Orient Sacco Society Ltd v Wanjeru [2023] KECPT 838 (KLR)

Orient Sacco Society Ltd v Wanjeru (Tribunal Case 30 of 2021) [2023] KECPT 838 (KLR) (31 August 2023) (Judgment)

Neutral citation: [2023] KECPT 838 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 30 of 2021

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

August 31, 2023

Between

Orient Sacco Society Ltd

Claimant

and

Jane Wangari Wanjeru

Respondent

Judgment

Claimant’s Case. 1. The Claimant’s case is contained in the Statement of Claim dated 18th January 2021. The Claimant advanced the Respondent two loans of Kshs.460,350/=Personal loan disbursed on 26. 6.14 and Kshs.1,400,000/= staff loan disbursed on 4. 7.15.

2. As per the Loan Agreement the Respondent was to pay Kshs.8,032. 27/= and Kshs.19,938. 15/= for the two loans respectively.

3. The Claimants states that the Respondent has refused to repay the loans despite demand letters and notice.The Claimant prays for judgement against the Respondent for;a.The total loan amount of Kshs 2,537,071. 30/=b.Cost of the suitc.Interest on (a) and (b)d.Any other order that the Honourable Tribunal may deem fit to grant in the circumstances.

Respondent’s Case. 4. The Respondent’s case is contained in the Respondent’s Statement of Defence dated 23. 3.23. The Respondent denies owing the Claimant the loans as claimed by the Claimant. The Respondent avers that this matter was raised before Hon. Justice Nzioka wa Makau in Nyeri ELRC No. 414 of 2017 but admits jurisdiction of this court. The Respondent prays that the Claimant’s case against her be dismissed with costs.

Claimant Findings. 5. During the hearing of the case on 15/2/23 the Claimant witness Mr. Joseph Kinuthia Kiragu who is also the Chairman of the Claimant in his statement of 18/1/21 and his list of documents of 18/1/21 confirm that the Claimant advanced Kshs. 2,537,071. 30/= in two loans. For the Kshs. 460,350/= personal loan, the Claimant witness confirmed on cross examination that the loan application form has not been produced in court.

6. The Claimant admits that the Respondent was advanced Kshs. 1,400,000/= with her salary as security and an interest rate of 5% for 7 years.

8. The Claimant witness confirmed that the Respondent’s service with the Claimant was terminated and that this action was challenged in court and the outcome was that she was terminated instantly.

9. He explained that the amount of Kshs. 2,537,071. 30/= in the sum total of the two loans advanced to the Respondent. On the variation of interest loan, the Claimant witness confirmed that it was communicated to the Respondent vide a letter, which was not produced in court.

Respondent. 10. The Respondent Jane Wangari Wanjeru in her Witness Statement dated 30. 1.21 and her list of documents dated 30. 1.21 avers that she took only one loan of Kshs. 1,400,000/=. She stated that a staff could not qualify for two loans at the same time. She confirms that the repayment stopped from 13. 3.17 when she left employment with the Claimant.

11. In their Written Submissions, the Claimant confirm that there was a loan agreement with the Respondent. The Claimant reiterates that in 2014 the Respondent took a new personal loan of Kshs. 460,350/= and a new staff loan of Kshs. 750,000/= in 2015, the Respondent took a new staff loan of Kshs. 1,400,000/=.“on the Kshs. 2,537,071. 30 claim, the details are hereinafter.a.Personal loan Kshs. 295,382. 87b.Personal loan interest Kshs. 288,145. 18c.Staff loan balance Kshs. 1,280,700. 50d.Staff loan interest Kshs 672,842. 74Total 2,537,071. 30

12. The Claimant avers that the claimed amount is partially admitted by the Respondent: on the Respondent’s Counterclaim. The Claimant asserts that it is not based on any known legal concept and hence denied.

Respondent’s Counter Claim 13. The Respondent filed a Counter Claim dated 15. 6.2021. In this Counter Claim, the Respondent states that she met her loan obligations upto March 2017 when she was unlawfully terminated.

14. She confirms the loan agreement for Kshs. 1,400,000/= at 5% for the period of the loan she avers that the security of the Kshs. 1,400,000/= was her salary. The Respondent was to be bonded for the term of the loan.

15. She avers that the Claimant in total breach of the bonding agreement terminated her service leaving her in distress and culminating ELRC Case No. 414 of 2017.

