Mikamati v Sacco & 2 others [2025] KECPT 357 (KLR)

Mikamati v Sacco & 2 others (Tribunal Case 484/E288 of 2021) [2025] KECPT 357 (KLR) (26 June 2025) (Judgment)

Neutral citation: [2025] KECPT 357 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 484/E288 of 2021

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

June 26, 2025

Between

Reuben Kinyua Mikamati

Claimant

and

Solution Sacco

1st Respondent

Viewline Auctioneers

2nd Respondent

Kairiria Munoru t/a K.K. Mоtоrs

3rd Respondent

Judgment

1. This case is instituted vide Statement of Claim dated 28/10/2021 wherein the Claimant prays for release of motor vehicle registration No. KBC 431G, loss of user and costs as whereof of the suit.

2. The Claimant has filed a Witness Statement dated 28/10/2021 in support of his claim.

3. The suit revolves around 18 hours 2 Minutes advanced to the Claimant on or about 11/02/2016 to be secured by motor vehicles his shares and the guarantors.

4. He states that the loan was to be repaid in 48 months.

5He states that on 16/03/2020 the Respondent instituted the auctioneers to repossess the Claimant’s motor vehicle No. KBC 431G in violation of the loan agreement.

6. He states that as at the date of his statement, the Respondent had already repossessed the suit vehicle.

7. He avers that the Respondent has refused to surrender the suit motor vehicle despite demand letter.

8. Again, he prays for release of the suit motor vehicle No. 431G as cost of this suit.

9. The Claimant has filed documents vide letter dated 28/10/2021 which include the loan agreement, 1st Respondent Credit Policy, Demand Letter among others.

10. The Claimants Case came up for Hearing on 06/11/24 wherein. The Claimant adopted his Statement as evidence in Chief.

11. The Claimant admitted getting loan of Kshs. 2,000,000 whose security was his shares.

12. He admitted defaulting in the loan repayment but denied his car KBC 3319 was a loan security. He stated that his vehicle was confiscated by the Respondent on 15/03/2020 without any documentation, occasioning him to go to Court but referenced to this Tribunal.

13. He stated that he uses his vehicle for transport earning Kshs. 10,000 per day but had filed no proof/evidence.

14. He averred that he had shares of Kshs. 500,000 with the 1st Respondent.

15. He admitted giving the logbook of the suit vehicle and not the vehicle.

16. He averred that the last repayment of loan was April 2020 where he repaid Kshs. 70,000/=.

17. He confessed not knowing about the counterclaim of Kshs. 3,200,000/=.

18. The Claimant averred he was ready to pay but on softer terms.

19. In his Written Submissions dated 13/01/2025, the Claimant maintains that the suit motor vehicle logbook was not voluntarily given to the Respondent claiming that the logbook was taken from the suit vehicle when he was illegally detained.

20. He further states that the suit vehicle was illegally detained by the Respondent since the Loan Agreement Form dated 11/02/2016 stipulated security as Claimant’s Shares in the Sacco and guarantors.

21. He avers that the detention of the vehicle was done without a court order or prior notice, contrary to the principles of natural justice.

22. As regards prayer on compensation, the Claimant alleges that he suffered losses and damages since the suit vehicle was not part of the loan society.

23. He avers that the detention of the suit vehicle affected his loan repayment as it was his only source of income.

24. He stated that he uses the suit vehicle as a transport vehicle at Kshs. 10,000/= per day.

25. He states that the Claim on loss of user is Kshs. 10,000/= per day for 1697 translating to Kshs. 16,970,000/=.

Respondent’s Case: 26. The Respondent’s Case is contained in the Response to Claim data 17/12/2021 wherein the Respondent prays for Kshs, 3,228,759. 57 plus interest accrued, among other prayers.

27. The Respondent Case is supported by the Respondent’s Witness Statement dated 17/12/2021 and documents filed on 17/12/2021.

28. The Respondent’s Case came up for Haring on 06/11/2024 where Mr. Martin Kimaita, a Credit Officer with the 1st Respondent adopted his Statement of 17/12/2021 as his evidence in Chief.

29. The witness stated that the security of the Claimant’s loan was Shares and Logbook and that the logbook meant the vehicle KBC 431G.

30He stated that the Claimant gave the vehicle logbook as transfer from to the Respondent.

31. He averred that the suit vehicle was not valued.

32. He explained that the Claimant was not on check hence the need to have the vehicle as security.

33. He admitted that the suit vehicle was in good condition and is on a lien.

34. In their Written Submissions dated 04/02/2025, the Respondent restated that the Claimant had Kshs. 500,000 savings and was granted Kshs. 2,000,000/= loan repayable in 48 months and guaranteed by his savings and vehicle KBC 431G whose logbook he gave to the Respondent to hold as lien for the loan repayment.

35. He further states that the Claimant fell into arrears almost immediately and that the arrears stood at Kshs. 3,228,759. 57 as at 28/10/2021.

36. The Respondent states that due to the confirmed refusal to repay the outstanding loan, they were compelled to exercise its right over the security held which was the suit motor vehicle KBC 431G which is attachment.

37. The Respondent avers that the Claimant has been accorded many opportunities to repay his loan including the offer to substitute the security by the Claimant offering parcel No. Amwathi/Maua/14769 in exchange of the vehicle.

