Mwangi v Chuna Coop. Savings & Credit Society Limited [2024] KECPT 903 (KLR)

Mwangi v Chuna Coop. Savings & Credit Society Limited (Tribunal Case 319/E452 of 2023) [2024] KECPT 903 (KLR) (23 May 2024) (Judgment)

Neutral citation: [2024] KECPT 903 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 319/E452 of 2023

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

May 23, 2024

Between

Daniel Wanjohi Mwangi

Claimant

and

Chuna Coop. Savings & Credit Society Limited

Respondent

Judgment

Claimant’s Case 1. Claimant’s case is based on the Statement of Claim of 2. 6.2023 and supported by Claimant Witness Statement dated 2. 6.2023. The Claimant has also produced documents dated 2. 6.2023 to support his case.The Claimant’s case was heard on 5. 2.2024 where the claimant adopted his witness Statements and his documents as his Evidence -in -Chief.

2. In his Statement of Claim, the Claimant states that he was a member of the Respondent member No. 12135 since July 2009. He states that his account was debited with Kshs. 104,249. 10/= by the Respondent. He states that pleas to reverse this transaction has not been heeded by the Respondent.He prays that this court passes judgment in his favour against the Respondent for Kshs. 104,249. 10/=, interest on the same plus costs.

3. In his witness statement dated 2. 6.2023, the Claimant reaffirms the content of his claim statement and states that the delay in reversing the debit entry of Kshs. 104,249. 10/= has caused him mental anguish and anxiety.The Claimant has supported his claim through his documents which include:-a.Termination letter by the Respondent dated 15. 4.2021. b.Contributions statement dated 23. 5.2023. c.Claimant letter of demand dated 11. 4.2023. d.Respondent demand letter to the Claimant dated 11. 4.2023 and a reminder letter of 5. 5.2023.

4. During the hearing of the Claimant’s case on 5. 2.2024, the Claimant adopted his witness statements as his Evidence - in -Chief.He reiterated that the debit of Kshs. 104,249. 10/= from his account by the Respondent was erroneous and efforts seeking an explanation from the Respondent were fruitless on cross examination the Claimant confirmed that he did not file the emails written to the Respondent as stated in his witness statement. He denied that he had a school fees loan with the Respondent.

5. On re examination the Claimant stated that beside the emails to the Respondent, he also did a letter on the Kshs. 104,249. 10/= debit from his account.In his written submissions dated 9. 5.2024 summarized his case seeking court attention to two main issues viz Is the deduction illegal

Whether Respondents made any effort to recover from Ms. Leah Ndungu .

In his submissions the Claimant states that he was not a guarantor to Ms. Leah Ndungu, hence the deduction was illegal.He states that the Respondent should have followed Ms. Leah Ndungu if they had a loan issue with her.

Respondent’s Case 6. The Respondent’s case is contained in Respondent’s Defence dated 8. 9.2023 and his witness statement of even date. The same is supported by his documents dated 8. 9.2023 and hearing of the matter on 5. 2.2024. The Defence/Respondent case, is summarized in the Respondent’s written submissions dated 8. 4.2024. In their memorandum of reply dated 8. 9.2023 the Respondent admits that the Claimant was a member of the Respondent and that he was making contributions to the Respondent. he also admits debiting the Claimant’s account with Kshs. 104,249. 10/=. The Respondent denies receiving account reversal requests.

7. In his witness statement, the Respondent through Mr. Andrew Abuga states that the Claimant was employed as an Accountant of the Respondent in 2009 and was responsible for reconciliation of members personal accounts among others.The Respondent witness states that the Claimant failed in his duties in Ms. Leah Ndungu’s case who tendered her resignation from the Respondent.

8. The Respondent states that the Claimant failed in his duties by failing to properly handle Ms. Leah Ndungu account while exiting the Respondent Sacco occasioning an overpayment to Ms. Leah Ndungu of Kshs. 104,249,10/= . this is the gist of the Respondent’s case.

9. The Claimant is alleged to have authorized this overpayment leaving the Sacco with only one option, recover from the Claimant.The Respondent states that the claimant failed in his duties, hence should be surcharged for the amount lost through his negligence.The Respondent has filed the following documents in support of the case viz.a.Claimant’s job descriptionb.Leah Ndungu exit letterc.Leah Ndungu statementd.Respondent letter confirming Leah Ndungu’s refunds.

