[2024] KEMSET 1023 (KLR)

Home v B-Smart Savings & Credit Cooperative Society Limited (Tribunal Case E006 of 2024) [2024] KEMSET 1023 (KLR) (2 August 2024) (Judgment)

Neutral citation: [2024] KEMSET 1023 (KLR)

Republic of Kenya

In the Micro and Small Enterprises Tribunal

Tribunal Case E006 of 2024

J.Bett, Chair, R.Katina, Vice Chair, J.Were, A Gikuya & A Kibet, Members

August 2, 2024

Between

Regina Wacera Home

Claimant

and

B-Smart Savings & Credit Cooperative Society Limited

Respondent

Judgment

Introduction 1. This claim dated 15th April 2024, was filed on 25th April 2024. The Claimant, Regina Wacera Home was represented by the Mr. Patrick Makau of P.K makau and Company advocates.kenda House 4Th Floor Rmd10,tom Mboya Street,P.O.BOX 72664-00200 Nairobi.The Claimant herein described as a business lady has been a member of B-smart Savings and credit Cooperatives Society limited. The claim was for recovery of savings totalling Ksh 371,000/= being an amount deposited with the Respondent for purposes of saving with an understanding that she will be getting business loans from the respondent whenever she needed a loan.

2. The Respondent is described as a savings and credit cooperative society carrying on business of savings and lending to its registered members.

3. Upon the filing of this Cause on 25th April 2024, the Tribunal issued directions on 26th April 2024 and set the Cause for a mention to confirm compliance of the Tribunal’s directions and for issuance of further directions. the Tribunal was informed by the learned counsel of the Claimant that service of the claim had been effected as directed. Affidavit of service was accordingly filed. The Tribunal was informed that the Respondent however had not complied nor entered appearance. The Cause was then slated for a hearing on 10th July 2024.

4. The Tribunal was informed by the Claimant during hearing on 10th July 2024 that the Respondent had been duly served with all the pleadings and annexures, and they failed to Respond. the Counsel for the claimant requested to apply for Judgment in default since the claim was uncontested. The Tribunal however gave directions to the learned counsel to proceed by the formal proof so as to bring out the issues clearly.

5. On the part of the Tribunal, it was convinced that it was proper in the circumstances to allow the matter so proceed since the claimant had sufficiently demonstrated to the Tribunal that it had made every effort to duly serve and notify the Respondent that a suit had been filed against them and there was no reply.

The Claimant’s Case 6. The learned Counsel on record stated that he had one witness that is the claimant. He however preferred to lay out his case first.

7. He said the claimant was claiming Ksh 371,000/= from the respondent an amount she had deposited at B-smart Savings and credit cooperative society limited. He stated that the claimant felt that there was no need of continuing to save with the respondent because they were not honouring their undertaking of offering business loans whenever she required . That is when she decided to opt out and withdraw from the membership of the respondent.

8. The claimant avers that through her advocate on record had written two separate demand notices the first one on 19th September 2023, the second reminder on 2nd December 2023, both demand notices were never responded to.

9. In her testimony the claimant presented her savings passbook as exhibit of what she was claiming. She also presented her savings statements as evidence of her saving record with the Respondents.

10. She avers that she started saving with the respondent from January 2020. That in 2022 when she was in need of importing a motor vehicle using her car KCW ----as security. She paid 4500/= for valuation of the motor vehicle which was done. But the loan was never processed despite her filling all the required forms.

11. She avers that she wrote a letter to the respondents to opt out and withdrawal her membership but the Respondents declined to receive the letter.

12. She finally prayed that the Tribunal do order the Respondent to pay the Deposit of 371,000/= plus the money paid for valuation of Ksh.4500/=. Totalling 375,500/= including costs of this suit as prayed for in the statement of claim.

Issues For Determination 13. Arising from the claim and the oral evidence at the formal proof hearing on 10th July 2024, the following issues presented themselves for the determination by this Tribunal;a.Whether the Respondent was served with the claim.b.Whether the Respondent has a debt of Ksh 371,500/= being savings paid by Claimant to the society Limited.c.Who bears the cost of this claim?

