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The Co-operative Tribunal has dismissed an application by a church official who sought to stay a decision that ordered him to pay Sh5.8 million which he borrowed from Sheria Sacco.

In August last year, the tribunal had ordered David Ndumo who is the treasurer of the Presbyterian Church of East Africa (PCEA), to pay the amount after defaulting on a loan taken in 2018.

This is after 15 guarantors, members of Sheria Sacco sought to recover the defaulted loan. The guarantors led by Juma Olago engaged Wright Auctioneers to attach his assets after he failed to repay the loan, forcing them to take up the liability as guarantors.

Auction his assets

In an initial ruling by the tribunal, Ndumo’s properties including his three cars including a Toyota Pass, Nissan Latio and a Toyota Prado, – were to be auctioned by Wright Auctioneers to help offset the loan.

However, Ndumo told the court that he had never been served with court papers by the plaintiffs and sought an injunction against the auction of his assets.

The move was opposed by the guarantors, who argued that Ndumo had misled the court to obtain the order.

“From the outset, I wish to state that the applicant has failed to show any compelling reasons to warrant the setting aside of the judgement and consequential orders,” the guarantors, through lawyer Wambugu Wanjohi, told the court in March.

Wanjohi argued that Ndumo only approached the court when the guarantors decided to execute the judgment and order for the auction of his property.

He further said that the claim was filed in 2019 under a certificate of urgency and that he was served with the order on January 15, 2020 in Nyeri town, where he accepted service by signing the principal copies and an affidavit of service.

The guarantors accused Ndumo of failing to service the loan despite several notices compelling the guarantors to repay the money. The guarantors, including Olago, Charles Maina, Jane Njoroge and Benjamin Ombogo, asked the court to dismiss Ndumo’s application and allow the auctioneer to sell the seized items.

Liability to guarantors

The auctioneers had already raided Ndumo’s home in Marurui estate and seized items including electronics, furniture and cars to be sold to recover the loan deducted from the guarantors.

The guarantors had initially made a claim against Ndumo on November 28, 2019, stating that he borrowed various loans between March 14 and August 7, 2018 amounting to Sh5.8 million from the Sacco but failed to service them despite several demands.

For its part, the Sacco said it followed the law in pursuing the defaulted loans. The tribunal heard that the Sacco gave the guarantors a loan known as Mkombozi, which was used to offset the debt.