Wana-anga Cooperative Savings & Credit Society Ltd v Ogwang [2023] KECPT 1101 (KLR)

Wana-anga Cooperative Savings & Credit Society Ltd v Ogwang (Tribunal Case 538 of 2015) [2023] KECPT 1101 (KLR) (Civ) (14 December 2023) (Judgment)

Neutral citation: [2023] KECPT 1101 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Civil

Tribunal Case 538 of 2015

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

December 14, 2023

Between

Wana-anga Cooperative Savings & Credit Society Ltd

Claimant

and

Mathew Nyerere J Ogwang

Respondent

Judgment

1. The matter for determination is a Statement of Claim dated 22nd September 2015 in which the Claimant avers that the Respondent its member. The Claimant claims that on or about August 2006 the Respondent applied for and was awarded a loan of Ksh. 200,000/- which was to be paid in ten months from September 2006. It’s the Claimants claim that the Respondent serviced his loans but defaulted midway and that the unpaid loan plus interest as at June 2015 is Ksh. 380,760/-. The Claimant therefore prays fora.Kshs. 380,760/=b.Interest at the rate of 17% straight-line from 1st July 2015 until payment in fullc.Costsd.Any other relief deemed just to grant.The Claim is accompanied by a witness statement of one Vincent Rota who is its Chief Executive Officer and documents in support of their claim.

2. The Respondent filed a Statement of Defence and Counter-claim dated 27th October 2015 in which he denied that he had ever been a member of the Claimant, but admitted taking the loan as a Front Office Loan. He however avers that he was given only Ksh. 193,300/= and that he serviced the loans faithfully until the Claimant started charging 17% interest rate. In their Counter-claim, the Respondent (now the Claimant), claim that he paid an amount of Ksh. 80,000/= which was not properly receipted and recorded, and that there were hidden costs charged which had not been disclosed before. Their claim is for proper accounts to be taken and reconciled.

3. In response to the Counter-claim, the Claimant denies the usurious interest as well as the Ksh. 80,000/-.

4. During the hearing, only the Claimant’s witness testified. The Respondent did not testify. The Claimant’s witness adopted his Witness Statement, and produced his documents. It was the Claimant’s evidence that the Respondent has only paid Ksh. 139,760/= and has an outstanding loan of Ksh. 241,468/-

5. Only the Claimant filed their submissions. In their submissions, the Claimant reiterated their claim and urged the court to grant them their prayers. The Claimant urged this court to note that the Respondent failed to appear for the hearing of this matter. The Claimants also urged the Tribunal to find from the evidence submitted that the Respondent is in default and is continuing being in default.

Analysis 6. The question before this Tribunal is whether the Claimant is entitled to the prayers sought in his Statement of Claim as against the Respondent. In answering this question, the Tribunal notes that the Respondent in his Defence disputes being a member of the Claimant. We feel that this is the first thing to be dealt with before we proceed to the dispute in the Claim, as this goes to the core of jurisdiction of this Tribunal. In Response to the Respondent’s claim of not being a member, the Claimant produced an Application for membership form that is duly filled by the Respondent, as well as a receipt acknowledging the payment of registration fee by the Respondent. The Respondent did not dispute this Application as well as the receipts, and as such this Tribunal is satisfied that the Respondent was a member of the Claimant.

7. The issue of jurisdiction settled, this Tribunal notes that it is not in dispute that the Respondent applied for a loan of Ksh. 200,000/= which was approved. According to the Application Form, he was given Ksh. 193,000/- after deduction of Commission of Ksh. 2,700/= and a Wanabima of Ksh 4,000/-.

8. It is also not in dispute that the Respondent defaulted in settling the loan amount, however what seems to be in dispute is the interest rate of 17% that the Claimant applied on the Respondent’s loan, and which the Respondent claims that it was not contracted for and that it was way above the average what the other saccos were paying.

9. This Tribunal has looked at the Loan Application Form and noted that no interest rate was specified. However, the Claimant’s through an Affidavit sworn on 29th November 2018, produced the minutes for the Special Joint Committee Meeting held on 3rd April 2007, which it shows that it was minuted in the Annual General Meeting of 2005, that the interest rates for front office loan was reduced from 20% to 17%. In the absence of any evidence to the contrary by the Respondent, and failure of the Respondent to controvert the same during the hearing, this Tribunal is inclined to belief that the applicable interest rates are the ones indicated by the Claimant. This Tribunal is guided by the Cooperative Societies Act at section 27 which gives supremacy to the General Meeting and which provides that;”The Supreme authority of a Co-operative Society shall be vested in the general meeting at which members shall have the right to attend, participate and vote on all matters”

10. The Tribunal also notes that the Respondent has made various repayments on the outstanding amount as shown in the Loan Statement filed by the Claimant.

11. The Respondent did not adduce any evidence to support his Counter-claim, and therefore, it automatically fails.

12. The upshot of the above is that we find merit in the Claimant’s claim and enter judgement in favour of the Claimant against the Respondent for a sum of Ksh. 241,468/- together with costs and interests.

JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 14TH DAY OF DECEMBER, 2023. HON. BEATRICE KIMEMIA - CHAIRPERSON SIGNED 14. 12. 2023HON. J. MWATSAMA DEPUTY - CHAIRPERSON SIGNED 14. 12. 2023HON. BEATRICE SAWE - MEMBER SIGNED 14. 12. 2023HON. FRIDAH LOTUIYA - MEMBER SIGNED 14. 12. 2023HON. PHILIP GICHUKI - MEMBER SIGNED 14. 12. 2023HON. MICHAEL CHESIKAW - MEMBER SIGNED 14. 12. 2023HON. PAUL AOL MEMBER - SIGNED 14. 12. 2023TRIBUNAL CLERK JONAHMS. MUSA ADVOCATE FOR THE CLAIMANT.OKEMWA & COMPANY ADVOCATE FOR RESPONDENT – NO APPEARANCEHON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 14. 12. 2023