Mwangi & others v Amica Credit Coop. Sacco Limited [2025] KECPT 198 (KLR)

Mwangi & others v Amica Credit Coop. Sacco Limited (Tribunal Case E706 of 2024) [2025] KECPT 198 (KLR) (27 March 2025) (Ruling)

Neutral citation: [2025] KECPT 198 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case E706 of 2024

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

March 27, 2025

Between

Tony Kinyua Mwangi & others

Claimant

and

Amica Credit Coop. Sacco Limited

Respondent

Ruling

1. Through a Notice of Motion Application dated 3rd September, 2024 the Claimants moved the tribunal and anchored their application under Order 40 Rule 1 and 1 of the Civil Procedure Rules, Rule II of Co-operative Tribunal (practice and procedure) Rules and section 104 of the Land Act Cap 280 Laws of Kenya seeking for the following orders:a.Spentb.Spentc.That a temporary injunction be and is hereby issued restraining the respondent whether by itself, its officers, employees, servants , agents or any other person claiming under it from howsoever advertising, selling by public auction or private treaty, offering for sale, taking possession of leasing, transferring or in any other manner whatsoever interfering with or adversely dealing with all the properties known as title numbers LTK/Kimana Tikondo/6418,6424,6425,6426,6427 and 6428, title number Ruiru/Ruiru East Block 2/18182 and Title Numbers Longonot /Kijabe Block 3/4691,4692 AND 4693 pending the hearing and determination of the suitd.Cost of the application to be provided for

2. In a Supporting Affidavit sworn by the 1st Claimant, he admitted under Paragraph 8 (i) (ii) and (iii) that he was aware that the Respondent caused the Claimant to create legal charges in its former owner Tittle LTK/Kimana Tikondo/6418 6424, 6425, 6426, 6427 and 6428 to serve repayment of Kshs. 1,560,000/= loan. Similar Title No. Ruiru/Ruiru East Block 2/18182 registered in the 1st Claimants name and the 2nd Respondent was charged to secure loan repayment to the 1st Claimant

3. Finally, Title Number Longonot/Kijabe Block 3/4691, 4692 & 4693 which were registered in the name of the 3rd Claimant was cleared on 29/06/2022 to serve the repayment of Kshs. 2,550,000/= loan granted to the 1st Claimant, although the Claimant averred that there was no legal charge created over the tittles.

4. However, the 1st Claimant state that if the legal charge were validly created, the statutory powers of the Respondent to enforce their right through the attachment and auction of the charged property to recover the defaulted loan amounting to Kshs. 7,361,580. 93/= is wrongly exercised.

5. Before the Respondents filed their responses dated 14/11/2024 in answer to the averments in the Notice of Motion application, the Tribunal granted an order of temporary injunction to restrain the Respondents from auctioning the Claimants listed plots pending mention of the suit on 5/11/2024.

6. On 5/11/2024 the Tribunal granted 14 days leave to the Respondents to file and serve their responses regarding the Claimants Notice of Motion application. In their 41 paragraph responses, the Respondent answered with precision each__ and every contention made by the Claimant. In support of the explanations given the Respondents attached the letter of offer dated 7/2/2022, the charge over Tittle Number LTK/Kimana Tikondo/6418, 6424, 6425, 6426 6427 and 6428 as security of Kshs. 1,560,000/= Another charge over Title No. Ruiru/Ruiru East Block 2/18182AS Security for Kshs. 3,000,000/= Title Number Longonot/Kijabe Block 3/4691, 4692 & 4693 as security for Kshs. 2,550,000/=

7. A letter of offer for additional loan facility for Kshs. 1,400,00/= dated 9/11/2022 is also attached in the Respondents bundle of documents.

8. Further the Respondent filed copies of a 90 days’ statutory notice dated 15/2/2024 addressed to the 1st Claimant over the properties registered and charged in his name. on the same note a40 days statutory notice as attached to the Respondent bundle of document which was issued to the 1st Claimant vide a letter dated 16/5/2024 on the Charge over property registered in their joint names. While another 40 days’ statutory notice was also attached which was addressed to the 3rd Claimant over the Charge registered on the properties registered in his name.

9. To conclude the process, the Respondents wrote to the 1st Claimant on the 2nd July, 2024 about their intention to engage registered auctioneers to enforce their rights under the legal charges on the properties detailed.

10. It is the attachment of the properties by M/S Watts Auctioneers through the attachment notice dated 24/4/2024 addressed to the borrower and the charges that made the Claimants file the instant application.

Analysis 11. With this background, it is not in doubt that the 1st Claimant is a member of the Respondent. It is further not in doubt that the 1st Claimant borrowed and was granted loans by the Respondent on different occasion which was served by different plots/land with tittles registered differently in their names either individually or jointly.

12. It is undisputed fact that the different tittles were charged and entries were made on 10/6/2022 and 29/6/2022 on the tittles as proof that the interest in those tittles were now available to the Respondents.

