Eastleigh Route Sacco Limited v Ihura [2024] KECPT 254 (KLR)

Eastleigh Route Sacco Limited v Ihura (Tribunal Case 13 of 2021) [2024] KECPT 254 (KLR) (7 March 2024) (Judgment)

Neutral citation: [2024] KECPT 254 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 13 of 2021

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

March 7, 2024

Between

Eastleigh Route Sacco Limited

Claimant

and

Evans Njoroge Ihura

Respondent

Judgment

1. The respondent was a member of the claimant Sacco No. 207 from the year 2012 and as a member he both made deposits in savings and also took several loans.In 2021, the claimant moved the court seeking orders to compel the Respondent to service the arrears which by the date of filing January 21, 2021 stood at Kshs. 388,526/=.On March 3, 2021, the Respondent filed his Defence which largely denied the contents of the statement of claim. This necessitated the claimant on March 31, 2021 to file a notice of motion application to strike out the Defence and enter Summary Judgment.

2. This Tribunal on September 2, 2021 gave the Respondent benefit of doubts by dismissing the Application to allow the suit to proceed to a full hearing to enable it determine the suit on merit.At full hearing, from evidence, this Tribunal was able to get the following:a.The Respondent had taken several loans from the Claimant.b.The loans were disbursed in cashc.Deposits were also paid in cash and those deposits served as the security for the loans.d.Interest for the loans were not captured in the Loan Application Forms, but were captured in the Loan Policy which all members of the Claimant Sacco were aware of the interest was either 1% or 1. 5% per month depending on the type of loan.e.The Respondent applied for his last loan in 2016 and defaulted in repayment from February 2017. By march, 2017 he was now fully dormant.f.The loans were repayed daily in cash and the Respondent stopped repaying when his motor vehicle broke down.g.The Respondent admitted to still owing the Sacco some arrears by the time his motor vehicle broke down.The only issue remaining for determination is as to whether the Respondent owes the Claimant and how much?

3. From evidence on record, it is not in doubt that the Claimant and the Respondent entered into several Contractual Agreements which gave rise to some obligations. Its also not in doubt, in as much as there are no documents before court, that as at the times the Claimant and the Respondent entered into those contractual obligations, it was clear to both parties the obligations and expectations of the Agreements – including the interest charged on the loans.Courts have always insisted that Loan Agreements create distinct legal obligations that are independent of any other issue, and it is also out position as a Tribunal that the Respondent should have continued servicing his loan arrears even if his source of repayments the motor vehicle, had broken down.

4. In Mrao Limited v First American Bank of Kenya & 2 others (2003) KLR 125, it was Honourable Kwach JA position that:“any person entering into a commercial transaction particularly one in which a large amount of money is involved, should obtain the best possible legal advice so that he can better understand his obligations. That if courts were to allow debtors to avoid paying their just debts by taking some Defences, then banks will be crippled if not driven out of business all together and no serious investor will bring their capital into a Country whose courts are a haven for defaulters.”

5. The Respondent having admitted during cross examination to having not paid the full arrears, he stopped paying when his vehicle broke down- the arrears were payed for daily when his vehicle was in operation – we see no plausible reason as a Tribunal to restrain the Claimant from recovering the loan arrears. The issues raised as to why the Agreements were not all in writing or why the interest rates issue not in the Loan Agreements are not good enough to be used as an excuse for non-repayment of loans taken.

6. The Statement of Claim filed on January 21, 2021 succeeds and judgment in favour of the claimant against the respondent has been issued for the sum of Kshs. 388,526/= plus interest and cost of the claim.

JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 7TH DAY OF MARCH, 2024. Hon. Beatrice Kimemia Chairperson Signed 7. 3.2024Hon. Beatrice Sawe Member Signed 7. 3. 2024Hon. Fridah Lotuiya Member signed 7. 3.2024Hon. Philip Gichuki Member Signed 7. 3.2024Hon. Michael Chesikaw Member Signed 7. 3.2024Hon. Paul Aol Member Signed 7. 3.2024Tribunal Clerk JemimahMulinge advocate for RespondentAuga advocate for claimantHon. Beatrice Kimemia Chairperson Signed 7. 3.2024Mulinge advocate – I pray for 30 days stay of executionAuga advocate – No objectionOrder- 30 days stay of execution granted.Hon. Beatrice Kimemia Chairperson Signed 7. 3.2024