Mureithi v Sokoro Sacco Society Limited [2024] KECPT 1494 (KLR)

Mureithi v Sokoro Sacco Society Limited (Tribunal Case 865, E956 of 2022) [2024] KECPT 1494 (KLR) (26 September 2024) (Judgment)

Neutral citation: [2024] KECPT 1494 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 865, E956 of 2022

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

September 26, 2024

Between

David Wahome Mureithi

Claimant

and

Sokoro Sacco Society Limited

Respondent

Judgment

1. The matter for determination is a Statement of Claim dated 4th November 2022 and filed on 8th November 2022 in which the Claimant claims that he was a member of the Respondent being member number 1049. The Claimant avers that he withdrew from membership in June 2022 and is yet to receive his savings amounting to Ksh. 148,400/-. The claimant therefore prays for:a.A refund of the sum of Kshs. 148,400/=(one hundred and forty-eight thousand four hundred shillings only) plus further deductions.b.Costs and interest of this suit.c.Any other relief that this court may deem fit and just to grant.The Claim is accompanied by a witness statement, and documents in support of the claim.

2. The Respondent filed a Response to Statement of Claim in which they admit that the Claimant was its member. However, the Respondents deny that the Claimant is entitled to a refund because he is yet to clear his loan that stands at Ksh. 68,500/- together with interests. According to the Respondents, the loan was secured using the Claimants deposits and therefore the Claimant cannot withdraw a deposit before clearing the loans in default.

3. The matter was canvassed by way of submissions and hence there was no hearing.

4. Both parties filed their submissions. In their submissions, the Claimants sought to establish whether he properly resigned from the Sacco. They submitted that the Claimant rightfully resigned and is entitled to his refunds. The Claimants did not submit on the loan, any loan balance or any outstanding interests.

5. In their submissions, the Respondents submitted that the Claimant did not do a proper withdrawal from the Sacco, noting that they did not receive any resignation letter. They submitted that Section 13 of the Cooperative Societies Act provides that the by-laws of a Sacco should bind the cooperative and the members, and the by-laws clearly provided that a member cannot be allowed to resign until his loan is satisfied.

Analysis 6. This Tribunal has considered the submissions by the parties and the documents filed by the parties. This Tribunal notes that it is not in dispute that the Claimant is a member of the Respondent. It is also not in dispute that the Claimant has savings with the Respondents. What is in dispute is whether he wrote a letter to resign, and also whether he is entitled for a setoff of his savings with the loan and the Claimant paid the balance, if any.

7. In answering the first question, the Tribunal notes that the Claimant had written dated 28th June 2022 resigning from the Sacco, and the same is acknowledged by a red pen, that directed a Muturi* to stop deductions. This Tribunal is therefore, inclined to believe that the Claimant indeed wrote a letter to resign from the Respondent. On the second question, we note that the Claimant claims that he resigns and seeks a refund of his deposits while the Respondent claims that as much as the Claimant is entitled to his deposit, he cannot be paid the same till he clears the outstanding loans.

8. This Tribunal is guided by the Cooperative Societies Act, which at section 4(b)(1) provides that cooperatives should incorporate the principle of open and voluntary membership in their by-laws. By-laws of a cooperative society is to bind each and every member as if each member signed them individually. Section 34 of the Cooperative Societies Act, further provide that:“A co-operative society shall have a first charge upon the share or interest in the capital and on the deposits of a member or past member, and upon any dividend, bonus or accumulated funds payable to a member or past member, in respect of any debt due from such member or past member to the society, and may set off any sum credited or payable to such member, or past member in or towards the payment of any such debt”.The Tribunal notes that the law gives an obligation to the Respondent to use the deposits to offset any liability that the Claimant may have in the Respondent. The Respondent did not provide any copy of their by-laws, though it would be interesting to see how they have circumvented such a clear provision as Section 34 above. The provision under section 1 of the loan form to the effect that members cannot resign from the Respondent when they have loan balances is void as it goes in contrary to the Cooperative Societies Act as long as the Claimant has a deposit that is more than the amount owed. As much as the Claimant did not make any comment on the loan allegedly owed, neither did he dispute that he had such a loan or the loan application form on record. We are therefore inclined to believe the Respondent that the Claimant had a loan with the Respondent. In the statement submitted by the Respondent, which was not in any way disputed by the Claimant as at December 2022, the Claimant’s share deposit was Ksh. 150,169/- against a loan balance of Ksh. 69,602/- and an interest of Ksh. 17,400/-.

9. Flowing from above, we find merit in the Claimants Claim and order as follows-Judgment is entered in favour of Claimant against Respondent for:a.Immediate refund of Ksh. 63,167/- to the Claimantb.The Claimant is awarded costs of this suit together with interest from date of filing suit at Tribunal rates until payment in full.

JUDGMENTSIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 26TH DAY OF SEPTEMBER, 2024. HON. B. KIMEMIA CHAIRPERSON SIGNED 26. 9.2024HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 26. 9.2024HON. BEATRICE SAWE MEMBER SIGNED 26. 9.2024HON. FRIDAH LOTUIYA MEMBER SIGNED 26. 9.2024HON. PHILIP GICHUKI MEMBER SIGNED 26. 9.2024HON. MICHAEL CHESIKAW MEMBER SIGNED 26. 9.2024HON. PAUL AOL MEMBER SIGNED 26. 9.2024TRIBUNAL CLERK JEMIMAHNo appearance by parties.Judgment delivered in absence of parties.HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 26. 9.2024