PCEA Ruiru Sacco Ltd v Muruja [2023] KECPT 732 (KLR)

PCEA Ruiru Sacco Ltd v Muruja (Tribunal Case E070 of 2021) [2023] KECPT 732 (KLR) (28 September 2023) (Judgment)

Neutral citation: [2023] KECPT 732 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case E070 of 2021

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

September 28, 2023

Between

PCEA Ruiru Sacco Ltd

Claimant

and

Ashford Gitonga Muruja

Respondent

Judgment

1. The matter for determination was brought via a Statement of Claim dated 06. 07. 2021 filed on the same date. In the Statement, the Claimant, a Sacco Society, averred to have advanced a loan of Kshs. 234,600/=; with a 12% per annum and a Kshs. 8,895/= monthly installments, to the respondent, a member of the Respondent. They prayed for the following:a.Kshs. 320,130/=b.Interest at 12% per annum on the above amount from 30th April until full repayment.c.Cost of the suit.

2. The Claimant also filed a Witness Statement dated 06. 07. 2021, of Edward Ngarega Gacheru, the Claimant’s Treasurer, reiterating the Statement of Claim. Attached was a list of documents including; payment voucher dated 21. 07. 2014, Statement of Accounts and a Demand Letter dated 5th March 2021.

3. Written submissions dated 5. 09. 2023 filed by the Claimant, indicated that an Interlocutory Judgement had been issued on 29. 11. 2022 and directions for the matter to be fixed for Formal Proof due to the amount of interest charged. In the submissions, the Claimant avers that the principal amount loaned to the Respondent was Kshs 320,130/=, the date when the loan became non-performing was 12. 07. 2019, when the principal sum was Kshs 257,143/=; and the interest being Kshs. 62,987/= to the date of filing the suit and there were no other expenses charged. There was an attempt to recover the outstanding amount through a Demand Letter dated 08. 03. 2021.

4. They also file a request for judgement dated 24. 10. 2022.

5. The Respondent did not enter appearance or file a Defence, despite sufficient service.

Issues for determination Whether the Respondent is indebted to the Claimant. 6. A Loan Application form marked MN4 produced by the Claimant, indicates in Paragraph 6, that an amount of Ksh 234,600/= was approved from the Kshs. 300,000/= applied by the Respondent. A loan issuing payment voucher dated 29. 04. 2021 and the Account Statement dated 29. 04. 2021, on 21. 07. 2017 a normal loan of Kshs 228,732/= was issued to the Respondent’s account.

7. With this, it is evident that in deed a loan of Kshs. 228,732/= was advanced to the Respondent.

To what extent is the respondent indebted 8. The Claimant admits that the Respondent did service the loan leaving a deficit of Kshs 257,143/=, when he defaulted on 12. 07. 2019 as per the Account Statement dated 29. 04. 2021.

9. In the case of Mugure & 2 others v Higher Education Loans Board (Petition E002 of 2021) [2022] KEHC 11951 (KLR), it was held that,Being of public interest, the in duplum rule will be applicable for those lending monies as it does to banks”

10. The same as well applies to the Claimant.

11. The Claimant charged interest on the outstanding amount since the date of the default 12. 07. 2019 to the date of filing of the suit 06. 07. 2021 which amounts to 2 years; and since interest was 12% per annum, and there were no other charges on the loan as indicated in the claimant’s written submissions, the interest amounts to Kshs 61,714. An amount that is does not contravene the In Duplum Rule under Section 44 of the Banking Act. The rule limits interest accrual to equal the principal amount outstanding when a loan becomes non-performing. The amount owed by the Respondent becomes Kshs 318,857/=.

Upshot 12. We find that the Claimant has proved the claim on a balance of probabilities and enter judgment in favour of the Claimant against the Respondent for Kshs. 318,857/= plus costs and interest on the claim at Tribunal rates from date of filing suit.

JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 28TH DAY OF SEPTEMBER, 2023. HON. BEATRICE KIMEMIA CHAIRPERSON SIGNED 28. 9.2023HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 28. 9.2023HON. BEATRICE SAWE MEMBER SIGNED 28. 9.2023HON. FRIDAH LOTUIYA MEMBER SIGNED 28. 9.2023HON. PHILIP GICHUKI MEMBER SIGNED 28. 9.2023HON. MICHAEL CHESIKAW MEMBER SIGNED 28. 9.2023HON. PAUL AOL MEMBER SIGNED 28. 9.2023Tribunal Clerk JemimahJudgment delivered in the absence of the parties.HON. BEATRICE KIMEMIA CHAIRPERSON SIGNED 28. 9.2023