[2021] KECPT 612 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL AT NAIROBI

TRIBUNAL CASE NO.222 OF 2019

ESTHER C. KERELON..........................................................................CLAIMANT

VERSUS

STIMA SACCO SOCIETY LIMITED ...........................................RESPONDENT

RULING

Vide the Application dated 17. 4.2019, the Claimants has moved this Tribunal seeking for the following Orders:

1. That this application be certified as urgent nd the same be heard in the first instance and on a priority basis;

2. That pending the interparties hearing and determination of this Application, this Honourable Tribunal be pleased to issue a stay of deduction and/or a temporary injunction restraining the Respondent whether by itself, its agents, servants and/or employees from transferring or deducting the Claimant’s salary or in anyway dealing with the Claimant’s salary as regards repayment of the alleged loans;

3. That this Honourable Tribunal be pleased to issue an order against the Respondent to produce the Applicant’s Original loan Application forms from the year 2006 to 2017;

4. That this Honourable Tribunal be pleased to issue an order against the Respondent to produce the Applicant’s original loan statements from the year 2006- 2017;

5. That this Honourable Tribunal be pleased to issue an order against the Respondent to produce the Applicant’s original member statements from the year 2006 to 2017;

6. That this Honourable Tribunal be pleased to issue an order against the Respondent to produce the Applicant’s Deposit contribution statements from 1994 to date; and

7. That the Costs of this Application be provided for in any event.

The Application is supported by the grounds on its face and the Affidavit sworn by the Claimant on even date (17. 4.2019).

The Respondent has opposed the Application vide the Replying Affidavit sworn by Susan Mutali, its Legal Officer on 4. 10. 2019.

Vide the directions given on 22. 7.2020, the Application was canvassed by way of written submissions. The Claimant filed her submissions on 23. 8.2019,while the Respondent did so on 11. 9.2020.

Claimant’s Contention

Vide the instant Application, the Claimant seeks the foregoing orders on grounds that the Respondent’s officers, on various dates between the years, 2006- 2017, took out loans using her name by forging loan Application forms. That during the said period also, the said officers doctored her loan Application forms to inflate the amount of loan taken by herself. That since 2006, her salary have been deducted to the tune of kshs.4,555,172. 20. That she is currently repaying a loan of Kshs.2,500,000/= that was fraudulently taken in her name and credited to her account on 4. 1.2017. That she is apprehensive that the Respondent will continue deducting her salary until the said loan is recovered.

The Claimant contend that the Respondent’s used systems “ Bridging Loan Recoveries , Bridging loan Commission “ and Loan Recovery” to recover monies allegedly credited into her accounts. She has particularized the irregularities in her said account as follows:

a. On 31. 7.2000, Kshs. 550,000 was credited to her account yet she had applied for Kshs.50,000/=;

b. On 30. 5.2008, Kshs.800,000/= was credited to her account yet she had applied for a loan of Kshs.100,000/=;

c. On 31. 3.2010, Kshs.800,000/= and Kshs.300,000/= were credited into her account yet she had applied for Kshs.150,000/=;

d. On 7. 2.2011,she applied for Kshs. 80,000/= but a loan Application form was forged to show that she had applied for Kshs.1,300,000/=; and

e. On 30. 11. 2013, she had applied for kshs.100,000/= but Kshs.1,300,000/= was credited to her account.

The Claimant then goes on to list the alleged discrepancies in her account at paragraphs 14-20 of her supporting Affidavit.

Respondent’s Case

The Respondent has opposed the Application on grounds that the Claimant did apply and was granted loan. That she is merely using the Tribunal as a means to avoid repaying the said loans. That at no point in time were her loan Application forms forged or doctored.

That in specific response to the averments made in her supporting affidavit, the Respondent contend thus:

a. That on 31. 7.2006, the Claimant applied for kshs.550,000/= and the said amount was disbursed to her;

b. That in response to paragraph 10 of the supporting Affidavit, the Claimant applied for a loan of Kshs.1,000,000/= but the Respondent approved a sum of kshs.800,000/=.

c. That in response to paragraph 11 of the supporting affidavit, the Claimant applied for a loan of Kshs.1,800,000/= on 31. 3.2010 but the Respondent approved a sum of Kshs.800,000/=.

That Respondent proceeded to make specific responses to the contention by the Claimant vide paragraphs 7-15 of the Replying Affidavit sworn by its legal Officer on 4. 10. 2019.

Issues for determination

The Claimant’s Application has presented the following issues for determination :

a. Whether the Claimant has established a proper basis to warrant the grant of an Order of a temporary injunction;

b. Who should meet the costs of the Application?

