Obebo & another v Commissioner for Co-operatives Development & 6 others [2023] KEHC 26119 (KLR)

Obebo & another v Commissioner for Co-operatives Development & 6 others (Constitutional Petition 7 of 2018) [2023] KEHC 26119 (KLR) (29 November 2023) (Judgment)

Neutral citation: [2023] KEHC 26119 (KLR)

Republic of Kenya

In the High Court at Kisii

Constitutional Petition 7 of 2018

REA Ougo, J

November 29, 2023

IN THE MATTER OF THE CONSTITUTION OF KENYA 2010 IN THE MATTER OF CO-OPERATIVE SOCIETIES ACT, CAP 490 LAWS OF KENYA

Between

Shadrack Mogesi Obebo

1st Petitioner

Lawrence O Nyangaga

2nd Petitioner

and

The Commissioner for Co-operatives Development

1st Respondent

The Co-operative Commissioner Kisii County

2nd Respondent

Jeremiah Omwansa Obwona

3rd Respondent

George Momanyi Mironga

4th Respondent

Samule Okirigiti Mokabi

5th Respondent

Mbotela Nelson Opanga

6th Respondent

Henry Nyabuto Ngarana

7th Respondent

Judgment

1. The petitioners are members of Mobamba Cooperative Society which is registered under the Corporative Societies Act, Cap 490 Laws of Kenya. The 1st respondent is the Commissioner for Cooperative development appointed pursuant to section 3 of the Cooperatives Societies Act while the 2nd respondent is the Cooperative Commissioner in Kisii County. The 3rd – 7th respondents are members of the interim Committee appointed by the respondents.

2. The petitioners allege that during the Annual General Meeting, a management committee chaired by Edward Miroro were elected (‘former committee’) pursuant to the society’s by-laws and in accordance to the Cooperatives Act. On 17/5/2018 the members of the former committee were summoned to the office of the 2nd respondent and issued with a letter requiring them to attend a special general meeting that was to be held on 24th May 2018. None of the members of the Sacco knew what was to be discussed at the special general meeting. Three hundred members attended the meeting and the 2nd respondent informed them that the former committee was to be disbanded and, in its place, an interim committee would be appointed. It was alleged that this was on account of the issues relating to the management of the sacco’s resources. The members of the Sacco were not agreeable to the preposition as they were not aware of an such issues. The 2nd respondent thereafter asked the members of the former committee to vacate their offices and to implement its unilateral decision, it sought services of the police.

3. The petitioner concedes that the 2nd respondent has power to suspend the former committee, however the same can only be conducted after a duly constituted legal inquiry under section 58 of the Cooperative Societies Act has been done. Alternatively, the power to remove or suspend and the former committee is vested in the annual general meeting where all the members participate. They contend that the manner in which the 2nd respondent exercised its power was ultra-vires and beyond the powers granted under section 28 (7) of the Cooperatives Act. The petitioners therefore sought the following reliefs:a.A declaration that the process followed in the constitution of the impugned interim committee was illegal, irregular, unconstitutional, mala fides and therefore invalid and void.b.The Honourable court be pleased to issue an order of injunction restraining the 3rd, 4th, 5th, 6th and 7th respondents from assuming office in any capacity or from conducting any transaction relating to the management and/or business of the petitioner/applicant co-operative society.c.The honourable court be pleased to issue an order of injunction restraining the respondents herein, their agents, servants and/or representatives from blocking and/or preventing the elected committee members from accessing their offices and discharging their lawful mandates.d.A declaration that the current elected committee members of the applicant Sacco Society herein are legally in office unless removed in accordance with the Society’s by-laws or under the provisions of the Cooperative Societies Act, Cap 490 Laws of Kenya and are therefore entitled to transact all Business in relation to, for and on behalf of the Society.e.Costs of the suit be borne by the Respondents jointly and severally.f.Such further and/or other reliefs as the Honourable court may deem fit and expedient to grant.

4. The petition was supported by the affidavit sworn by Shadrack Mogesi Obebo on 14/6/2018.

5. The petition is opposed by the 2nd respondent who filed a replying affidavit dated 2nd March 2021. Pamela K. Mase swore the affidavit in her capacity as the County Cooperatives Commissioner. The 2nd respondent explained that she has a supervisory role over all cooperative societies within the County but the day to day running of the societies is done by the management committees which are elected by members. In 2018 she received complaints from farmers in regards to the management committee of Mobamba Co-operative Society. They alleged that the assets of the society were being disposed without the consent from farmers.

