REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL AT NAIROBI

TRIBUNAL CASE NO.315 OF 2020

JOSEPH  KAMAU MUGO............................................................CLAIMANT

VERSUS

CHANIA  KIBWEZI TRAVELLORS SACCO.......................RESPONDENT

RULING

Vide the Application  dated 23.9.2020,  the Respondent has moved  this Tribunal  seeking  for Orders inter alia:

1. Spent;

2. That  this Honourable  Tribunal  be pleased to  issue a mandamus Order compelling the Defendant/Respondent to immediately release from their (NTSA) Portal  the  Applicant’s four motor vehicles registration  number KBJ 774V, KBL 024H, KAQ 305 Q and  KAR  637F which  are non-contested  pending  hearing and  determination  of this suit;

3. That this Honorable  Tribunal  be pleased  to issue an order  for restructuring  of the loan due after deductions of all the nominal or book value of his shares, dividends  or  his interests  any deposits  held by the society on the Applicant’s behalf  on  condition that the Respondent  can continue  holding the Applicant’s  motor vehicle  registration  KBC 351F logbook  in lien pending  full payment  of the loan due ;

4. That the costs of this Application be provided for.

5. That this Honourable  Tribunal  be pleased  to make such further  or other orders  as it may  deem just  and expedient  in the circumstances  of this case.  

The Application is supported by the grounds on its face and the following Affidavits:

a. Supporting Affidavit  sworn by  the Claimant  on even date (23.9.2020); and

b. Further Affidavit sworn by the Claimant on 27.10.2020.  

The Respondent  has  opposed  the Application vide the Replying  Affidavit  sworn by Alfred  Githae Kimani its Chairman  on 13.10.2020.

Vide  the  directions  given  on  14.10.2020,  the Application  was canvassed  by way of  written submissions.  The Claimant filed  his written submissions  as follows:

a. Initial  set of submissions on  11.11.2020;

b. Supplementary  submissions  on  18.11.2020,

The Respondent  filed  its submissions  on 16.11.2020.

Claimant’s Contention

Vide  the instant  Application, the Claimant  prays for the Orders  sought  to  be granted  because  of the following  reasons:

That  the Respondent  has without  cause, refused  and/or declined  to release three (3) of his five (5) motor vehicles  from the NTSA Portal.

That  on 27.7.2020, he wrote  to the Claimant  requesting  for the withdrawal of the said  three  (3) motor vehicles. That  instead  of obliging  and doing so, the Respondent  made an unprocedural  and illegal  resolution  to expel him  as a member  and went ahead  to demand  that he  clears all his  debts  with it.

That,  cumulatively,  he applied  for a loan of Kshs. 2,152, 781/=  and pledged  Motor Vehicle  Registration  No. KBC 351F  as security by depositing its logbook with  the Respondent. That  he currently has an outstanding  loan of Kshs.1,883,766/=. That  he also  has savings  with the Respondent  totaling  to Kshs.1,090,182/=.

That  he was expelled  without  being afforded an opportunity  to  be heard. That this  goes contrary  to  the Respondent’s  by-laws as an expelled member is  entitled  to be  repaid  the  amount of the value  of his shares,  dividends, or interests  and deposits.

Respondent’s  Case

The Respondent  has opposed  the Application  on the following  grounds:-

That  as at 31.12.17,  the Claimant  was its treasurer. That during  his  tenure  as the treasurer,  the Claimant  unprocedurally advanced  himself a  loan of Kshs.2,152,781/=. That as its  member,  the Claimant  has  five  (5) vehicles, namely;

a. KBJ 774V;

b. KBL 024H;

c. KAQ 305Q;

d. KBC 351T;

e. KAR 637F

That  these vehicles  are operating  under its  TLB License.

That in disregard  to  its Rules and Regulations, the Claimant  has gone ahead  to re-brand  three of its vehicles with a company  called J-Classic Limited.

That the daily returns  of  the five (5) motor vehicles  is what is used to repay  the loan.

That  the  Claimant  has not been repaying  the loan and the Respondent’s other dues.

That  it is  the Claimant’s  intention  for the  said  motor vehicles to be  released  from the portal  so  as  to evade repayment  of the loan.

That  as at the time  he  signified intention  to withdraw  three (3) of his  motor  vehicles,  the Claimant  was already  in arrears.

That  it is willing  to discharge  the said  motor vehicles  as long as  the Claimant repays  his debt.

Claimant’s  further  Affidavit  sworn  on 27.10.2020

This Affidavit  is a  rebuttal to the averments  made by  the Respondent  in the Replying  Affidavit sworn  by  Alfred  Githae  Kimani on 13.10.2020.

As regards the contention  that he unprocedurally  awarded  himself a loan, the Claimant  contend that he  followed  the usual  protocols before being  advanced  the said loan.

That he branded  the three motor vehicles  after being  expelled  from  the Sacco.

That  it is only motor vehicles KBC 351F and  KAZ 621X which  were  predominantly  servicing  the loan.

That he has not defaulted  in repayment  of the loan and that  his last  payment was  on  4.3.2020.