Temporary injunction

We have jurisdiction to make an order regarding temporary injunctions by dint of order 40 of the Civil Procedure Rules. Order 40 Rule 1 (a) provides thus:

“ Where in any suit it is proved by Affidavit or otherwise –

(a) That any property in dispute in a suit is in danger of being wasted, damaged, or alienated by any party to the suit, or wrongly sold in execution of a decree, the court may by order grant a temporary injunction to restrain such act, or make such other order for the purpose of staying and preventing the wasting, damaging, alienation, sale, removal, or disposition of the property as the court thinks fit, until the disposal of the suit or until further orders.

Before exercising the above jurisdiction, we are guided by the Principles enunciated by the court in the case of Giella – versus- Cassman Brown [1973] EA. They include:

(a) A prima facie case with a probability of success;

(b) Irreparable damage; and

(c) Balance of Convenience.

The court in the case of Mrao Limited versus first American Bank of Kenya Limited (2003) eKLR explained what Constitute a Prima Facie case in the following terms:

“.......A Prima Facie case is more than an arguable case. It is not sufficient to raise issues. The evidence must show an infringement of a right and the probability of the Applicant’s case upon trial. It is a case which on the material presented, to the court, a Tribunal properly directing itself will conclude that there exists a right which has apparently been infringed by the opposite party as to call for an explanation from the latter......”

Prima faciecase with probability of success.

From the Mrao case above, it is trite that for a party to establish a prima facie case with a probability of success, he/she must establish existence of a right which has been violated so as to call for an explanation or rebuttal from the other party.

The question that begs is whether in the current Application, the Claimant has demonstrated existence of a right which has been violated by the Respondent so as to require the Respondent to make a rebuttal.

From the nature of the Application, it is apparent that the Claimant has accused the Respondent of the following acts of fraud:

a. Forging loan Application Forms ;

b. Doctoring figures in the loan Application forms;

c. Crediting and quickly recovering monies from her loan accounts.

On its part, the Respondent contend that it advanced the Respondents the loans applied for at every given time. That at no point in time has it forged the loan Application forms as alleged.

Forgery or alteration of documents is a serious criminal offence punishable by law. Section 349 of the Penal Code says as follows on regards forgery.

“ Any person who forges any document or electronic record is guilty of an offence which, unless otherwise stated, is a felony and is liable, unless owing to the circumstances of the forgery or the nature of the thing forged,

...to an imprisonment for three years.”

In civil cases, forgery is equivalent to fraud. If a party alleges fraud, it is thus his/her duty to strictly prove it. This was the holding of the court in the case of R.G. Patel – vs- Lalji Makanji [1957] EA 314.

In the case of Mirko Blaeterman (suing through his power of Attorney – Shabir Hatim Ali) & Another – vs- David Mwangi Muiruri & 2 others[2015] eKLR, the court had this to say about fraud:

“ It must also be remembered that allegations of fraud must be strictly proved, so that whilst a standard of prove beyond reasonable doubt is not required, nevertheless a standard move than mere balance of probabilities is called for such a standard of proof can hardly be satisfied by contested Affidavit evidence, which has not been subjected to cross - examination.”

We could not agree more with the holding of the court in the above case. The only forum where the Tribunal can ascertain existence or otherwise of fraud is through a formal hearing where evidence will be led and subjected to cross-examination. Evidence tendered by way of Affidavits is bare as it lacks the crucial ingredients of cross- examination. With the foregoing in mind, we note that the instant Application is purely founded on allegations of fraud. The Claimant has accused the Respondent of fraudulently handling her account. The Respondent has denied this fact. Both contentions are founded on Affidavits filed by the parties. In lieu of our finding above, we hold that we are unable to make any definitive findings on the allegations made at this stage, simply put, we are not satisfied that the Claimant has established a prima faciecase with a probability of success.

Conclusion

The upshot of the foregoing is that we dismiss the Claimant’s Application dated 17. 4.2019 with costs in the cause. We further give the following directions to facilitate expeditious disposal of the main claim:

a. The Respondent to file a statement of Defence together with witness statements and list and bundle of documents within 21 days herein;

b. The Claimant to file a Reply to the Response as well as supplementary list and bundle of documents and witness statements (if need be) within 14 days of service;

c. Mention to confirm compliance and fixing a hearing date on ............

RULING SIGNED, DATED AND DELIVERED VIRTUALLY THIS 7TH DAY OF JANUARY, 2021.

Hon. F. Terer Deputy Chairman Signed 7. 1.2021

Mr. P. Gichuki Member Signed 7. 1.2021

Mr. B. Akusala Member Signed 7. 1.2021

In the absence of both parties

Court clerk Maina

Hon. F. Terer Deputy Chairman Signed 7. 1.2021