Bacista Savings & Credit Cooperative Society v Mucheke & 3 others [2023] KECPT 1098 (KLR)

Bacista Savings & Credit Cooperative Society v Mucheke & 3 others (Tribunal Case 54 of 2021) [2023] KECPT 1098 (KLR) (14 December 2023) (Judgment)

Neutral citation: [2023] KECPT 1098 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 54 of 2021

BM Kimemia, Chair, J. Mwatsama, Vice Chair, B Sawe, F Lotuiya, P. Gichuki, M Chesikaw & PO Aol, Members

December 14, 2023

Between

Bacista savings & Credit Cooperative Society

Claimant

and

Reuben Mucheke

1st Respondent

Franklin Mulemba

2nd Respondent

wilson Maina kiai

3rd Respondent

zacheus Wekesa

4th Respondent

Judgment

1. The matter for determination is the Statement of Claim Amended on 21/7/2022 seeking the following prayers.a.A declaration that the Respondent misappropriated Kshs. 45. 139,026/= being Claimant’s funds.b.An order requesting the Respondent to refund as follows;1st Respondent Kshs.19,332,900/=2nd Respondent Kshs.22,011,126/=3rd Respondent Kshs.1,432,000/=4th Respondent Kshs.2,363,000/=a.Interest on b above from 29/1/2021b.Costsc.Any other relief.

2. The Respondents filed a Defence dated 11/10/2022 denying responsibility of the Claim of misappropriating Kshs 1,432,000/=.

3. Judgement was entered against the 1st, 2nd, and 4th Respondent who were duly served and did not file any response.

4. The matter came up for hearing on 22/11/2023. The Claimant stated that the Respondents misappropriated the funds of the Claimant Kshs. 45,139,026/=

5. That an inquiry was conducted dated 6/8/2020 published in Kenya Gazette Notice Number 5868 of 14/8/2020. The Intention to Surcharge dated 4/12/2020 was issued and the surcharge order dated 11/2/2021.

6. The 3rd Respondent stated that he was accused of misappropriation. That he did not use the money and that it was the Chairman who would withdraw the money.

7. That he was summoned by the Inquiry team in 2018 and that the money was used as loan and members should repay.

8. The parties filed Written Submissions dated 27/11/2023 and 27/11/2023 respectively.

9. We have considered the Written Submissions of the parties. We note that this is a matter for recovery of Surcharge under order 75 CooperativeSocieties Act.

10. There was a Surcharge Order after an Inquiry Order by the Commissioner of Cooperative Development under Section 73 of the CooperativeSocieties Act.

11. During examination by members, it’s clear that the 3rd Respondent was aware of the Inquiry, he was given an opportunity during the Inquiry, he was served with the Intention to Surcharge and also confirmed having been served with the Surcharge order.

12. He was the Treasure of the Claimant and he confirmed that he did not take any action and challenge the amount in the Inquiry. He stated that he was aware of the Inquiry results and that he did not challenge the amount in the Inquiry Report.

13. That despite service of the Intention to Surcharge, he did not appeal to the Commissioner for Cooperative Development and a Surcharge Order was issued. He also confirmed that he did not file an Appeal as required under Section 74 of the Cooperative Societies Act.

14. The Claimant therefore filed this Claim seeking to enforce the Commissioner of Cooperative Development’s Surcharge order under Section 75 of the CooperativeSocieties Act which provides that;Section 75(1)CooperativeSocieties Act.“subject to Section 74, an order made pursuant to Section 73 for any moneys to be repaid or contributed to a Cooperative Society shall be filed with the Tribunal and SHALL , without prejudice to any other mode of recovery be a civil debt recoverable summarily”.

15. We note that the 3rd Respondent is challenging the misappropriation of Kshs 1,432,000/=. The Inquiry was conducted, it was not challenged by the 3rd Respondent.

16. The intention to Surcharge was served to 3rd Respondent, it was never challenged neither was the Surcharge challenged.

17. It was required that the 3rd Respondent should have appealed against the decision of the Commissioner for Cooperative Development according to Section 74(1) Cooperative Societies Act.During the Cross-examination by the members of the Tribunal, the 3rd Respondent confirmed to have participated in the inquiry process, he was served with the Intention to Surcharge and the Surcharge orders. The same were not challenged.

18. We therefore find that the 3rd Respondent should not reopen the matter since he was given the opportunity to participate in the Inquiry and to challenge the Intention to Surcharge and he also never filed an Appeal against the Surcharge Order as required under Section 74 (1)CooperativeSocieties Act.

19. The provisions of Section 75 CooperativeSocieties Act are clear, this matter is dealt with as a civil debt recoverable summarily.

20. We therefore find that the Claimant has proved the Claim as contained in the Amended Claim dated 21/7/2022 on a balance of probabilities. We enter judgement against the 3rd Respondent and confirm judgement as contained in the Amended Claim. We order as follows:a.We declare that the Respondent misappropriated Kshs 45,139,026/= being the Claimant’s funds.b.We order for the Respondents to refund the Claimants funds as follows:1st Respondent Kshs. 19,332,900/=2nd Respondent Kshs. 22,011,126/=3rd Respondent Kshs. 1,432,000/=4th Respondent Kshs. 2,363,000/=Total Kshs. 45,139,026/=c.Costs and interest in the Claim is awarded to Claimant from the date of filing the Claim at Tribunal rates.

JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 14TH DAY OF DECEMBER, 2023. Hon. Beatrice Kimemia - Chairperson Signed 14. 12. 2023Hon. J. Mwatsama - Deputy Chairperson Signed 14. 12. 2023Hon. Beatrice Sawe - Member Signed 14. 12. 2023Hon. Fridah Lotuiya - Member Signed 14. 12. 2023Hon. Philip Gichuki - Member Signed 14. 12. 2023Hon. Michael Chesikaw - Member Signed 14. 12. 2023Hon. Paul Aol - Member Signed 14. 12. 2023Tribunal Clerk JonahMrs. Njagi advocate for the 3rd Respondent.Kurui advocate for the ClaimantsMrs. Njagi advocate – We pray for 30 days stay for the 3rd RespondentKurui advocate - We have no objectionTribunal Orders:30 days stay of Execution granted to the 3rd Respondent.Hon. J. Mwatsama - Deputy Chairperson Signed 14. 12. 2023