REPUBLIC OF KENYA
IN THE CO-OPERATIVE TRIBUNAL AT NAIROBI
TRIBUNAL CASE NO.386 OF 2020
FRANCIS KABUGU MAKU.............................................CLAIMANT
VERSUS
MUKI SACCO LIMITED.....................................1ST RESPONDENT
ISAAC MUSILA MUTISO T/A
SILVERLINE AUCTIONEERS..........................2ND RESPONDENT
RULING
1. The Application for determination is dated 2.10.2020 brought under Order 22 Rule 51 (1), (2),(3), Order 52 and 53 Civil Procedure Rule and Section 3A Civil Procedure Act, Article 159 of the Constitution and all other enabling provisions of the law.
The Application seeks for the following orders:
1. Spent
2. Spent
3. That upon hearing of the Application inter-parties, this Honourable Court be pleased to set aside the Public Auction notice of the Applicant’s property and find that the said attachment is unlawful and no costs accrues against the applicant and stop the Public Auction.
2. The same is premised on the grounds on the face of the Application and Affidavit in support of Francis Kabugu Maku sworn on 2.10.2020 and he stated the following in support of his Application. That the Claimant/Applicant is the owner of Land Refence No. NYANDARUA /MUMUI/459 valued at Kshs. 22,000,000/=.
He is a member of the 1st Respondent and had a loan with Equity Bank for Kshs.520,000/= and transferred the said loan to 1st Respondent. He avers he had shares worth Kshs.360,000/= with the 1st Respondent.
That the 1st Respondent paid the loan to Equity Bank Limited of Kshs.522,000/= plus other charges which totaled to Kshs.565,325.85/=.
He further avers that he was selling a piece of land at Ndunyu Njeru a subsidiary to the 1st Respondent for Kshs.1.800,000/=.
The said money was to repay the amount of Kshs.520,000/= to Equity Bank Limited and balance was to clear the loan against Ndunyu Njeru plot which was a FOSA loan.
3. That the Applicants mother Zaweria Wambui claim had a loan of Kshs.751,600/= and Tatua loan of Kshs.250,000/=.
That the Applicant’s wife Agnes Gituto Kabugu also had a loan of Kshs.577,000/= and special loan of Kshs.860,000/=.
That the 1st Respondent sent the Applicant to the Surveyor to sign papers as they use him as an agent to register documents at the lands office.
The 1st Respondent sent his forms to consolidate all his loans, mother loan and wife’s loan and the same was coming to Kshs.5,000,000/= as it appears on the title. He declined to sign the form as per paragraph 10 in his Affidavit to consolidate his loans and does not know how the 1st Respondent managed to charge the title for Kshs.5,000,000/= as it now appears in the title.
4. The Applicant avers the FOSA loan was secured by Ndunyu Njeru plot title instead of clearing the loan. The interest was Kshs.700,000/= and that his instructions were not followed.
That he owes Kshs.1,900,000/= inclusive of his mother’s and wife’s which totals to Kshs.1,200,000/= and loan of Kshs.700,000/=.
He states he is faced with the risk of being landless and unless the orders are granted.
5. The Respondents filed their response to the application with the 1st Respondent filing a response sworn by Violent Wanjiru Ndugu on 9.12.2020 stating she is the Chief Executive Office (CEO) of the 1st respondent and stated the Applicant was granted various loans.
(i) 13.7.2015 borrowed Kshs.1,018,000/= BOSA loan
(ii) 14.01.2016 borrowed Kshs.500,000/= as Tatua Loan.
That the Applicant requested his loan together with those of his mother – Zaweria Wambui Maku and wife Agnes Gituto Kabugu be consolidated and he surrendered his title Nyandarua/Mumui/459 to be charged as security.
The Claimant offset his mother’s loans from his shares since he had guaranteed his mother’s loans using his shares.
The Applicant defaulted on the loans and Respondent’s interest registered on title Nyandarua/Mumui/459 on 15.6.2017. Despite various reminders requesting him to clear, he neglected to do so. The Applicant was served with Statutory Notice pursuant to Section 90 (1)(2)(3)( e) of Land Registration Act( Annexed and Marked VWN5(a), 5 (b) and 5 ( c) is a copy of the Notice, Affidavit of service and licence of the process server)
6. The Applicant has admitted his indebtedness for the sum of Kshs.2,600,000/= and cannot now be allowed to turn around he did not sign the security documents which secured the loan facilities.
There was no fraud as alleged and the loans are overdue.
7. The 2nd Respondent filed a Replying Affidavit on 26.10.2020 in opposition to the Applicant. In response to paragraph 14 (a) the Claimant approached me and requested to deposit Kshs.100,000/= and did not refuse since it was part payment of the amount owing from him to the Sacco.
The 2nd Respondent is a licensed Auctioneer acting under instructions of the 1st Respondent.
