[2025] KECPT 379 (KLR)

Omasete v Management Committee Shoppers Sacco Limited (Tribunal Case 449/E640 of 2023) [2025] KECPT 379 (KLR) (26 June 2025) (Judgment)

Neutral citation: [2025] KECPT 379 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 449/E640 of 2023

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

June 26, 2025

Between

Robert Matano Omasete

Plaintiff

and

The Management Committee Shoppers Sacco limited

Defendant

Judgment

1. The Claim herein was brought by the Claimant via Plaint dated 14th July, 2023, filed on 23rd August, 2023. Therein, the Claimant prays for judgement against the Respondent for the orders: ‘a.That the Respondent cited herein is hereby restrained forthwith and/or prohibited in any way from harassing and/or intimidating the Claimant.b.That the Respondent wither through its management committee, employees and/or proxies/agents are prohibited to sell the land whose title the Claimant gave them as security for purposes of being cleared from the Credit Reference Bureau (CRB).c.That the Claimant to pay the sum of Kshs 84,228/= pursuant to the mutual agreement between him and the herein Respondent and be forthwith cleared from CRB and the withheld title deed be released to him upon payment of the said amount forthwith.d.That Respondent be ordered to pay the Claimant all amounts in respect to the declared dividends on his share capital since the end of year 2018 to date and/or the said dividends be utilized to offset his loan balance of Kshs. 84,228/=/e.That costs of this suit be provided for.

2. The Claimant’s claim is that the Claimant is a former member of the Respondent having been registered as member no. 6511 and was a member until he lost his employment on the collapse of his employer, Nakumatt Holdings Limited in 2018. That at the time he lost employment, the Claimant was servicing a loan he had borrowed from the Respondent which he was paying through a check-off agreement between the said employer and the Respondent. That the Claimant was awarded a supply tender by the Premier Foods Company Limited sometime in May, 2020 and since he did not have funds, he approached the KCB Bank Kariobangi Branch who accepted to finance him upto 60% of the value of the tender. That KCB Bank did a background check on the Claimant’s credit worthiness and found out that he was listed with the CRB by his Sacco and hence was urged to liase with the Sacco for clearance of his name from the said CRB before being financed. That the Claimant was informed by the Respondent that he owed the Respondent a total loan balance of Kshs. 109,228/= being in respect of a normal loan of Kshs. 102,626. 43/= an Emergency Loan of Kshs. 2,691/= and a FOSA loan of Kshs 3,911/= and was asked to pay at least Kshs. 80,000/= which amount he could not raise at the time, hence there was an agreement that he pays Kshs. 20,000/= which amount the Claimant paid. That the Claimant was asked to give a Security for the balance of Kshs. 89,228/= alongside the payment of Kshs. 20,000/= to be cleared from CRB and to which proposal he obliged and presented a land Title Deed belonging to his friend Mr. Isaac Ongana, but the Respondent failed to clear him from CRB to date. That when the tender aborted owing to the outbreak of Covid 19, the Claimant was unable to pay the loan balance of Kshs. 89,228/= which he had agreed to pay with the proceeds of the tender and he left the Land Title with the Defendant as he sourced for funds through other means. That in February, 2023, the Claimant was awarded yet another supply tender and he went back to KCB Bank for financing where he was found to be still listed with the CRB by the Respondent. That the Claimant sought to know from the Respondent why he was still listed with CRB yet there was an agreement signed May, 2020 that his name would be cleared from the CRB as he had given the title Deed as a Security for his outstanding loan balance of Kshs. 89,228/=. That he was informed by the credit officer that he owed the sum of Kshs. 290,000/= but he failed to explain to him how it accrued to the said amount from Kshs. 89,228/=. That the Claimant was told to pay Kshs. 50,000/= at that time, failure to which the security would be sold to recover the loan balance. That the Claimant paid Kshs. 5,000/= but the Respondent stated that it will proceed with the process of selling the security land. That the Claimant has a share capital of Kshs. 20,000/= with the Respondent but since the loss of his employer in 2018, he has not been paid dividends declared on the said share capital. That the Claimant is willing to pay the loan balance of Kshs. 84,228/= being the actual loan balance after deducting Kshs. 25,000/= and 5,000/= from Kshs. 109,228/=.

3. In response to the Claim, the Respondent on 10th November, 2023 filed a Defence dated 16th October, 2023. In the Defence, the Respondent admits that the Claimant is a former member of the Respondent under registration number 6511. That the Claimant was advanced a loan facility amounting to Kshs. 650,000/= payable in 40 months from 08/06/2025. That the Claimant is indebted to a time of Kshs. 290,000/= as per the Statement of Accounts. That the Claimant defaulted on payment of the loan resulting to the Claimant offering BAKAL/CHWELE/3295 as security. Further the Respondent denies the Claimant’s averments in paragraph 7,8 and 11 of the Plaint and states that the board agreed in the Directors’ meeting for the reversal of payment made from Nakumatt members because no amounts were received from Nakumatt as deductions to the Respondents, hence no payment was made towards the loan facility. That no specific time did the Respondent agree to have the Claimant’s name cleared from any Credit Reference Bureau without the full payment of the defaulted amount. That it would be impossible to be cleared from any Reference Bureau if one is still indebted as is the Claimant. That the Respondent has a right to sell the property used as collateral for the realization of the funds defaulted by the Claimants. That they duly served the Claimant a demand notice requesting the payment of the defaulted amount failure to which the property used as security will be sold.

