Nganyi v Wana-Anga Savings and Credit Co-operative Society Limited & 2 others [2025] KECPT 378 (KLR)

Nganyi v Wana-Anga Savings and Credit Co-operative Society Limited & 2 others (Tribunal Case 265/ E404 of 2023) [2025] KECPT 378 (KLR) (10 July 2025) (Judgment)

Neutral citation: [2025] KECPT 378 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 265/ E404 of 2023

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

July 10, 2025

Between

Walter Aswa Nganyi

Claimant

and

Wana-Anga Savings and Credit Co-operative Society Limited

1st Respondent

Nancy Wambui Mukuwa

2nd Respondent

Virginia Wangui Kuria

3rd Respondent

Judgment

1. The Claim herein was brought by the Claimant in the Tribunal vide the Statement of Claim dated 11th May, 2023, filed on 16th May, 2023. In his Statement of Claim, the Claimant seeks judgement jointly and severally for: -a.A permanent injunction restraining the 1st Respondent whether by itself, its directors, officers, employees, servants or agents, licensees from deducting or transferring the Claimant’s Applicant’s salary and pension towards repayment of the advanced loan to the 2nd and 3rd Respondents.b.An order that the 1st Respondent to immediately refund any and all amounts previously deducted from the Claimant towards repayment of the loans advanced to the 2nd and 3rd Respondents.c.This Honourable Tribunal to declare that the loan application and consequent loan(s) advanced to the 2nd and 3rd Respondents are null and void.d.This Honourable Tribunal to exercise it inherent jurisdiction to grant any further orders as it may deem fi and just in the circumstances.e.An order that the Claimant be awarded costs of the instant suit.

2. The Claimant ‘s Claim as per the Statement of Claim is that he and the 2nd and 3rd Respondents are members and/or subscribers of the 1st respondent. That the 2nd and 3rd Respondents in collusion with officials from the 1st Respondent fraudulently applied for the obtained loans of various sums from the 1st Respondent which loans were approved without the requisite due diligence and also in blatant breach of procedural requirements on account of forgeries of the Claimant’s signatures as guarantor to the said loans. That as a result of the aforesaid illegal actions, the 2nd and 3rd Respondents well knowing that the loans were illegally obtained have since defaulted on the same leading the Claimant to guarantee the said loans without having all the material facts within his knowledge. Further, the Claimant has stated particulars of fraud, collusion and misrepresentation against the 1st, 2nd and 3rd Respondent to wit: -a.That the purported signatures on the 2nd and 3rd Respondent loan application forms and guarantee forms do not belong to the claimant herein.b.That the 2nd and 3rd Respondents are not known nor do they have any relationship with the Claimant herein.c.That the 1st Respondents failed to undertake due diligence prior to approval of the loans herein.d.That there was blatant fundamental and illegal collusion as well as material misrepresentation of facts between the officials of the 1st Respondent and the 2nd and 3rd Respondent herein.

3. It is the Claimant’s averment that as a result of the aforesaid illegal and unlawful guarantee, the 1st Respondent has commenced deductions from the Claimant’s salary and pensions and the latter is apprehensive that such unlawful actions will continue unless halted by the tribunal. That the Claimant is not liable to pay any sums for the loan(s) as they were fraudulently and illegally obtained and any sums issued ought to be recovered from the 2nd and 3rd Respondents. That the Claimant has, through advocates issued a demand notice of intention to the 1st Respondent demanding that they cease any further deductions of the loan sums in vain.

4. In response to the Claimant’s claim, the Respondent filed on 6th June, 2023 a response dated 30th May, 2023, wherein it denies that there was a collusion between the 1st Respondent and its officials in obtaining loans as well as the particulars of fraud, collusions and misrepresentations thereunder.

5. The 1st Respondent further avers that the Claimant willingly chose to stand in as a guarantor for the loans advanced to the 2nd and 3rd Respondents via loan Application dated 18th June 2009 and 14th July, 2009 respectively. That the Claimant’s act of signing the guarantor forms constitute an undertaking on his part to reimburse the 1st Respondent in case of default by the 2nd and 3rd Respondents; that the 1st respondent advanced loans of Kshs. 500,000/= and Kshs. 120,000/= to the 2nd and 3rd Respondents respectively and the Claimant stood in as one of their guarantors for Kshs. 73,000/= and Kshs.60,000/= respectively. That the Claimant was duly notified of the 2nd and 3rd Respondent’s default and even commenced investigation to locate them in an effort to recover the outstanding loans from them. That the Claimant acknowledged and/or conceded to his guarantor ship status and is an abuse of the process of the Tribunal; That the Claimant has not come to the Tribunal with clean hands and is therefore not deserving of the reliefs sought in his claim; That the Claimant is aware of his obligation as a guarantor of the 2nd and 3rd Respondent to the extent of engaging them on and went as far as commissioning private investigators to trace the physical whereabouts of the defaulters with a view to recover the full amounts in default. That the allegations of forgery are mere afterthought aimed at evading the Claimant’s responsibility as a guarantor. That the Claimant’s suit is dubious, vexatious, devoid of merit, tainted with untruths/falsehoods payment of their outstanding loans owed to the 1st Respondent. That in the alternative if any deductions were made, the same was done in good faith and an effort to recover the loaned sums, as efforts to realize the security from the 2nd and 3rd Respondents had proved futile. That the 1st Respondent would at the hearing that at all material times it acted with professional skill, good faith and expertise, in accordance with requisite statutory laws and standards as set out by its profession without bias or malice.

