Gershon Dullo Angado v Kenya Union of Savings & Credit Cooperatives Limited & Intime Auctioneers [2021] KECPT 555 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL AT NAIROBI

TRIBUNAL CASE NO.464 OF 2019

GERSHON DULLO ANGADO......................................................CLAIMANT

VERSUS

KENYA  UNION  OF SAVINGS  &

CREDIT  COOPERATIVES  LIMITED...........................1ST  RESPONDENT

INTIME  AUCTIONEERS.................................................2ND  RESPONDENT

RULING

Vide the Application  dated 5. 8.2019 the Claimant has moved  this Tribunal  seeking  for Orders inter alia:

1. That this  application  be certified  urgent IPSO FACTO  be heard  ex-parte and service  be dispensed  within  the first instance;

2. That  this  Honorable  Tribunal  be pleased to  grant  STATUS QUO ORDERS  restraining  the 1st and  2nd  Respondents either  by themselves or their agents  acting on  their behalf  from disposing off Land  Reference Number 209/8294/382, AKIBA ESTATE SOUTH C, NAIROBI COUNTY by way of  public  auction  intended  to take place  on the 12th  August  2019 pending  the  hearing  and determination  of the instant  application ;

3. That  this  Honorable  Tribunal  be pleased  to grant  orders compelling  the 1st  Respondent to produce  and file in court  duly audited  loan and  savings  accounts  in respect  to the Claimant/Applicant herein ;

4. That this Honourable  Tribunal be  pleased  to grant orders  compelling  the 1st  Respondent  to comply  with the  miscellaneous  provisions  of the Banking  Act in  Administering  the claimant  loan account.;

5. That this  Honorable  Tribunal  be pleased  to grant  the claimant/Applicant  orders  to liquidate  the remaining  balance  by way of monthly  installments  till payment  in full;

6. That cost of this application be provided for.

The Application is supported by the grounds on its face and the  following Affidavit;

a. Supporting  affidavit  sworn on 5. 8.2019;

b. Further affidavit  sworn  on  16. 10. 2019.

The Respondent  has  opposed  the Application vide  the  Replying  Affidavit  sworn by George  Ototo on 25. 9.2019.

Vide  the  directions  given  on  5. 8.2020,  the Application  was canvassed  by way of  written submissions.  The Claimant filed his  written submissions  on  14. 12. 2020 however,  the Respondent’s submissions  were not  on record  as at the time  of preparation  of this Ruling.

Claimant’s  Contention

The Claimant  has opposed the sale  (by way  of Public Auction) of his property L.RNO.209/8294/382  Akiba  Estate  South C based  on the following  grounds:

a. That the  Respondent did not issue  him with  the requisite  45 days  redemption  Notice.

b. That  he dispute  the sum demanded;

c. That  he has repaid  the loan;

Respondent’s case

The Respondent has opposed the Application  on grounds  inter alia that upon being  granted a loan  of Kshs.7,000,000/=  the Claimant  has defaulted  in repayment  of the same. The  initial  default occurred  in April, 2011. That  this prompted  it to instruct  Watts  Auctioneers  to  recover  the same.  That the  sale did  not  materialize  as the Claimant  gave  a  commitment  to  regularize his account. That  he subsequently failed  to do so. That this  prompted  it to commence  the process  of realization  of  security. That  it  took the  following  steps:

a. That he was  issued  with a 90 days  statutory  Notice;

b. That he  was subsequently issued  with a  40 days notification  of  sale;

c. That upon  the lapse of  the above notices,  the 2nd Respondent  was instructed  to proceed  to  advertise  the charged  property for sale;

d. That armed  with instructions the  2nd Respondent issued  a 45  days  redemption  notice  on 5. 11. 2018.

That  upon  receipt  of the redemption  notice,  the Claimant wrote a letter dated  2. 4.2019 acknowledging  the  existence  of the  realization  process  and committed  to  regularize  his  account. That  he  again  failed  to do so.

That he is  thus in breach of the  terms of the loan  facility  and  as at  8. 7.2019 he owed  the  1st  Respondent  kshs.17,492,577. 05/=.

Claimant’s  further Affidavit  sworn  on  16. 10. 2019

Vide this  affidavit, the Claimant  sought  to rebut  the averments  made  by  the Respondent in the foregoing  Replying  Affidavit.  He  reiterated  the fact that  the 45 days  redemption  Notice was  not served  upon  him. That  the 2nd  Respondent  did not also issue  him with the requisite  notification  of sale as  required  by Rule  15 of the  Auctioneers  Rules. That failure  by the  2nd  Respondent  to issue  the said  notices,  renders the whole process Null  and Void.

