Bobby v Kipkaren Sacco Limited & another [2023] KECPT 1096 (KLR)

Bobby v Kipkaren Sacco Limited & another (Tribunal Case 904 (E037) of 2022) [2023] KECPT 1096 (KLR) (30 November 2023) (Judgment)

Neutral citation: [2023] KECPT 1096 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 904 (E037) of 2022

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

November 30, 2023

Between

George Ouma Bobby

Claimant

and

Kipkaren sacco Limited

1st Respondent

County Cooperative Commissioner Uasin Gishu

2nd Respondent

Judgment

1. This Judgement relate to a Claim which was filed by the Claimant first vide a Statement of Claim dated 15/11/2022 and at the same time filed a Notice of Motion under a Certificate of Urgency dated 15/11/2022. The first Statement of Claim is supported by an Affidavit sworn by the Claimant and a List of Documents, all dated 15/11/2022. In this first Statement of Claim, the Claimant seeks for the following orders:a.An Injunction and/or conservatory orders be issued restraining Respondents or any other person in the same capacity from interfering with my membership status with the Respondent.b.Declaration that the process undertaken to determine the Claimant’s status was illegal, irregular, unconstitutional mala fide and therefore invalid and void.c.Declaration that the Claimant is a bonafide member of the 1st Respondent Sacco as defined in its by-laws section 6a,7a,b,c (Kipkaren Sacco by-laws) and the provisions under Cooperative Societies Act (no.12 of 1997) part V.d.That the 1st Respondent be compelled by this Honorable Court to facilitate supply of copies of all the period 2018 to 2021 and audit reports for the period 2018 to 2021 as guaranteed under the Cooperative Societies Act no. 12 of 1997 Section 21 d and to validate Section 16,17,18, of the Cooperative Societies Act no. 12 of 1997 on membership composition.e.The Claimant be granted privileges under 1st Respondent Certification with all provisions as outlined in Cooperative Societies Act and the Traffic Act.f.The 2nd Respondent swear an Affidavit why it believes that the Claimant is no longer qualified to operate as a member and under the 1st Respondent certification.g.The Respondent to pay costs of the petition.

2. The Notice of Motion dated on the instant date and filed at the same time listed different prayers as followsa.Spent.b.That, pending the hearing of this Application inter-parties, the court be pleaded to issue Temporary orders of injunction restraining the first Respondent from holding an Annual General meeting scheduled for December,2022. c.That, pending the hearing of the Claim the Court be pleased to issue Temporary orders of injunction restraining the 1st Respondent from holding an Annual General Meeting scheduled for December, 2022. d.Same as prayer (a) in the Statement of Claim.e.Same as prayer (g) in the Statement of Claim.

3. Regarding the Notice of Motion dated 15/11/2022 the Tribunal made the following orders:a.That the Statement of Claim to be served upon the Respondent.b.The Respondent to file responds within 10 days upon service. Respondent to also file Defence statement, List of Documents and Witness Statement.c.Mention for further directions on 30/11/2022.

4. After several mentions of the matter the Tribunal again gave other directions on 10/2/2023 as follows:a.That the Application dated 15/11/2022 be held in abeyance to pave way for main hearing.b.Respondent to file Witness Statement and all documents to be relied on during hearing 21 days from the date of the directions.c.Claimant granted 14 days upon service by the Respondents to file supplementary Witness Statements/ Documents.d.Mention to confirm compliance with pre- trial direction and confirm hearing date on 6/4/2023 – Tentative hearing date in Kakamega on 11/5/2023.

5. On the mention date 6/4/2023, it was noted that the Respondent had not filed the Written Submissions and the documents as directed by the Tribunal and the Claimant insisted that he was ready to proceed.The Tribunal directed the parties that the hearing would proceed on 7/8/2023 without fail.

6. The Claimant filed an Application dated 2nd June 2022 that he would act in person and copied the Respondent.

Claimant’s Case. 7. Mr. George Ouma Bobby – the Claimant made a Sworn Statement that since the inception of Kipkaren Sacco Society Ltd, he became a member and founder Chairman since 2011 till 2017 when his Motor Vehicle was attached by Co-operative Bank.

