Case ID:182230

Francis Kabugu Maku v Muki Sacco Limited & another [2021] eKLR

Case Metadata

Case Number:

Tribunal Case 386 of 2020

Parties:

Francis Kabugu Maku v Muki Sacco Limited & Isaac Musila Mutiso t/a Silverline Auctioneers

Date Delivered:

02 Sep 2021

Case Class:

Civil

Court:

Cooperative Tribunal

Case Action:

Ruling

Judge(s):

Hon. B. Kimemia - Chairperson, Hon. J. Mwatsama - Deputy Chairperson, Mr. Gitonga Kamiti - Member & Mr. B. Akusala - Member

Citation:

Francis Kabugu Maku v Muki Sacco Limited & another [2021] eKLR

Advocates:

Wandaka for Claimant/Applicant

Getange Advocate for Respondent

Court Division:

Tribunal

County:

Nairobi

Advocates:

Wandaka for Claimant/Applicant

Getange Advocate for Respondent

History Advocates:

Both Parties Represented

Disclaimer:

The information contained in the above segment is not part of the judicial opinion delivered by the Court. The metadata has been prepared by Kenya Law as a guide in understanding the subject of the judicial opinion. Kenya Law makes no warranties as to the comprehensiveness or accuracy of the information

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL AT NAIROBI

TRIBUNAL CASE NO.386 OF 2020

FRANCIS KABUGU MAKU.............................................CLAIMANT

VERSUS

MUKI SACCO LIMITED.....................................1

ST

RESPONDENT

ISAAC MUSILA MUTISO T/A

SILVERLINE AUCTIONEERS..........................2

ND

RESPONDENT

RULING

1. The Application for determination is dated

2.10.2020

brought under

Order 22 Rule 51 (1), (2),(3), Order 52 and 53 Civil Procedure Rule and Section 3A Civil Procedure Act, Article 159 of the Constitution

and all other enabling provisions of the law.

The Application seeks for the following orders:

1. Spent

2. Spent

3. That upon hearing of the Application inter-parties, this Honourable Court be pleased to set aside the Public Auction notice of the Applicant’s property and find that the said attachment is unlawful and no costs accrues against the applicant and stop the Public Auction.

2.

The same is premised on the grounds on the face of the Application and Affidavit in support of

Francis Kabugu Maku

sworn on

2.10.2020

and he stated the following in support of his Application. That the Claimant/Applicant is the owner of

Land Refence

No. NYANDARUA /MUMUI/459

valued at

Kshs. 22,000,000/=.

He is a member of the 1

st

Respondent and had a loan with Equity Bank for

Kshs.520,000/=

and transferred the said loan to 1

st

Respondent. He avers he had shares worth

Kshs.360,000/=

with the 1

st

Respondent.

That the 1

st

Respondent paid the loan to Equity Bank Limited of

Kshs.522,000/=

plus other charges which totaled to

Kshs.565,325.85/=.

He further avers that he was selling a piece of land at Ndunyu Njeru a subsidiary to the 1

st

Respondent for

Kshs.1.800,000/=.

The said money was to repay the amount of

Kshs.520,000/=

to Equity Bank Limited and balance was to clear the loan against Ndunyu Njeru plot which was a FOSA loan.

3. That the Applicants mother

Zaweria Wambui

claim had a loan of

Kshs.751,600/=

and

Tatua loan of Kshs.250,000/=.

That the Applicant’s wife Agnes Gituto Kabugu also had a loan of

Kshs.577,000/=

and special loan of

Kshs.860,000/=.

That the 1

st

Respondent sent the Applicant to the Surveyor to sign papers as they use him as an agent to register documents at the lands office.

The 1

st

Respondent sent his forms to consolidate all his loans, mother loan and wife’s loan and the same was coming to

Kshs.5,000,000/=

as it appears on the title. He declined to sign the form as per paragraph 10 in his Affidavit to consolidate his loans and does not know how the 1

st

Respondent managed to charge the title for

Kshs.5,000,000/=

as it now appears in the title.

4. The Applicant avers the FOSA loan was secured by

Ndunyu Njeru

plot title instead of clearing the loan. The interest was

Kshs.700,000/=

and that his instructions were not followed.

That he owes

Kshs.1,900,000/=

inclusive of his mother’s and wife’s which totals to

Kshs.1,200,000/=

and loan of

Kshs.700,000/=.

He states he is faced with the risk of being landless and unless the orders are granted.

5. The Respondents filed their response to the application with the 1

st

Respondent filing a response sworn by

Violent Wanjiru Ndugu

on

9.12.2020

stating she is the Chief Executive Office (CEO) of the 1

st

respondent and stated the Applicant was granted various loans.

(i) 13.7.2015 borrowed Kshs.1,018,000/= BOSA loan

(ii) 14.01.2016 borrowed Kshs.500,000/= as Tatua Loan.

That the Applicant requested his loan together with those of his mother –

Zaweria Wambui Maku

and wife

Agnes Gituto Kabugu

be consolidated and he surrendered his title

Nyandarua/Mumui/459

to be charged as security.

The Claimant offset his mother’s loans from his shares since he had guaranteed his mother’s loans using his shares.

The Applicant defaulted on the loans and Respondent’s interest registered on title

Nyandarua/Mumui/459

on

15.6.2017.

Despite various reminders requesting him to clear, he neglected to do so.

The Applicant was served with Statutory Notice pursuant to Section 90 (1)(2)(3)( e) of Land Registration Act( Annexed and Marked VWN5(a), 5 (b) and 5 ( c) is a copy of the Notice, Affidavit of service and licence of the process server)

6. The Applicant has admitted his indebtedness for the sum of

Kshs.2,600,000/=

and cannot now be allowed to turn around he did not sign the security documents which secured the loan facilities.

