Njuguna v Metropolitan National Sacco Limited [2025] KECPT 257 (KLR)

Njuguna v Metropolitan National Sacco Limited (Tribunal Case 993/E1007 of 2022) [2025] KECPT 257 (KLR) (29 April 2025) (Judgment)

Neutral citation: [2025] KECPT 257 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 993/E1007 of 2022

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

April 29, 2025

Between

Ruth Njambi Njuguna

Claimant

and

Metropolitan National Sacco Limited

Respondent

Judgment

1. The Claimant was a member of the Respondent’s Sacco Member No. 28801, and it was provided for in the by-laws of the Respondent that:i.The Claimant had the right to purchase shares from the Respondent and the extent of her shareholding would determine her eligibility to get a financial facilityii.That based on her share holding she would receive dividends annuallyiii.That she was entitled to an emergency loaniv.That in case the Claimant wished to leave, she was free to do so upon the issuance of a reasonable notice

2. That on 29th July, 2022 the Claimant gave the Respondent the requisite notice to pay or refund her deposits, and that at the time the Claimant gave the notice of withdrawal the Claimant's cumulative share contribution with the Respondent were worth Kshs. 503,000/=

3. That the Respondent failed, neglected and or refused to refund the Claimant his share contribution in breach of the Respondent’s by-laws despite demand made, necessitating the filing of this Statement of Claim dated 28th November, 2022 for recovery of the sum of Kshs. 503,000/= plus interest from 28th November, 2022 until payment in full.

4. The Respondent filed their Statement of Defence dated 17th February, 2023 stating among others that:i.The Claimant has not proved or sufficiently established that the Respondent is in possession of his shares, savings and or deposits and without prejudice has not met the condition for a refundii.The Statement of Claim is replete with outright falsehoods, misrepresentation and concealment of material factsiii.As per the Respondent’s resolutions at their Annual General Meeting, members resolved and agreed to put refunds on hold until the liquidity challenges faced by the Respondent ceases and which the liquidity problems are facts which are well within the Claimant’s knowledgeiv.The Respondent never received the Claimant’s notice of withdrawal and the Claimant’s demand notice does not conform to the statutory notice envisaged under the Co-operative Societies Act, Rules and the Respondent’s by-lawsv.The Respondent has been through so much turmoil and financial challenges and is overwhelmed by various applicants seeking to withdraw from the Society as a result of mismanagement by previous committeevi.In response to the numerous cases of withdrawal by its members, it requires and it is necessary to have a more structured approach to handle the outstanding matters, failure to which the existence of the society is uncertain.vii.This Tribunal on 8th October, 2024 gave directions for the Respondent to file and serve their Witness Statement, Statement of Accounts and other documents within twenty one days and for the parties to file their written submissions. The Claimant filed their written submissions dated 22nd October, 2024 stating among others:a.That her total savings as at the time of withdrawing her membership amounted to Kshs. 503,000/=b.That the Claimant formally resigned and even followed her resignation letter with a demand letter from her Advocates dated 18th October, 2022c.That membership at the Respondent was voluntary and after expressing her desire to cease membership, she should have been paid her dues.d.That a party cannot be forced to remain a member of a society once they have expressed the desire to cease being a member

5. As at the date of writing this judgment, the Respondent was yet to file a Statement of Account or their written submissions.

Has the Claimant sufficiently proved her claim on a balance of probabilities and is she entitled to a refund? 6. We note that the Claimant did properly withdraw from the Respondent vide a letter dated 29th July, 2022 and followed her resignation by a demand letter from her Advocates dated 18th October, 2022 asking for a refund, and the Respondent has not produced anything to show that there is a standard format for notice of withdrawal from the SACCO.

7. The Respondent has not pleaded any liability on the part of the Claimant in terms of loans and guarantees to other members, and in as much as we sympathize with the Respondent’s financial situation, we are also alive to the fact that a member has a right to her deposits. The Co-operative Societies Act is clear on the concept of voluntary membership to a Co-operative Tribunal, and as long as a Co-operative society is in operation, it is expected to honor its obligations to its members. The Legal Notice No. 82 (The Sacco Societies Act) at Section 21 (6) is also clear to the effect that:“A non-deposit-taking Sacco society shall refund to a member the amount accumulated in the member's non-withdrawable account within sixty days of receiving the written notification of the member to withdraw from membership of the Sacco society.”

6. The Claimant produced her Statement of Account dated 9th September 2022, and the Respondent did not dispute the amounts owed, and this Tribunal is inclined to believe that the Respondent owes the Claimant Kshs. 503,000/= in refunds.

Final Ordersi.The Claimant’s Statement of Claim dated 28th November, 2022 succeedsii.Judgment is entered in favour of the Claimant for the sum of Kshs. 503,000/= with costs and interest at Tribunal rates from date of filing claim.

JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 29TH DAY OF APRIL, 2025. HON. B. KIMEMIA - CHAIRPERSON SIGNED 29. 4.2025HON. J. MWATSAMA - DEPUTY CHAIRPERSON SIGNED 29. 4.2025HON. BEATRICE SAWE - MEMBER SIGNED 29. 4.2025HON. FRIDAH LOTUIYA - MEMBER SIGNED 29. 4.2025HON. PHILIP GICHUKI - MEMBER SIGNED 29. 4.2025HON. MICHAEL CHESIKAW - MEMBER SIGNED 29. 4.2025Tribunal Clerk JemimahMachoka advocate for Claimant.No appearance for RespondentHON. B. KIMEMIA - CHAIRPERSON SIGNED 29. 4.2025