Issues  for determination

The Claimant’s Application  has  presented  the following  issues  for determination :

a. Whether  the Claimant  has  established   a proper basis  for the  grant  of an order  of temporary  injunction;

b. Who should  meet  the costs  of the Application?

Temporary injunction

We have  jurisdiction  to make  an order  regarding  temporary  injunctions  by dint  of order 40  of the Civil  Procedure  Rules. Order  40  Rule 1  (a) provides  thus:

“ Where  in any suit  it is proved  by Affidavit or otherwise –

a) That  any property  in dispute  in a suit is  in  danger  of being  wasted,  damaged, or alienated  by any party to  the  suit, or wrongly sold in execution of a decree,  the court may  by order  grant  a temporary  injunction to  restrain  such  act, or  make such  other  order  for the purpose  of staying  and preventing  the wasting, damaging, alienation, sale,  removal, or disposition of the property  as the court thinks fit, until  the disposal  of the  suit  or until further  orders.

Before  exercising  the above  jurisdiction,  we are  guided  by  the Principles  enunciated  by the court in  the case of  Giella – versus-  Cassman  Brown [1973] EA. They  include:

a)  A prima facie case  with a probability  of success;

b) Irreparable  damage; and

c) Balance  of Convenience.

The court   in the  case of Mrao  Limited  versus  first  American Bank  of Kenya  Limited (2003) eKLR explained what  Constitute  a Prima Facie  case  in the following terms:

“.......A Prima Facie  case is  more than  an arguable  case. It is  not sufficient  to  raise  issues.  The evidence  must show  an infringement  of a right  and the probability  of  the Applicant’s case  upon trial.  It is a case which  on the material  presented,  to the  court,  a Tribunal  properly  directing  itself  will conclude  that there  exists  a right  which  has apparently been infringed  by the  opposite  party as to call  for an explanation from  the latter......”

What  we discern  from the foregoing  decisions of the court is that  for one to establish  existence  of a prima facie  case  he or she should  establish  existence  of a right  which  has been  infringed  by the  opposing  side so as to call  for  explanation.  The crux  of the Claimant’s case  is that  the Respondent  and the 2nd  Respondent,  in particular  has failed  to issue  the requisite  45 days  redemption  Notice.

Secondly,  that he  disputes  the sum demanded  by the 1st Respondent. We  will address  these  two  main issues  sequentially  beginning  with the  issue  of relating  to  the amounts due.

Dispute  regarding  amounts  due

The court  of Appeal  in the case  of  Giro  Commercial  Bank  limited  - vs -  Haid  Hamud  Mutesi[2002[eKLR had  to say regarding a  dispute  as to the amount owing:

“ It has  been had  time and again  that a mortgagee  cannot  be restrained  from exercising  his power  of sale because  the amount  due is  in dispute, or  that  the mortgagor   has  commenced  a  redemption  action  or because  the mortgagor  objects  to the manner in which  the sale is being  arranged....”

Applying  the holding  of the court  in this case  to the matter  at hand,  it is apparent  that the  Claimant  disputes  the manner  in which  the  1st Respondent  has computed  the debt.  This is  not a  ground  for the grant  of a temporary  injunction.

Redemption Notice

The Claimant  has strenuously accused  the  2nd Respondent  of  not issuing  the 45 days redemption Notice  before  advertising  the charged property  for sale.  That failure  to do so  goes to  the root of  the  execution process  with the consequence  that  the  said process  is null and  void.

We have, however perused  the  annextures  attached  to the  Replying  Affidavit  sworn by  George  Ototo on 25. 9.2019 and note that  indeed  the  1st  Respondent  followed all the requisite  processes  before  advertising  the property  for sale. A 90 days statutory  Notice  dated 15. 8.16 was issued (annextures  G 08). This  was  followed by  a 40 days  Notification  sale dated  25. 8.2017 (annexture G 09). This  was then followed  by a 45 days redemption Notice  dated 5. 1.2018(annexture  G 0 -11).  All  the Notices  are accompanied  by their respective  certificate  of postage.

We thus  cannot  fathom  the circumstances  under which  the  Claimant  is disputing  service of  Redemption  Notice  yet there is  evidence  that the  same  was duly  served  upon  him.

Conclusion

The upshot  of the foregoing  is that  we do not  find merit  in the Claimant’s  application  dated  5. 8.2019 and hereby  dismiss  it with costs. Orders to apply  to CTC. NO. 467/19.

Ruling signed, dated and delivered virtually this 25th   day of  March,  2021.

Hon. B. Kimemia               Chairperson                Signed      25. 3.2021

Hon. Jane Mwatsama       Deputy Chairperson  Signed      25. 3.2021

Mr. P. Gichuki                    Member                       Signed      25. 3.2021

Miss Jerotich  for  1st  Respondent.

Hon. B. Kimemia               Chairperson                Signed      25. 3.2021