Mek Sacco Society Limited v Samson Omondi Chilo & 6 others [2019] KECPT 65 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL AT NAIROBI

TRIBUNAL CASE NO. 612 OF 2017

MEK SACCO SOCIETY LIMITED.........................CLAIMANT

VERSUS

SAMSON OMONDI CHILO & 6 OTHERS......RESPONDENTS

RULING

The matter  for determination  is  a Notice of Motion  application  dated  21. 6.19 seeking  stay  of  execution  of the  judgment  decree entered  on 8. 1.2019 and  other prayers on the  face of  the  application :-

(a) This application  be certified urgent  and the same  be heard  ex-parte in the first instance.

(b) There be  stay of execution  of the judgment  decree  herein  pending  hearing  and determination  of this application.

(c) The ex-parte  judgment  herein  entered  on 8th  January  2019 against  the  7th  respondent  be set aside.

(d) Cost of this application be in the cause.

Based on the grounds on the face of the application and supported by an affidavit of SIMON OTIENO ADEDE filed on 21. 6.19.

The same  is opposed  vide  the grounds  of opposition  filed  on  26. 7.2019, and  the replying  affidavit  of SIMON  OTIENO ADEDE in opposition  of the  grounds of opposition dated  25. 7.19. Parties canvassed their application by way of written submission as ordered on 19. 8.19 and 4. 10. 19. Only the claimant /respondent filed their written submissions on 14. 10. 19.

We note the orders issued on 4. 10. 19 pending the two other similar applications filed on 23. 9.9 and 25. 9.19.

The respondents  judgment creditor was granted  7 days  to file  their  written submissions and the ruling of their  application  was  maintained  for  7. 11. 19 as ordered  on the 19. 8.19 and  they filed  on 20. 9.19.

We have  perused  the records  and noted  that the  substance  of the claim  is in  surcharge  order  against  all  the respondents  for a sum  of Kshs.16,772,074/= with the  individual, respondents having  their  apportioned  amount.

We have  noted the  ruling  dated  8. 1.19 when judgment  was entered in favour  of the claimant  and it was  held  that  the position  of the  tribunal  was that,

“we cannot  go into the merit  of the surcharge  order. The defence filed  in this  matter  has  no place  when we considered section  73,74,and 75 of the Cooperative Society Act.”

The applicant has submitted that they were never served and they were shocked to receive the decree.

That he was appointed the position of General Manager in January 2013.  The applicant contends that he was condemned, unheard and that he has a good defense raising triable issues.

That section  74 (1) is clear  that any party  aggrieved  by the orders  of the Tribunal  appeal to the Tribunal which  has discretion  to dispatch  without  undue  regard  to technicalities .

That  the applicant  suit  is probably  before  the tribunal because  he has  not exhausted  his  remedy  to  enable  him move  to the High Court.

That  the period  within  which  he was  to approach  the  tribunal  has since  expired  in a misleading  statement  intended  to forestall the applicant’s right  to justice.

That he was  not aware  of the suit  and being  condemned  to pay  without  an opportunity  to be  heard  is contrary  to the principles  of natural justice.

The applicant has cited various authorities in the violation of his constitutional rights. Therefore, a stay of execution should issue.

The respondent/claimant has submitted that the applicant is among the seven former officials of MEK SACCO.

That  after inquiry  by the commissioner  for cooperatives  they  were  found culpable  and were  surcharged but  an  intention  to surcharge  was issued  on 7. 11. 2016 and  surcharge orders on 7. 3.2017.

That  two   other officials fully complied with the surcharge orders.

That no appeal against the inquiry proceedings was filed with the tribunal and there is no appeal against the order of this tribunal before the high court.

That the respondent moved  the tribunal was cited section 58,73,74 and 75 to enforce the  finding of the commissioner and judgment was issued on  8. 1.19.

That the application  is  defective,  bad in law  and lacks  merit because  the applicant  has  not challenged  the findings  of the  commissioner and  has not  demonstrated  the existence  of any  appeal  on law  before  the High Court.

That  the office  of the  commissioner  and  the tribunal  are institutions whose  functions  are complementary  and the tribunal  is the  forum  for appeal  to those dissatisfied  with the orders  of the  commissioner ,  and the applicant  should  have filed  an appeal  within  30 days  if dissatisfied  by the  orders of the commissioner.

That the applicants having  failed  to move  to the  tribunal  and the  High Court  of Appeal  there is  no legal  basis  for stay  of execution.

