Kamau v New Milimani Sacco Limited [2024] KECPT 209 (KLR)

Kamau v New Milimani Sacco Limited (Tribunal Case 108/ E037 of 2023) [2024] KECPT 209 (KLR) (7 March 2024) (Judgment)

Neutral citation: [2024] KECPT 209 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 108/ E037 of 2023

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

March 7, 2024

Between

Samuel Ndungu Kamau

Claimant

and

New Milimani Sacco Limited

Respondent

Judgment

Preliminaries. 1. This Tribunal is called upon to make a judgement on a dispute of a refund of deductions of Kshs. 349,020. 77/= which was made by the Respondents from the account of the Claimant on 7th June, 2022. When the parties failed to reach an agreement, the Claimant filed a Statement of Claim dated 20th January, 2023 seeking judgement against the Respondent for the following orders:a.Immediate realize by New Milimani Sacco the sum of Kshs. 349,020. 77. b.Costs and interest of the suit.

2. The Claimant was a member of the Respondent and he opened and operated a savings Account No. 3991 held by the Respondent.

3. Is support of the Claim, the Claimant attached his Loan Statement, his savings, Account Statement and a photocopy of an Affidavit of a Loan Agreement for Kshs. 2,600,000/= between the Claimant and the Respondent.

4. The Respondent filed a response on 31st March, 2023 stated that the Claimant had repaid the borrowed Loan and by February 2022, his outstanding loan was Kshs. 341,229/= which attracted interest of Kshs. 7,240/= making a total of Kshs. 349,020/=.

Claimant’s Case. 5. The Claimant’s case is that on 22nd, September, 2022 he entered into a loan agreement with the Respondent to be advanced Kshs. 2,600,000/= which was served by his title deed registered as Komothai/Karatina/2101. The loan was to be paid within a period of 24 months through cash collections by the Respondent field collection officer.According to the Claimant, he was given a Pass book by the Respondent and every time he gave the field collection officer cash, she would record in the Pass book. The Pass book would be replaced by the Respondent’s field officer whenever it gets full.

6. Further, the Claimant stated that he diligently repaid the loan by making Payments on weekly and sometimes after three to four working days. Thereafter, the Respondents returned his title deed (security) to him.

7. The Claimant state that despite clearing the loan, the Respondents went ahead and deducted Kshs. 349,020. 77/= from his savings account and described it as loan recovery.

Respondent’s Case. 8. The Respondents on their part agreed that as one of their members, they advanced a loan facility of Kshs. 2,600,000/= to the Claimant to be repaid within 24 months with and interest of Kshs. 390,000/=. Further, the Respondent never disputed that the Loan was served by a title deed registered as Komothai/Karatina/2101 together with the Claimant’s savings/shares/special deposit etc.

9. The Respondent’s Chairman Rev. Julius Kiburi Wambugu detailed a Witness Statement and stated that the Claimant stopped repaying the loan in March, 2022. It was his statement that the outstanding balance attracted interest which was auto-recovered from the Claimant’s savings by the Sacco’s computerized system. The Claimant was thereafter informed about the offset and allowed to collect his title deed.

10. To support their Defence, the Respondent attached the Claimant’s Loan Statement from 22/06/2020 up to 07/06/2022, the Claimant’s Savings statement and a photocopy of an Affidavit signed by the Claimant.

11. On 19/7/2023 when the matter came up for mention, the parties agreed to canvass this matter by way of Written Submissions. The Tribunal issued directions on the exchange of the Written Submissions and ordered that a Judgement will thereafter be delivered.

Issues For Determination. 12. After analyzing the facts as contained in the Tribunal’s file, we have come up with two (2) issues for determination.a.Whether the Claimant repaid the Loan and the interest fully?b.Whether the Claimant is entitled to the refund of Kshs. 349,020. 77

Whether the Claimant repaid the loan and the interest fully. 13. On 22nd September, 2022, the Claimant was loaned Kshs. 2,600,000/= by the Respondent. By the time of writing this Judgement, there is no Loan Application form in the file which was filed by either of the parties to show the duration of the repayment of the loan together with other terms and conditions.

14. On the face of the Claimant’s Loan Statement, it shows that from 9th October, 2020, to 25th February, 2022, the Respondent posted an average of Kshs. 20,000/= and Kshs. 21,000/= in what is levelled as field collection presumably from the Claimant. This therefore qualified the Statement from the Claimant that one Damaris Mwanzau was a field collection officer of the Respondent.

15. In his Witness Statement, the Claimant stated that he was issued with a pass book in which the field collection officer recorded the amount of money received from him at any given time. The Claimant never filed a copy of the alleged passbooks with the Tribunal in order to allow us to consider the evidence contained in those pass books. Nevertheless, the Claimant submitted that when those pass books got full, they would be returned to the Sacco. On this, apart from the Claimant’s statement that he attempted to address the issue of the deducted amounts from the Sacco’s officers, there is no evidence that the Claimant tried to get copies of the full pass books that he had surrendered to the Respondents.

16. With no other evidence, we therefore rely on the Members’ Loan Statement which show that the last repayment of Kshs. 14,600/= was made on 25th February, 2022 by the Claimant which left a balance of Kshs. 333,869. 67/= in his Loan Account. Further on 14th April, 2022, the Respondent posted a Loan Penalty of Kshs. 15,151. 11/=, which put the total outstanding loan as Kshs. 349,020. 78/=.

17. In the absence of any other evidence to show how the Claimant repaid the outstanding balance, it is our finding on a scale of probability, that the Claimant never repaid the loan in full.

On whether the Claimant is entitled to the refund of Kshs. 349,020. 77; 18. Given that the Tribunal has no Loan Application form in the file records, we have a record of the Respondents’ copy of an Affidavit signed by the Claimant and witnessed by a Commissioner of oaths which related to the Loan Agreement.Paragraph 5 of the said Affidavit state;“That incase I default, I have authorized New Milimani Sacco to recover the said Loan balance, plus interest and penalties from my savings/ shares/ special deposits and if the loan will still be outstanding, the balance shall be recovered from the said guarantor either from his/her savings/shares of special deposits/ Title deed/plot certificate/logbook without any prior notice of communication whatsoever”.

19. On plain reading of the above paragraph, it shows that the Claimant gave power/authority to the Defendant to recover any outstanding loan, penalties and interest that he owed from his savings/ shares and special deposit first before they could consider to recover from his guarantors or any other source.

20. Having found that the Claimant seem not to have paid the loan fully, we are persuaded to agree that the act taken by the Defendant was justified.

21. In the end, we enter judgement as follows:a.That judgement is hereby against the claimant for Kshs. 349,020. 77/= plus costs and interest in 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 JemimahMiss Karimi for Respondent.No appearance for ClaimantHON. BEATRICE KIMEMIA - CHAIRPERSON SIGNED 7. 3.2024Miss Karimi for Respondent: I pray for 45 days stay of execution.Order: 30 days stay of execution granted.HON. BEATRICE KIMEMIA - CHAIRPERSON SIGNED 7. 3.2024