6. On 24/5/2018 a special general meeting was held and the management committee suspended for a period of 90 days and an interim team put in place pursuant to section 93A of the Co-operatives Societies Act. The interim committee worked under the terms of reference set out by the 2nd respondent and were to report back to the farmers as provided by the law. On 20/8/2020 the interim committee presented an inspection report to the 2nd respondent and the report found that the former committee had sold land belonging to the farmers without proper procedures and that monies due to farmers could not be traced in any bank account. The committee recommended that all illegal contracts entered into by the former committee be rescinded and the properties revert back to farmers. Following the findings of the report, a special general meeting was called on 2/10/2018 and the members elected a new management committee after the report was read to them.

7. The interim committee also recommended that an inquiry under section 58 of the Co-operative Societies Act be conducted so as to unearth the corruption by the former committee. The Cabinet Secretary thereafter instituted an inquiry which was headed by officers from the national government and a report was released in January 2021. The recommendation in the Inquiry Report was that the management committee be surcharged for the monies misappropriated, that is, Kshs. 20,000,000/-. The inquiry report further recommends that all land sold by the former committee illegally be repatriated to the farmers some of whom are over 80 years old and languishing in poverty.

8. The 2nd respondent contend that the petitioners have not demonstrated how their constitutional rights have been violated as a farmer whose interests the 2nd respondent was protecting. The 2nd respondents acted within the confines of the Co-operative Societies Act when constituting the interim committee and the provisions of Article 47 of the Constitution do not apply in the action taken. In any event, the petitioners claim has been overtaken by events since the interim committee no longer exists as it was only mandated to work for 90 days.

9. The 3rd - 7th respondent filed two replying affidavits, one dated 14/12/2018 and the other dated 26/11/2019. They contend that in their report they exposed the improper conducted of the former committee. The former committee of Mobamba Farmers’ Co-operative Society Limited purported to sell the property of the society without the consent of the members and the money from the sale could not be traced.

10. They presented the report during the special general meeting of Mobamba Farmers’ Co-operative Society and a new management committee was elected. The reliefs sought by the petitioners have therefore been overtaken by events hence are seeking court orders in vain. The petitioners have not demonstrated a prima facie case with probability of success. Section 58 and 93A of the Co-operative Societies Act, Cap 490 provides that the 2nd respondent had powers to appoint an interim committee and ask for an inquiry. Due process was followed in the election of the new management committee and the petitioners have not demonstrated any cause of action against the 3rd to 7th respondents.

Evidence by the Parties 11. Shadrack Mogesi Obebo (Pw1) testified that he is a member of Mobamba co-operative society. He adopted his statement as his evidence in chief. He testified that he was aggrieved by the commissioner’s actions. They elected the chairman and other members. They were later called for a meeting but were not told the reason for the meeting. They were then told that the former committee was to be disbanded. Pw1 testified that the members are aggrieved at how the former committee were just shown the door. On cross-examination he testified that they carried out elections and later their officials were dismissed. He maintained that the interim committee is illegally in office. Upon electing members of the former committee, they embarked on building. Pw1 was not aware of other parcels of land that had been sold and money from the sale not accounted for.

12. Lawrence Nyangaga (Pw2) adopted his written statement filed in court on 2/12/2019. He testified that they were not given notice and their leaders were removed from office. The former committee was removed before the inquiry was done. On cross examination he testified that he recalls a meeting where the interim chairman’s report was read to the farmers. He maintained that there was no proof they sold properties of the farmers. He testified that no elections have been done for farmers to elect their people and that the interim committee is still in the office. He testified that he was not given notice for the meeting held on 24/5/2018. He was not given notice that the former committee was to be disbanded. He testified that farmers should be allowed to choose their own leaders. According to Pw2 elections were done against the law as they should have waited for the petition to be concluded.

13. Charles Oyunge Mandi (Pw3) testified that he is a farmer with Masanga Mobamba Co-operative society and his membership No. is 3455. He attended a special general meeting on the 24/5/2018. The outcome of the meeting was not known to them and later, the commissioner appointed officials. The disbanded committee was to serve for 3 years but had not completed 3 years.

