1. The Plaintiff’s (‘’the Bank’’) case against the Defendants is for money advanced and not repaid. In the Plaint dated 28th November 2018, the Bank seeks the following reliefs:
a. Kshs 171,500,000.00 being the loan amount due as at 27th August 2018.
b. Interest on a) above at the rate of 14% per annum from 27th August 2018 until payment until payment in full.
c. Costs of the suit together with interest thereon at such rate and for such period of time as this Honourable Court may deem fit to grant.
d. Any such other or further relief as this Honourable Court may deem appropriate.
2. The Bank’s case is that the parties entered into an agreement evidenced by a Letter of Offer dated the 16th March 2015 where it granted the 1st Defendant (‘’the Company’’) two facilities; a Term Loan of KES 30,000,000.00 and an Asset Based Finance of USD 1,605,816.00. The facilities were advanced on the strength of already existing overdraft and asset financing facilities that had been advanced to the Company through a prior Letter of Offer dated 28th March 2014. In addition, the 2nd and 3rd Defendants executed a deed of guarantee and indemnity dated 30th July 2014 under which they undertook to discharge Company’s obligations to the Bank. The liability of each Guarantor was limited to the principal sum of USD 2,000,000.00 and KES. 40,000,000.00. The two facilities were disbursed through various loan accounts. The Company also executed and registered a fixed debenture dated 13th October 2014 securing the principal sum of USD 2,000,000.00 and was a continuing security for 30 motor vehicles. The 2nd Defendant also registered a charge for KES. 30,000,000.00 on his land parcel; LR No. 12715/1653 situated Machakos.
3. The Company defaulted on its repayment obligations whereupon the Bank commenced recovery action. It sold the charged property, repossessed and sold some motor vehicles. It could not recover some vehicles. The Bank states that following all efforts to sell the secured assets, the amount due to it as at 27th August 2018 is KES. 171,500,000.00 which it claims from the Defendant jointly and severally.
4. The Defendants filed a Statement of Defence dated 30th January 2019 where they admit the facilities advanced by the Bank. They however deny that they breached the agreements and/or that they are indebted to Bank as alleged. The claim that they made payments to the Bank which it did not disclose. They admit that the Bank repossessed the secured motor vehicles and sold them and appropriated the proceeds without disclosing to them the money recovered. The Defendants further aver that they are entitled to a set off on account of transport services rendered by the 1st Defendant to the Bank for which the Bank has not paid. The Defendants seek an audit of the accounts and pray that the suit be dismissed.
5. Despite filing a defence, the Defendants failed to participate in pre-trial processes. They also failed to attend court when the matter came up for hearing several times despite being served. At the hearing scheduled for 17th May 2022, neither the Defendants nor their Advocate attended court despite being served with the hearing notice. The Bank proceeded with the case and called one witness, Mr. Francis Kiranga (PW 1), who adopted his statements and produced documents before the Court.
6. PW 1’s testimony mirrored the case set out in the Plaint. The Defendants did not produce any evidence in support of their case and consequently the Bank’s case is uncontroverted as the Defence without any supporting evidence remains a document of mere allegations (see CMC Aviation Ltd v Kenya Airways Ltd (Cruisair Ltd ) [1978] eKLR). On the other hand, the Banks is still required to prove its case on a balance of probabilities. The fact that it is a formal proof does not relieve it of this burden (Karugi and Another v Kabiya and 3 Others [1983]eKLR).
7. Turning to the uncontested evidence, I am satisfied that the Bank has proved that the parties were in a contractual relationship as evidenced by the facility documents including the Letters of Offer, the guarantee and indemnity, the Debenture and Charge documents. The Defendants are bound by the contractual agreements and consequently must repay the loan amount that was disbursed.
8. The Bank has also established by documentary evidence that the Company defaulted on its repayment obligation and the Bank commenced recovery action by selling the charged property, repossession and sale of some motor vehicles secured by the Debenture. The Defendants were aware of the default and did not dispute the same in their Statement of Defence. Finally, the Bank was able to show that the Defendant owed it Kshs 171,500,000.00 as at 27th August 2018 by producing statements of account.
9. From the totality of the evidence, I find and hold that the Bank has proved its case on a balance of probabilities. I therefore order as follows:
(a) Judgment is entered for the Plaintiff against the Defendant jointly and severally for the sum of Kshs 171,500,000.00 being the loan amount due as at 27th August 2018.
(b) Interest is awarded on a) above at the rate of 14% per annum from 27th August 2018 until payment in full.
(c) The Defendant shall bear the costs of the suit.
