Kariko v Besco Coop. Sacco Limited [2025] KECPT 201 (KLR)

Kariko v Besco Coop. Sacco Limited (Tribunal Case 62/E147 of 2024) [2025] KECPT 201 (KLR) (27 March 2025) (Ruling)

Neutral citation: [2025] KECPT 201 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 62/E147 of 2024

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

March 27, 2025

Between

John Kariko

Claimant

and

Besco Coop. Sacco Limited

Respondent

Ruling

1The matter before us for determination is the Respondent’s Notice of Motion application dated 16th July, 2024.

2The Application is brought under sections 3,15 and 17 of the Co-operative Tribunal (Practice and Procedures) rules, 2009, Sections 7(5) of the Cooperative Societies Act and Sections 34(2) and (3) of the Cooperative Societies Rules 2004.

2In the Application, the Respondents/Applicant prays for the following orders;1. Spent2. Spent3. The default judgement entered by the tribunal on 15th July 2024 be set aside4. That time for entering appearance and responding to the claim be enlarged5. That the respondents be allowed to enjoin Herbert Girhana, James Ronga and Elkana Mageto as 2nd, 3rd and 4th respondents herein6. That cost of this application be borne by the claimant

3The Application is determined on the grounds on the face thereof including that the claimant has never served the suit papers upon the Respondents/Applicants or its CEO; that there is no evidence that the sum of Ksh.4,254,000/= was paid to the Respondent’s /Applicants’ account by the Claimant; that the process for land acquisition by a Sacco was not followed; that the beforehand amount is termed by the Claimant as a loan and a disposal at the same time ; that is the Claimant loaned money for anyone, it would be the three former officials of the respondent/applicant sought to be enjoined in their personal capacities.

4The Application is supported by the Affidavit of Joseph Kinyua Gathuku sworn on 16th July 2024

5The deponent states that he is the chairman of the Respondent and that he learnt about the matter the day after the judgement was entered against the Respondent,that the Respondent/ Applicant is not in the business of obtaining loans from members and there is a well laid down procedure for borrowing which was never followed by the former officials; that the said former officials entered into loan personal loans agreement with the claimants; the claimants documents indicate the sum of ksh.4,245,006/= as the claimants deposit not a loan; that the amount has never been deposited or paid into the respondents account and the amount of ksh.1,000,000/= does not appear in the respondents accounts; that the alleged loan interest of 60% is not most competitive, that if the respondent had been served with the court process, it would have entered appearance and defended the respondents and they have a good defence and counter claim against the claimant money fraudulently and irregularly obtained from the Respondent/Applicant through the former officials. The Respondent/Applicant filed a supplementally affidavit sworn by the same deponent on 30th September 2024 in which he declined into matters of evidence which we do not wish to go into at this juncture

6The Application was opposed by the claimant while replaying Affidavit sworn by John Nga’ng’a Kariko, the Claimant on 1st August 2024, wherein he depones that the respondent’s application is full of glaring falsehoods is frivolous and an abuse of the court process; that the application is designed to deny him the fruits of his judgement legitimately obtained as the Applicant snubbed the summons; that the summons to enter appearance and the claim were served physically to the applicant through its Chief Executive Officer and the email service was only supplemental, that in fact, the email address was provided by the applicant itself in response to the claimants advocates demand letter; that the CEO was served at the respondent/applicants offices at Bidco factory premises where he accepted service and the process server took a photo of him receiving the documents; that the summons and the claim documents were properly served upon the applicant whole chore to demean the Tribunal’s authority hence the regularity of the judgement and decree herein.

Determination 7We have considered all the documents filed by both parties in respect to the application herein and find that;1. The service of summons and statement of claim upon the respondents/applicant has-been demonstrated in the affidavit of service upon which the Tribunal relied while considering the application for interlocutory judgement has been consideredNo sufficient evidence reasons or grounds have been put forth to convince the tribunal that the official was not served in the premises of the respondent.It is therefore, our findings that the respondent was duly served in his official capacity and he received summons and statement of claim on for the respondent, and the service was therefore proper2. Having held that service upon the respondent was proper, it follows that the judgement entered pursuant thereto is a regular judgementThe judgement entered on default of appearance and defence under order 10 of the civil procedures Rules are called upon to set aside is therefore, a regular judgement

8. The provisions of order 10 Rule provided that;“Where judgement has been entered under this order the court may set aside or vary such judgement and any consequential decree or order upon such terms as are just. The tribunal’s powers to set aside judgement are discretionary and must be exercised on the basis of evidence and sound legal principles.

9. The respondent have defence and counter claim raising triable issues

10. In the case of Kenya power & lightening company LTD Vs Abdulhakim Abdulla Mohammed & another of 2007 eKLR, the court held:“The overriding interest consideration in an application to set aside a default judgement where the intended defence raises triable issues, is to do justice to both parties.It is trite that where an intended Defence raises triable issues, it ought to be allowed to go to trial.

11. We had considered the draft response and counter claim and find that indeed the same raises several issues warranting taking the matter to trial.

12. Though the respondent has not satisfactorily explained to the reasons for failure to enter appearance and defence it is clear that the application to set aside judgment was filed without undue delay

13. Having found the draft response herein to raise triable issues it would be in the interest of notice to have both parties heard on the merits by the case we further rely on the of Mbugua Vs Sigimo Enterprise LDT (Environment and land case civil suit of 2017 [2023] KEELC 22453(KLR)(Ruling)

14. In the circumstances we allow respondent’s notice of motion application dated 16th June 2024 and set aside the default judgement entered herein on 15th July 2024, on the following conditions1. The Respondent to file and serve statement of response and counter claim within fourteen (14) days from the date hereof.2. The Respondent to pay to the claimant a sum of both ksh.20,000/= as thrown away costs within thirty days from the date hereof;3. In defaults of compliance with 1 and 2 above the order setting aside the default judgement shall automatically lapse.4. The Claimant is granted costs of this application.5. The case be mentioned on 17th day of September 2025 to confirm compliance and take for further directions.

RULING SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 27TH DAY OF MARCH, 2025. HON. B. KIMEMIA - CHAIRPERSON SIGNED 27. 3.2025HON. J. MWATSAMA - DEPUTY CHAIRPERSON SIGNED 27. 3.2025HON. BEATRICE SAWE - MEMBER SIGNED 27. 3.2025HON. FRIDAH LOTUIYA - MEMBER SIGNED 27. 3.2025HON. PHILIP GICHUKI - MEMBER SIGNED 27. 3.2025HON. MICHAEL CHESIKAW - MEMBER SIGNED 27. 3.2025Tribunal Clerk JonahMbuthia advocate for the RespondentMungai advocate holding brief for Tumu advocate for the Claimant.