Kaburu v Centenary Sacco Limited (Tribunal Case 335/E136 of 2021) [2025] KECPT 301 (KLR) (Civ) (29 May 2025) (Judgment)

Neutral citation: [2025] KECPT 301 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Civil

Tribunal Case 335/E136 of 2021

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

May 29, 2025

Between

Winnie Karimi Kaburu

Claimant

and

Centenary Sacco Limited

Respondent

Judgment

1.The Claim is instituted vide Amended Statement of Claim of 3^rd February, 2023, where the Claimant is seeking a refund of Kshs. 600,000/=being the value of her vehicle KBR 167Z sold by the Respondent or order compelling the Respondent to account for Kshs. 150,000/= deposited in her account at the Sacco, her savings of Kshs. 252,299/= and an account of sales from her vehicle.She has also prayed for costs of suit and interest.

2.In her Witness Statement dated 17/4/2024, the Claimant admits getting a loan of Kshs. 1,000,000/= from the Respondent secured by her savings of Kshs. 310,000/= and her vehicle valued at more than Kshs. 650,000/=.She alleges she serviced the loan until March 2020, when she defaulted due to Covid. She alleges that on 8/6/2021, the Respondent served her with a letter indicating she was in default in her loan repayment and arrears standing at Kshs. 535,105/= which she disputed.She alleges she made a cash deposit of Kshs. 150,000/= towards offsetting the loan and also sought a member friend, Doreen Gitobu to give her shares of Kshs. 252,299/= to clear the loan balance.She Claims/states that despite all above efforts towards clearing her loan, the Respondent still went ahead to auction her vehicle KBR 167Z which was by then valued at Kshs. 600,000/=.

3.The Claimant filed a Witness statement of Doreen Gitobu dated 17/4/2023. Ms. Doreen Gitobu states that she wrote to the Respondent offering her shares of Kshs. 252,259/= to the Claimant to assist her offset her loan balance with the Respondent.The Claimant avers that her request was not honored.The Claimant also filed documents dated 17/4/2024 in support of her case which documents are:a.A copy of the loan repayment schedule.b.Letter dated 8.6.2021c.Loan Account Statement showing a balance of Kshs. 341,863.23/=d.Loan Account Statement showing deposit of Kshs. 150,000/=.e.Letter dated 5.7.2021 by Doreen K. Gitobu.f.Motor vehicle Valuation Report.The Claimant’s case was heard on 6/11/2024 wherein she adopted her Amended Statement as her Evidence- in -chief.She admitted that she was granted a loan by the Respondent but defaulted due to the Covid menace.She Stated that besides her shares and deposits, she had offered her vehicle KBR 167z valued at Kshs. 600,000/= as security of her loan.

Respondent’s Case

4.The Respondent’s case is based on the Defence and Counter Claim dated 13/2/2024 wherein the Respondent states that the Claimant deposited Kshs. 150,000/= after her vehicle was already sold by the Respondent and that the loan outstanding was Kshs. 820,195/=.The Respondent states that they issued a notice to the Claimant dated 8/6/2021 and notice of sale of motor vehicle on 15/6/2021.Auction of vehicle took place on 12/8/2021. They state that the Kshs. 150,000/= the Claimant paid was used to offset the loan and that her savings of Kshs. 252,299/= were not sufficient to offset her balance.The Respondent prays for dismissal of Claimant’s case and Kshs. 172,259.19/= as at 1/10/2024.

5.In the Witness Statement dated 13/2/2024 and their documents of 13/2/2024 the Respondent witness Ms. Diana Mukami states the Claimant defaulted in her loan repayment as per the loan agreement. She admits that the Claimant used her Vehicle KBR 167Z as security for the loan.She stated that at 8/6/2021 the loan balance was Kshs. 820,195/=.She avers that the Claimant was served a notice to recover on 15/6/2021.She avers that the Claimant issued with a notice of sale for her vehicle KBR 167Z.She states that the Vehicle was sold on 12/8/2021 by public auction and proceeds were used to offset the loan and paying accruing fees.She states that the Claimant later deposited Kshs. 150,000/= to the Respondent.

6.The Respondent states that the Claimant’s dividends for 2021 and 2022 were used to reduce Claimant’s loans.The Respondent states that the Claimant owes them the following:

Principal loan Kshs. 111,272.23/=
Loan interest Kshs. 61,022.96/=, a total of Kshs. 172,292.19/=.

