Registered Trustees of Micro Enterprises Support Programme Trust (MESPT) v Tana Teachers Savings and Credit Co-Operative Society Ltd, Abudakar Homa Dibo, Walab Hassan, Mustafa Kuyo Bidhachi, Mathias Asseer Benjamin, Mohammed Ali Kofa, Bahola S. Maro & Hussein O. Hiribae [2018] KEHC 5042 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT MALINDI

CIVIL SUIT NO. 15 OF 2014

THE REGISTERED TRUSTEES OF MICRO ENTERPRISES

SUPPORT PROGRAMME TRUST (MESPT)........PLAINTIFF

VERSUS

TANA TEACHERS SAVINGS AND CREDIT

CO-OPERATIVE SOCIETY LTD.................1ST DEFENDANT

ABUDAKAR HOMA DIBO...........................2ND DEFENDANT

WALAB HASSAN...........................................3RD DEFENDANT

MUSTAFA KUYO BIDHACHI.....................4TH DEFENDANT

MATHIAS ASSEER BENJAMIN.................5TH DEFENDANT

MOHAMMED ALI KOFA............................6TH DEFENDANT

BAHOLA S. MARO.......................................7TH DEFENDANT

HUSSEIN O. HIRIBAE.................................8TH DEFENDANT

JUDGEMENT

1. By a plaint filed on 3rd July, 2014 the Plaintiff, the Registered Trustees of Micro Enterprises Support Programme Trust (MESPT) seeks judgement against the defendants in the sum of Kshs. 7,231,916. 80 together with interest at court rates and costs of the suit.

2. The Plaintiff’s case as disclosed in the plaint is that through a loan agreement dated 14th October, 2010 it advanced the 1st Defendant, Tana Teachers Savings and Credit Co-operative Society Limited a loan of Kshs. 10,000,000 for purposes of on-lending the same to small-holder farmers and agri-business primarily in the Agricultural Business Development (ADB) rural finance component in target districts in the former Coast Province specifically Tana River, Lamu and Malindi districts. The loan which was repayable within three years was secured by an already existing debenture dated 24th June, 2009 and guaranteed by Abudakar Homa Dibo, Walab Hassan, Mustafa Kuyo Bidhachi, Mathias Asseer Benjamin, Mohamed Ali Kofa, Bahola S. Maro and Hussein O. Hiribae the 2nd to 8th defendants respectively who were members of the 1st Defendant’s Management Committee. The loan was advanced at an interest rate of 10% per annum on a reducing balance basis and attracting a late repayment penalty of 5% per month on any amount in arrears.

3. It is the Plaintiff’s case that the 1st Defendant initially serviced the loan but later defaulted and as at 11th March, 2013 the outstanding debt being made up of the principal, interest and penalties stood at Kshs. 7,231,916. 80. This is the amount the Plaintiff demands and despite demand and notice of intention to sue the defendants have not been responsive.

4. The defendants though acknowledging the debt sought the dismissal of the Plaintiff’s claim through a statement of defence filed on 29th September, 2014. The grounds upon which the defendants seek the dismissal of the suit are: lack of locus by the Plaintiff to institute these proceedings; failure of the beneficiaries of the loan to service the same; failure by the Plaintiff to provide accounts and contradictions as to the amount owed by the defendants to the Plaintiff.

5. Raphael Kuria, the head of credit and business at MESPT testified as PW1. He reiterated the contents of the plaint and produced as exhibits the documents in the Plaintiff’s list of documents dated 26th June, 2014 filed in court on 3rd July, 2014.

6. The exhibits produced confirmed the Plaintiff’s unrebutted narrative that it advanced a loan of Kshs. 10,000,000 to the 1st Defendant which was payable within three years. There is evidence that the Plaintiff later demanded for the payment of the outstanding principal, interest and penalty after the 1st Defendant defaulted in making payment.

7. The defendants’ claim that there was variance in the figures demanded by the Plaintiff was not supported by any evidence as the defendants did not call any witness. The claim that is before this court is the one in the plaint and the evidence that was placed before the court through the testimony of PW1 is that the amount owing is as stated in the plaint.

8. In their submissions filed on 10th May, 2018 the defendants contend that the loan agreement did not state which amount was to be charged interest and penalty. This is an attempt to repudiate the agreement entered between them and the Plaintiff. The terms of the loan agreement are clear and this court cannot rewrite the contract for the parties.

9. The defendants also assert that the Plaintiff did not provide a statement of the accounts. This is a civil matter in which the standard of proof is on a balance of probabilities. It was upon the defendants to demonstrate that the Plaintiff was not entitled to the amount claimed. They have not done so.

10. The defendants took issue with the testimony of PW1 Raphael Kuria and submitted that since his statement was not filed together with the plaint it did not meet the requirements of Order 11 of the Civil Procedure Rules, 2010. It is indeed true that PW1’s witness statement was filed on 4th April, 2018. However, the defendants have not specifically pointed out the rule breached by this late filing. It is noted that PW1 specified his credentials in court when he testified. He also produced exhibits that were filed together with the plaint. There is no reason why the evidence of PW1 should be rejected.

11. The issue of the locus of the Plaintiff to institute the proceedings was not taken up by the defendants in their submissions. According to the statement of defence it is stated the Plaintiff being a trust was not capable of instituting proceedings on its own but could only do so through the names of the individual registered trustees. As already stated the defendants did not expand on this issue in their submissions and neither did the Plaintiff take up the matter. I therefore conclude that this line of defence was abandoned and I need not make any comment on the same.

12. In short, I find that the Plaintiff has approved that it is owed the sum of Kshs. 7,231,916. 80 by the defendants. Judgement is therefore entered against the defendants jointly and severally in the sum of Kshs. 7,231,916. 80 plus interest at court rates from the date of judgement till payment in full. The Plaintiff will also have the costs of the suit from the defendants.

Dated, signed and delivered at Malindi this 26th day of July, 2018.

W. KORIR,

JUDGE OF THE HIGH COURT