14. Pamela K. Mase (Dw1) testified that she is the county co-operative commissioner in Kisii county. As a county co-operative officer, she supervises, guides and co-ordinates, protects and ensure the assets of the society are protected. Before she became the cooperative county officer, Mr. Vincent received complaints from farmers of Mobamba about their assets. Members were complaining that the committee had misappropriated funds and mishandled the assets. Section 93A was invoked was by the commissioner and the people in the committee asked to step aside to allow for investigations. She prepared a notice for the meeting. The purpose of the meeting was to allow the farmers understand the allegations against the former management committee. The members were told there was to be an interim committee to investigate the allegations. The inspection report proved that the issues in the interim report were true. The report found land was sold un-procedurally and that when the committee was in office and they hadn’t presented their audited accounts for the last 3 years. There was a special general meeting that was called and elections held. An inquiry team confirmed that land was being sold irregularly. They were surcharged members of the former committee to pay the amount lost. Dw1 testified that she followed the law and the process wasn’t illegal or irregular.

Submissions by the Parties 15. The petitioner in their submissions identified the following issues for the court’s determination:i.Whether the current former committee members of the Sacco society were legally in office.ii.Whether the respondent followed the due process of the law in removing from office the duly elected committee members of the Sacco.iii.Whether the petitioner’s fundamental rights have been violated by the respondents.iv.Whether the prayers sought in the petition ought to be granted.

16. On the first issue, the petitioner submits that the elections of the members of the former committee was conducted in conformity with section 27 (3) of the Co-operatives Societies Act and no offence were levelled against them for the 2nd respondents to exercise the power to suspend the former committee.

17. The respondent failed to follow the due process of the law in removing from office the duly elected committee members of the Sacco. First the respondents failed to serve notice within 15 clear days give a clear agenda for the proposed special general meeting removing the petitioners from office. Section 2 of the Co-operative Societies Ac No. 12 of 1997 defines ‘special general meeting’ as a general meeting other than an ordinary general meeting of which 15 clear days written notice of the resolution and of the date, time and place has to be given to each member. The meeting to remove the petitioners from office was done after a 7-day notice and the agenda was raised during the meeting. The petitioners relied on the decisions in the case of Bernard Mugo & 8 others v Kagaari South Farmers Co-op Society Ltd & 4 others [2016] eKLR; Muka Mukuu Farmers Co-operative Society Ltd v The Commissioner for the Co-operative Societies [2004] eKLR; and Republic exparte Kenya Planters Co-operative Union v Commissioner for Co-operative Development & 2 Others [2020] eKLR.

18. It was also submitted that the petitioners were removed from the office through the 2nd respondent’s unilateral decisions. The 2nd respondent floated an agenda to remove the members of the former committee but when the members did not agree with her suggestion to suspend the members the 2nd respondent walked out of the meeting. The 2nd respondent later used police officers to block the petitioners from accessing the office or the funds. The removal of the petitioners from the office was therefore a unilateral decision. See the Court of Appeal decision in Washington Silvanus Washiali Khwale v District Co-operative Officer Mumias & 5 Others [2014] eKLR.

19. The petitioners argue that the procedure for removal of members of the former committee was not followed. The proper channel of challenging the duly elected members of a cooperative society is through a general meeting as opposed to a special general meeting as per section 27 of the Co-operative Societies Act. They relied on the decision of Republic v Commissioner for Co-operative Development & 17 others ex-parte Kenya Planters Co-operative Union Limited [2014] eKLR.

20. On the third issue, whether the petitioners’ fundamental rights were violated, the petitioners submit that they had a right to participate in all the affairs touching on the Sacco. The petitioners were entitled to a fair hearing with proper notice and reasons before their removal from office in line with Articles 47 and 50 of the Constitution of Kenya, 2010. The petitioners had legitimate expectation that the by-laws would be followed. The petitioners were called to a meeting with short notice, an agenda for their removal was floated during a meeting to ambush them with no time to defend themselves, the procedure for their removal from office was not followed and the decision to remove them from office was unilateral.

21. Finally, the petitioner submits that they are entitled to the orders sought. They submit that the they have demonstrated a prima facie case with high chances of success and irreparable loss will be suffered if the orders are not granted. They have also adduced sufficient evidence to the effect that the respondent followed an illegal process and the decision to remove the elected members was not sanctioned by the members.