10. During the hearing of the case on 5. 2.2024, Mr. Abunga confirmed that he works with the Respondent Sacco since 2018 in the internal audit department.He adopted his statement dated 8. 9.2023 and documents of even date as his Evidence - in -Chief.He explained why the Kshs. 104,249. 10/= was deducted from the Claimant. He stated that the Claimant did not do due diligence while discharging Leah Ndungu.On cross examination, the Respondent explained his duties in the Respondent Sacco and also explained that the matter took long because there was a forensic audit.The Respondent could not prove that the Claimant was on duty when Ms. Leah Ndungu transactions were done.

11. On re examination the Respondent confirmed that the RTGS dated 25. 5.2018 was authorized by three Directors of the Respondent Sacco namely Chairman, Treasurer, Secretary and the Chief Executive Officer.In their written submissions dated 8. 4.2024, the Respondent confirms debiting the Claimant’s account by Kshs. 104,249. 10/=. The Respondent through the written submission narrates the sequence of events leading to the debiting of Claimant’s account.He states that the Claimant authorized the overpayment to Ms. Leah Ndungu hence the surcharge.The submissions reaffirm that the Claimant was negligent and hence culpable in Ms. Leah Ndungu overpayment.

Analysis 12. From the proceedings, we note that both parties admit that there was an overpayment of Kshs. 104,249. 10/= to a former member Ms. Leah Ndungu .We also observe that the process to clear an exiting member was done by the accounts department where the Claimant worked.The Respondent has not adduced any evidence to prove that the claimant was specifically and individually responsible for this overpayment to Leah Ndungu.

13. We also observe that the Claimant sought explanations on the deduction from the responding but no response was received.We feel that the Respondent was obligated to respond to queries raised by the Claimant.We also note that the Respondent made no efforts to follow the former member Ms. Leah Ndungu to recover the overpayment before effecting debiting the Claimant’s account, despite having data on Leah Ndungu.

14. The Respondent has absorbed the other officials who signed for the overpayment claiming that they did not have access to the system to verify Ms. Leah Ndungu balances.The Respondents option to recover the overpayment from the Claimant is not informed by any evidence or documents presented in this court.We also observe that Ms. Leah Ndungu letter to withdrawal from the Respondent Sacco is dated 5. 3.2018 and addressed to the manager while the deduction of the overpayment from the Claimant’s account was effected in 31. 12. 2021.

15. We also note that the Respondent alluded to a forensic audit to determine the overpayment but whose findings were filed in court.In view of this analysis we find that Respondent has not adequately defended their case. They have not filed sufficient evidence to prove their case.On the other hand, we find that the Claimant has prosecuted his case adequately by stating that he was not exclusively responsible for members statements reconciliation and that he was never given timely explanations on the debit made on his account.

16. We find that the Respondent went for the Claimant’s account to recover the overpayment simply because the Claimant’s account was under their control.It would have been expected that the Respondent would pursue Ms. Leah Ndungu to recover the overpayment before reverting to the Accountant.

17. We pass judgment in favour of the Claimant against the Respondent for reimbursement of Kshs.104,294. 10/= with interest plus costs of filing suit.

JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 23RD DAY OF MAY, 2024. HON. J. MWATSAMA - DEPUTY CHAIRPERSON SIGNED 23. 5.2024HON. BEATRICE SAWE - MEMBER SIGNED 23. 5.2024HON. FRIDAH LOTUIYA - MEMBER SIGNED 23. 5.2024HON. PHILIP GICHUKI - MEMBER SIGNED 23. 5.2024HON. MICHAEL CHESIKAW - MEMBER SIGNED 23. 5.2024HON. PAUL AOL - MEMBER SIGNED 23. 5.2024Tribunal Clerk JonahMugo advocate for the RespondentMKN & Company advocate for the Claimant – No appearanceMugo advocate – We pray for 45 days stay of executionTribunal ordersRespondent granted 30 days stay of execution.HON. J. MWATSAMA - DEPUTY CHAIRPERSON SIGNED 23. 5.2024