Claimant’s Case 4. The Claimant’s case was heard on 8th August, 2025 in the absence of the Respondent who did not attend the hearing. The Claimant was in person in the proceedings. The Claimant adduced sword evidence. The Claimant stated that he is a farmer and lives in Cheptais, Mount Elgon. That he would rely on his Supporting Affidavit sworn on 14th July, 2023 as his evidence in Chief and produced the Claimant’s List of documents dated 24th July, 2024 filed on 23rd August, 2023 as the Claimant’s Exhibits 1-5 in the order in which they appear . the Claimant stated further in his evidence that as a member of the Respondent, he had a loan of Kshs. 600,000/=. That when his employer Nakumatt went down, his loan balance was Kshs. 109,228/=. That in a bid to get out of CRB, he paid Kshs. 20,000/= which he borrowed from his friend. That after Covid pandemic subsided, he again sought to be removed by the Respondent from the CRB, he was asked to pay Kshs. 20,000/= and to provide collateral. That his friend gave him his title which he used as collateral. That however the Respondent gave him a balance of Kshs. 200,000/= and returned his name to CRB. That he prays for the Respondent to release the title and that given his balance to make to make payment.

5. On clarification sought by the Tribunal, the Claimant sated that the title he provided as collateral was not changed. The title was held. That as at 15/05/2020, the principal amount was Kshs. 88,000/= towards which he paid Kshs. 5,000/=. That according to the Respondent’s loan account statement, the balance is Kshs. 123,792. 54/=.

Analysis. 6. It is not in dispute that the Claimant was a member of the Respondent, neither is it in dispute that the Claimant borrowed a loan of Kshs. 600,000/= from the Respondent or that he defaulted in payment of the said loan when he lost his job upon the collapse of his employer, Nakumatt Holdings. What is in dispute is the amount owing from the Claimant to the Respondent on the said loan and whether or not the Respondent should be restrained from selling the property under title number BOKOLI/CHWELE/3295 provided by the Claimant as collateral. While the Claimant claims that he owes the Respondent Kshs. 84,228/= only. the Respondent avers that the loan balance is Kshs. 290,000/=.

7. Whereas the parties were on 16/11/2023 directed by the Tribunal to reconcile accounts before the hearing date, it is evident that reconciliation did not take place. From the documents on record, the Claimant and Respondent converge on two points, on being that the Claimant was required to provide collateral for the loan balance in May, 2020 which he did and the other being that the collateral security release form stamped the 15th of May 2020 by the Respondent indicates the secured amount of loan Kshs. 88,000/=. It is therefore late for us to take the loan balance as at May, 2020 to have been the sum of Kshs. 88,000/= or thereabout.

8. It is trite that he who alleges must prove. It was therefore upon the Claimant to demonstrate why the loan balance must be Kshs.84,228/= despite his admission that he paid only Kshs. 5,000/= in the year 2023 about 3 years after the Claimant provides the security.

9. The Claimant has not produced the agreement evidencing the Respondent’s promise to remove his name from a Credit Reference Bureau. As such, we are not able to address the issue. What is clear to us from the statement of Account which is the only documentary evidence of the account activities is that the loan balance as at close of account on 25/05/2022 was not Kshs. 84,228/=

10. On the issue of dividends raised by the Claimant, we find that he failed to produce evidence that any dividends were declared or even paid out by the Respondent in the relevant period. On whether or not the Claimant has met the threshold for the grant of an injunction against the Respondent.Part 1 (i) of the collateral Security Submission/Release form filed in the Tribunal by both parties, read with event of default under the first paragraph of page 2 clearly sets out the obligation of the Claimant and the rights of the Respondent under the agreement form.

11. The Claimant has not convinces us that he was not in default or that the Respondent’s threat to sell the security property was wrongfully founded.

Determination. 12. In conclusion, we find and hold that the Claimant has not proved his claim against the Respondent to the requisite standard of a balance of probability, consequently, the Claimant’s claim of 19/7/2023 is hereby dismissed with no order as to costs.

JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 26TH DAY OF JUNE, 2025. HON. J. MWATSAMA - DEPUTY CHAIRPERSON SIGNED 26. 6.2025HON. BEATRICE SAWE - MEMBER SIGNED 26. 6.2025HON. FRIDAH LOTUIYA - MEMBER SIGNED 26. 6.2025HON. PHILIP GICHUKI - MEMBER SIGNED 26. 6.2025HON. MICHAEL CHESIKAW - MEMBER SIGNED 26. 6.2025HON. P. AOL - MEMBER SIGNED 26. 6.2025Tribunal Clerk GechikoRobert Matano- PresentShoppers Sacco – No appearanceHON. J. MWATSAMA - DEPUTY CHAIRPERSON SIGNED 26. 6.2025