DATED and DELIVERED at NAIROBI this 24th day of JUNE 2022.
D. S. MAJANJA
JUDGE
a. Kshs 171,500,000.00 being the loan amount due as at 27th August 2018.
b. Interest on a) above at the rate of 14% per annum from 27th August 2018 until payment until payment in full.
c. Costs of the suit together with interest thereon at such rate and for such period of time as this Honourable Court may deem fit to grant.
d. Any such other or further relief as this Honourable Court may deem appropriate.
2. The Bank’s case is that the parties entered into an agreement evidenced by a Letter of Offer dated the 16th March 2015 where it granted the 1st Defendant (‘’the Company’’) two facilities; a Term Loan of KES 30,000,000.00 and an Asset Based Finance of USD 1,605,816.00. The facilities were advanced on the strength of already existing overdraft and asset financing facilities that had been advanced to the Company through a prior Letter of Offer dated 28th March 2014. In addition, the 2nd and 3rd Defendants executed a deed of guarantee and indemnity dated 30th July 2014 under which they undertook to discharge Company’s obligations to the Bank. The liability of each Guarantor was limited to the principal sum of USD 2,000,000.00 and KES. 40,000,000.00. The two facilities were disbursed through various loan accounts. The Company also executed and registered a fixed debenture dated 13th October 2014 securing the principal sum of USD 2,000,000.00 and was a continuing security for 30 motor vehicles. The 2nd Defendant also registered a charge for KES. 30,000,000.00 on his land parcel; LR No. 12715/1653 situated Machakos.
3. The Company defaulted on its repayment obligations whereupon the Bank commenced recovery action. It sold the charged property, repossessed and sold some motor vehicles. It could not recover some vehicles. The Bank states that following all efforts to sell the secured assets, the amount due to it as at 27th August 2018 is KES. 171,500,000.00 which it claims from the Defendant jointly and severally.
4. The Defendants filed a Statement of Defence dated 30th January 2019 where they admit the facilities advanced by the Bank. They however deny that they breached the agreements and/or that they are indebted to Bank as alleged. The claim that they made payments to the Bank which it did not disclose. They admit that the Bank repossessed the secured motor vehicles and sold them and appropriated the proceeds without disclosing to them the money recovered. The Defendants further aver that they are entitled to a set off on account of transport services rendered by the 1st Defendant to the Bank for which the Bank has not paid. The Defendants seek an audit of the accounts and pray that the suit be dismissed.
5. Despite filing a defence, the Defendants failed to participate in pre-trial processes. They also failed to attend court when the matter came up for hearing several times despite being served. At the hearing scheduled for 17th May 2022, neither the Defendants nor their Advocate attended court despite being served with the hearing notice. The Bank proceeded with the case and called one witness, Mr. Francis Kiranga (PW 1), who adopted his statements and produced documents before the Court.
6. PW 1’s testimony mirrored the case set out in the Plaint. The Defendants did not produce any evidence in support of their case and consequently the Bank’s case is uncontroverted as the Defence without any supporting evidence remains a document of mere allegations (see CMC Aviation Ltd v Kenya Airways Ltd (Cruisair Ltd ) [1978] eKLR). On the other hand, the Banks is still required to prove its case on a balance of probabilities. The fact that it is a formal proof does not relieve it of this burden (Karugi and Another v Kabiya and 3 Others [1983]eKLR).
7. Turning to the uncontested evidence, I am satisfied that the Bank has proved that the parties were in a contractual relationship as evidenced by the facility documents including the Letters of Offer, the guarantee and indemnity, the Debenture and Charge documents. The Defendants are bound by the contractual agreements and consequently must repay the loan amount that was disbursed.
8. The Bank has also established by documentary evidence that the Company defaulted on its repayment obligation and the Bank commenced recovery action by selling the charged property, repossession and sale of some motor vehicles secured by the Debenture. The Defendants were aware of the default and did not dispute the same in their Statement of Defence. Finally, the Bank was able to show that the Defendant owed it Kshs 171,500,000.00 as at 27th August 2018 by producing statements of account.
9. From the totality of the evidence, I find and hold that the Bank has proved its case on a balance of probabilities. I therefore order as follows:
(a) Judgment is entered for the Plaintiff against the Defendant jointly and severally for the sum of Kshs 171,500,000.00 being the loan amount due as at 27th August 2018.
(b) Interest is awarded on a) above at the rate of 14% per annum from 27th August 2018 until payment in full.
(c) The Defendant shall bear the costs of the suit.
DATED and DELIVERED at NAIROBI this 24th day of JUNE 2022.
D. S. MAJANJA
JUDGE