8. He further stated that when his vehicle was attached, he stepped down as the Chairman and stopped participating in the affairs of the Respondent for 5 years till 2022.

9. When asked whether he was making contributions to the Respondent during the 5 years his motor vehicle was impounded. The answer was no.On whether he knows that Kipkaren Sacco by-law clause 14(vii) makes it clear that when a member fails to make contributions to the Sacco he/she will cease or deemed to have cleared from the Sacco.The Claimant denied existence of such a by-law.He was referred to prayer 1 & 2 of his Statement of Claim particularly where he stated that the acts of the Respondent were illegal, malafide void & unconstitutional and whether he knew that there are not constitutional matters. The Claimant answer was that “I am a founder member not a life member”Finally, the Claimant states that the Respondent would have consulted him before being removed and that the members in an Annual General Meeting have the final say in Cooperative Societies.

The Respondent’s Case 10. The Advocate for the Respondent stated that they wish to rely on the Verifying Affidavit of Mike Kemboi dated 9/2/2022, their amended 1st Respondent Response to the Claim with a Counter-Claim dated 9/2/2022, copies of the Annual General Meeting minutes held on 4/7/2017, letters dated 26/7/2017, 30th October 2017, 5th March 2018 and Claimant’s letter dated 31st August 2022 along with other documents listed.

11. At the close of the case, the Tribunal made orders to the effect that:a.The Claimant to file and serve Written Submissions within 14 days from this day.b.The Respondent to fie and serve replying Written Submissions within 14 days of service.c.Mention to confirm Written Submissions on 15/9/2023.

Analysis 12. Having considered the facts adduced by the Claimant in his Statement of Claim and other documents annexed together with his Written Submissions ANDThe Respondents Defence statement, Counter-Claim, Affidavits, annextures and Written Submissions. We have Isolated three issues for determination namely:i.Whether Kipkaren Sacco Society was acting within its mandate to terminate the membership of the Claimant.ii.Whether the Respondents Counter-Claim has merit.iii.Who would pay the costs.

Issue One 13. Whether Kipkaren Sacco Society was acting within its mandate to terminate the membership of the Claimant.First, it is not in dispute that the Claimant was a member of the Respondent since its Inception/Registration in 2011 and he became the Chairman upto 2017 when he relinquished the chairmanship.Section 7 of the Cooperative Society’s Act Cap 490 provide who should approach the Cooperative Tribunal in case of any dispute or among them.These are:1. If any dispute concerning the business of a Cooperative Society arises.a.Among members, past members and persons claiming through member, past members and deceased members or,b.Between members, past members or deceased members and the society, its committee or any officer of the society or,c.Between the Society and any other Cooperative Society.The dispute at hand is between a member/ past member and his Society. We consider that the dispute is properly before the right forum and none other.To support our view, we are guided by the decision of the Court in the case of Wakenya Pamoja Sacco Society Ltd v Stephen Ogamba (2008) eKLR wherein Musinga J (as he then was) stated:“where there is a clear procedure for redress of any particular grievance prescribed by the Constitution or an Act of Parliament that procedure would be strictly followed”The Respondent’s Submissions on the issue of jurisdiction is misplaced because he referred to the Claimant as a petitioner as if the case is a constitutional matter. Consequently, it is our view that the Claimant would have sought for Judicial Review is misleading because the dispute at hand is not constitutional in nature and referring to the Claimant as a petitioner equally not in order.It is trite law that Claimants dispute is in the right forum and the Tribunal is clothed with jurisdiction by the Cooperative Societies Act.

14. Considering the Claimant was a chairman of the Sacco since inception in 2011, the procedure of registration of a Sacco at the time was that draft by-laws would have accompanied the Application to the Commissioner of Cooperatives.Section 13 of the Cooperative Societies Act provide that:“the by-laws of a Cooperative society shall when registered bind the Cooperative Society and the members thereof to the same extent as if they were signed by each member and contained covenants on the part of each member for himself as his personal representatives to observe all the provisions of the bylaws”By a dint of this provision, the Claimant was bound by Kipkaren Sacco Society Ltd

