[2021] KECPT 532 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL

AT NAIROBI

TRIBUNAL CASE NO.314 OF 2020

PETER NJAGI NGOROI.........................................CLAIMANT

VERSUS

DAIMA SACCO SOCIETY LIMITED......1ST RESPONDENT

GIANT AUCTIONEERS................................2ND RESPONDENT

RULING

Vide the Application dated 23. 9.2020, the Claimant has moved this Tribunal seeking for Orders inter alia:

1. That this application be certified urgent and heard exparte in the first instance;

2. That a temporary injunction be issued against the Respondents, their agents, servants, employees, their officers or anybody claiming through the Respondents from selling by public Auction t he property known as GATURI/WERU/5169 on 25. 9.2020 or at any other time thereafter and from disposing of, alienating, transferring and or otherwise howsoever interfering with the Claimants interest in the said property pending the hearing of this Application inter-parties ;

3. That a temporary injunction be issued against the Respondents, their agents, servants, employees, their officers or anybody claiming through the Respondents from selling by public Auction the property known as GATURI/WERU/5169 on 25. 9.2020 or at any other time thereafter and from disposing of, alienating, transferring and or otherwise howsoever interfering with the Claimants interest in the said property pending the hearing of this suit ;

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

The Application is supported by the grounds on its face and the Supporting Affidavit sworn by himself on even date and the Supplementary Affidavit sworn by himself again on 9. 11. 2020. The Respondent has opposed the Application vide the Replying Affidavit sworn by Lucy Marigu Murathi on 13. 10. 2020.

Vide the directions given on 14. 10. 2020, the Application was canvassed by way of written submissions. The Claimant filed his written submissions on 16. 11. 2020 but the Respondent did not do so despite being reminded to do so.

Claimant’s Contention

Vide the instant Application, the Claimant contend that he took a business loan with the 1st Respondent in the year, 2016. That as security for the loan, he offered his land L.R.NO.GATURI/WERU/5169.

That he used the funds to tender for work which had been given by the County Government of Embu. That the said government did not pay him for work done until now thus he is unable to service loan.

That the Respondent has applied exorbitant interest rates to the facility. That he has for a period of 1 ½ month from August, 2020- 19-9-2020 paid a total of Kshs.900,000/=.

Respondent’s Case

The Respondent has opposed the Application on grounds that the Application is founded on lies and is brought on bad faith.

That sometimes in the year, 2016, the Claimant approached it for a loan of Kshs.2,500,000/=. That the said loan was secured. That the Claimant availed title No. LR. GATURI/WERU/5169 as security for the loan. That upon valuation of the said property, the loan was approved. That subsequently, the Claimant defaulted in repayment of the said loan.

That upon default, several statutory Notices were issued but the Claimant did not make good the loan nor even communicate to the 1st Respondent.

That whilst Covid- 19 has affected business the world over, the Claimant’s account fell into arrears way before Covid-19. That as at 11. 9.2019 the arrears stood at Kshs.2,911,291/=.

That the 1st Respondent is not privy to any business dealing between the Claimant and the Embu County Government as the loan Application form shows that the Claimant was taking the loan for his agro vet business.

That having defaulted on repayment of the loan, the Claimant did not make any effort to follow up with the 1st Respondent.

That whilst surrendering his property as security for the loan, the Claimant knew well about the attendant consequences if the loan was not paid.

Issues for determination

The Claimant’s Application dated 23. 9.2020 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 Facie case 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 Facie Case

Following the foregoing exposition of the law, a question abound as to whether the Claimant has established a prima facie case with a probability of success.

The Claimant’s borne of contention is that he cannot repay the loan until such time that the County Government of Embu pays him for the work done. That repayment of the loan was tied to him being paid by the County Government of Embu.

We have perused the business loan Application form annexed to the Replying Affidavit of the 1st Respondent and marked as IMM-1. It shows the purpose of the Kshs.450,000/= loan to be school fees.

We have also perused the loan Application form signed by the Claimant on 27. 7.2016, it shows the purpose of the Kshs.200,000/= loan to be “agrovet”.

We have also perused the loan application form signed by the Claimant on 27. 6.2016, it shows the purpose of the loan to be construction.

We have also perused another loan Application loan signed by the Claimant on 16. 6.2016. It shows the purpose of the loan to be for construction.

We have also perused all the annextures provided by the Claimant as well as the Respondent and nowhere have we found a document tying and/or hinging repayment of the loan to payment of the Claimant by Embu County Government.

We have also note in the loan Application forms that the Claimant offered property LR. NO. GATURI/WERU/5169 as security for repayment of the loan.

What is apparent also is that the Claimant does not deny having defaulted in repayment of the said loan. What he seems to suggest is that the 1st Respondent has applied exorbitant interest rates thus ballooning the outstanding loan. We hasten to state that a dispute is not a ground for the grant of a temporary injunction.

The totality of the foregoing is that the Claimant has come to the court of equity when he himself has not done equity to the 1st Respondent. The monies held by the 1st Respondent do not belong to it but rather to members by way of contributions. Therefore a party cannot borrow the said money default in repayment and subsequently seek refuge in court when called upon to repay. This is what the Claimant has exactly done. We are not inclined and/or ready to entertain this kind of conduct. Simply put, we are saying that the Claimant has not established a prima facie case with a probability of success.

Conclusion

The totality of the foregoing is that we do not find merit in the Claimant’s Application dated 23. 9.2020 and hereby dismiss it with costs to the 1st Respondent.

RULING SIGNED, DATED AND DELIVERED VIRTUALLY THIS 25TH DAY OF MARCH, 2021

Hon. B. Kimemia Chairperson Signed 25. 3.2021

Hon. Jane Mwatsama Deputy Chairperson Signed 25. 3.2021

Mr. P. Gichuki Member Signed 25. 3.2021

No appearance

Further mention on 24. 5.2021 for directions.

Hon. B. Kimemia Chairperson Signed 25. 3.2021