Cooperative Society Limited v Ruto [2022] KECPT 153 (KLR)

Cooperative Society Limited v Ruto (Tribunal Case 110 of 2021) [2022] KECPT 153 (KLR) (Civ) (26 May 2022) (Judgment)

Neutral citation: [2022] KECPT 153 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Civil

Tribunal Case 110 of 2021

J. Mwatsama, Vice Chair, P. Gichuki & B. Akusala, Members

May 26, 2022

Between

Cooperative Society Limited

Claimant

and

Isaac Kemboi Ruto

Respondent

Judgment

1. The matter for determination was brought vide a Memorandum of Claim dated December 15, 2021. The claimant a Cooperative Society stated the respondent was its member since February 11, 2008. The respondent had shares amounting to Kshs. 24,116/= in the year 2014 and in the year 2019 the respondent who was in charge of the claimant deceitfully took monies for his own gain without the authority of claimant or members. He advanced himself Kshs. 4,109,107/= for his own personal use and gain.The claimant avers therespondent admitted his indebtness to claimant in writing on February 20, 2020and proposed a payment plan of Kshs. 5000/= each month. He was to pay Kshs. 1. 200,000/= by December 31, 2020and balance in December 2021The claimant refused the proposal by the respondent.The claimant further states the respondent on different occasions took goods worth Kshs. 837,707/= from claimant and gave to persons not members of the claimant.The claimant therefore prays for judgment against respondent for :a.Kshs. 4,946,814/=b.Costs of the suitc.Interest on (a) and (b) at court rates

2. The respondent filed answer to Memorandum of Claim dated March 18, 2021filed on March 25, 2021. The respondent denied knowledge of the allegations by the claimant. The respondent aver the amount being demanded by claimant was an afterthought after claimantissued illegal notice of retirement to the respondent.The respondent denied taking farm inputs and further stated he negotiated with claimant for a salary of Kshs. 80,000/= up from Kshs. 25,000/= due to the responsibilities given to respondent and the supply of farm inputs being treated as incentives to its employees from 2014. The respondent denies any wrong doing and states there was no complaint laid to the CID leading to a charge before a court of law and no complaint was placed before the Annual General Meeting.

3. The respondent further filed a Counter Claim and stated the claimant terminated his services within justifiable cause.The respondent further states the claimant was in breach of employment law occasioning loss of income and Respondent was subjected to financial and psychological torment.The respondent claims he was not paid.Particulars of breach as particularized in the Counter Claim are:i.Three months pay in lieu of noticeBasic +house allowance (55,000/=+8250x3)….Kshs. 189,750/=ii.Compensation for unfair terminationKshs. 63,250x12 months…………..kshs. 759,000/=iii.Payment for breach of contract from December 2019 to December 2020Gross payx12 months (63,250/x12)…….kshs, 759,000/=iv.Responsibility allowances Kshs. 25,000x19yrs…kshs. 475,000/=v.Commuter leavesKshs. 1000x6 days x4 wksx12monthsx19………..kshs. 5,472,000/=vi.Unpaid leaveThe leaves accumulated with non-payment for 15 years (30dysx15yrs worked)…kshs. 63250x15. .kshs. 948,750/=vii.Risk allowance kshs. 12,500x12x20yrs…..kshs. 3,000,000/=viii.Under payment of wages as per the Labour Relations Act 2007. a.2000- March 2012 [kshs. 19600x135months]..kshs, 1,722,400b.April 2012 – march 2013 [kshs7600x12months]kshs. 91,200/=c.April 2013 -july 2014 [kshs, 7450x16monthskshs, 119,200/=d.August 2014- November 2014 [8350x40months] kshs.33,400/=e.December 2014 -june 2016 [kshs. 8650x25months] kshs 216,250/=f.January 2017- December 2017[kshs 34,500x12months] kshs. 414,000/=g.January 2018-december 2018[kshs. 26,500x12months] kshs .318,000/=h.January 2019- June 2020 [kshs. 32250 x6 months] kshs. 193,500/=i.July 2019 – January 2020[kshs 24,150x7months] kshs.169,050/=Total Kshs. 2,499,600/=ix.Severance payProvides pay at one month’s salary for every complete years of service.Basic pay of one month’s for 15 days for each year worked[kshs. 63,250x20x26/15….kshs. 2,192,666. 60/=x.Gratuity payTotal salary earned divided by 26 days x15 days x 20years ..kshs .63,250divide 26x15x20. .kshs. 729,807. 70/=xi.Over time45 hrs per week36hrsx4wks = 144-45=99 hrs[overtime]99hrsx241mnths=23,858overtime hrs32,858hrs kshs. 110…… kshs. 2,624,490/=Total claim kshs. 20,427,464. 30The respondent’s services were terminated without notice and prayed for :a.General damages in accordance with paragraph 20 above.b.A declaration that the termination is unjust and inequitable and contravenesarticle 28, 41 (1), 45(2), 47, 48 and 50 (1) of the Constitution of Kenya and be reduced to normal termination with full benefitsc.A declaration the termination of the Respondent employment was unfair and unlawfuld.Certificate of servicee.Interest at court rate of paragraph 20 above from time of termination to date of judgment.f.Costs of the suit.g.Any other order thehonourable court may deem fit to grant.

