Kariuki & 6 others v Commisioner for Coperative Development; Tuungane Tujijenge Sacco Limited & another (Interested Parties) [2023] KECPT 1081 (KLR)

Kariuki & 6 others v Commisioner for Coperative Development; Tuungane Tujijenge Sacco Limited & another (Interested Parties) (Tribunal Appeal 5 of 2020) [2023] KECPT 1081 (KLR) (Civ) (14 December 2023) (Judgment)

Neutral citation: [2023] KECPT 1081 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Civil

Tribunal Appeal 5 of 2020

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

December 14, 2023

Between

Elias Kariuki

1st Appellant

Isaiah Cunguti

2nd Appellant

James Ireri Stephen

3rd Appellant

Jane A. Karanga

4th Appellant

Njeru Mbogo

5th Appellant

Susan Wairimu Nyaga

6th Appellant

William Mbungu

7th Appellant

and

The Commisioner for Coperative Development

Respondent

and

Tuungane Tujijenge Sacco Limited

Interested Party

Quickline Auctioneers

Interested Party

Judgment

1. The matter for determination is a Memorandum of Appeal dated 10th November 2020 and filed on 12th November 2020 in which the Appellants seek the following orders:a.The Inquiry conducted by Hesbon M. Kiuria and Nicholas Ndirangu is tainted with bias;b.Hesbon M. Kiuria Nicholas Ndirangu usurped the mandate of the Commissioner in prematurely recommending the surcharging of the Appellants;c.The Inquiry conducted by Hesbon M. Kiuria and Nicholas Ndirangu is tainted with irregularities;d.The decision by the Commissioner to surcharge the Appellants being founded on bias and illegalities be quashed and set aside;e.The Respondent pays costs herein.

2. In the Appeal, the Appellants argue that the Inquiry by was devoid of rules of natural justice as they were not given an opportunity to be heard, and neither did the Inquiry Officers have jurisdiction to undertake the Inquiry. They also claim that the Inquiry Officers did not find any evidence linking the Appellants to the alleged loss by the interested parties, and also that the Inquiry Officers did not know any definite amount that had been misappropriated, and neither did they sign the Inquiry Report. Further, they claim that the Commissioner ignored their Response on why they should not be surcharged.

3. The Respondent have not filed any response. The 1st Interested Party filed their Response on 1st October 2021. In their Response, they depone that the Appellants were served with Notices of Intention to Surcharge, and instead of the Appellants showing cause why they should not be discharged, they made mere denials. They further depone that the Commissioner and the Inquiry Officials were well within the jurisdiction in preparing the Inquiry Report.

4. Both parties filed submissions. The Appellants, in their submissions, submit that the Surcharge was unlawful and the reason for this is that the Inquiry Officers usurped the functions on the internal structure of the 1st Interested Party. On this, they also submit that the monies allegedly misappropriated was used to further societies’ by-laws such as education. Further, the Appellants submit that they were not accorded their Constitutional Rights of fair hearing and neither were they accorded an opportunity to defend themselves. They rely on the Society’s by laws, the CooperativeSocieties Act, the Constitution of Kenya and various case laws.

5. In the 1st Interested Party submissions, submit that due process was indeed followed to the tabling of the Inquiry Report before a Special General Meeting of the 1st Interested Party. They also submit that the Appellants were given a chance to show cause and through a letter, they denied and disputed all the allegations.

Analysis 6. The question that the Tribunal asks itself is whether the Appellants are entitled to the prayers sought in their Memorandum of Appeal. On the prayer to find that Hesbon M. Kiura and Nicholas Ndirangu conducted the Inquiry with illegality and bias, the Tribunal will now consider the Inquiry Report. This Tribunal is not made up of auditors and neither have we been supplied with the documents that the Inquiry Officers used, and therefore we will consider the report on the face of it. In the Inquiry report, the Tribunal notes the Terms of Reference (T.O.R) at page 7, and notes that there is no mention of the Appellants names, or any other person’s name, and neither is any alleged misappropriated amount mentioned. This rules out the question of bias, as the Inquiry Officers started on a clean slate and found the names of others, including the Appellants, as they progressed with the Inquiry. On illegality, this Tribunal notes that Hesbon Kiura (Principal Co-operative Officer and Nicholas Ndirangu (Principal Co-operative Auditor) were properly engaged by the Commissioner of Co-operatives via gazette Notice No. 3422 of 8th May, 2020). The Inquiry Officers reported to the Commissioner who tabled the Inquiry Report before the Special General Meeting of the 1st Interested Party. The Report at page 60 recommends a surcharge of Ksh. 5,158,680/= and at page 61 gives a breakdown of the apportionment of the Ksh. 5,158,680/= in 3 headings that is, unsupported & Illegal payments, Lost money and Mpesa Fraud. All these headings are dealt with extensively in the body of the report.

7. On the ground that the Appellants were not given an opportunity to be heard, the Tribunal notes the Commissioners letter dated 9th September 2020 in which the Commissioner calls upon the Appellants to show cause why they should not be surcharged. The Appellants responded by way of denials and did not show cause why they should not be surcharged. At this time the Inquiry Report had already been tabled before the Special General Meeting and the Appellants presumed to have knowledge of it. This Tribunal therefore finds that the Appellants were accorded enough opportunity to be heard.

Conclusion 8. The upshot of the above is that we find the Appellant’s Appeal dated 10. 11. 2020 has no merit, and the same is hereby dismissed with costs to the Interested Party.

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 JonahNo appearance by parties.LaterNjoroge advocate for the AppellantsHON. J. MWATSAMA - DEPUTY CHAIRPERSON SIGNED 14. 12. 2023