That the applicant  has no superior rights  to the  members of  MEK Sacco who lost over  45million  shilling and for which  upon  full hearing  of all  parties,  scrutiny  of  the evidence  found  the applicant  and all  the others  culpable  for the  loss.

That the  Co-operative  Act provides  the framework  under which  the applicant should  have sought  redress yet  the applicant  deliberately  failed  to  take  the  appropriate  steps  provided  for under  the law  after  the conclusion  of the inquiry  and  subsequent issuance  of intention  to surcharge  culminating  to the surcharge  orders.

That  the Respondent  simply  moved  the tribunal  to enforce  the surcharge  orders.

On  the issue of  stay  of execution  this is  a discretionary  power and the application  for stay  presupposes  the existence  of  an  appeal  or application  to review  the orders  being  executed.

That  the applicants’ failure  to challenge  the commissioner’s  findings  in time or  file  and appeal  out  of  time  cannot  be remedied by  the  Tribunal  even when  the parties  rely  upon  Article 159 (21) (a) of the constitution owing  to the  fact the  Cooperative  Society Act is a substantive  statute.

That  the tribunal’s  role  after  surcharge  is to enforce  findings  of the  commissioner.

We have  carefully  considered  the submissions  of  the parties  and note  that in this  matter  the applicant  has  brought   their  application  under order  22 Rule  22  Civil Procedure  Rule  and under  order 10  Rule  11 Civil  Procedure  Rule.

We note  that this  is an application  that  invokes  discretionary  powers  of the tribunal  and these  discretionary  powers must be  exercised  judiciously. This  was held  in BUTT  VS RENT  RESTRICTION  TRIBUNAL (1992) KLR 472

We note  that the  stay of execution  pending  the hearing and determination  of the application  that is  prayer  (b) of the  Notice of Motion  of the  application was already  granted in the  first  instance and the only  prayer  that is pending  is  prayer  (c)setting  aside  ex-parte  judgment.

The principles  for setting  aside  exparte  judgment  as held  in SHAH  VS  MBOGO are  that :

(a) Either  the defendant  was not probably  served with the  summons or

(b) That the defendant  failed  to appear  at the  hearing  due to sufficient  cause .

In this  matter we note that the ex-parte  judgment  is  of a different  nature on  the issue  in regard   to surcharges  under  section  73,74 and 75 of Cooperative Society  Act.

In this  matter  we note that  the claimant  moved  the tribunal  in a summary  manner pursuant to the  surcharge  orders  issued  on 1. 3.17 by the  commissioner  for co-operative  development. The  judgment  was issued.

The ruling on 8. 1.19.

The Co-operative  Society Act is clear  on the issues  of surcharges and under  section  73,  the commissioner  ordered  a surcharge  against  the respondent  after  inquiry. Section  74  is clear  that  any  person aggrieved  by an order  of the commissioner  may  within  30 days appeal  to the tribunal. And  any  person  aggrieved  by the  decision  of the tribunal  may  within  30days appeal  to the  High Court. Section 75 which provides  that  the tribunal  shall  without   prejudice  to any  mode of  recovery  recover  the same  amount  as ordered  in the surcharge  as a civil  debt  recoverable summarily.

In the  circumstances  therefore,  this judgment  entered  against  the respondents  was not ex-parte  judgment  per sebut  a surcharge  recoverable  in a summary  manner  under  section  74  of the Cooperative Society  Act.

It is  not  the duty  as  enumerated  in the ruling  dated 8. 1.19 for the  tribunal  to look  into  the merits  of the surcharge. The duty  of the tribunal  is to enforce the surcharge  order  and not  to go  into  the merits  or demerits of the surcharge  orders  unless  the same has been  brought  by way  of an appeal as  enumerated  under section  74(1) of the Cooperative Society  Act.

We  therefore  totally  agree  with the submissions  of the  claimant and accordingly  dismiss the application  dated  21. 6.19 with costs.

This order  to apply  to all  respondents in the matter.

Read and delivered in open court, this 7th  of November,2019.

In the presence of:

Claimant:Miss Obuori holding brief for Onyango Martin

Respondent:Mbuthia holding brief for miss Kamari for 7th Respondent

Court Assistant:Leweri and Buluma

B.Kimemia  - Chairman-signed

R.Mwambura  – Member-signed

P.Swanya  - Member-signed