4. The claimant filed a reply to answer to Memorandum of Claim and defence to counter- claim and stated that the Tribunal has no jurisdiction to deal with the retirement ofclaimant as an employee.The claimant and respondent had tabulated the respondent’s dues andrespondent has refused to collect or has surrendered the same by Kshs.515,000/= and cannot be effect until the loan is cleared. Respondent undertook to repay the same vide his letter dated February 20, 2020. The respondent’s services were not terminated but is normal retirement at his request after passing the retirement age of 55 years.Request was made when respondent was 57 years and it was approved.The claimant further stated in their Defence vide MIN/2/11/12/2019 of December 11, 2019Executive Committee Meeting, the respondent proposed the benefit to pay part of his debt.The respondent is not entitled to general damages if at all.

5. When the matter came up for hearing the issue of jurisdiction was raised and on December 8, 2021 the Tribunal directed for parties to file written submissions in respect to the issue of jurisdiction and claimant filed their written submissions dated December 22, 2021on January 12, 2022and respondent filed their written submissions dated January 17, 2021on February 17, 2022. Having considered the pleadings and written submissions the claim was filed and now the issue for determination is one.Whether the Tribunal has jurisdiction to hear the claim and or counter claim?What jurisdiction ?Black’s Law Dictionary - a court’s power to decide case or issue or decree.Jurisdiction is the power and authority constitution, conferred upon/or constitutory recognized as existing in] a court or judge to pronounce the sentence of the law or to award the remedies provided by law.

6. From the Memorandum of Claim the claimant avers the respondent was in charge of claimant and laid access to the fund and advanced himself money.This in our view is not a claim to which the Cooperative Tribunal can handle.The claim as it was theclaimant and filing case against respondent as an employee who allegedly embezzled the claimant’s funds.Despite the respondent being a member of the claimant the claim herein emanates from him being an employee of the claimant and actions he undertook as an employee.In the case of owners of the Motor Vessel - “Lillian s” v Caltex oil[Kenya] Ltd 1989. “jurisdiction is everything. Without it a court- has no power to make one more step. Where a court has no jurisdiction there would be no basis for a continuation of proceedings pending other evidence. A court of law downs its tool in respect of the matter before it the moment it holds the opinion that it is without jurisdiction.. where a court takes it upon itself to exercise jurisdiction which it does not possess, its decision amounts to nothing. Jurisdiction must be acquired before judgment is given”Samuel Kamau Macharia v Kenya Commercial Bank[2012]eKLR stated thus:“a court’s jurisdiction flows from either the Constitution or legislation or both. Thus, a court of law can only exercise jurisdiction as conferred by the Constitution or other written law. It cannot arrogate to itself jurisdiction exceeding that which is conferred upon it by law…..that the issue as to whether a court of law has jurisdiction to entertain a matter before it, is not one of mere procedural technicality; it goes to the very heart of the matter, for without jurisdiction, the court cannot entertain any proceedings.”

7. The jurisdiction of the Tribunal is clearly set out under section 71 Cooperative Societies ActIf the liquidator of a society whose registration has been cancelled alleges that any of the offences mentioned in sections 318,319,320,321,322 or 323 of the Companies Act (cap 486) have been committed, he shall report the facts to the Commissioner, who shall, if he thinks fit, institute such proceedings as may be necessary.”This means that the claim hence is not sustainable and is void ab initio. We therefore put our hands down as we have no jurisdiction in the matter.

Judgment signed, dated and delivered at Nairobi Virtually this 26th day of May, 2022. Hon. J. Mwatsama Deputy Chairperson Signed 26. 5.2022Mr. P. Gichuki Member Signed 26. 5.2022Mr. B. Akusala Member Signed 26. 5.2022Tribunal Clerk NasiekuLivendi Advocate holding brief for Angu Kitigin for the RespondentMs Angwenyi holding brief for Magare for the Claimant.Hon. J. Mwatsama Deputy Chairperson Signed 26. 5.2022