Issues  for determination

This Application  has presented  the  following  issues  for  determination:

a. Whether  the Claimant  has laid a proper  basis  to warrant the making of an Order  compelling  the Respondent  to release  his motor  vehicles from the NTSC portal.

b. Whether  we have jurisdiction  to Order  for restricting  of loans.

c. Who should  meet  the costs  of  this Application?.

Release  of motor vehicles

Prayer  two (2) of this  Application requires  us to  make an Order  of

“..mandamus compelling the Defendant/Respondent to immediately  release  from  their  (NTSC) Portal the Applicants  motor vehicles number KBJ 774V,  KBL 024K, KAQ 305Q and KAR  637F.

The  import of this Order  is that the Tribunal  is being  invited  to  issue  a mandatory  injunction  compelling  the  Respondent  to release  the listed motor vehicles from its portal. This  being the case,  what then are the conditions  to be taken  into account  before we  can  make and/or  issue  such  Orders? We find the answer  to this  questions in the case of  Kenya  Breweries  Limited  & Another  - vs- Washington Okeyo [20....]eKLR.  In  the  pertinent  part,  the court  held thus:

“ The  test whether  to grant  a mandatory  injunction  or not  is  correctly stated  in  Vol.  24. Halbury’s Laws of England, 4^th Edition page  48 which  reads,

“ A mandatory  injunction  can  be granted  on an interlocutory Application  as well as at the  hearing, but in the  absence  of special  circumstances, it will  not normally  be granted..”

This position  was ....by this court in the case  of  Locabail International  - vs-  Agroeport &  others [1986] AKLR 9017- where the court  held in the pertinent  part thus:

“ A  mandatory  injunction  ought  not to be  granted  on an interlocutory  Application  in the absence  of special  circumstances, and that  only  in clear  cases  either  where  the court thought  the matter  ought  to be decided  at once or  where the injunction  was directed  at a simple  and summary  act  which  could be easily  remedied  or where the Defendant  had attempted  to  steal a match  from the Plaintiff. Moreover,  before granting  a mandatory  interlocutory  injunction,  the court  had to feel a higher  degree  of  assurance that at the trial, it  would  appear  that the injunction  had rightly  been granted, that  being a different  and a  higher  standard,  there was  required  for a  prohibitory  injunction.”

It thus  follow that  a mandatory injunction  can only be granted   on special occasions or circumstances and only when a case is  clear.  The  question  begs  as to whether  the instant  Application  has presented existence  of  special  circumstances to warrant  for grant  of this injunction.  Our  answer  is in the negative.  What is apparent is that the Claimant took a loan  from the Respondent. He confirms  that the current balance  as  at the time of filing this claim  is Kshs.1,883,766/=. That he  took  the said loan  on the security of  Motor Vehicle  Registration  No. KBL 351 F. That  there is  no reason therefore as to why the other motor vehicles  should be discharged.  Further,  he contends  that he has savings amounting  to Kshs.1,099,182/= and that  the same  is sufficient  security  to  guarantee  clearance  of the loan.

Section  33  of the Co-operative  Societies  Act. Its titled  “ society  to have first charge over debts, assets, etc. in certain  cases”

It goes  on to provide:

“33 (1) subject  to any written  law  as to priority  of  debts, where  a Co-operative Society  has-

(1) Lent money  to any member  or  past member to enable  him buy  any such  things as aforesaid  or  to obtain  any such services,  the Society shall have a first  charge upon such things or,  as the  case may be, any agricultural produce , animals  or  article, produced  therewith or therefrom, or with the aid  of such money”

It is thus  apparent  that as long as  the Claimant  remains  indebted  to the Respondent,  the Respondent  has a first  charge  over all  his motor vehicles  registered  with it.

Offset  with savings

It is trite law  that a  member  cannot seek  to  offset  his loan  with his deposits  with  a Sacco.  The said  member  having  to first  clear  his loan before  demanding  refund  of  his deposits.

Restructuring of loan

The Claimant  has invited  us to restructure  his loan. For  starters, we find that the said  prayer cannot be  entertained  at  an interlocutory  stage.  Secondly,  we find that  we do not  have jurisdiction  to re-write  contracts  of parties  who come before us.

Conclusion

The upshot  of the foregoing  is that we find  that the Claimant has not established  a proper  basis  to warrant  the grant of  the Orders  sought. We accordingly  dismiss  his Application  dated  23.9.2020 with costs in the cause.

Further,  and so  as to expeditiously  dispose  of  this  matter,  we fix  the mention  for Pre-trials  on 23.3.2021.

RULING SIGNED, DATED AND DELIVERED VIRTUALLY THIS 28TH DAY OF JANUARY, 2021.

Hon. B. Kimemia                  Chairperson                 Signed      28.1.2021

Mr. B. Akusala                       Member                       Signed      28.1.2021

Mr. R. Mwambura                Member                        Signed      28.1.2021

Miss  Musyoka  for Respondent: Present

Notice to  issue to Claimant.

Hon. B. Kimemia                  Chairperson                 Signed      28.1.2021