[2023] KECPT 429 (KLR)

Muriithi v United Nations Sacco Limited (Tribunal Case 202 of 2008) [2023] KECPT 429 (KLR) (Civ) (27 April 2023) (Judgment)

Neutral citation: [2023] KECPT 429 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Civil

Tribunal Case 202 of 2008

BM Kimemia, Chair, J. Mwatsama, Vice Chair, B Sawe, F Lotuiya, P. Gichuki, M Chesikaw & PO Aol, Members

April 27, 2023

Between

Hon Ndiritu Muriithi

Claimant

and

United Nations Sacco Limited

Respondent

Judgment

1. The claim for determination is dated 30/05/2008 was filed on 11/06/2008. It was accompanied by a Verifying Affidavit sworn by the Claimant on 30/05/2008 and filed on 11/06/2008. The claimant, however, filed an Amended Statement of Claim dated 06/02/2009 on 09/03/2009. The claimant avers that he was a member of the Respondent until the cessation of his employment at the International Finance Corporation. He further states during his membership with the respondent, the respondent advanced a loan facility of Kshs 3,255,000/= on 01/07/2004. Upon ceasing to be an employ at IFC, the claimant claims that his former employer paid Kshs. 883,329/= to the respondent as payment for the outstanding loan. The claimant, however, avers that the loan outstanding as at 01/02/2008 was Kshs 466,738. 85/= thus an overpayment by Kshs 416,590. 15/=. He further states that by 09/05/2008 the Respondent had collected in excess of Kshs 1,425,235/=. He claims that he was also underpaid his dividends by Kshs 56,010. 79/=.

2. Pursuant to an order of the Tribunal dated 22/10/2009, the respondent got leave to file their Statement of Defence dated 29/10/2009 and filed on the same day. The Respondent avers that the claimant held three accounts; Savings account, Shares account and Loan account. The respondent claims that money paid by the claimant’s former employee was only applied towards the loan account, shares account and benevolent fund.The respondent avers that after ceasing being an employee of IFC, the journal entry of Kshs 883,329/= was applied to reduce his loan. The Respondent also states that the employer only remitted the sum of Kshs. 776,534. 40/= in May 2007. The respondent further contends that due to ceasing employment earlier than expected and defaulting on payments between May 2005 to December 2005, the repayment period reduced from the 48 months as agreed to 34 months. Therefore, the interest was calculated on a reducing basis based on the 34 months. The actual interest accrued was Kshs 952,512/= for the whole period of 34 months according to the Respondents. The Respondent avers that Kshs 120,500/= was transferred to the Claimants account while Kshs 56,010. 79/= was applied towards reducing the outstanding loan.The respondent emphatically claims that the claimant misrepresented his loan account by not taking into account the element of interest as well as dividend paid and therefore the figure of Kshs 1,481,244. 79/= claimed cannot arithmetically stand.The respondent confirms that it recovered its loan and interest accrued that the claimant owed and therefore, prayed for the claim to be disallowed and dismissed.

3. The claimant filed his submissions dated 06/12/2022 on 08/12/2022 while the Respondent filed theirs dated on 09/01/2023 and filed on 10/01/2023.

Analysis and Determination. 4. After considering all the pleadings, evidence proffered by the witnesses and the written submissions, the issue for determination before the Tribunal is Whether the claimant overpaid the Respondents when settling the loan facility?

5. Both parties do not dispute that the amount owed as of 31/07/2007 was Kshs 1,766,638. 35. The computation of the figures in the Statements of Accounts produced as evidence by both parties is what is in dispute.

6. According to the claimant the amounts Kshs 883,329/=, Kshs 42,912/=, Kshs 12,613/=, Kshs 176,564, Kshs 1,299,900/= and Kshs 776,534. 30/= were used to settle the outstanding loan facility. Kshs 1,299,900/= was drawn from the share account to set off the loan facility. The sum of the amounts stated above is Kshs 3,191,873/=. This cumulative sum less the outstanding loan amount as at 31/07/2007 plus the dividend underpayment of Kshs 56. 010. 79/= is Kshs 1,481,244. 79/= which is what the claimant claims as overpayment.

7. During examination in Chief of Dan Kasirye (RW1), the witness testified that the only lumpsum paid from International Finance Corporation was Kshs. 776,534. 30/=. This payment happened after the claimant ceased to be an employee of IFC. This was supported by documents produced indicating the payment of the same to the Respondent proving that indeed Kshs 776, 534. 30 came from IFC.

8. Mary Wahonya (RW2) during examination in chief, testified and indicated that Kshs 1,299,900/= that was in the share account with the narration ‘payment offset account’ was split into two that is Kshs, 883,329/= and Kshs 416,517/=. The amounts were disbursed into the claimant’s loan account and the SACCO’s interest income account respectively. This was supported by the Disbursement Voucher that was proffered indicating the debit and credit of the share account. Thus, proving that the summation of Kshs 1,299,900/= and Kshs 882,329/= was wrong and equated to double entry. Further it goes without saying that interest accrued from any loan facility is income to the lender.

9. The second witness further testified that amounts Kshs 42,912/= and Kshs 12,613/= were erroneously credited into the Statement of Account but were however reversed to correct the anomaly. She further indicated that Kshs 176,564/= was from the claimant’s savings account and transferred to the loan account to settle the outstanding loan. Both accounts as produced by the respondents indicate as much. The claimant requested transfer of his dividends to his personal account which resulted to the transfer of Kshs 97,002/= from the loan account with the narration ‘transfer to loan’ to the savings account. This together with the balance in the savings account amounted to Kshs 120,500/=. Therefore, showing only Kshs 56,010. 76/= was used to settle the loan. The underpayment alleged by the claimant was actually part of the Kshs 176,564/=.

10. From the foregoing, it is clear that the claimant made only three payments towards the settlement of the loan facility; Kshs 1,299,900/=, Kshs 776,534. 30/= and Kshs 56,010. 76/=.

11. We find that the claimant has not proved the claim on a balance of probability and the same is dismissed.

12. Each party to bear their own costs.

JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 27TH DAY OF APRIL, 2023. Hon. Beatrice Kimemia Chairperson Signed 27. 4.2023Hon. J. Mwatsama Deputy Chairperson Signed 27. 4.2023Hon. Beatrice Sawe Member Signed 27. 4.2023Hon. Fridah Lotuiya Member Signed 27. 4.2023Hon. Philip Gichuki Member Signed 27. 4.2023Hon. Michael Chesikaw Member Signed 27. 4.2023Hon. Paul Aol Member Signed 27. 4.2023Tribunal Clerk Jemimah/JonahGatundu advocate for the ClaimantMrs. Wachira advocate for the Respondent.Hon. J. Mwatsama Deputy Chairperson Signed 27. 4.2023