Owadho & others v Stima Sacco Society Limited & another [2025] KECPT 307 (KLR)

Owadho & others v Stima Sacco Society Limited & another (Tribunal Case 666/E778 of 2022) [2025] KECPT 307 (KLR) (29 May 2025) (Judgment)

Neutral citation: [2025] KECPT 307 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 666/E778 of 2022

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

May 29, 2025

Between

Timothy AO Owadho & others

Claimant

and

Stima Sacco Society Limited

1st Respondent

Eragae Etopojo Samuel

2nd Respondent

Judgment

1. This judgement originates from a statement of Claim and a Notice of Motion dated 12th August 2022 which was filed on 23/8/2022. The Claim contained nine (a) Claimants who nominated one Mr. Benjamin Mutisya Kimata to plead on behalf of the guarantors.

2. These Claimants sought judgement against the Respondent for:a.Spentb.Costs of this claimc.Any other or further relief that the Tribunal deems fit and just to grant.The Notice of Motion was anchored under 40&51 c 3,4 &10(2) of the civil procedure Rules, section 1A,1B and 3A of the civil procedure Act.

3. In support of the Claimant, The Claimants filed an authority to plead and swear a Verifying Affidavit, List of Witnesses and a List of Documents exhibits marked no.1-6.

4. Service of Summons together with the Claimants’ documents were served upon the Respondents by one Mr. Andrew k. Mwanzia who is a court process server.

5. On 13/10/2022 ,the Tribunal considered the Claimant Notice of Motion application and ordered as follows:i.That the application dated 12/8/22 to be held in abeyance to pave way for the hearing of the main suitii.That no deductions are to be made by the 1st Respondent pending hearing and determination of the suitiii.That respondents to file and serve their statements of Defence, witness statements and List of Documents to be used at trial within 21 days from today.iv.Mention for pre-trial directions on 18. 1.2023. v.Tentative hearing date on 20. 2.2023.

6. In the meantime, the 1st Respondent filed a Memorandum of Response dated 3/10/2022 on 12//10/2022 and denied the claim of the Claimants.In furtherance of the defence Susan m. Mutali, the legal officered the 1st Respondent provided a chronology of events from the time the 2nd Respondent borrowed a premium loan of KSHS 3,000,000/-The 1st Respondent attached a list of documents which included the Loan Application Form, the 1st notice of demand and the 2nd notice of demand together with the witness statement of Donald Owuor who is the Legal Officers of the 1st Respondent.In the Tribunal records, there is no response or defence from the 2nd respondent. During Pre-Trial Directions held on 22/10/2024, the 2nd respondent claimed he was not served with the claimant’s pleadings which was denied by Musau advocate acting for the claimants.Promptly the tribunal made the following orders:“The application by the 2nd Respondent by the 2nd respondent today is a delaying tactic. Equity aids the diligent.Having not complied with the orders of the tribunal to file and serve his responses despite having sufficient time the 2nd respondent can only blame himself for not acting to defending his rights.The tribunal therefore declined his application to be served with the pleadings”.The matter therefore proceeded on hearing

Claimant Case 7. The 1st Claimant witness to testify was on Mr. Timothy Aggrey Obotho Owadho working as a technician in KP& C. He adopted his witness statement dated 16/5/2023 wherein he had stated that he guaranteed Kshs 1,000,000/= not Kshs.3,000,000/=.Other Claimants who testified such as Khadija Yunis stated that the 2nd respondent resigned from the company after taking the loan and went ahead to default.The claimants stated that they guaranteed KShs 1. 0m but the 2nd Respondent was granted KShs 3. 0mFurther, the Claimant blamed the 1st Respondent for allowing the 2nd Respondent to withdraw all his deposits in the account without carrying out due diligence regarding the loan taken.It was the testimony

1st Respondent Case 8. Mr Donald Owuor testified that guarantors signed the loan application form for the 2nd respondent voluntary.He stated that when loan is being processed through the system, it sends notifications to the guarantors to accept or decline.The 2nd Respondent applied for a Loan of KShs 3. 0M and the loan application form was produced by the 2nd RespondentThe loan was approved and disbursed appropriate

2nd Respondent case 9. The 2nd respondent gave oral testimony that he does not dispute that he was loaned KShs 3,0million by the 1st respondent upon the guarantors of the claimantHe stated that he made a standing order of Kshs 100,000/=for payment of the loan. when he resigned from kpl&c he wrote to the 1st Respondent and proposed to continue to repay the loan at the rate of Kshs 100,000/= per month but the Sacco wanted 300,000/=per month. He confirmed that he had advised the 1st Respondent not to disturb his guarantors because he is capable of handling the matter.

Analysis 10. The facts in this case speak for themselves because the Loanee who is the 2nd respondent is ready and willing to service his loan.We note that during hearing and upon cross examination, the 2nd respondent confirmThat when he resigned he informed the 1st Respondent. he further confirmed that he obtained the loan from the 1st Respondent and the claimants were his guarantors.

11. Considering the prayers of the claimants in the NOM application dated 12/08/2022We are persuaded that since the 2nd respondent has testified himself and confirmed that he is willing and capable of repaying his loan, we do not see the reason why temporary injunction dated 13/10/2022 earlier granted cannot be made permanent.It is therefore our finding that the 1st respondent be permanently restrained from attaching the salary or shares of the guarantors in satisfaction of the 2nd Respondent outstanding loan.The 2nd respondent confirmed that when left employment, he went to start a security and consultancy firm.at the same town he stated that he needed time to speak to the 1st respondent to allow him to continue repaying his loan after all he is still a member of the Sacco.

12. Finally in conclusion it is our finding that the 1st Respondent should hold a meeting with 2nd respondent and agree on how and how much the 2nd Respondent should pay monthly without threatening the guarantors with attachment of salary.We further find that the 1st Respondent is quick to recover from the guarantors rather than pursuing the loanee. In the instant case the loanee is willing and ready to pay his loan.

13. To this end we have considered the evidence on record and the oral testimonies of the parties and enter judgement in favour of the Claimants against the 1st & 2nd Respondents and order that the 1st Respondent should stop any intended plan to attach the Claimant salaries and instead pursue the 2nd Respondent for the recovery of the loan.The cost of this suit shall be borne by the 1st Respondent.Judgement is entered in favour of Claimant against Respondent and we order :a.. 1st Respondent to stop any attachment or deduction of claimant salaries and pursue the 2nd Respondent for recovery of the loan.b.Costs to be Borne by the 1st Respondent

JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 29TH DAY OF MAY, 2025. HON. B. KIMEMIA - CHAIRPERSON SIGNED 29. 5.2025HON. J. MWATSAMA - DEPUTY CHAIRPERSON SIGNED 29. 5.2025HON. BEATRICE SAWE - MEMBER SIGNED 29. 5.2025HON. FRIDAH LOTUIYA - MEMBER SIGNED 29. 5.2025HON. PHILIP GICHUKI - MEMBER SIGNED 29. 5.2025HON. P. AOL - MEMBER SIGNED 29. 5.2025Tribunal Clerk MutaiMs. Oginda advocate for the 1st RespondentFred Musyimi advocate for Claimant – No appearanceHon. J. Mwatsama Deputy Chairperson Signed 29. 5.2025