[2021] KECPT 589 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL AT NAIROBI

TRIBUNAL CASE NO.83 OF 2020

LILIAN WAYUA MBEVI....................................................................CLAIMANT

VERSUS

FEP SACCO SOCIETY LIMITED.........................................1ST RESPONDENT

PURPLE ROYAL AUCTIONEERS.......................................2ND RESPONDENT

RULING

Vide the Application dated 21. 2.2020, the Claimant has moved this Tribunal seeking for the following Orders:

1. Spent;

2. That this Honourable Tribunal be pleased to grant a temporary injunction restraining the Respondents whether by acting by themselves, servants or agents from attaching, advertising for sale by way of auction or otherwise the Claimant’s properties Title No. Ndumberi/Riabai/5613, Kihingo Area and Title NO. Ndumberi/Riabai/3796, near Kiambu High School, Kiambu County on 27. 2.2020 or thereabout be stayed pending the hearing and determination of this Application;

3. That the intended auction of the properties title No. Ndumberi/Riabai/5613, Kihingo Area & title No. Ndumberi/Riabai/3796, Near Kiambu High School, Kiambu County scheduled for 27. 2.2020 or thereabout be stayed pending the hearing and determination of this Application;

4. That this Honourable Tribunal be pleased to grant a temporary injunction restraining the Respondents whether by acting by themselves, servants or agents from attaching, advertising for sale by way of auction or otherwise the Claimant’s properties Title No. Ndumberi/Riabai/5613, Kihingo Area and Title NO. Ndumberi/Riabai/3796, near Kiambu High School, Kiambu County pending the hearing and determination of this claim;

5. That this Honourable Tribunal be pleased to grant an interlocutory order barring the Respondent from taking possession of the Claimant’s properties Title No. Ndumberi/Riabai/5613, Kihingo Area and Title NO. Ndumberi/Riabai/3796, near Kiambu High School, Kiambu County ending the hearing and determination of this suit;

6. Any other or further or better relief that this Honourable Tribunal may deem fit and just and convenient to grant in the circumstance; and

7. That the costs of this Application be provided for.

The Application is supported by the grounds on its face and the Affidavit sworn by Claimant on 21. 2.2020. The Respondent has opposed the Application vide the Replying Affidavit sworn by the 1st Respondent’s Chief Executive Officer ( Dr.Jackson Wanjau) on 13. 3.2020.

Vide the directions given on 23. 7.2020, the Application was canvassed by way of written submissions. The Claimant filed her written submissions on 26. 10. 2020 while the Respondent filed its initial set of submissions on 26. 10. 2020 and Supplementary ones on 2. 11. 2020.

Claimant’s Contention

Vide the instant Application, the Claimant contend that the Respondents have put her charged properties on sale yet her loan with the 1st Respondent is performing. That she took the said loan way back in 2016 whilst she worked with the 1st Respondent on the security of the following properties:

a. L.R. NO. Ndumberi/Riabai/5613; and

b. L R.NO.Ndumberi/Riabai/3796

That she has been faithfully repaying her loan until a point when she lost her job with the 1st Respondent. That she has been making efforts to repay and on diverse dates between 20. 11. 2019 and 21. 2.2020, she has paid a total of Kshs.130,000/=.

That she has since proposed to the 1st Respondent to review her repayment terms. That she is willing to make a monthly repayment of Kshs.40,000/=.

That upon making and/or presenting the said proposal to the Respondents, the Respondents have not responded to her but resorted to dubious advertisements for sale of the charged properties. That they have affixed the said Notices on electricity poles all over Kiambu Town without issuing formal Notice to her.

That she finds it unfair for the Respondents to advertise the properties for sale while the loan is performing to the best of her ability.

Respondent’s Case

Vide the Replying Affidavit of the 1st Respondent’s CEO sworn on 13. 3.2020, the Respondent has opposed the Application based on the following grounds:

That the Claimant applied for two loans from the 1st Respondent namely; Kshs.7,500,000/= and Kshs.1,000,000/= respectively.