8. The 1st Respondent swore a Further Affidavit on 27.4.2021 filed on 28.4.2021.
The Applicant also filed a Further Affidavit in response to the Further Affidavit of 1st Respondent sworn on 19.5.2021 filed on 27.5.2021 stating he did not sign any charge as alleged in the office of G. Gatumuta Advocate.
The parties were to file written submissions which the Applicant filed their written submissions dated 28.6.2021 on 30.6.2021.
The Respondent filed their written submissions dated 4.5.2021 on 3.5.2021.
Upon analysis of the Application before us the issues before us are thus:
Issue one:
1. Whether the applicant ought to be granted the orders sought for?
2. Issue two:
Costs.
9. Issue one:
Whether the applicant ought to be granted the orders sought for?
The Claimant seeks for injunctive orders. The threshold for injunction is laid out in Giella -vs- Cassman Brown & Company Limited [1973] EA 358.
The conditions that must be met are:
a. Applicant must show a prima facie case with probability of success.
b. Applicant must demonstrate they stand to suffer irreparable loss that would not adequately be compensated by way of damages.
c. Balance of probability.
a. Prima Facie Case
The Claimant avers he had a loan with the 1st Respondent however disputes the fact that he signed a charge over his title Nyandarua/ Mumui/459 and his loan is not Kshs.5,000,000/= as alleged by the 1st Respondent.
The 1st Respondent on the other hand agrees with the Applicant in terms of the loans but does not account as to how they are demanding for Kshs.5,000,000/=.
With the dispute as to the amounts not being clear there Applicant has proved prima facie case.
b. Irreparable Harm means that the injury must be one that cannot be adequately compensated for in damages and that the existence of a prima facie case is not itself sufficient. The Applicant should further show that irreparable injury will occur to him if the injunction is not granted and there is no other remedy open to him by which he will protect himself from the consequences of the apprehended injury.
The Applicant avers that the land Nyandarua/Mumui/459 is valued at Kshs.22,000,000/=. The charge is for Kshs.5,000,000/=. The sale of land worth Kshs.22,000,000/= to recover Kshs.5,000,000/= would be harm done to the Applicant. He would have lost his land.
The 1st Respondent in their submissions state the Applicant is using the court to frustrate their recovery efforts and has not brought before this Tribunal any measures to liquidate his obligations.
They aver that if indeed there was fraud the Applicant has not denied giving his title to stand as security for his loans and his wife and mother.
By granting the Orders sought the Respondent will be crippled in its operations to the Respondent society.
The harm suffered would be to both the Claimant/Applicant and Respondent in this end claimant to loose his land and Respondent having financial and/or liquidity issues with non-payment of the loan.
c. Balance of convenience
In the case of Pius Kipchirchir Kogo – vs - Frank Kimeli Tenai [2018] eKLR which defined concept of balance of convenience as :
“ The meaning of balance of convenience in favour of the Plaintiff is that if an injunction is not granted and suit is ultimately decided in favour of Plaintiff the inconvenient caused would be greater than that which would be caused to the Defendant if an injunction is granted but the suit is ultimately dismissed. Although it is called balance of convenience it is really the balance of inconvenience and it is for the Plaintiffs to show that the inconvenience caused to them be greater than the which may be cause to the Defendant inconvenience be equal, it is the Plaintiffs who suffer.
In other words, the Plaintiff have to show that the comparative mischief from the inconvenience which is likely to arise from withholding the injunction will be greater which is likely to arise from granting.”
In the case before us we find that the Applicant may have more to suffer if the said Public Auction takes place.
We find the Application Orders as sought cannot be given in their entirely. There is a loan that is pending and the issue is the amount due. We thus cannot give an order as couched in Order 4 of the Application.
10. To this end, the Application dated 22.10.2020 is found to be with merit and the Orders of the Tribunal are given in accordance to Section 3 and 3A Civil Procedure Rules 3 and 4 Co-operative Tribunal (Practice and Procedure) Rules we Order:
1. The setting aside of the Public Auction notice of the Applicant’s property pending hearing and determination of the main suit.
2. The 1st Respondent to furnish and file Statement of Account for the Claimant/Applicant within 14 days of the Ruling.
3. The Applicant to continue servicing the loan as per their admitted amount.
4. All parties to file their Witness Statements and documents 30 days from today and Pre- trial directions to be given on 9.11.2021
RULING SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 2ND DAY OF SEPTEMBER, 2021.
Hon. B. Kimemia Chairperson Signed 2.9.2021
Hon. J. Mwatsama Deputy Chairperson Signed 2.9.2021
Mr. Gitonga Kamiti Member Signed 2.9.2021
Mr. B. Akusala Member Signed 2.9.2021
Tribunal Clerk R. Leweri
Wandaka for Claimant/Applicant
Getange Advocate for Respondent
Hon. B. Kimemia Chairperson Signed 2.9.2021