The Respondent admits that Kshs. 330,000/= from Sale of vehicle was used to clear the loan.During the hearing of the Respondent’s case on 13/2/2024, Ms. Diana Mukami adopted her statement of 13/2/2024 and documents of 13/2/2024 as her evidence.She stated that the Claimant defaulted in loan repayment since 2018.She avers that all efforts were used to have Claimant repay her loan but in vain.She stated that the Second Claimant Witness Doreen Gitobu was a member of the Sacco and was a guarantor.She stated that they sold the security vehicle because the Claimant’s loan was defaulted.The Respondent filed Written Submissions dated 19/5/2025. In their Submissions, they state that the Claimant had a defaulted loan and that Kshs. 330,000/= from the vehicle proceeds was used to repay the defaulted Claimant’s loan.They pray for determination of their Counter Claim of Kshs. 172,295.19/=

Analysis.

7.As per the amended Statement of Claim, the Claimant prays for determination on whether the auction of her vehicle KBR 167Z by the Respondent was lawful and if found unlawful get paid Kshs. 600,000/= by the Respondent being the value of the vehicle.The Claimant further prays for an order compelling the Respondent to provide a true account of Kshs. 150,000/= paid as loan, her savings of Kshs. 252,299/- and amount realized from sale of security vehicle KBR 167Z.As regards the process to sell the motor vehicle KBR 167Z, we find that the motor vehicle was offered as security by the Claimant in the loan agreement form for Kshs. 1,000,000/=.The vehicle was auctioned on 11/8/2021 as stated on cross examination of the Respondent Witness on 6/11/2024.The same is confirmed by the Claimant who stated that the vehicle was sold around 12^th August, 2021.We note that there was a debt collection notice dated 8/6/2021, a Sacco letter to auctioneers dated 15/6/2021 and Auctioneers’ letter to the Sacco on repossession of vehicle dated 29/6/2021.

8.As regards the process to auction, the security vehicle, we find that the Claimant was given adequate notice before the auction of the vehicle.However, we note that the Claimant deposited Kshs. 150,000/= on 5/7/2021 with the Respondent but the security vehicle was auctioned after this date.It is evident that the Claimant made attempts to clear her loan, including the cash deposit of Kshs. 150,000/= and Doreen Gitobu allied transfer of her savings to her in order to clear the Claimant’s loan.On the other hand, we find that the Respondent was not keen to update the Claimant’s loan balance even after the receipt of Kshs. 150,000/= from the Claimant.We also observe that the request by Doreen Gitobu to offer her shares to the Claimant was neither acknowledged or acted upon.Again, we observe that the Respondent did not expedite the Claimant’s loan issue adequately.

9.In view of the facts and evidences filed by parties and the hearing of the cases on 6/11/2024, we find that the Claimant has adequately prosecuted her case.

Upshot

11.We find that the Claimant’s case has merit and enter judgement in favor of the Claimant against the Respondent as hereunder:a.Respondent to pay Claimant Kshs. 600,000/= being the value of Motor vehicle KBR 167Z with interest at Tribunal rates.b.Respondent to reconcile the Claimant’s loan including the proceeds from the sale of motor vehicle KBR 167Z and the utilization of the same sale proceeds within 60 days.c.Cost of suit to the Claimant.

Counter Claim.

12.The Counter Claim is contained in the Defence and Counter Claim dated 13/2/2024 and the Respondent Witness Statement.The Counter Claim is for Kshs. 172,295.19/=, broken down into;a.Principal loan balance of Kshs. 111,272,23/=,b.Loan interest of Kshs. 61,022.96.The Counter Claim can only be determined once the Respondent has provided the actual proceeds of the auction of KBR 167Z.The Respondent only mentioned the Kshs. 330,000/= utilized from the proceeds towards Claimant loan repayment.We are of the opinion that the Respondent needs to reconcile the accounts of the Claimant before filing a counter claim.In this regard, the Counter Claim fails.Mention on 9.9.2025. Notice to issue.

JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 29^TH DAY OF MAY, 2025.HON. B. KIMEMIA CHAIRPERSON SIGNED 29.5.2025Hon. J. Mwatsama Deputy Chairperson Signed 29.5.2025Hon. Beatrice Sawe Member Signed 29.5.2025Hon. Fridah Lotuiya Member Signed 29.5.2025Hon. Philip Gichuki Member Signed 29.5.2025Hon. P. Aol Member Signed 29.5.2025Tribunal Clerk MutaiKiama advocate for the claimantWanjohi Mutuma advocate for the Respondent – No appearanceMention on 9.9.2025 to confirm complianceHon. J. Mwatsama Deputy Chairperson Signed 29.5.2025