Determination And Final Orders The right to be heard 14. The first issue is whether the Respondent was granted the right to be heard. The Tribunal as expected by the law considered this issue as it is a Constitutional right for the Respondent to be accorded the right to be heard.

15. The learned counsel stated that he served the Respondent and filed affidavit of service. Further, a hearing notice dated 27th May 2024 which was stamp received by B-Smart Savings and Cooperative society thus evidenced of service of notice of hearing upon the Respondent. The Respondent however did not file the Response nor attended the hearing of the suit. No explanation was given for failure to file the Response. Further, no explanation was given for failure to attend the hearing of this suit by the Respondent or its Representative.

16. The Tribunal was informed by the learned Counsel Regina Wacera Home that the Claimant served all the documents upon the Respondent. Corresponding affidavit of service were filed by the Claimant.

17. In allowing this suit to proceed to formal proof, the Tribunal was guided by the Constitutional principles of the right to be heard and the reasoning of the appellate court in James Kanyiita Nderitu & Another [2016] eKLR, where the Court of Appeal stated as follows:“From the outset, it cannot be gainsaid that a distinction has always existed between a default judgement that is regularly entered and one which is irregularly entered. In a regular default judgement, the defendant will have been duly served with summons to enter appearance or to file defence, resulting in default judgment.

18. The Tribunal is guided by the Constitutional principles of the right of a party to be heard while noting that this right should not create injustice and prejudice to others. Having found that there was proper service and that there was no justification for the failure to file the Response and attend the hearing of the suit, the Tribunal was convinced that it was proper and justifiable in the circumstances to allow the matter to proceed to formal proof on 10th July 2024.

Savings Deposited with the Society 19. As to whether the Respondent owes the claimant the claimed amount being savings from the Claimant. The Claimant relied on the savings passbook and savings statement that were received by the Respondent. No evidence was produced to the contrary.

Outstanding debt 20. Having considered the evidence tendered by the Claimant in its totality, the Tribunal finds that the relevant law that will govern it in coming up with its judgment is found under the provisions of Order 10 Rule 4 (1) of the Civil Procedure Rules, 2010 which provide as follows:“4(1) Where the plaint makes a liquidated demand only and the defendant fails to appear on or before the day fixed in the summons or all the defendants fail so to appear, the court shall, on request in Form No. 13 of Appendix A, enter judgment against the defendant or defendants for any sum not exceeding the liquidated demand together with interest thereon from the filing of the suit, at such rate as the court thinks reasonable, to the date of the judgment, and costs.

21. No evidence has been given on refund of the amount paid by the claimant on or before the filing of this suit. When the Claimant set off to claim the outstanding amount of Ksh. 371,500/=. from the Respondent, no evidence was presented to the contrary. The produced exhibits and documents as evidence were not contested, that is the basis in which We find that the Claimant is owed, in the absence of evidence to the contrary,we find the Respondent owes the Claimant Ksh. 371,500/ being savings.

Costs 22. The Claimant specifically pleaded to be awarded costs of this suit. We find that it is fair and just to award costs to the Claimant.

Orders 23. Flowing from the findings, we find that in the interest of justice, the Respondent should pay the Claimant:-a.The pay back the savings of Ksh. 371,500/=b.Costs of the Claim of Ksh 55,000/=c.Interest on (a) and (b) above at prevailing court rates.Those then are the Orders of the Tribunal.

DELIVERED AND DATED THIS 2ND DAY OF AUGUST 2024 IN NAIROBIDr. J. BETT - [CHAIRMAN]R. KATINA - [VICE-CHAIR]Hon. J. WERE -[MEMBER]A. GIKUYA - [MEMBER}A. KIBET -[MEMBER]Judgement delivered virtually in the presence of:1. Claimant2. –Tribunal Administrator3. –Tribunal Administrator4. –Tribunal Assistant