[2023] KECPT 812 (KLR)

Njeru v Nawiri Sacco Society Limited (Cause 810/E901 of 2022) [2023] KECPT 812 (KLR) (Commercial and Tax) (26 October 2023) (Judgment)

Neutral citation: [2023] KECPT 812 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Commercial and Tax

Cause 810/E901 of 2022

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

October 26, 2023

Between

Catherine Njeru

Claimant

and

Nawiri Sacco Society Limited

Respondent

Judgment

1. Claim for determination is vide a statement of Claim dated 12/10/2022 accompanied by Verifying Affidavit dated 12/10/2022 both of which were filed on 13/10/2022. This was filed with a notice of motion brought under Certificate of Urgency dated 12/10/2022 and filed on 13/10/2022 whose order for temporary of stay of sale of the Claimant goods were granted. The Claimant also filed a Statement of Account detailing the loan repayments.

2. The Respondent filed a Statement of Defence dated 16/01/2023 on 26/012023 and a List of Documents dated 16/01/2023 both of which were filed on 26/01/2023. The List of Documents included a Loan Application Form, Letter Offer, Loan Account Statement, Demand Letters, Notification of Sale of Movable Properties.

Claimant’s Case 3. Claimant witness 1 was the Claimant, Catherine Njeru. She adopted the witness statement dated 28/02/2023 as Evidence- in-Chief, she also produced the loan statement and a notification of a sale as exhibits marked c-exh1

4. The Claimant indicated that she had arrears totaling to Kshs.45,606/=. She further intimidated that they took her goods without notice .She further indicated that she was informed by the Respondent Manager that the guarantors had not paid. She intimated that she usually pays at the end of every month and that on 07/10/2022 she had paid less Kshs.988/= she further emphasized that the Respondent’s said the auctioneers were paid Kshs.15,000/= and that there was no notice that she was in arrears of 6 days .She Claimed that they refused to take Kshs.1000/= and went away with her goods. In her Witness Statement she indicated that she rescheduled payment of her loan from the prior Kshs.7,298/= which she stated to pay from 30/12/2021.

Respondent’s Case 5. Respondent witness 1 was Joseph Mwaniki who was a Credit Manager at the Respondent. He adopted his Witness Statement dated 16/01/2023 as Evidence- in-Chief and produced the List of Documents dated 16/01/2023 as Respondent Exhibit 1-5.

6. He averred that he lent the Claimant Kshs.250,000/= whose security was the business items and guarantorsRespondent witness 1 averred that they had challenges with payment of the loan and therefore forwarded the matter to the debt collectors. He indicated that they send the notification of sale. He further pointed out that the Claimant owed Kshs.78,185/=.

Analysis And Determination 7. The issue of determination was whether the Respondent appropriately attached the Claimant goods for the purpose of recovering the loan?

8. The first point of departure will be answer whether the Tribunal has the jurisdiction to entertain the matter. In Ownersof Motor vessel ‘’Lillian’s Vs. Caltex oil (Kenya) Limited, the court held that jurisdiction is everything, without it the court should down its tools. Section 76 of the CooperativeSocieties Act spelt out the matter that the Tribunal may entertain. Being a matter of debt between a Sacco and member, their matter falls under ambit of the Tribunal and therefore the Tribunal has the requisite jurisdiction to entertain it.

9. The Tribunal will now consider whether the Respondent acted appropriately and procedurally .This being a secured creditor ,the Respondent may pursue the avenue of using a debt collection agency without first going to court .The auctioneer after receiving a letter of instruction proceed to seize the debtor goods .After seizing the collateral ,the auctioneer and the secured creditor will work together to value the security property .Before the sale of the property ,the creditor shall send to the debtor a notice of a secured creditor’s intention to dispose of the security property. The notice need to identify the debtor and the secured creditor, contain a description of a collateral, and provide a statement of the amount required to satisfy the secured obligation including interest and a reasonable estimate of the cost, manner of intended disposition and provide a statement of the date after which the collateral will be sold or otherwise disposed of.

10. The sale shall be by public auction and shall be advertised.After settling the outstanding debt and the auctioneer’s charges the balance of the sale proceeds shall be given to the debtor.

11. In the present circumstances ,the Respondent did not endeavor to value the property as is required .Further the Respondent did not send any notice of intention to dispose the security property .Furthermore during a hearing the Tribunal discovered that the Respondent did not proffer any evidence to prove service of the demand letters. Moreover, the Respondent failed to indicate the cost at which the goods were sold at neither did he present the auctioneers report.The Respondent feel short of what was required .This consequently points to unprocedural nature at which the recovery was done. The Respondent therefore acted unprocedurally attaching the Claimant’s goods

12. The Tribunal therefore finds in favor of the Claimant’s against the Respondent and orders as follows:a.The Respondent to pay the Claimant Kshs.1, 500/= calculated as the daily profit from 06/10/2022 to the day of delivering of this judgment.b.The Respondent to bear the cost of the suit.

JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 26TH DAY OF OCTOBER, 2023. HON. BEATRICE KIMEMIA - CHAIRPERSON SIGNED 26. 10. 2023HON. J. MWATSAMA - DEPUTY CHAIRPERSON SIGNED 26. 10. 2023HON. BEATRICE SAWE - MEMBER SIGNED 26. 10. 2023HON. FRIDAH LOTUIYA - MEMBER SIGNED 26. 10. 2023HON. PHILIP GICHUKI - MEMBER SIGNED 26. 10. 2023HON. MICHAEL CHESIKAW - MEMBER SIGNED 26. 10. 2023HON. PAUL AOL - MEMBER SIGNED 26. 10. 2023TRIBUNAL CLERK JEMIMAHMs. Muinja advocate holding brief for Njeru Ithiga for 1st and 2nd Respondent.Catherine Njeru – PresentJudgment as read out.HON. J. MWATSAMA - DEPUTY CHAIRPERSON SIGNED 26. 10. 2023