https://new.kenyalaw.org/akn/ke/judgment/kecopt/2026/250

Energy Regulated Non-WDT Society Ltd v Mwangi (Tribunal Case E406 of 2023) [2026] KECOPT 250 (KLR) (4 June 2026) (Judgment) Neutral citation: [2026] KECOPT 250 (KLR) Republic of Kenya In the Cooperative Tribunal Tribunal Case E406 of 2023 J Mwatsama, Ag Chair, B Sawe, F Lotuiya, M Chesikaw & PO Aol, Members June 4, 2026 Between Energy Regulated Non-WDT Society Ltd Claimant and Veronica Mweru Mwangi Respondent Judgment Brief Facts 1.The Claimant is a registered Savings and Credit Cooperative Society and the Respondent is a member of the Claimant with Membership No. 1338.That the Respondent is a former employee of the Claimant.Vide a loan application dated 07012018 the Respondent applied for a loan of Ksh. 3,500,000= payable within a period of 60 months at an interest of 1.5% per month on a reducing method. The agreed repayment instalment was Ksh. 88,877= per month. The loan was secured by five (5) guarantors and the shares of the respondent which stood at Ksh.1,191,498= on the date of the said loan application.The loan of Ksh. 3,500,000= was credited to the account of the Respondent on 28022019.The Respondent further applied for an emergency loan of Ksh. 20,000= via her mobile no. 0721834896 and was advanced on 2882020.That on 13th January 2023, the claimants wrote a demand letter to the Respondent and gave 14 days to settle an outstanding loan amount of Ksh.1,710,610.35. The Claimants Case. 2.Vide a Statement of Claim dated 10th May 2023 the Claimants stated that the Respondent borrowed a total of Ksh. 3,520,000= and as at the date of filling the Statement of Claim, there was a balance of Ksh,1,185,471.70= and accrued loan interest of Ksh. 525138.65 making a total outstanding of Ksh. 1,710,610.35 due from the Respondent. 3.In a Witness Statement sworn by Stanley Mwachi Ayumba, the CEO of the Respondent, the Claimants state that the Respondent made some repayments from the time she took the loan and then stopped repayment without any notice or reason. The Respondent’s Defence. 4.The Respondent denied that she owes the Claimant Ksh. 1,710,610.35 instead she states that she made routine payments while in employment until the Claimant suspended her from employment. 5.The Respondent further state that she filled an Application dated 17th January 2024 and requested the Claimant to furnish her with her Statement of Account. The Claimant has refused to provide to date. 6.Finally she states that she is entitled to an offset of the outstanding loan against her shares held by the Claimant. Hearing. 7.During the hearing held on 1442025, the Claimants testified and produced documentary evidence to proof their claim.The Respondent on the other hand testified that she has shares of Ksh.1.3 million held up by the Claimant which is enough to offset the outstanding loan, plus the interest.She further stated that the Claimants hold her savings and benefits from her employment. 8.After the close of hearing of the Claimants and the Respondent’s case, the Tribunal gave the following orders:i.That the Claimant to file and serve written submissions within 7 days from the date herein.ii.That the Respondent to file and serve his written submissions within 7 days upon receipt of service by the Claimants. 9.On the date of writing this judgement, none of the parties had filed written statements. Issues. 10.Having considered the Claimant’s Statements, the Affidavits, the Respondent’s Defence, the oral hearing proceedings of both parties and the evidence placed before the Tribunal by the Claimant, the issues that stand out 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 Claimant has proved their case against the Respondent? 11.During the hearing held on 1442026, the chief executive officer of the Claimant’s Sacco Stanley Mwachi Ayumba restated that the Respondent owes the Sacco an outstanding loan and interest of Kshs. 1,710610.35. He produced the Respondent’s loan application dated 07012018 which was approved on 912019 and a schedule of the disbursement of the loan on 28022019. The same schedule showed the repayment of the loan by the Respondent through salary and other deposits until 2292020. To proof these repayments, the Claimants witness produced a Cooperative Bank statement showing that the Respondent repaid the loan as indicated in the schedule. 12.Undoubtedly, the Respondent did not deny that she borrowed and was granted the loan by the Claimant. 13.According to the Respondent, her contestation is that she repaid the loan regularly until the time she was suspended. The Claimant acknowledged this averment under paragraph 5 of the Claimants witness statement dated 10th May 2023 that:“The Respondent made some payment towards the settling of the loan amount but at some point, stopped and failed to make any more” 14.Granted that the Respondent admitted that she was granted the loan and that the Respondent confirmed that she repaid her loan up to some point, it is clear that the Claimants have discharged their responsibility of proof. However, the issue for us to determine at this point, is how the sharesdeposits savings of the Respondent was accounted for or not by the Claimant. 15.One of the securities of the loan as shown in the loan application form is her shares. Under clause “H” headed FOR OFFICIAL USE ONLY in the loan application the Claimants’ officials show that the Respondent had Ksh. 1,191,498= worth of shares as at 912019. During hearing held on 1442026 the Respondent stated that her shares had increased to Ksh.1.3 million, this was not denied by the Claimants. 16.Reading through the Claimants’ Statement of Claim, the Witness Statement dated 10th May 2023 and the Claimants schedule of repayments by the Respondent, there is nowhere that the Claimants have shown how they treated the Respondents shares depositssavings. 17.Given that the Claimants failed to provide or file before the Tribunal the Respondents Statement of Account, it is clear that the Claimants calculations of the loan outstanding against the account of the Respondent is shrouded with opaqueness. This is because it is not clear where how the Claimants treated the Respondents shares held. If the shares were deducted, why not make it clear? 18.However, In the absence of clear calculationstabulations, we order that the sharessavingsdeposits of the Respondent being held by the Claimant be shown as a deduction when calculating the loan balance due from the Respondent. Afterall the Respondent had under Clause “D” of the loan application offered his shares and guarantors as security. 19.Accordingly, the amount of Ksh.1,710.610.35 be deducted from the shares of the Respondent held by the Claimant of Ksh.1.3m and the balance from the deduction be refunded to the Respondent according to the provisions of the Claimants’ by-laws. Who should meet the cost of the claim? 20.Although costs of an action or proceeding are at the discretion of a court, the general principle is that costs follow the event as provided under Section 27 of the Civil Procedure Act Cap 21. As such the successful litigant should ordinarily be awarded costs unless for good reason the court directs otherwise. 21.Finally, the Tribunal hereby enters judgement in favour of the Claimant against the Respondent for payment of the balance of money after deduction of the outstanding loan of Ksh.1,710,610.35 plus interest from the shares of Ksh.1.3 million.Each party to bear their own costs. JUDGMENT DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 4TH DAY OF JUNE, 2026.HON. J. MWATSAMA - AG. CHAIRPERSON SIGNED 462026HON. BEATRICE SAWE - MEMBER SIGNED 462026HON. FRIDAH LOTUIYA - MEMBER SIGNED 462026HON. MICHAEL CHESIKAW - MEMBER SIGNED 462026HON. P. AOL - MEMBER SIGNED 462026Mutai - Court AssistantMs. Njeri for the ClaimantMs. Ithondeka for the Respondent