[2024] KECPT 1528 (KLR)

Sitonik & 4 others v Kenya Bankers Savings & Credit Co-operative Society & another (Tribunal Case 483 (E653) of 2023) [2024] KECPT 1528 (KLR) (26 September 2024) (Judgment)

Neutral citation: [2024] KECPT 1528 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 483 (E653) of 2023

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

September 26, 2024

Between

Janet Chepng’Etich Sitonik

1st Claimant

Gladys Wangui Mugai

2nd Claimant

Kennedy Kiteme Kang’Gali

3rd Claimant

Patrick Luvai

4th Claimant

Meshack Ndegwa

5th Claimant

and

Kenya Bankers Savings & Credit Co-Operative Society

1st Respondent

Eunice Mutava Kalondu

2nd Respondent

Judgment

Claimant’s Case 1. The Claimant’s case is based on the Amended Statement of Claim dated 29/9/2023, Witness Statement dated 29/9/2023, List of Documents dated 21/9/2023 and 29/9/2023 and the hearing on 16/7/2024. In the Statement of Claim, the Claimants were members of the Respondent and that they guaranteed 2nd Respondent for a loan of Kshs. 500,000/=.

2. The Claimants states that the 2nd Respondent later enhanced her Loan Application to Kshs. 3,500,000/= without their knowledge.The Claimant avers that the 2nd Respondent defaulted in her loan repayment occasioning the 2nd Respondent appertaining the loan defaulted among the Claimants.The Claimants state that the 1st Respondent did not do due diligence prior to giving the 2nd Respondent Kshs. 3,500,000/=.The Claimants through Mr. Kennedy Kitene the 3rd Claimant states that the 2nd Respondent enhanced her loan from Kshs. 500,000/= to Kshs. 3,500,000/= without their knowledge.They state that the alleged guarantorship of Kshs. 3,500,000/= in both illegal and irregular.The Claimant have filed supporting documents vide their bundles dated 29/9/2023 and 29/9/2023, which include loan admission by the 2nd Respondent, demand letters and 1st Respondent acceptance that the 2nd Respondent borrowed Kshs. 3,500,000/=.

3. During the hearing of the matter on 16/7/2024 Mr. Kennedy Kitene Kangali for the Claimants adopted his Statement of 29/9/2023 and documents dated 21/9/2023 as their evidence in chief.The Claimant witnessed avers that they guaranteed the 2nd Respondent Kshs. 500,000/= and the enhancement of the loan to Kshs. 3,500,000/= was illegal and irregular.The Claimant sates that they suspect forgery on the part of the Respondents.

4. In the Claimant’s documents vide bundle dated 21/9/2023 the Claimant has attached evidence to prove that there was indeed another loan beside the Kshs. 500,000/= which the Claimants guaranteed.This is attested by the acknowledgements of debits of some of the claimants as follows.Date. Claimant Name Amount Debited31/8/2023 2nd Claimant- Gladys Wangui Kshs. 432,623/=31/8/2023 3rd Claimant- Kennedy Kiteme Kshs. 304,297/=31/8/2023 4th Claimant- Patrick Luvai Kshs. 502,664/=The above debits are for the super loan of Eunice Kalondu Mutara member number 36054 who is the 2nd Respondent.The Claimant states that the 2nd Respondent is willing to repay the defaulted amount.

Repondent’s Case. 5. The Respondent’s case is based on the Statement of Defence dated 11/4/2024. The Respondent were not present of the case on 16/7/2024. In their Statement of Defence dated 11/4/2024 the 1st Respondent admits that the Claimants were its members.The 1st Respondent admits the Claimant averments on Kshs. 500,000/= guarantor ship but denies the loan enhancement to Kshs. 3,500,000/= as alleged by the Claimant.The Respondent refers the Claimant to part D of the loan Application which is the security offered by the loan in this case the 2nd Respondent.The Respondent avers that the Claimants were in possession of correspondences between the 1st and 2nd Respondents.The 1st Respondent state that it tried all ways to have the 2nd Respondent repay her loan but to no avail.

6. It is observed that the 1st and 2nd Respondents were not in court when their matter came for hearing on 16/7/2024 despite notice.

Analysis. 7. We find that the Claimants have adequate prosecuted their case through their Statement of Claim, document, Witness Statement and hearing of the case.On the other hand, the 1st and 2nd Respondents have only filed a Statement of Defence.We observe that despite notice to attend the hearing of their case, the Respondents failed to appear on 16/7/2024. We also note that the 2nd Respondent admits that she owes the 1st Respondent and is ready to repay the defaulted amount.

8. It is also observed that the evidence filed in Court regarding debiting of the Claimants accounts to repay 2nd Respondent super loan were not denied by the 1st or 2nd Respondent.During the hearing of this case, the Claimant stated that he was in communication with the 2nd Respondent who was willing to repay her loan.In essence, the 2nd Respondent admits owing the 1st Respondent in form of loan default.

Conclusion. 9. We find merit in the Claimant’s case. We also observe that the Claimants’ account was debited to repay the 2nd Respondent’s super loan, a situation that was not denied by the Respondents.We are convinced that the Claimants were subjected to repaying a loan separate from the one they guaranteed.As regards prayers (b) and (c), we have not seen credible evidence on the Kshs. 3,500,000/= loan details. In view of the above, we pass judgement in favor of the Claimant against the Respondent for: -a.An order of permanent injunction prohibiting 1st Respondent from attaching the Claimant’s shares in fulfilment of the 2nd Respondent loan facility of Kshs. 3,500,000/=fails.b.Prayer (c) failsc.Costs of the Suit.d.A refund of the amount deducted by the 1st Respondent to repay the super loan of the 2nd Respondent.

JUDGMENTSIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 26TH DAY OF SEPTEMBER, 2024. HON. B. KIMEMIA CHAIRPERSON SIGNED 26. 9.2024HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 26. 9.2024HON. BEATRICE SAWE MEMBER SIGNED 26. 9.2024HON. FRIDAH LOTUIYA MEMBER SIGNED 26. 9.2024HON. PHILIP GICHUKI MEMBER SIGNED 26. 9.2024HON. MICHAEL CHESIKAW MEMBER SIGNED 26. 9.2024HON. PAUL AOL MEMBER SIGNED 26. 9.2024Tribunal Clerk MutaiMs. Kwamboka advocate holding brief for Mr.Otieno advocate for the ClaimantNdungu advocate holding brief for Ms. Zahra Salim advocate for 1st RespondentEunice Mutava- No appearanceNdungu advocate- We pray for stay of execution.Ms. Kwamboka advocate- We are not opposedTribunal order:30 days stay of execution granted.