There was no fraud as alleged and the loans are overdue.

7. The 2

nd

Respondent filed a Replying Affidavit on

26.10.2020

in opposition to the Applicant. In response to paragraph 14 (a) the Claimant approached me and requested to deposit

Kshs.100,000/=

and did not refuse since it was part payment of the amount owing from him to the Sacco.

The 2

nd

Respondent is a licensed Auctioneer acting under instructions of the 1

st

Respondent.

8. The 1

st

Respondent swore a Further Affidavit on

27.4.2021

filed on

28.4.2021.

The Applicant also filed a Further Affidavit in response to the Further Affidavit of 1

st

Respondent sworn on

19.5.2021

filed on

27.5.2021

stating he did not sign any charge as alleged in the office of

G. Gatumuta Advocate

.

The parties were to file written submissions which the Applicant filed their written submissions dated

28.6.2021

on

30.6.2021.

The Respondent filed their written submissions dated

4.5.2021

on

3.5.2021.

Upon analysis of the Application before us the issues before us are thus:

Issue one:

1. Whether the applicant ought to be granted the orders sought for?

2.

Issue two:

Costs.

9.

Issue one:

Whether the applicant ought to be granted the orders sought for?

The Claimant seeks for injunctive orders. The threshold for injunction is laid out in

Giella -vs- Cassman Brown & Company Limited [1973] EA 358.

The conditions that must be met are:

a. Applicant must show a prima facie case with probability of success.

b. Applicant must demonstrate they stand to suffer irreparable loss that would not adequately be compensated by way of damages.

c. Balance of probability.

a. Prima Facie Case

The Claimant avers he had a loan with the 1

st

Respondent however disputes the fact that he signed a charge over his title

Nyandarua/ Mumui/459

and his loan is not

Kshs.5,000,000/=

as alleged by the 1

st

Respondent.

The 1

st

Respondent on the other hand agrees with the Applicant in terms of the loans but does not account as to how they are demanding for

Kshs.5,000,000/=.

With the dispute as to the amounts not being clear there Applicant has proved

prima facie case

.

b.

Irreparable Harm

means that the injury must be one that cannot be adequately compensated for in damages and that the existence of a prima facie case is not itself sufficient. The Applicant should further show that

irreparable injury

will occur to him if the injunction is not granted and there is no other remedy open to him by which he will protect himself from the consequences of the apprehended injury.

The Applicant avers that the land

Nyandarua/Mumui/459

is valued at

Kshs.22,000,000/=.

The charge is for

Kshs.5,000,000/=.

The sale of land worth

Kshs.22,000,000/=

to recover

Kshs.5,000,000/=

would be harm done to the Applicant. He would have lost his land.

The 1

st

Respondent in their submissions state the Applicant is using the court to frustrate their recovery efforts and has not brought before this Tribunal any measures to liquidate his obligations.

They aver that if indeed there was fraud the Applicant has not denied giving his title to stand as security for his loans and his wife and mother.

By granting the Orders sought the Respondent will be crippled in its operations to the Respondent society.

The harm suffered would be to both the Claimant/Applicant and Respondent in this end claimant to loose his land and Respondent having financial and/or liquidity issues with non-payment of the loan.

c. Balance of convenience

In the case of

Pius Kipchirchir Kogo – vs - Frank Kimeli Tenai [2018] eKLR

which defined concept of balance of convenience as :

“ The meaning of balance of convenience in favour of the Plaintiff is that if an injunction is not granted and suit is ultimately decided in favour of Plaintiff the inconvenient caused would be greater than that which would be caused to the Defendant if an injunction is granted but the suit is ultimately dismissed. Although it is called balance of convenience it is really the balance of inconvenience and it is for the Plaintiffs to show that the inconvenience caused to them be greater than the which may be cause to the Defendant inconvenience be equal, it is the Plaintiffs who suffer.

In other words, the Plaintiff have to show that the comparative mischief from the inconvenience which is likely to arise from withholding the injunction will be greater which is likely to arise from granting.”

In the case before us we find that the Applicant may have more to suffer if the said Public Auction takes place.

We find the Application Orders as sought cannot be given in their entirely. There is a loan that is pending and the issue is the amount due. We thus cannot give an order as couched in Order 4 of the Application.

10. To this end, the Application dated

22.10.2020

is found to be with merit and the Orders of the Tribunal are given in accordance to

Section 3 and 3A Civil Procedure Rules 3 and 4 Co-operative Tribunal (Practice and Procedure)

Rules we Order:

1. The setting aside of the Public Auction notice of the Applicant’s property pending hearing and determination of the main suit.

2. The 1

st

Respondent to furnish and file Statement of Account for the Claimant/Applicant within 14 days of the Ruling.

3. The Applicant to continue servicing the loan as per their admitted amount.

4. All parties to file their Witness Statements and documents 30 days from today and Pre- trial directions to be given on

9.11.2021

RULING SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 2

ND

DAY OF SEPTEMBER, 2021.

Hon. B. Kimemia Chairperson Signed 2.9.2021

Hon. J. Mwatsama Deputy Chairperson Signed 2.9.2021

Mr. Gitonga Kamiti Member Signed 2.9.2021

Mr. B. Akusala Member Signed 2.9.2021

Tribunal Clerk R. Leweri

Wandaka for Claimant/Applicant

Getange Advocate for Respondent

Hon. B. Kimemia Chairperson Signed 2.9.2021