Kenya Union of Savings & Credit Cooperatives Limited (KUSCCO) v Kipinte Sacco Society Limited [2021] KECPT 586 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL AT NAIROBI

TRIBUNAL CASE NO.259 OF 2020

KENYA  UNION  OF SAVINGS & CREDIT

COOPERATIVES LIMITED (KUSCCO).............................................. CLAIMANT

VERSUS

KIPINTE  SACCO SOCIETY LIMITED......................................... RESPONDENT

JUDGMENT

1. The Claimant  filed  Statement  of Claim  dated  7. 8.2020 on  24. 8.2020. The claim  is for repayment  of loan  advanced  to the Respondent  in the year  2011 for Kshs.3,945,000/=.The  loan fell into arrears  and despite  several  demands  by the Claimant the sum of  money  remained unpaid.

2. The claim  is thus for:

a. Damages  for breach  of contract

b. Kshs. 6,282,633/= as at 30th June 2020.

c. Interest  on (a) and (b) above  from the date  of disbursement  until payment  of the arrears in full.

d. Any other relief  that the Honorable  Tribunal  may find  fit to grant.

e. Costs of the suit.

3. The Respondent  despite  service  as per the  Affidavit of Services of Benjamin  Mutua  sworn  on 29. 10. 20 and filed  on 6. 11. 2020 evidences  service  of  summons  to enter  appearance and statement  of claim  were served  on Respondent. The  Respondent  failed  to enter  appearance  and a Request  for Judgment  Application  dated 29. 10. 2020 was filed.

The  Request for  Judgment  Application  was allowed  on  18. 11. 2020.

4. The matter  was slated  for formal  proof  on 26. 1.21.

CW1 Grace  Muiruri gave  her evidence  adopting  her witness statement  dated  7. 8.2020. The Statement  gives detailed  account  of the Claimant  being  an  umbrella  Co-operative  society  body and  advances  credit  facilities  to member cooperatives.

In the  year  2014  the Respondent  requested  for a loan and  an approval  for Kshs. 3,945,000/= on 13th January, 2013.

5. The Respondent  paid their  loan for a while  then begun  defaulting.

Despite  demand  letters and default  notices  the Respondent  has refused  to pay  up.  The loan  accrues  interest to  13. 5.% per annum and default  penalty  of 6% per annum.

The loan  plus interest  has accumulated  to Kshs.6,282,633/= at date of  filing suit.

6.  There being  no statement  of Defence  we are called up to make a determination.

The Respondent  has defaulted  paying his  loans.

The Claimant  has evidenced  the:

a. Loan Application  and loan agreement  forms  as advanced.

b. Kuscco  cheque  payment  voucher.

c. Default  notices  from Kuscco and

d. Demand  letters

e. Financial  Statements.

7. Issues  to be addressed

Issue one:-  Was there  a loan advanced?

Issue two:  Whether  the Respondents  defaulted   in payment of the loans?

Issue  three:-  Remedies  for breach  of contract.

8. Issue one:

Was there  a loan advanced?

The Claimant  has evidenced  the loans  advanced  to the Respondent, when it was  advanced  and the repayment  plan  or period 12 monthly  installments.

9. Issue two:

Whether  the Respondents  defaulted   in payment of the loans?

The Respondent  can be said  to have defaulted  in the loan repayment. This  is  evidenced  by the default  notices  from Kuscco requesting for repayment  and demand  letters  from the  Respondent  Advocates.

10. Issues  three:

Question-  what is the  reason for  breach of  a loan  agreement?

The remedy  for any loan  is repayment  of the loan itself plus  the interest  applicable.

11. Issue four:

Are  General Damages  payable in this instance?

General Damages  are awarded  and paid  in instances  where there  has been breach.

Conclusion

The upshot of the  above is that  judgment is  entered  in favour of  claimant  against  Respondent for:

a. Kshs. 6,282,633/=.

b. Interest  of (a) above  from  date of  filing suit at   Tribunal  rates.

c. Prayer  for damages for breach  fails.

d. Costs of suit.

JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY THIS 27TH  DAY OF MAY, 2021.

HON. B. KIMEMIA   CHAIRPERSON   SIGNED  27. 5.2021

HON. J. MWATSAMA  DEPUTY CHAIRPERSON SIGNED  27. 5.2021

MR. P. GICHUKI    MEMBER   SIGNED  27. 5.2021

Tribunal Clerk   Leweri

Miss  Ochieng  holding  brief for  Owaga for Claimant: Present

No appearance for  Respondent.

HON. B. KIMEMIA   CHAIRPERSON   SIGNED  27. 5.2021