https://new.kenyalaw.org/akn/ke/judgment/kecopt/2026/236

Post Bank Sacci Society Limited v Kyalo (Tribunal Case E156 of 2023) [2026] KECOPT 236 (KLR) (14 May 2026) (Judgment) Neutral citation: [2026] KECOPT 236 (KLR) Republic of Kenya In the Cooperative Tribunal Tribunal Case E156 of 2023 J Mwatsama, Ag Chair, B Sawe, F Lotuiya, M Chesikaw & PO Aol, Members May 14, 2026 Between Post Bank Sacci Society Limited Applicant and Jean Mbithe Kyalo Respondent Judgment 1.Matter for determination is Statement of Claim dated 9th February, 2023. The Claimant Society states that Respondent was their Member No. 6175 and he applied for separate loan facilities between the years 2019 and 2021, which loan advanced totaled to Kshs.1,497,276.28. The Claimant Society states that the Respondent has not been paying the loans as per the agreed terms and despite demand Respondent has not shown good will to make payment. 2.The Claimant prays for:a.Judgement of Kshs.1,497,276.28.b.Interest in (a) at Court rates until payment in full.c.Costs of this suit.Claimant filed Witness Statement dated 25th August 2023 and List of Documents dated 16th February, 2024 which had the following documents:1.Loan statement2.Loan application form3.Demand letter dated 30th January 2023 3.The Respondent filed a Statement of Defence dated 4th April, 2023 where all the Respondent did was deny the Claimant’s Claim. They prayed for the Claimant’s case to be dismissed. The Respondent did not file Witness Statement or List of Documents in support of their Defence. 4.Matter proceeded to hearing with Claimant Witness giving evidence producing her Witness Statement dated 25th August 2023 as evidence in chief. The Claimant produced List of Documents dated 16th February, 2024 and produced the same as (Ex1, Supplementary List of Documents dated 19th October, 2024. During cross examination she confirmed that Respondent was a member and not employee of the Society. She was a common Bond Member.She confirmed the Respondent was advanced a loan amount of Kshs.1,497,276.28. The loans were secured loans which security was the Claimant’s deposits and the guarantors. Which as per the Credit Policy Clause 7.0 guarantors are to pay the full amount. She stated they did not go for the guarantors as they have an injunction order against Societyto recover from them in case No. CTC E039/23. The Society prayer was for Respondent to repay their loan. The evidence herein was to apply in two other files in the series CTC E157/23 and E131/23. 5.The Respondents opted not to call any witnesses and closed their case. Parties weredirected to file Written Submissions and Claimant filed Submissions dated 10th April, 2026 and Respondent filed Written Submissions dated 23rd April, 2026. 6.Having considered the pleadings, the evidence during trial and Witness Submissions filed the issue for determination is one: Whether the Claimant owes the Respondent Ksh. 1,497,276.28.The Claimant seeks from the Respondent who is a loanee to repay their loan. The Respondent do not deny they took a loan from the Claimant. Their Defence was mere denial and the case the Respondent was fronting during cross examination is that the Claimant Society did not follow the loan recovery procedure in the Credit Policy which meant the guarantors were to repay the loan on default as they were contractually and equally liable. 7.The Respondent is transferring their obligation or duty to repay the loan outstanding to the guarantors. The Claimant state the said guarantors were issued with a Court Order injuncting themfrom deductions of their Savings. The question to be answered is whether the Respondent can abdicate their duties as a loanee because they have guarantors.Guarantors are persons under a secondary obligation. They come in to satisfy a debt in the event the loanee who is the principal debtor defaults. A Guarantor should not betreated as a principal debtor. The guarantors ought to come in once the principal debtor has been pursued and all possible avenues to compel the principal debtor are exhausted. In the case of HCCC No. 573 of 2011 – Nairobi Talewa Road Contractors Limited & another vs. Jamii Bora Charitable Registered Trustees & Another, the Court stated that parties to a commercial contract are bound by the terms thereof. A party should not be permitted to benefit from their breach. The Court ruled the principal debtor must be pursued and all attempts made to recover from him and only then should the guarantors be held liable. 8.It cannot be that the Respondent herein being the principal debtor is entitled to ask why the guarantors have not been attached and is not addressing their own default. The guarantors are secondary they did not sign up to take up unpaid loans at all. They were but a backup for the Society and not to be misused by the loanee. The Defence by the Respondent that the guarantors are equally contractually liable should not be entertained by the Tribunal.The case at hand is between the Claimant Society and Respondent, the loanee. If indeed the Respondent were sincere they ought to have enjoined the guarantors to the case but have their liability apportioned to them as well which was not done. 9.It cannot be business as usual in the Society where members take loans, willingly default and expect guarantors to repay the loan for them. Duty of Care must be present. Duty of Care owed to the guarantor is paramount in as much as there is a contract there must be a shield. The Society should appreciate that guarantors are members of the Society as well. Eventually no one will guarantee anyone's loan if no duty of Care is taken towards guarantors. 10.To the question whether the Respondent owes the Claimant, the answer in the positive. It is not denied and the Respondent is the rightful person to repay their loan.We find the Respondent owes the Claimant an amount of 1,497,276.28. UpshotJudgement is entered in favour of Claimant against Respondent for Kshs.1,497,276.28 plus cost and interest from date of filing suit. JUDGMENT DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 14TH DAY OF MAY, 2026.HON. J. MWATSAMA AG. CHAIRPERSON SIGNED 14.5.2026HON. BEATRICE SAWE MEMBER SIGNED 14.5.2026HON. FRIDAH LOTUIYA MEMBER SIGNED 14.5.2026HON. MICHAEL CHESIKAW MEMBER SIGNED 14.5.2026HON. P. AOL MEMBER SIGNED 14.5.2026Mutai Court AssistantMuthie advocate for the ClaimantMusyoka advocate for the Respondent