Wambua v Fortune Sacco Society Limited [2024] KECPT 213 (KLR)

Wambua v Fortune Sacco Society Limited (Tribunal Case 185/E001 of 2022) [2024] KECPT 213 (KLR) (7 March 2024) (Judgment)

Neutral citation: [2024] KECPT 213 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 185/E001 of 2022

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

March 7, 2024

Between

Denis Maingi Wambua

Claimant

and

Fortune Sacco Society Limited

Respondent

Judgment

Facts of the Case. 1. On 18th September, 2017, the Claimant was advanced a loan of Kshs. 1,500,000/= by the 1st Respondent to his business Judens Collections. On 9th September, 2019, he was given another top up loan of Kshs. 1,500,000/=. On 23rd August, 2019, he was given another loan of Kshs. 300,000/= to his personal account. All the above loans were secured by a charge over land parcel number Kirinyaga/Marurumo/1474.

2. On 27th January, 2022, the Claimant was issued with a Notice of Redemption for the repayment of Kshs. 1,813,000/= failure to which the Respondent was issued with instructions to sell land parcel number Inoi/Kariko/3513 by way of public auction on 29th March, 2022.

3. It is the Claimant’s contention that land parcel number Inoi/Kariko/3513 was not used to secure the above loans and the loan for which it was deposited for, was repaid in full. That the charge is actually fraudulent and illegal as it was done without his knowledge and authority and he did not sign any documents to that effect.The Claimant’s Notice of Motion Application for 23rd March, 2022 was considered by this Tribunal and on 24th March, 2022, this Tribunal gave the following orders:i.Temporary injunction restraining the 1st and 2nd Respondents of their agents from selling by Public Auction land parcel number Inol/Kariko/3513 pending the determination of the suit.ii.That Applications and pleadings to be served upon the Respondents and they should file in response their Witness Statements, Statement of Defence and documents to be used during trial.

4. In response to the Claim, the 1st Respondent gave a chronology of the events to the effect of that.i.There was an informal agreement between the Claimant and the Respondent that in order to sufficiently cover the value of the loans, the claimant was to present additional security, which he dud un the form of parcel of land number Inoi/Kariko/3513ii.That following the incorporation of land parcel number Inoi/Kariko/3513, the 1st Respondent discharged a motor vehicle KCH 765W that had been used as security for one of the loans.iii.That the Claimant was making nominal and sporadic payments that were way below the agreed monthly installments and as a result he was in arrears of Kshs. 1,458,186. 28/= as at 23rd February, 2022. iv.That the statutory power of sale was the last option as the Claimant did not make any serious efforts to offset the loan balance and Inoi/Kariko/3513 was the only property that would have solely covered for the outstanding balance.v.That the Claimant is abusing the court process by running to the court for injunctive orders with the aim of evading his legal obligation and duty of paying up the loan and thus denying the 1st Respondent their rightful and legal entitlement.We have considered the pleadings and evidence adduced in court and the only question remaining for this Tribunal, is as to whether the temporary injunction it issued on 24th March, 2022 should be lifted to allow the 1st and 2nd Respondent to exercise the statutory power of sake on Land Parcel number Inoi/Kariko/3513 to recover on the outstanding arrears.

Whether the temporary injunction issued on 24th March, 2022 should be lifted to allow the 1st and 2nd Respondent to exercise the Statutory power of sale on land parcel number Inoi/Kariko/3513 to recover on the outstanding arrears.Courts have always maintained that a party’s right to exercise its statutory power of sale on charged property arises the moment there is a debt which has remained outstanding despite demand. In the instant case, it is not in doubt that the Claimant owes the 1st Respondent; what is in doubt, is which property was charged as security for the loan in question. 5. It is also not in doubt that the Claimant has failed to honor all the proposals he has made to the 1st Respondent to settle the loan arrears.The Claimant approached this Tribunal for the equitable orders of permanent injunction and as such this Tribunal will also confine him to the law of equity which demands that, “he who seeks equity, must also do equity” as a Tribunal, we have not been convinced by the Claimant, neither has he demonstrated good faith to offset the arrears and as such, we cannot deny or delay the 1st Respondent from recovering ‘ad infinitum’ even if the property in question was not the one the Claimant signed for as the security for the loans.

Final Orders.i.Statement of claim dismissed for lack of merits with costs.ii.The Counter-Claim succeeds and judgment is entered in favour of Respondent against Claimant for Kshs.1,458,186. 28/= plus costs and interest in the claim at Tribunal rates.

JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 7TH DAY OF MARCH, 2024. HON. BEATRICE KIMEMIA - CHAIRPERSON - SIGNED 7. 3.2024HON. BEATRICE SAWE - MEMBER - SIGNED 7. 3. 2024HON. FRIDAH LOTUIYA - MEMBER - SIGNED 7. 3.2024HON. PHILIP GICHUKI - MEMBER - SIGNED 7. 3.2024HON. MICHAEL CHESIKAW - MEMBER - SIGNED 7. 3.2024HON. PAUL AOL - MEMBER - SIGNED 7. 3.2024Tribunal Clerk - JemimahMiss Ndung’u for Claimant.Miss Kamau holding brief for Kibue for Respondent.HON. BEATRICE KIMEMIA - CHAIRPERSON - SIGNED 7. 3.2024