16. That the Respondent states that she is ready to continue with the agreed loan repayment if the employment were to be reinstated. The Respondent claims that at the time of her termination her loan balance was Kshs. 834,243/=.The Respondent prays for Judgment against the Claimant for;a.A declaration that the loan repayment by the Respondent should resume as at the date of the unlawful termination of the employment contract by the Claimant.b.A declaration that the total outstanding loan balance is Kshs. 824,243/=c.Reinstatement of the terms of the loan agreement between the Claimant and the Respondent.d.Reinstatement of the Respondent to her position within the Claimant institution.e.Cost and interests of the suit.f.Any other reliefs that this Honourable court deems fit to grant.

Claimants Response to Respondents Counter Claim. 17. The Claimant denies that the Respondent met her loan repayment obligations. The Claimant confirms Kshs. 1. 400. 000/= given in the year 2015 but denies that the security of this loan was Respondent’s salary.

18. The Claimant confirms that the Respondent was to be bonded to the Claimant Institution for the period of the loan.

19. The Claimant denies that the Employment Court Case No 414 of 2017 has a bearing on this matter. The Claimant alleges that the Respondent cannot abide by the initial loan terms since she is gainfully employed elsewhere. The Claimant reiterates that the loan balance owed by the Respondent to the Claimant is Kshs. 2,537,071. Finally the claim prays that the Respondent’s counter claim is struck out with costs.

Findings on the Counter Claim. 20. We find that the issue of the Kshs. 1,400,000/= loan balance is not in contention. The loan agreement for the Kshs. 1,400,000/= indicates loan interest of 5% as stated by the Respondent but denied by the Claimant. Both parties are in agreement that the Respondent was to be bonded with the Claimant Institution for the period of the loan. The Claimant denies that the ELRC Case No. 414 of 2017 has any bearing in this case.

21. The Respondent avers that loan balance at the time of her dismissal was Kshs.834,243/= against the Claimant’s position of Kshs. 2,534,071/=.

Conclusion. 22. In view of the above findings, we order hereunder;a.A declaration that the loan repayment by the Respondent should resume as at the date of the unlawful termination of the employment contract by the Claimant is not granted.b.A declaration that the total outstanding loan balance is Kshs. 1,400,000/=.c.Loan Interest 5% upto 21. 11. 2018. d.Reinstatement of the Respondent to her position within the Claimant institution not granted.e.Each party to bear own costs.

23. Prior to her termination she was repaying Kshs.20,000/= per loan. She Claims that her loan was a salary guaranteed loan. She reiterates that she had one loan of Kshs, 1,400,000/= since she had cleared an earlier one of Kshs. 600,000/=

24. She stated that she was awarded Kshs. 448,000/= by the employment court but did not use the money to clear the loan.

25. In the Respondent’s Written Submissions, the Respondent admits receiving Kshs. 1,400,000/= loan to be repaid in 72 monthly installments at Kshs.20,000/= per month and an interest of 5%.

26. The Respondent notes the conflicted figures given by the Claimant with respect to loans given to the Respondent. The Respondent asserts that she would not have been given the Kshs. 1,400,000/= loan if she had an uncleared loan.

27. The Respondent maintain that the 5% interest in the loan agreement form was for the entire amount. The Respondent avers that the Claimant arbitrary changed the interest rate from 5% to 18%, contrary to the loan agreement form.

Conclusion 28. We find that both parties are in agreement on the outstanding Kshs. 1,400,000/= loan owed by the Respondent to the Claimant. We also find that the Claimant erred in applying the 18% interest on the loan without taking into account the judgement of the Employment Court suit no.414 of 2017, Nyeri where it was decided in her favour. Her suit was seeking determination on Respondent’s wrongful unfair termination by the Claimant.In view of the above findings this court orders;a.In favour of Claimant for Kshs. 1,400,000/=b.Each party to pay own costs.c.Interest at 5% upto 21. 11. 18(date of judgement of suit ELRC No. 414 of 2017

JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 31ST DAY OF AUGUST, 2023. HON. BEATRICE KIMEMIA CHAIRPERSON SIGNED 31. 8.2023HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 31. 8.2023HON. BEATRICE SAWE MEMBER SIGNED 31. 8.2023HON. FRIDAH LOTUIYA MEMBER SIGNED 31. 8.2023HON. PHILIP GICHUKI MEMBER SIGNED 31. 8.2023HON. MICHAEL CHESIKAW MEMBER SIGNED 31. 8.2023HON. PAUL AOL MEMBER SIGNED 31. 8.2023TRIBUNAL CLERK JEMIMAHMr. Gichabi advocate holding brief for Limo for the Claimant.Mr. Kiongera for the RespondentsJudgment as read out on 31. 8.2023. Kiongera advocate : We pray for 30 days stay of execution.Gichabi advocate- We pray that the 30 days be reduced.Tribunal order: 21 days stay of execution granted to Respondent.