[2021] KECPT 555 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL AT NAIROBI

TRIBUNAL CASE NO.464 OF 2019

GERSHON DULLO ANGADO......................................................CLAIMANT

VERSUS

KENYA UNION OF SAVINGS &

CREDIT COOPERATIVES LIMITED...........................1ST RESPONDENT

INTIME AUCTIONEERS.................................................2ND RESPONDENT

RULING

Vide the Application dated 5. 8.2019 the Claimant has moved this Tribunal seeking for Orders inter alia:

1. That this application be certified urgent IPSO FACTO be heard ex-parte and service be dispensed within the first instance;

2. That this Honorable Tribunal be pleased to grant STATUS QUO ORDERS restraining the 1st and 2nd Respondents either by themselves or their agents acting on their behalf from disposing off Land Reference Number 209/8294/382, AKIBA ESTATE SOUTH C, NAIROBI COUNTY by way of public auction intended to take place on the 12th August 2019 pending the hearing and determination of the instant application ;

3. That this Honorable Tribunal be pleased to grant orders compelling the 1st Respondent to produce and file in court duly audited loan and savings accounts in respect to the Claimant/Applicant herein ;

4. That this Honourable Tribunal be pleased to grant orders compelling the 1st Respondent to comply with the miscellaneous provisions of the Banking Act in Administering the claimant loan account.;

5. That this Honorable Tribunal be pleased to grant the claimant/Applicant orders to liquidate the remaining balance by way of monthly installments till payment in full;

6. That cost of this application be provided for.

The Application is supported by the grounds on its face and the following Affidavit;

a. Supporting affidavit sworn on 5. 8.2019;

b. Further affidavit sworn on 16. 10. 2019.

The Respondent has opposed the Application vide the Replying Affidavit sworn by George Ototo on 25. 9.2019.

Vide the directions given on 5. 8.2020, the Application was canvassed by way of written submissions. The Claimant filed his written submissions on 14. 12. 2020 however, the Respondent’s submissions were not on record as at the time of preparation of this Ruling.

Claimant’s Contention

The Claimant has opposed the sale (by way of Public Auction) of his property L.RNO.209/8294/382 Akiba Estate South C based on the following grounds:

a. That the Respondent did not issue him with the requisite 45 days redemption Notice.

b. That he dispute the sum demanded;

c. That he has repaid the loan;

Respondent’s case

The Respondent has opposed the Application on grounds inter alia that upon being granted a loan of Kshs.7,000,000/= the Claimant has defaulted in repayment of the same. The initial default occurred in April, 2011. That this prompted it to instruct Watts Auctioneers to recover the same. That the sale did not materialize as the Claimant gave a commitment to regularize his account. That he subsequently failed to do so. That this prompted it to commence the process of realization of security. That it took the following steps:

a. That he was issued with a 90 days statutory Notice;

b. That he was subsequently issued with a 40 days notification of sale;

c. That upon the lapse of the above notices, the 2nd Respondent was instructed to proceed to advertise the charged property for sale;

d. That armed with instructions the 2nd Respondent issued a 45 days redemption notice on 5. 11. 2018.

That upon receipt of the redemption notice, the Claimant wrote a letter dated 2. 4.2019 acknowledging the existence of the realization process and committed to regularize his account. That he again failed to do so.

That he is thus in breach of the terms of the loan facility and as at 8. 7.2019 he owed the 1st Respondent kshs.17,492,577. 05/=.

Claimant’s further Affidavit sworn on 16. 10. 2019

Vide this affidavit, the Claimant sought to rebut the averments made by the Respondent in the foregoing Replying Affidavit. He reiterated the fact that the 45 days redemption Notice was not served upon him. That the 2nd Respondent did not also issue him with the requisite notification of sale as required by Rule 15 of the Auctioneers Rules. That failure by the 2nd Respondent to issue the said notices, renders the whole process Null and Void.

Issues for determination

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

a. Whether the Claimant has established a proper basis for the grant of an order of 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......”

What we discern from the foregoing decisions of the court is that for one to establish existence of a prima facie case he or she should establish existence of a right which has been infringed by the opposing side so as to call for explanation. The crux of the Claimant’s case is that the Respondent and the 2nd Respondent, in particular has failed to issue the requisite 45 days redemption Notice.

Secondly, that he disputes the sum demanded by the 1st Respondent. We will address these two main issues sequentially beginning with the issue of relating to the amounts due.

Dispute regarding amounts due

The court of Appeal in the case of Giro Commercial Bank limited - vs - Haid Hamud Mutesi[2002[eKLR had to say regarding a dispute as to the amount owing:

“ It has been had time and again that a mortgagee cannot be restrained from exercising his power of sale because the amount due is in dispute, or that the mortgagor has commenced a redemption action or because the mortgagor objects to the manner in which the sale is being arranged....”

Applying the holding of the court in this case to the matter at hand, it is apparent that the Claimant disputes the manner in which the 1st Respondent has computed the debt. This is not a ground for the grant of a temporary injunction.

Redemption Notice

The Claimant has strenuously accused the 2nd Respondent of not issuing the 45 days redemption Notice before advertising the charged property for sale. That failure to do so goes to the root of the execution process with the consequence that the said process is null and void.

We have, however perused the annextures attached to the Replying Affidavit sworn by George Ototo on 25. 9.2019 and note that indeed the 1st Respondent followed all the requisite processes before advertising the property for sale. A 90 days statutory Notice dated 15. 8.16 was issued (annextures G 08). This was followed by a 40 days Notification sale dated 25. 8.2017 (annexture G 09). This was then followed by a 45 days redemption Notice dated 5. 1.2018(annexture G 0 -11). All the Notices are accompanied by their respective certificate of postage.

We thus cannot fathom the circumstances under which the Claimant is disputing service of Redemption Notice yet there is evidence that the same was duly served upon him.

Conclusion

The upshot of the foregoing is that we do not find merit in the Claimant’s application dated 5. 8.2019 and hereby dismiss it with costs. Orders to apply to CTC. NO. 467/19.

Ruling signed, dated and delivered virtually this 25th day of March, 2021.

Hon. B. Kimemia Chairperson Signed 25. 3.2021

Hon. Jane Mwatsama Deputy Chairperson Signed 25. 3.2021

Mr. P. Gichuki Member Signed 25. 3.2021

Miss Jerotich for 1st Respondent.

Hon. B. Kimemia Chairperson Signed 25. 3.2021