Amica Savings & Credit v Munyua [2023] KECPT 766 (KLR)

Amica Savings & Credit v Munyua (Tribunal Case 625 of 2017) [2023] KECPT 766 (KLR) (Civ) (24 August 2023) (Judgment)

Neutral citation: [2023] KECPT 766 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Civil

Tribunal Case 625 of 2017

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

August 24, 2023

Between

Amica Savings & Credit

Claimant

and

Bernard Gacheru Munyua

Respondent

Judgment

1. The suit is brought vide a Statement of Claim dated 2nd November 2017 filed on 7th November 2017. The Claimant claims to be member of the Respondent.

2. The Claimant claims that between 1st February 2017 and 2nd March 2017, the Respondent drew several cheques in favour of his suppliers knowing very well that he had insufficient funds in his account to clear the said amounts which caused an overdraft of Kshs. 3,096,337. 50.

3. Further, the Claimant claims that on or about 27th January 2017, the Respondent was advanced a loan facility of Kshs. 200,000. However, the Respondent neglected to service the loan on the terms agreed leaving a loan balance of Kshs. 174,000 which has never been settled up to date.

4. The Claimant avers that they had an agreement with Family Bank to clear member cheques on its behalf since the Claimant did not have the capacity to do so. Due to a glitch in its system, they erroneously cleared the cheques against the insufficient funds in the Respondent’s account. The Claimant claims he paid all those sums to the suppliers which the Respondent is yet to repay up to date.

5. The Claimant therefore prays for: -a.Judgement to be entered in favor of the Claimant against the Respondent for Kshs. 3,295,337. 50. b.Costs and interests of the suit.c.Such further relief that the Honorable Tribunal may deem fit.d.against the Respondent

6. The suit is accompanied by a Verifying Affidavit and Witness Statement sworn by James K. Gachau dated 2nd November 2017 and a List of Witnesses and a List of Documents dated 2nd November 2017.

7. In response to the claim, the Respondent filed an Amended Defense on 2nd July 2018 where he denies having an overdraft facility with the Claimant. The Respondent claims that he had sufficient funds in his account when the cheques were drawn. He claims that he was forced to later pay the rejected cheques to his suppliers in cash while he had funds in his account.

8. The Respondent claims that he could not control the system held at the Claimants bank, and if any glitches occurred, the same was never notified/communicated to the Respondent, and he is thus not liable to any misfortunes that befell the Claimant.

9. The Amended Statement of Defence was accompanied by a Witness Statement dated 17th September 2018 and a List of Documents dated 2nd November 2018.

Issues a. Whether the Respondent is entitled to the amount claimed. 10. It is not disputed that the Respondent drew several cheques from his account amounting to Kshs. 3,096,337. 50 between 1st February 2017 and 2nd March 2017. The evidence adduced by the Claimant is that the Respondent drew the said amount knowing that his account had insufficient funds. On the other hand, the Respondent claims he had sufficient funds in the account.It is upon Cooperative Societies’ to keep proper accounts which shall explain the Society’s transactions including all money paid and received as per Section 25 of the Cooperative Societies Act.Further, Cooperative Societies shall produce all moneys, securities, books, accounts and documents belonging to or relating to the affairs of such society as per Section 26 of the same Act.

11. The Claimant has adduced the 20 alleged cheques that were drawn by the Respondent as the primary evidence. In addition, they have produced two Statement of Accounts, one from Amica Sacco and another one from Family Bank. The Statements clearly indicate the transactions that went through the account, the balances in the account and whether the balances were credits or debits. It is apparent from the Statement of Accounts that the cheques drawn by the Respondent are indicated as unpaid cheques, others are reversed cheques and some indicate there was insufficient funds. In that regard therefore, we find the evidence by the Claimant that the Respondent was drawing money from his account without sufficient funds to be true.The Claimant claims that he paid all those sums to the suppliers on behalf of the Respondent. From the further list of document filed on 10th December 2021, the Claimant has attached a schedule of the summarized account transaction of the Respondent. The summarized account indicates that some of the alleged cheques were cleared. Among them are;i.Cheque No. 036208 in the name of Alkins Enterprises Ltd for Kshs. 189,360. ii.Cheque No. 036220 in the name of Summer Africa Ltd for Kshs. 39,800. iii.Cheque No. 036219 in the name of Maguna- Andu Distributors Ltd for Kshs. 32,335. iv.Cheque No. 036222 in the name of Maguna- Andu Distributors Ltd for Kshs. 38,530. v.Cheque No. 036224 in the name of Valuserve Ltd for Kshs. 15,050. vi.Cheque No. 036241 in the name of Summer Africa Ltd for Kshs. 82,510.

12. In view of this summarized account, it is clear that the Claimant only paid Kshs. 397,585 to the suppliers on behalf of the Respondent.The Respondent also claimed to have paid the suppliers in cash after the Claimant rejected his cheques. The Respondent in his Supplementary List of Documents dated 9th May 2022, adduced evidence through receipts demonstrating that they made payments on the dishonored cheques to his suppliers in cash. The receipts are for;i.Cheque No. 036203 in the name of Zuri Millers Ltd for Kshs. 97,500. ii.Cheque No. 036236 in the name of Zuri Millers Ltd for Kshs. 38,600. iii.Cheque No. 036246 in the name of Maguna- Andu Distributors Ltd for Kshs. 79,560. iv.Cheque No. 036222 in the name of Akshar Africa Ltd for Kshs. 39,585.

13. In view of this receipts, it is clear that the Respondent made payments on the dishonored cheques to his suppliers in cash in the sum of Kshs. 255,245. The entire overdrawn amount as per the 20 cheques produced by the Claimant is Kshs. 2,343,905. 50 and not Kshs. 3,096,337. 50 as claimed. Considering the fact that the Respondent paid Kshs. 255,245 the outstanding balance is Kshs. 2,088,660. 50. On the issue of the loan advanced to the Respondent by the Claimant, it is not disputed that the Respondent made partial payments to the Claimant and the outstanding balance is Kshs. 174,000.

Conclusion 14. The Claimant proved its case on a balance of probabilities that the Respondent drew 20 cheques when he had insufficient funds in his account. The Respondent on the other hand failed to prove that his account had sufficient funds. However, he adduced evidence to show that he made cash payments to the suppliers leaving a balance of Kshs. 2,088,660. 50. We therefore enter judgment in favour of the Claimant against the Respondent as follows;a.Total overdrawn/debit amounts Kshs. 2,088,660. 50Outstanding loan amounts Kshs.174,000. b.Costs and interests of this claim.

JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 24TH DAY OF AUGUST, 2023. HON. BEATRICE KIMEMIA CHAIRPERSON SIGNED 24. 8.2023HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 24. 8.2023HON. BEATRICE SAWE MEMBER SIGNED 24. 8.2023HON. FRIDAH LOTUIYA MEMBER SIGNED 24. 8.2023HON. PHILIP GICHUKI MEMBER SIGNED 24. 8.2023HON. MICHAEL CHESIKAW MEMBER SIGNED 24. 8.2023HON. PAUL AOL MEMBER SIGNED 24. 8.2023Tribunal Clerk JemimahNo appearance by the parties.Judgment delivered in the absence of the parties.HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 24. 8.2023