King'ori v Muki Savings & Credit Co-operative Sacco Society Limited & another (Tribunal Case 57 of 2020) [2024] KECPT 946 (KLR) (23 May 2024) (Judgment)
Neutral citation:
[2024] KECPT 946 (KLR)
Republic of Kenya
Tribunal Case 57 of 2020
Janet Mwatsama, Vice Chair, B Sawe, F Lotuiya, P. Gichuki, M Chesikaw & PO Aol, Members
May 23, 2024
Between
Danson Theuri King'ori
Claimant
and
Muki Savings & Credit Co-operative Sacco Society Limited
1st Respondent
Superfew Auctioneers
2nd Respondent
(Coram: Hon. J. Mwatsama- Deputy Chairperson, Hon. B. Sawe- Member, Hon. F. Lotuiya- Member, Hon.P. Gichuki- Member, Hon. M. Chesikaw- Member and Hon. P. Aol- Membe)
Judgment
1.The matter for determination is the Claimant’s Statement of Claim dated 11/2/2020 and supported by the following;I.Witness Statement dated 23/6/2021.II.List of Documents dated 23/6/2021.III.Reply to Defence dated 3/5/2021.IV.Claimant’s Written Submissions dated 10/9/2020.V.Hearing proceedings of 2/10/2023.
2.In the Statement of Claim, the Claimant prays for judgement against the 1st and 2nd Respondents for:
3.The Claimant states that he is a member of the Respondent Account Holder NO. 01-0101-001-08489. He confirms entering into a loan agreement with the Respondent for Kshs. 500,000/= 0n 11/11/2014 repayable with a total interest of Kshs. 112,500/=The Claimant confirms facing difficulties repaying the loan leading to an outstanding Loan balance of Kshs. 173,961/= and interest of Kshs. 15,650/= as at 2/2/2017.The Claimant states that the Respondent was to extend the grace period from 2/2/2017 to end of the same month to enable Claimant to repay.He claims that he repaid Kshs. 193,399/= in full and an excess of Kshs. 173,691/= and Kshs. 15,659/= interest.Claimant avers that the 1st Respondent demanded and instructed the 2nd Respondent to attach his property of cows/chattels on 7/2/2020. He claims states that the 1st Respondent has refused to explain the arrears of Kshs. 198,994/=.He restates that he has repaid all the monies advanced to him by the 1st respondent, hence prayers.
4.In his witness statement, the Claimant avers that he was informed by the 1st Respondent Branch Manager that he owed the Respondent loan and interest totaling Kshs. 189,349/=. The Claimant states that he continued to repay the loan and that by January 2018, he owed the 1st Respondent Kshs. 82,000/=.The Claimant further stated that he visited the Respondent offices on 23/4/2018 requesting for a Statement of Account. He claims he was surprised by the print out which showed that he owed the 1st Respondent Kshs. 195,433.70/= when he believed he has repaid Kshs. 193,399/=.He however challenged some entries in the member’s Accounts Statement. He states that one year later in 4/8/2019, he received a letter of intention to report him to the Credit Reference Bureau.He claims that he received a demand letter dated 6/1/2020 from the 1st Respondent for Kshs. 198,994/= against the demand letter of Kshs. 195,543.70/= for April 2018.
5.The Claimant further states that the 1st Respondent just after one month instructed the 2nd Respondent to visit his home to proclaim his property.He claims that the 1st Respondent has never issued him with any Demand Notice to proclaim and attach. He states that the 1st Respondent has refused to supply account statement showing the amount owed to the Respondent.
6.In his reply to Defence, the Claimant avers that he had repaid his loan with the Respondent hence the auction of the loan security is unlawful.He further states that the demand notices were unlawful since he had already cleared his loan.The Claimant has filed relevant documents to support his case. These include:1.The Loan Agreement,2.Member’s Statement Deposit Slips,3.Demand Letter4.The Proclamation Notice.In his Written Submissions, dated 11.10.2023. The Claimant has given a brief of the loan process up to the time of default and subsequent Demand Notice and intended auction.The Claimant again avers that he had cleared his loan in full and therefore the recovery steps taken by the Respondent are unlawful. The Claimant has provided several citations to support his case.
7.During the hearing of the matter on 2/10/23, the Claimant produced his Witness Statement dated 11.02.2020 and documents as his Evidence- in- Chief.He confirms having received Kshs. 500,000/= from the Respondent in February, 2016. The loan balance grew to Kshs. 189,349/=. He states that the 1st Respondent called on 2/2/2017 indicating intention to take the security. They later gave me 1 year to repay.He states that by 20/1/2018 he had defaulted Kshs. 193,399/= an amount he cleared. He avers that the 1st Respondent figure of Claim is Kshs. 185,543/=.
8.On Cross Examination, the Claimant confirmed he was given the loan in 2016 and was in arrears until January, 2018 when he cleared to pay the loan. He confirmed that his repayment was not consistent. He avers that he did not know there were additional interest.On re-examination, the Claimant admits he was to repay Kshs. 189,000/= and that he was given February, 2018 as deadline to clear. He states he repaid Kshs. 193,000/=.
RESPONDENT’S CASE.
9.The Respondent’s case is based on the following:
- Amended Statement of Defence dated 16/3/2022.
- Counter-claim dated 16/3/2022.
- List of Documents dated 27/10/2021.
- Hearing dated 2/10/2023.
10.The 1st Respondent has filed the following documents in support to his case.
- Loan Application form dated 7/11/2014.
- Demand Letter of 6/1/2020.