That upon receipt of the said loans, the Claimant did not make any payments until she received a demand letter from the 1st Respondent’s Advocate on record dated 16. 9.2019.

That when repayment was not forthcoming, it instructed the 2nd Respondent vide a letter of instruction dated 11. 11. 2019.

That upon receipt of instructions the 2nd Respondent began recovery process by issuance of a 45 days redemption Notice.

That upon issuance of appropriate Notices, the properties were then advertised for sale on 10. 2.2020.

That contrary to the assertion that the loan is performing, the converse is true. That the Claimant is supposed to repay the loan by monthly installments of Kshs.194,167/= which she never did until she received a demand letter in September 2019.

Issues for determination

The Claimant’s Application dated 21. 2.2020 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 Faciecase 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

From the holding of the court in the Mrao case above, for a party to establish existence of a Prima facie case, he/she must demonstrate existence of a right which has been violated such to call for a rebuttal from the opposing party. The question then abound as to whether the Claimant has demonstrated existence of a right which has been violated by the Respondents so as to call for protection.

The Claimant’s borne of contention is that the Respondent has proceeded to advertise her properties for sale while her loan is performing. That between the period 20. 11. 19 and 21. 2.2020 she has paid a cumulative sum of Kshs.130,000/=.

That due to harsh economic times, she wants to be allowed to repay the loan by way of monthly installments of Kshs.40,000/=.

That the Respondents have not issued her with the proper Notices before advertising her properties for sale.

On its part, the 1st Respondent contends that the Claimant took two types of loans for Kshs.7,500,000/= and Kshs.1,000,000/= which attracts monthly repayments of Kshs.194,167/= but did not repay the same until the point she received a demand letter from its advocates on record. That due process has been adhered to in the process of realizing the securities offered.

That the monies the Claimant is holding belongs to members and that any delay in repayment will seriously hamper its operations.

We categorize the facts surrounding this Application into three namely; whether the Claimant defaulted in repayment and if so whether the Respondents is estopped from recovering the same. Secondly, whether the Respondents have followed due process in its recovery.

Default

From the material placed in support and opposition of the Application, it is not in dispute that the Claimant has defaulted in repayment of the loan. Whilst the Claimant has expressly avoided to confirm this fact, the same is discernible when she prays for variation of repayment terms to Kshs.40,000/=.

Whether 1st Respondent is prohibited from recovering the defaulted loan

From the Claimant’s own argument, the 1st Respondent should be prohibited from recovering the entire loan merely because the said loan is performing. We respectively disagree with her and find that once the loan is in default the 1st Respondent is entitled to recover the full amount.

Process of recovery

It is not in dispute that the Claimant provided two of her properties as security for the loan. These are LR.NO.Ndumberi/Riabai/5613and 3796.

It is the Claimant’s Contention that the Respondents advertised the said properties for sale without issuance of proper Notices. That she only saw posters placed on electricity poles all over Kiambu advertising the said properties for sale.

We have perused the documents field by the 1st Respondent, this include:

a. A letter of instruction to the 2nd Respondent dated 11. 11. 19;

b. Notification of sale dated 2. 12. 2019;

c. 45 days redemption Notice dated 2. 12. 2019; and

d. Affidavit of service sworn by Maina Mwangi on 16. 12. 2019.

Upon perusal of the Affidavit of service referred to above, it is apparent that the Claimant was served with Notification of sale of her properties on 16. 12. 2019. She personally acknowledge receipt of the said Notice. How then can she allege that she was not aware about the execution process?.

From the foregoing, we are satisfied that the Claimant was issued with the requisite Notices before the charged properties were advertised for sale.

Conclusion

The upshot of the foregoing is that we do not find merit in the Claimant’s Application dated 21. 2.2020 and hereby dismiss it with costs to the 1st Respondent.

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

HON. F. TERER DEPUTY CHAIRMAN ................................

MR. P. GICHUKI MEMBER .................................

MR. B. AKUSALA MEMBER ..................................

In the presence of

Claimant absent

Court assistant Maina

HON. F. TERER DEPUTY CHAIRMAN SIGNED 7. 1.2021.