Wanjala v Progressive Credit Ltd (Commercial Case E358 of 2026) [2026] SCC 80 (KLR)
The bottom line
#A Mombasa court ruled a lender's tuktuk repossession illegal because it never properly served the borrower with notice of default, ordering the vehicle returned with damages.
What this practically means
#Executive summary
#Key legal issues
#Whether the Claimant was in default of the loan
The Claimant was in default of Kshs. 12,678/-, equivalent to one month's default, having paid Kshs. 38,130/- against an agreed total of Kshs. 50,808/-
The offer letter was the binding contract: a loan of Kshs. 39,673/- repayable in four monthly instalments of Kshs. 12,702/- with 7% interest. The Claimant repaid Kshs. 38,130/- in three months instead of four; having elected to restructure, he should have paid Kshs. 50,808/- in total. The shortfall of Kshs. 12,678/- constitutes default. The 7% interest does not offend the in duplum rule.
Whether the Respondent issued the Claimant with notice of default
No proper notice of default was given; the demand letter dated 15th July 2025 did not evidence receipt and bore an erroneous postal address
Clause 7 of the offer letter permitted service by hand, post, personalized electronic media or print media. The Respondent relied on a demand letter that did not evidence receipt by the Claimant and had an erroneous postal address. The Respondent had the Claimant's full contact details and could even trace him through auctioneers, so it could not explain its failure to effect proper service through the numerous available avenues.
Whether the repossession of the tuktuk was proper
The repossession was improper, illegal and consequently void
Since no proper notice of default was given, the repossession fell with it. The auctioneers were never called as witnesses to rebut the Claimant's evidence that they never identified themselves and had already repossessed the tuktuk by the time he returned. The Respondent's affidavit file of Rose Waithira Kahiga was a bare narration insufficient to dislodge the Claimant's evidence. The court relied on Mogo Auto Limited v Ochola.
Whether the Claimant is liable to pay Kshs. 62,462/- under the counterclaim
The counterclaim fails and is dismissed
The counterclaim comprised Kshs. 22,000/- in auctioneer fees and Kshs. 40,462/- as loan default. Because the repossession was illegal, the Respondent cannot recover monies flowing from an illegal act. The court had already found default of only Kshs. 12,678/-, not the sum claimed. The counterclaim was therefore dismissed.
Whether the Claimant is entitled to the reliefs claimed
The declaration and mandatory injunction were granted; loss-of-user damages were awarded at a reduced rate of Kshs. 1,500/- per day
Because the repossession was illegal, the declaration of unlawfulness issued and the mandatory injunction for release of the tuktuk was allowed, subject to the rider preserving the Respondent's right to repossess upon proper and lawful notification of default and proclamation if the Claimant remains in default. Loss of user was allowed at Kshs. 1,500/- per day rather than the Kshs. 3,000/- per day claimed, with interest from the date of judgment.
Legal principles established
#- An offer letter accepted and signed by a borrower is the binding contract between the parties, and the court will not rewrite its terms
- The in duplum rule applies to all money lenders
- Repossession of security without proper notice of default to the borrower is illegal and void
- A party cannot recover monies from an illegal act of repossession
Court orders
#- 1.A declaration that the actions of repossession by the Respondent on motor-vehicle registration (tuktuk) number KTWB 800D on the 14/4/2026 were unlawful without proper notice and failing to provide proper documentation of default & repossession
- 2.Mandatory injunction compelling immediate release of motor-vehicle registration number KTWB 800D to the Claimant, with the rider that the Respondent reserves its right, upon proper and lawful notification of default and proclamation, to repossess the security if the Claimant remains in default
- 3.Damages for loss of user awarded at the rate of Kshs. 1,500/- per day from 14/4/2026 up to the date of judgment
- 4.The said amount shall earn interest from the date of judgment
- 5.Each party to bear its own costs
- Jurisdiction invoked
- Small Claims Court Act (implied by the court and the Adjudicator's title; no specific provision cited in the judgment)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Wanjala v Progressive Credit Ltd (Commercial Case E358 of 2026) [2026] SCC 80 (KLR)", Case Analysis (2026). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/scc/2026/80/eng@2026-06-29
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.