6. The 1st Respondent consequently prays that the Claimant’s suit be dismissed with costs.

7. The 2nd and 3rd Respondents failed to enter appearance and file Defence within the stipulated period and the Claimant on 6/11/2023 obtained Interlocutory Judgement against the 2nd and 3rd Respondents on the basis of the request for judgement dated 16/6/2023.

Claimant’s Case. 8. The Claimant’s first witness, Claimant Witness 1, David Guto adduced sworn evidence at the hearing. Claimant Witness 1 stated that he is a forensic document examiner. That he received several documents from the Claimant’s advocates herein on 1st August, 2023, for verification of signatures. That the documents were A1, a loan Agreement number 13742, A2, a loan application form number 13106, documents marked B1 and B2 which are known signatures of the Claimant, documents marked C1 and C2 for specimen signatures of the Claimant. The witness stated that his job was to compare the signatures in A1 and A2, the agreements and ascertain if they were signed by the same person when compared to B1 and B2 and C1 and C2. That his opinion after examination was that the signatures do not share similar characteristics, meaning the documents A1 and A2 were not signed by the same person or by the Claimant.

9. The Witness produced in evidence and it was marked as Claimant’s exhibit 1.

10. On cross-examination, Claimant Witness 1 stated that though the specimen signatures were made over a span of 15 years, time lapse does not affect them as an individual’s writing characteristics do not change.

11. The Claimant Walter also adduced sworn evidence at the hearing as Claimant Witness 2 and produced his Witness Statement dated 11/5/2023 which he signed as his evidence in chief. He also produced in evidence the Claimant’s list of documents dated 11/5/2023 and marked the documents as Claimant’s exhibits 2-5 in the order in which they appear.

12. On Cross-examination, Claimant Witness 2 confirmed he was at the material time a member and is still a member number 1734 of the 1st Respondent for over 30 years. That he is familiar with the loan approval process of the 1st Respondent and he has procured loans from the Respondent. That guarantors’ signatures are mandatory for one to receive a loan.

13. Further, Claimant Witness 2 stated that the subject loans herein were taken by the 2nd and 3rd Respondents in the year 2009. That he was notified of the default in 2019 by the 1st Respondent. That he knew about the forgery in 2019. That he notified the 1st Respondent about the forgery but he was ignored. The Respondent did not respond immediately. That he also reported the matter to the Authorities and he was told it would be investigated. That he delayed to bring the matter to the Tribunal as it was not the only issue he was handling and he was sick and had undergone an operation. That he wrote letters to the 1st Respondent dated 8/11/2019, 26/10/2020 and 31/1/2022 as he needed to notify the 1st Respondent that the deductions were improper. That by writing the said letters, he was not undertaking duties of a guarantor. That he got in touch with the defaulters. That the signatures are not his as shown on the forensic report. That the 1st Respondent started making deductions in the year 2019 and the sum of Kshs. 106,000/= had been deducted as the date of hearing as per the 1st Respondent’s documents at page 14-20. That he was given the loan agreements by the 1st Respondent. That he had no control over the deductions but he wrote a letter in 2019. That he informed the 1st Respondent that he wanted to trace the defaulters.

14. On re-examination, the Claimant stated in his letters dated 27/2/2019 and 8/11/2019 he was protesting the deductions. That “I asked the 1st Respondent to investigate the forgery.” On clarification being sought by members of the Tribunal, the Claimant stated that he did not know about the loans until deductions were made. That he does not know the 2nd and 3rd Respondents. That he contracted the 1st Respondent and tried to reach Virginia Wangui but did not succeed.