The 2nd Respondent’s Submissions 22. It was submitted that the petitioners have only listed various articles of the statute and constitution yet there are no pleadings to the specificity of violations and how the violation infringed the petitioner’s constitutional rights. It relied on the case of Zack Kinuthia v Judicial Service Commission, Ngugi Mbumbi & 3 others (2020) eKLR. The petitioner failed to demonstrate how the 2nd respondent infringed on their rights collectively. They have also not pleaded the specific of the interim committee that are unconstitutional.

23. They also submit that the deponent of the supporting affidavit to support the petition, Shadrack Mogesi Obebo, lacks the capacity and authority to institute this instant petition. He failed to attach any letter authorizing him to file the petition on behalf of the 2nd petitioner. The deponent therefore lacks locus standi and the supporting affidavit should be struck out. The failure to secure the authority offends Order 1 Rule 13 of the Civil Procedure Rules. The petition is therefore incurably defective and should be struck out.

24. On whether the petitioners are entitled to the reliefs sought, it was submitted that the 2nd respondent acted within the provisions of section 93 by allowing members to appoint an interim committee with clear terms of reference within a period of 90 days. The actions of the 2nd respondent was eventually vindicated by the inquiry report which showed clear malpractice.

Analysis and Determination 25. I have considered the parties' pleadings, their rival submissions and the issues before the court are twofold: firstly, whether the respondents followed the correct procedure in dissolving the former management committee; and secondly, whether the petitioners are entitled to the orders sought.

26. Article 47 of the Constitution provides that every person has a right to administrative action that is expeditious, efficient, lawful, reasonable and procedurally fair. The Court of Appeal in Civil Appeal No 52 of 2014, The Judicial Service Commissioner v Hon Mr Justice Mbalu Mutava & another [2015] eKLR held as follows:“Article 47(1) marks an important and transformative development of administrative justice for, it not only lays a constitutional foundation for control of the powers of state organs and other administrative bodies, but also entrenches the right to fair administrative action in the Bill of Rights. The right to fair administrative action is a reflection of some of the national values in article 10 such as the rule of law, human dignity, social justice, good governance, transparency and accountability. The administrative actions of public officers, state organs and other administrative bodies are now subjected by article 47(1) to the principle of constitutionality rather than to the doctrine of ultra vires from which administrative law under the common law was developed.”

27. In this instant petition it is not in dispute that the 2nd respondent gave notice to members of Mobamba Cooperative Society regarding a special general meeting to discuss the issues affecting the society and the way forward. The notice was issued on 17/5/2018 and the meeting was scheduled for 24/5/2018. The 2nd respondent by virtue of section 27 (8) of the Co-operative Societies Act had the power to convene a special general meeting of the society. During the meeting, the 2nd respondent informed the members that the management committee had mismanaged the properties and urged the members of the management committee to step aside and give way for inspections. The meeting became rowdy and had to come to an abrupt ending. The following day the 2nd respondent wrote to the Lands Registrar that only the members of the interim management committee, the 3rd to 7th respondent, could transact on behalf of the society. The interim management assumed office and presented an inspection report recommending that an inquiry be instituted by the 2nd respondent pursuant to section 58 of the Co-operative Societies Act.

28. After considering the sequence of events at the society, the 2nd respondent cannot be said to have kept strict adherence to the provisions of section 58 of the Cooperative Societies Act. It is not in dispute that the former committee was dissolved by the 2nd respondent. Section 58 of the Co-operative Societies Act sets the procedure for dissolution of a society’s management committee as follows:58. Inquiry by Commissioner(1)The Commissioner may, of his own accord, and shall on the direction of the Minister, as the case may be, or on the application of not less than one-third of the members present and voting at a meeting of the society which has been duly advertised, hold an inquiry or direct any person authorized by him in writing to hold an inquiry, into the by-laws, working and financial conditions of any co-operative society.(2)All officers and members of the co-operative society shall produce such cash, accounts, books, documents and securities of the society, and furnish such information in regard to the affairs of the society, as the person holding the inquiry may require.(3)The Commissioner shall report the findings of his inquiry at a general meeting of the society and shall give directions for the implementation of the recommendations of the inquiry report.(4)Where the Commissioner is satisfied, after due inquiry, that the Committee of a co-operative society is not performing its duties properly, he may—(a)dissolve the Committee; and(b)cause to be appointed an interim Committee consisting of not more than five members from among the members of the society for a period not exceeding ninety days.