15. By-laws of every Cooperative Society are strictly formal rules that govern its management and it contains among others the requirements of how new members are to be admitted and termination of membership.One of the prayers of the Claimant is to seek for a declaration that the process undertaken to terminate his membership was illegal, irregular, unconstitutional, malafide and therefore invalid and void. We have looked at the draft by-laws in which the Claimant himself was listed as No. 1 in the list of promoters, particularly by-law No. 7 which provide for the requirements that would make one to be legible to be a member of the Sacco. These are listed as follows.“A person of either sex shall be eligible for membership who possesses the following qualification:a.Is within the field of membership consisting of the following common bond: Owners of PSV vehicle operating Eldoret-West Indies-Kipkaren Estate, and any other routes agreed by members in a general meeting.b.Is not less than 18 years of age.c.Is of good character.d.Is an employee of the Sacco and;e.Is not a member of another Sacco having similar objectives.f.Is of sound mind.g.Is a member of the immediate family of a member?It was the testimony of the Claimant that he relinquished his position as Chairman in 2017 and stopped participating in the Sacco activities when his motor vehicle was impounded by the bank.

16. In analyzing the requirements set in by-law no. 7, we note that the Claimant’s motor vehicle was impounded, he lost being an owner of a motor vehicle plying in the particular routes named in the by-law no. 7(a).This was compounded by the Claimant relinquishing his position as the Chairman of the Sacco and failing to participate in the activities of the Sacco since 2017, which takes us to by-law no 16 on voluntary withdrawal in the Sacco, particularly by law 16(a) which read thus:“A member with no liability or outstanding obligation: in respect of other member’s loans may withdraw from membership at any time provided that where a member has an outstanding obligation in respect to guarantee shall continue to be responsible unless alternative arrangement acceptable to the Society are made.”During hearing, the Respondents stated that after the Annual General Meeting elections of 2017, the Claimant disappeared for five (5) years, only to appear in 2022 with an Application to be allowed to substitute his motor vehicle.The Respondents went further to state that it is only when the Committee of the Sacco noted that the Claimant ceased to make monthly contributions that they wrote to him a termination letter dated 15/03/2018, which was produced at hearing.

17. Given that the Claimant was not under any duress/influence when he relinquished the chairmanship and given his long absenteeism or lack of active participation in the affairs of the Sacco. It is our view that the Claimant was the author of the termination of his membership.Although, it is not in the Tribunal’s record file that the Claimant was first suspended before termination of membership as provided in by-law no. 15( e), we hold that when a member loses the common bond as provided, then he actually loses the qualification to be a member.It is therefore our view, that the committee was perfectly in order to execute their mandate to terminate the membership of the Claimant. We therefore find that the Claimant’s Statement of Claim dated 15/11/2022 is without merit.

18. On the Counter-Claim, we have read the 1st Respondent’s amended response to the Claim and the Counterclaim, the Verifying Affidavit sworn by Mike Kemboi, the annexures and the Written Submissions of both parties. The Response of the Claimant contained in the Written Submission is incorrigible, poorly drafted and does not address the substantive prayers in the Counter-Claim. In the Submissions, the Claimant dwells so much on using emotional tones/ words which fail to bring out what he wants to say requesting for proof which he would have done it during the hearing.On the balance of convenience, we allow the prayers of the Respondents’ Counter-Claim on (b), (c) and (d).

19. Flowing from the analysis above, the decisions of the court and the provisions of the Cooperative Act, it is our considered view that the Claimant’s dated 15/11/2022 is not merited and is hereby dismissed with costs.

On the same breath, prayer (b), (c) and (d) of the Respondent’s Counter-claim dated 9/2/2023 is merited and allowed as prayed with costs.It is so ordered.

JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 30TH DAY OF NOVEMBER, 2023. Hon. Beatrice Kimemia Chairperson Signed 30. 11. 2023Hon. J. Mwatsama Deputy Chairperson Signed 30. 11. 2023Hon. Beatrice Sawe Member Signed 30. 11. 2023Hon. Fridah Lotuiya Member Signed 30. 11. 2023Hon. Philip Gichuki Member Signed 30. 11. 2023Hon. Paul Aol Member Signed 30. 11. 2023Tribunal Clerk JonahGeorge Ouma Bobby- PresentKipkaren Sacco – No appearanceHon. J. Mwatsama Deputy Chairperson Signed 30. 11. 2023