondent claims to have filed accounts statement and a notification letter dated 21st July 2022. On the Tribunal file record, there is no record of the bundle as at the time of writing this judgement. If it was there, the contents would have shed some light on the Respondent’s averments, in its absence, we rely on what is on record to make a finding. 26.For the final loan application dated 13th November 2018 for Ksh.350,000/= we agree with the Respondent that this is a top up loan because the application form meets the standard of normal practice of the treatment of a top-up loan. For example, paragraph 14 of the form shows that the Respondent was seeking for Ksh.350,000/= as a top up of the existing loan of Ksh. 2,073,991/= to make the principal loan of Ksh.2,423,99/= as shown. On this, while we applaud the Claimant for the display of the duty of disclosure in the instant loan application form, equally, we fault them for treating the same as a new loan application in their Statement of Claim. 27.Regarding the mobile loan of Ksh.220,000/= advanced to the Respondent, the Claimant filed before the Tribunal evidence that the loan was granted. During hearing the Respondent contended that she repaid the mobile loan in full. But when she was asked to produce receipts or Mpesa transaction to proof her assertion, she failed to do so claiming that she lost the receipts. In order to resolve this issue, we order the Respondent to get her statements from Safaricom and take to the Claimant to proof the repayment or sit down with the Claimants’ CEO and agree on a repayment schedule of the Ksh.220,000/= plus interest. 28.Drawing from the above analysis, it is our finding that the Claimants claim of Ksh.7,865,550.11 from the Respondent is tainted with loan splitting and engaging in fragmented accounting, miscalculations and exaggerations that need to be recalculated. We therefore dismiss the sum claimed as inaccurate. Disposition 29.On the admission made by the Respondent during hearing, we hereby enter judgement in favour of the Claimant against the Respondent for the payment of Ksh.1,297,099/= with interest from the date of filing suit until payment is made in full.Further, we make the following orders in the judgement;i.That the Claimant and the Respondent to sit & re- calculate the repayments & interest of the original loan borrowed in 2016 and that of the subsequent top ups in 2017 and 2018 within 30 days from the date of this judgement.ii.That any balance of the re-calculated amount over the admitted sum of Ksh.1,297,099/= and its interest will be paid by the Respondent.The cost of this application will be borne by the Respondent. JUDGMENT DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 15TH DAY OF JUNE, 2026.HON. J. MWATSAMA - AG.CHAIRPERSON SIGNED 15/6/2026HON. BEATRICE SAWE - MEMBER SIGNED 15/6/2026HON. FRIDAH LOTUIYA - MEMBER SIGNED 15/6/2026HON. MICHAEL CHESIKAW - MEMBER SIGNED 15/6/2026HON. P. AOL - MEMBER SIGNED 15/6/2026Court Assistant - MutaiMs. Njeri advocate for the ClaimantMs. Ithondeka advocate for the Respondent