13. With those facts projected by the Claimant and the Respondent herein, we have isolated the following issues for determinationa.Whether the 2nd and the 3rd Claimants are proper before this Tribunal?b.Whether the Claimants are entitled to the temporary injunction as prayed pending hearing and determination of this suit.c.Costs

14. Whether the 2nd and the 3rd Claimants are proper before the Tribunal Co-operative Societies and Sacco’s in Kenya are governed and regulated by the Co-operative Societies Act Cap 49 Laws of Kenya and Sacco Societies Act No.14 of 2008

15. Section 76 of the Co-operative Societies Act provides the categories of persons or entities of much the Tribunal may hear and determine their disputes.

16. For clarity, we quote the section 76 as follows:i.If any dispute concerning the business of a Cooperatives Society arisesa.Among members, past members and persons claiming through membersb.Between members, part members or deceases members and the society, its committee or any officer of the Society orc.Between the society and any other Co-operative Society

17. Since the boundaries of the Tribunal have been set as to who approaches the Tribunal as a Claimant or a Respondent. We have not read anymore or seen any evidence provided by the Claimant that the 2nd and the 3rd Claimants are members of the Respondent. Nowhere in the Statement of Claim dated 3/9/2024 or the Supporting Affidavit of the Claimant does he mention that the 2nd and the 3rd Claimants are members of the Respondents plead under Paragraph 4 of their Replying Affidavit dated 1/11/2024 that the 1st Claimant while the 3rd Claimant is a registered charger.

18. Given that the Tribunal is supposed to hear and determine cases of the parties enumerated under section 76 of the Co-operatives Societies Act, it is our finding that the Claim of the 2nd and 3rd Claimants in the instant application do not lie in the Tribunal but lies in other Courts of Law with proper jurisdiction. In other words, the Tribunal does not have jurisdiction to entertain matters brought by parties who are not members of Co-operatives Societies or Sacco’s.

19. On this basis, we order that the 1st Claimant put his documents in order or provide evidence occurrence with the Respondents that the 2nd and the 3rd Claimants are members of the Respondent.

b) Whether the Claimant is entitled to the temporary injunction as prayed pending hearing and determination of this suit. 20. Clause 10. 2 of the Charge over Tittle Number LTK/Kimana Tikondo/6418, 6424, 6425, 6426 6427 and 6428 it provides that:“before exercising the power to sell the charged property, the lender shall serve a notice on chargor to sell(with copy to such persons as are prescribed by section 96 (3) of the Land (Act) and shall not proceed to complete any contract for the sale of the charged property until atleast forty days (40) days have elapsed from the date the service of such notice’’

21. It is this clause that the Claimant has raised an issue of invalidity and defectiveness as one of the grounds under clause (iv) in the Notice of Motion

22. The Tribunal notes that the Claimants are apprehensive of the suit properties was conducted or in accordance with section 97 (2) of the Land Act before the engagement of the auctioneers. We note that the Respondents did not file any valuation schedule to alley the fears.

23. Because the 1st Claimant has not shown (how he paid the loan (if any) and that the loan is still outstanding, it is prudent for the 1st Claimant to repay the loan as per the contractual obligations thus created.

24. In the interest of justice and to grant a little bit of reprieve to the 1st Claimant to liase with the Respondents with a view to negotiate and agree on the payment plan. The Tribunal confirms order 3 of this Tribunal issued on 5th September, 2024

25. In conclusion, we make the following orders regarding the Notice of motion application dated 3/9/2024. 1.Prayer 1 – Spent2. Prayer 2 – Spent3. Prayer 3 – That a temporary injunction is hereby issued restraining the respondent whether by itself, its officers, employees, servants , agents or any other person claiming under it from howsoever advertising, selling by public auction or private treaty, offering for sale, taking possession of leasing, transferring or in any other manner whatsoever interfering with or adversely dealing with all the properties known as title numbers LTK/Kimana Tikondo/6418,6424,6425,6426,6427 and 6428, title number Ruiru/Ruiru East Block 2/18182 and Title Numbers Longonot /kijabe Block 3/4691,4692 AND 4693 pending the hearing and determination of the suit.4. Mention for Pre-trial directions on 17. 9.2025

RULING SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 27TH DAY OF MARCH, 2025. Hon. B. Kimemia - Chairperson Signed 27. 3.2025Hon. J. Mwatsama - Deputy Chairperson Signed 27. 3.2025Hon. Beatrice Sawe - Member Signed 27. 3.2025Hon. Fridah Lotuiya - Member Signed 27. 3.2025Hon. Philip Gichuki - Member Signed 27. 3.2025Hon. Michael Chesikaw - Member Signed 27. 3.2025Tribunal Clerk JonahOmondi Advocate for the RespondentMutua Advocate for the Claimant.Hon. J. Mwatsama - Deputy Chairperson Signed 27. 3.2025