38. This offer was not pursued by the Claimant.

39. The Respondent restated that the Claimant offered the logbook for KBC 431G to be used as collateral for his loan.

40. The Respondent admits repressing vehicle KBC 431G despite having not perfected the security.

Analysis: 41. The Tribunal is invited to determine the following issues: 1. Aid the Claimant default in his loan repayment

2. Was the suit vehicle KBC 431G offered as security for the Claimant’s loan

3. Was the suit vehicle KBC 431G lawfully repressed by the 1st Respondent as a security to the Claimant’s Loan.

4. Over the Claimant question for loss of user.

5. Who bears the costs of the suit?

42. We note that the Claimant has admitted being granted a loan by the 1st Respondent and that he defaulted in his repayment of the loan. The 1st Respondent which he defaulted but consistently states that he is ready to repay. The sort of this suit is the motor vehicle KBC 431G security for the defaulted loan.

43. As regards the motor vehicle KBC 431G being a security for the Claimant’s loan, we find that there is no evidence to that effect.

44. In fact, the only reference to a motor vehicle being a security to the Claimant’s loan is a writing “logbook security” and signed against it presumed by the Claimant in part 6 of the Claimant’s loan agreement form.

45. The loan application form being a contract between the Claimant and the 1st Respondent showed the explicit and showed have included the particulars of the vehicle being offered as security for the loan.

46. As regards Claimant defaulted on his loan, this has not been denied by either party.

47. It is this Tribunal’s portion that the suit motor vehicle KBC 431G was not offered as a security for the Claimant’s loan.

48. As concerns the repossession of KBC 431G by the Respondent, we find that given that this motor vehicle was not a security for the Claimant’s loan, then its repossession by the 1st Respondent is unlawful.

49. It has been admitted by the 1st Respondent that indeed the vehicle KBC 431G is in their possession.

50. The 1st Respondent admitted during cross examination that the security perfection requirements for the vehicle KBC 431G were not fully followed as per the 1st Respondent policy on loans security.

51. On the Claim for loss of user, the Claimant avers that the detention of his vehicle KBC 431G by the 1st Respondent affected him economically occasioning his loan defaulting and loss of earnings from the vehicle.

52. He alleges that prior to the detention of the vehicle he used to transport building materials from Nkubu to Maua and Isiolo to Maua at Kshs. 5,000/= per trip amounting to Kshs. 10,000/= per day.

53. The Claimant argues that due to unlawful detention of his vehicle by the 1st Respondent he suffered loss of business and livelihood for 1697 days at Kshs. 10,000/= resulting to a total Claim of Kshs. 16,970,000/=.

54. We agree with the Claimant that he must have suffered loss of business due to the unlawful detention of his vehicle but note that the amount prayed for is on the higher side. We have considered the amount prayed for and are in agreement that the vehicle could not have been on duty seven days a week for the entire period of detention.

55. We have therefore agreed to compensate the Claimant for 3 days a week at Kshs. 7000/= per day for the period April 2020 to the date of this Judgment.

Conclusion: 56. In view of the foregoing this Tribunal orders the following:a.1st Respondent to release motor vehicle KBC 431G to the Claimant within 14 days from the date of this Judgment.b.1st Respondent to pay Claimant damages for loss of user calculated as follows:Rate per day Kshs. 7,000 for 3 days in a week 112 days in a month.Total months= 62Total payable to the Claimant by the 1st Respondent = Kshs. 5,208,000c.Cost of suit to the Claimant.

Counter Claim: 57. This Counter Claim is contained in 1st and 2nd Respondent’s Response to the Claim dated 17/12/2021.

58. The Counter Claim is for Kshs. 3,228,759. 57/= plus interest accrued thereon as for the loan agreement from 20/10/2021 until payment in full among others.

59. We observe that the amount of Counter Claim is supported by the Respondent’s Documents filed on 17/12/2021 wherein the Claimant was granted Kshs. 2,000,000/= repayable in 48 months but which was defaulted thereafter.

60. The Claimant has severally admitted the loan granted and the defaulting of the same loan.

61. The Claimant has also stated that he is ready to repay his defaulted loan but insists that the repayment period is 4 years which was not over by the time of filing this suit.

62. In view of the fact that the Claimant has undertaken to continue repaying his defaulted loan and that the 1st Respondent has filed Claimant’s Statement as at 23/10/2021 showing a loan balance of Kshs. 3,228,759. 57/=, this Tribunal is satisfied that the Counter Claim is merited and hereby order the following:a.Claimant to repay defaulted loan to the 1st Respondent amounting to Kshs. 3,288,759. 57/=.b.1st Respondent to pay storage charge for motor vehicle KBC 431G.

Upshot: 1. Judgment is entered in favor of Claimant against Respondent In the following terms:a.Release of motor vehicle KBC 431G within 14 days.b.Loss of user – Kshs. 5,208,000/= as calculated as calculated clearly.c.Cost of suit.

2. For the Counter Claim Judgment is entered in favor of Respondents (Sacco) against the Claimant (member) for Kshs. 3,288,759. 57/= plus costs and interest with costs.

JUDGEMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 26TH DAY OF JUNE, 2025. HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 26 .6. 2025HON. BEATRICE SAWE MEMBER SIGNED 26 .6. 2025HON. FRIDAH LOTUIYA MEMBER SIGNED 26 .6. 2025HON. PHILIP GICHUKI MEMBER SIGNED 26 .6. 2025HON. MICHAEL CHESIKAW MEMBER SIGNED 26 .6. 2025HON. PAUL AOL MEMBER SIGNED 26 .6. 2025Tribunal Clerk A.GechikoMr. Marina Advocates holding brief for Gakami Advocate for the ClaimantKariuki Advocates for the 1st and 2nd RespondentsKariuki Advocates: We apply for Stay for Execution for damages for a period of 30 days.Mr. Maina Advocates: We do not oppose the Stay of Execution.Tribunal Orders:Stay of Execution granted for 30 days.HON. J. MWATSAMA – DEPUTY CHAIRPERSON SIGNED 26/06/2025