Macharia & 3 others v Ngung’u [2024] KECPT 904 (KLR)

Macharia & 3 others v Ngung’u (Tribunal Case 391/E504 of 2022) [2024] KECPT 904 (KLR) (30 May 2024) (Judgment)

Neutral citation: [2024] KECPT 904 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 391/E504 of 2022

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

May 30, 2024

Between

Gatundi Macharia

1st Claimant

Muthoni Mbae

2nd Claimant

Elizabeth Muthoni

3rd Claimant

Georgina Mueni

4th Claimant

and

Dickson Ngung’u

Respondent

Judgment

1. The Claimants and the Respondent are members of Mhasibu Sacco, and at some point, the Respondent approached the Claimants to guarantee him a loan which he serviced leaving a balance of Kshs 1,048,952. 00/=

2. To recover the unpaid balance, Mhasibu Sacco deducted the deposits of the Respondent’s guarantors as follows.i.Gatundu Macharia - Kshs 343,753/=ii.Muthoni mbae - Kshs 343,753/=iii.Elizabeth muthoni - Kshs 258,319/=iv.Georgina Mueni - Kshs 103,126/=Total -Kshs 1,048,952/=The deducted deposits remaining unpaid, the Claimants on 5th July, 2022 filed this case to recover their deposits.

3. The Respondent filed his Statement of Defence on 26th July, 2022 stating among others that:i.He was granted a financial facility of Kshs 1,572, 000/= which was secured by his Sacco deposits, shares and annual insurance deductions made from his deposits.ii.That the facility repayment period was 60 months and he made monthly payments of Kshs 25,000/= for a period of 15 months.iii.That the balance of the unpaid loan was deducted from his deposits.

4. At the hearing, evidence was produced to confirm that the Claimants had guaranteed the Respondent to a tune of Kshs 981,599. 21/= which was deducted by Mhasibu Sacco as follows:a.Gatundu Macharia - 321,835. 81/=b.Elizabeth muthoni - 241,376. 85/=c.Muthoni Mbae - 321,835. 81/=d.Georgina Mueni - 96,550. 74/=

5. We have looked at the pleadings, the Submissions by claimant dated 23. 1.2023 filed on 7. 2.2023 and evidence adduced at trial and the only question remaining for determination is as to whether the Respondent owes the Claimants.

Does the Respondent Owe the Claimants? 6. It is settled law that guarantors are entitled to relief once they have settled the amounts owing. Guarantors right to relief once they have settled the arrears owing accrues from the relationship created by the guarantee. In Nairobi HCCC No 573 of2011 (Talewa Road Constructors Limited &anotherv Jamii Bora Charitable Trust &another) it was the courts position that parties should not benefit from breaches as they are bound by the terms of the contract they entered into.

7. In this particular case, it is not in doubt that the Claimants guaranteed the Respondent and to what tune. It is also not in doubt that when the Respondent failed to pay the outstanding loan arrears, the creditor (Mhasibu) deducted the arrears from the Claimants deposits in line with the terms of the loan agreement. It’s only logical that the Respondent reimburse the Claimants their deposits that were deducted to offset the loan that he took.

Final Orders.i.Judgment is entered in favour of claimant against respondent for Kshs 981,599/= plus costs and interests.

JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 30TH DAY OF MAY, 2024. Hon. J. Mwatsama - Deputy Chairperson Signed 30. 5.2024Hon. Beatrice Sawe - Member Signed 30. 5.2024Hon. Fridah Lotuiya - Member Signed 30. 5.2024Hon. Philip Gichuki - Member Signed 30. 5.2024Hon. Michael Chesikaw - Member Signed 30. 5.2024Hon. Paul Aol - Member Signed 30. 5.2024Tribunal Clerk JonahKayura advocate for the ClaimantBedan Njeri & company advocate for Respondent- No appearance.Hon. J. Mwatsama Deputy Chairperson Signed 30. 5.2024