- Loan Account Statement dated 18/2/2021.
11.On cross examination, the Respondent witness stated that the Loan Application is the principal document for the loan granted. She stated that the Claimant borrowed Kshs. 500,000/= for 15 months at 18% interest.She stated that there was a Kshs. 100/= penalty per month. She stated that the loan was defaulted for over 10 months. She averred that there was a new loan policy implemented during the term of the Claimant’s loan.
12.In their 1st Respondent Written Submissions dated 27/10/2023, the Respondent confirms that the Claimant borrowed Kshs. 500,000/= to be repaid in 15 months at an interest of 1.5%. The Claimant generated the loan with his 5 freshian cows.The Claimant defaulted in loan repayment occasioning the Respondent to do a reminder to the Claimant. The Respondent states that the Claimant admitted the loan and subsequent default.The Respondent states that they did several reminders but the Claimant ignored to honor his financial obligations. This occasioned the Respondent to engage the 2nd Respondent, the Auctioneers. The Respondent stated that the Loan Application Form filed in court was adequate evidence of the loan granted to the Claimant.
13.He also states that the loan was defaulted at the same stage, a situation the Claimant does not deny. He states that due to the default, the loan balance stood at Kshs. 173,691/= and an interest of Kshs. 15,650/=. He states that these two figures of Kshs. 173,691/= and Kshs. 15,600/= are mentioned in the Statement of Claim paragraph 6.He avers that the issued for determinations are whether the Claimant repaid the loan and whether the Proclamation of Attachment dated 7/2/2020 was lawful.He claims that the claimant had arrears of Kshs. 173,691/= at time of default, plus interest thereon. He states that the Claimant’s alleged repayment is not supported by any documents.He states that the Claimant has failed to prove any repayments made on the loan. He states that the Claimant owes the Respondent Kshs. 198,994/=. This is attested by the Claimant’s Account Statement filed by the credit manager. The Credit Manager explained as follows: -
- At time of default, the Claimant owed Respondent Kshs. 173,691/= plus Kshs. 15,650/=.
- By time of Proclamation Notice, the loan balance was Kshs. 63,642/= and interest of Kshs. 15, 650/=. This is after the Claimant made some repayments.
- As at the time of engaging the Auctioneers the Claimant had defaulted 10 months and loan was accruing interest.
- He states the loan interest had grown to Kshs. 90,650/= (Kshs. 15,650/= plus the additional of Kshs. 75,000/=).
- He states there was a penalty of Kshs. 3,500/=.
- There was Kshs. 41,202/= debt collection fee.
14.He states that an aggregation of the above tabulation brings a total of Kshs. 198,994/=, the basis of the counter claim.He states that the Loan Agreement between the Claimant and the 1st Respondent provided for the Respondent to realize the security provided by the Claimant in the event of default.He refers the court to the Loan Application under “items in guarantee which indicate the claimant had provided for the freshian cows, among others as items the Respondent can attach in the event of default.
THE COUNTER CLAIM.
15.The Respondent filed a counter claim for Kshs. 198.994/= to the Claimant dated 16/3/2022. The justification for the claim is that the Claimant owes the Respondent the Counter-claim amount being the principal amount and interest.
ANALYSIS.
16.It is not in dispute that the Claimant was loaned Kshs. 500,000/= by the Respondent. It is also evident that the Claimant defaulted in the loan repayment a fact stated in his Statement of Claim.The Loan Agreement form is a critical document in any Loan Application. In this case, the Claimant had provided his freshian cows as part of his property to be attached in the event of default. This document has not been challenged in court.The Respondent has tabulated figures in justification of his Counter-claim. He has through this proceeding provided evidence that indeed the Claimant owes the Respondent money in form loan defaulted and interest thereon. The Respondent has explained the actions taken before engaging the Auctioneer.
17.It is observed that both parties are in agreement the principal amount granted to the Claimant and that the Claimant defaulted in the loan repayment. The only area where both parties differed was on the final amount due and the interest rates charged.
18.We find that the Claimant has not adequately prosecuted his case as regards his prayers in the Statement of Claim. The Respondent has prosecuted his case including the counter claim dated 16/3/2022. The member Account Statement produce by the Respondent and which has not been challenged by the Claimant, tabulates the Claimant’s Loan Statement.As regards the Counter-Claim, we find that the claim was un uncontroverted.
CONCLUSION.a.We find that the Statement of claim dated 11/2/2020 fails in its entirety and therefore the same is dismissed.b.The Counter Claim dated 16.3.2022 succeeds to the extent of prayer (b) for Kshs. 198,944/=.We therefore enter judgement in the Counter -claim in favor of the Respondent against the Claimant for Kshs. 198,944/=.c.parties to bear own costs.
JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALL AT NAIROBI THIS 23RD DAY OF MAY 2024.Hon. J. Mwatsama Deputy Chairperson Signed 23.5.2024Hon. Beatrice Sawe Member Signed 23.5.2024Hon. Fridah Lotuiya Member Signed 23.5.2024Hon. Philip Gichuki Member Signed 23.5.2024Hon. Michael Chesikaw Member Signed 23.5.2024Hon. Paul Aol Member Signed 23.5.2024Tribunal Clerk JonahNgugi Kamau advocate for the ClaimantAriga advocate holding brief for Getange advocate for the RespondentNgugi Kamau advocate – We pray for 30 days stay of execution.Ariga advocate- We are not opposed to the same.Tribunal order:30 days stay of execution granted.Hon. J. Mwatsama Deputy Chairperson Signed 23.5.2024