Respondent’s Case. 15. The Respondent’s Witness, Respondent Witness 1, Vincent Otieno Rota, adduced sworn evidence on behalf of the 1st Respondent and stated that he is the Chief Executive Office of the 1st Respondent. That he has been the Chief Executive Officer since the year 2018. Respondent Witness 1 further stated that he filed a Witness Statement dated 30/5/2023 and wished to adopt it as his evidence in chief. He also produced the list of documents dated 30/5/2023 and as evidence and marked the documents therein as the document’s exhibit 1-11 in the order of appearance. The Witness further stated that the Claimant, 2nd Respondent and 3rd Respondents are members of the 1st Respondent. That Nancy Wambui the 2nd Respondent was granted a loan of Kshs 500,000/= while Virginia Wambui Kuria, the 3rd Respondent was granted a loan of Kshs. 120,000/=. That the procedure for loan Application is that the Applicant picks the loan form and looks for guarantors, then returns the form to the Sacco where the loans officer confirms the details thereof then the Approval officer gives remarks and reviews the credit officers comments and approves the loan. That as per the loan Application of the 2nd and 3rd Respondents, the Claimant was one of the guarantors. That the 2nd and 3rd Respondents defaulted in the year 2019. That the procedure upon default is that the guarantors and loanee are notified after 30 days of default. That between 30 and 60 days, guarantors are notified through messages and phone calls. That between 60 and 90 days, a reminder is sent out and thereafter deposits are deducted. That the 1st Respondent contacted the 2nd and 3rd Respondent and when they could not be reached, the Claimant was given their contacts. That he could not comment on whether the loan Application form of the 2nd and 3rd Respondents were signed by the Claimant as a guarantor or not. That the 1st Respondent had so far recovered Kshs 51,000/= and Kshs. 61,000/= for the 2nd and 3rd Respondent’s loans respectively from the Claimant. That he could not comment on the forensic report.

16. On Cross-examination, Respondent Witness 1 states that at no point does the guarantor interact with the 1st Respondent when guaranteeing a loan. That the 1st Respondent does not have a document officer and used the previous Application loan forms to compare to the Claimant’s signature. That when the loanees applied for the loans, the claimant was not notified. That by starting investigations, the Claimant implied he was a guarantor. That the borrowers do not sign the forms in the presence of Sacco officials.

17. On Re-examination, the Witness stated that the 1st Respondent was satisfied with the loan forms and guarantees of the 2nd and 3rd Respondent.

18. After the hearing, parties were directed to file Written Submissions in support of their cases.

19. The Claimant’s Submissions are dated 26th February, 2025, while the 1st Respondent’s Submissions are dated 13th March, 2025.

Analysis and Determination. 20. We have considered the pleadings of parties, the documents filed therewith and the Written Submissions and have one issue arising therefrom, that is; Whether or not the Claimant guaranteed the two loans granted to the 2nd and 3rd Respondent by the 1st Respondent.

21. It is not in dispute that the loans granted to the 2nd and 3rd Respondent by the 1st Respondent were approved on among other grounds, the procurement of suitable guarantors. Whereas the name of the Claimant appears among the names of guarantors on the two application forms, the Claimant maintains that he did not sign the said forms and that the signatures thereon purported to be his are not his signatures. It is trite that he who alleges must prove. In support of his case, the Claimant called as his witness a document expert who demonstrated vide the forensic report that the signature on the 2nd and 3rd Respondents’ loan application forms were not similar to the known and specimen signatures of the Claimant. A look at the demonstration of the document expert as well as the two application forms shows two different signatures, which as per the document expert are dissimilar in forensic terms. Respondent Witness 1 in his evidence, stated that the credit committee did not call the Claimant after the forms were signed. He did also state that the forms are signed elsewhere and brought to the Sacco for loan approval, and they don’t question the signatures. It is curious to us however, that the 1st Respondent approved the loans despite the difference in the purported signatures of the Claimant clearly appearing distinctly different even to the untrained eye. It is our finding that the Claimant has adduced sufficient evidence both documentary and oral, that he did not sign the loan agreement forms of the 2nd and 3rd Respondents herein as he did not sign the forms. We therefore find that the Claimant’s case is merited and he is entitled to the reliefs sought. Consequently, we are satisfied that the Claimant has proven his case against the Respondents to the required standard. We therefore hereby enter judgement in favour of the Claimant against the Respondents in terms of prayers (a), (b), (c) and (e) of the Statement of Claim.

JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 10TH DAY OF JULY, 2025. HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 10. 7.2025HON. BEATRICE SAWE MEMBER SIGNED 10. 7.2025HON. FRIDAH LOTUIYA MEMBER SIGNED 10. 7.2025HON. PHILIP GICHUKI MEMBER SIGNED 10. 7.2025HON. MICHAEL CHESIKAW MEMBER SIGNED 10. 7.2025HON. P. AOL MEMBER SIGNED 10. 7.2025Tribunal Clerk KokiJudgment delivered in the absence of parties.HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 10. 7.2025