29. According to the provisions of section 58 of the Co-operative Societies Act, the 2nd respondent could only dissolve the management committee after holding an inquiry. The findings of the inquiry are then tabled before the society at a general meeting and the 2nd respondent is required to give directions on the implementation of the recommendations of the inquiry. However, after an inquiry and the commissioner is satisfied that the committee was not performing its functions it may dissolve the committee and appoint a caretaker committee.

30. A reading of section 58 of the Co-operative Societies Act makes it clear that conducting an inquiry marks the commencement of the process. The evidence before the court reveals that the 2nd respondent acted in reverse. It dissolved the management committee and appointed the caretaker committee without first conducting an inquiry and in my view, this was not procedurally fair.

31. I also agree with the submission of the petitioners that the 2nd respondent did not give the members sufficient notice. The meeting was held 7 days after the notice was issued as opposed to the mandatory 15-day requirement. Section 2 of the Co-operative Societies Act provide that:special general meeting” means a general meeting, other than an ordinary general meeting, of which at least fifteen clear days written notice of the resolution and of the date, time and place of the meeting has been given to each member.

32. The petitioners have sought injunctive orders against the 3rd to 7th respondents from assuming office, however, I note that the 3rd-7th respondents are no longer in office as the caretaker committee their term having lapsed after 90 days. It will therefore be futile to grant injunctive orders given that the 3rd-7th respondent has served their 90-day term in office. The position by courts is that an injunction cannot be granted once the event intended to be injuncted has been overtaken by events. In the case of Habiba Ali Mursal & 4 Others v Mariam Noor Abdi [2018] eKLR, the Court held as follows:“On the issue as to whether an injunction should be issued, there is nothing to restrain as the respondent has already demolished the walls of the building. According to the photographs annexed to the application for contempt which I shall shortly herein after deal with, the walls of the building have already been demolished and all windows removed. The entire building has been fenced and sealed using iron sheets. The applicants are not in the premises. The purpose of an injunction is to restrain that which is threatened to occur or is in the process of being undertaken in breach of one’s right. It is never meant to prevent what has already occurred. It will therefore be futile to grant injunctive orders. I will therefore decline to grant any orders in the notice of motion dated 11th October, 2018 save for an order that the respondent shall meet the costs of this application. It is so ordered.”

33. Similarly, in Stanley Kirui v Westland Pride Limited [2013] eKLR it was held: -“The court cannot injunct what has already happened. I will be guided by the findings in case of Mavoloni Company Ltd vs Standard Chartered Estate Management Ltd, Civil Appeal No. 266 of 1997[1997] LLR 5086, where the court held that “an injunction cannot be granted once the event intended to be injuncted has been overtaken by events.” Similar findings were held in the case of Esso Kenya Ltd Vs Mark Makwata Kiya, Civil Appeal No. 69 of 1991 where it was stated “an injunction cannot issue to restrain an event that has taken place.”

34. I also note that members of the society in a special meeting held on 2nd October 2018 have now elected a new management committee. The petitioner did not amend their pleadings challenging the manner in which the elections were conducted and are therefore satisfied with the manner in which the members of the new management committee were elected. I therefore find thatprayer (c) cannot be granted as the event intended to be injuncted has been overtaken by events. The members of the society have also elected a new management committee and therefore prayer (d) has equally been overtaken by events.

35. The upshot is that the petitioner’s petition is meritorious and I proceed to make a declaration that the process followed by the 2nd respondent in the constitution of the impugned interim committee was illegal, irregular, and wasin contravention of Article 47 of the Constitution as it failed to follow the laid down procedure in section 58 of Co-operative Societies Act. Costs of the petition is awarded to the petitioners against the 2nd respondent only.

DATED, SIGNED, AND DELIVERED VIA MICROSOFT TEAMS THIS 29TH DAY OF NOVEMBER 2023. R.E. OUGOJUDGEIn the presence of:Mr. Marita For the 1st and 2nd PetitionersRespondents: All Absent