Shete v Commissioner for Cooperative Development [2025] KECPT 382 (KLR)

Shete v Commissioner for Cooperative Development (Tribunal Appeal E001 of 2025) [2025] KECPT 382 (KLR) (10 July 2025) (Ruling)

Neutral citation: [2025] KECPT 382 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Appeal E001 of 2025

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

July 10, 2025

Between

Chombo Shete

Appellant

and

Commissioner for Cooperative Development

Respondent

Ruling

1. The Application for determination is Notice of Motion dated 19/2/2025 filed on 20/2/2025. The Application seeks for the following orders;1. Pending the hearing of this Application interparties, an order be and is hereby issued to restrain the Respondent, it’s servants, employees, agents and/or any other person from implementing or effecting the Inquiry Report in respect of Kishushe Cooperative Society Limited prepared by the Respondent pursuant to the Inquiry Order issued under the Cooperative Societies Act under gazette notice number 1903 dated 13th February, 2024. 2.Pending the hearing of this Application, an order be and is hereby issued to restrain the Respondent, its servants, employees, agents and/or any other person from implementing or effecting the Inquiry Report in respect of Kishushe Cooperative Society Limited prepared by the Respondent pursuant to the Inquiry Order issued under the Cooperative Societies Act under gazette notice number 1903 dated 13th February, 2024. 3.Pending the hearing of this Application interparties, an injunction be and is hereby issued to restrain the Respondent, its servants, employees, agents and/or any other person from undertaking any elections of Kishushe Cooperative Society Limited pursuant to the recommendations made in the Inquiry Report in respect of Kishushe Cooperative Society Limited prepared by the Respondent pursuant to the Inquiry Order issued under the Cooperative Societies Act under gazette notice number 1903 dated 13th February, 2024. 4.Pending the hearing and determination of this Application interparties, an injunction be and is hereby issued to restrain the Respondent, it’s servants, employees, agents and/or any other person from undertaking any elections of Kishushe Cooperative Society Limited pursuant to the Recommendations made in the Inquiry Report in respect of Kishushe Cooperative Society Limited prepared by the Respondent pursuant to the Inquiry Order issued under the Cooperative Societies Act under gazette notice number 1903 dated 13th February, 2024. 5.Pending the hearing and determination of this application, an injunction be and is hereby issued to restrain the Respondent, its servants, employees, agents and/or any other person from undertaking any elections of Kishushe Cooperative Society Limited pursuant to the recommendations made in the inquiry report in respect of Kishushe Cooperative Society Limited prepared by the Respondent pursuant to the inquiry order issued under the Cooperative Societies Act under gazette notice number 1903 dated 13th February, 2024. 6.Pending the hearing of this appeal, an order be and is hereby issued to restrain the Respondent, its servants, employees, agents and/or any other person from implementing or effecting the inquiry report in respect of Kishushe Cooperative Society Limited prepared by the Respondent in pursuant to the Inquiry Order issued under the Cooperative Societies Act under gazette notice number 1903 dated 13th February, 2024. 7.Pending hearing of this appeal, an injunction be and is hereby issued to restrain the Respondent, its servant, employees, agents and/or any other person from undertaking any elections of Kishushe Cooperative Society Limited pursuant to the recommendations made in the Inquiry Report in respect of Kishushe Cooperative Society Limited prepared by the Respondent pursuant to the inquiry order issued under the Cooperative Societies Act under gazette notice number 1903 dated 13th February, 2024. 8.The costs of this Application be provided for.

2. The Application is supported by the Affidavit of Chombo Shete sworn on 19/2/2025 where he averred he is the Appellant in the proceedings and is a member and official of Kishushe Ranching Cooperative Society.He stated on 29/1/2025 the Respondent read and released to members of the society an undated and unsigned Inquiry Report which was purportedly prepared following an Inquiry Order issued under the Cooperative Societies Act under Gazette Notice No. 1903 dated 13/2/2024. He states there was a meeting held on 29/1/2025 at the Respondent’s registered office of the society. The Appellant/Applicant attended the meeting where the Commissioner’s officials were also present reading the Inquiry Report. A report which later the Appellant/Applicant state was not signed or dated.

3. Amongst its recommendations, the Appellant/Applicant avers was that; one, a general meeting of society be called and elections be held for purpose of electing new officials within 30 days. Secondly, there are members who had been surcharged with the total surcharge amount being excess 7 million.

4. The Appellant/Applicant feels his woes are or have been precipitated by a member who had been disqualified from holding office because he owes the Society Kshs. 260,000/=.The Appellant/Applicant states the report is meant to enable the said member win elections if called.The surcharge is meant to lock out the Appellant from seeking office because he will be disqualified once surcharged. The Appellant/Applicant states membership of Kishushe Society is well over 710 members and a request for inquiry being done by one person failed the legal and mandatory 1/3 membership required in law for purpose of an inquiry.

5. The Appellant states he was summoned by an officer of the Respondent by the name of Kennedy Emali at the time of preparing the report but he was not asked to provide evidence of the alleged amounts not accounted.Further, the Appellant avers one of the people implicated in the report Hogla Nyata had died long before the report was commenced and as such the report would not have considered her views before surcharging her.The Applicant avers recommendation to hold elections on basis of unlawful report and inquiry is irrational an unreasonable and would financially dent the Society whose General meeting requires at least Kshs. 2,200,000/=.The Applicant is apprehensive that the Respondent and its agents would proceed to implement the report before the lapse of 30 days. There is already a notice for the Annual General Meeting and elections dated 6/2/2025 which has already been issued. The Appellant wants a proper and lawful inquiry to be conducted and lawful recommendations made.

6. The Court allowed the Society that is Kishushe Ranching Cooperative Society to be enjoined to participate in the Appeal for reason, the society is the genesis of the Appeal where the 2nd Respondent emanates.The 2nd Respondent in response to the Application dated 19/2/2025 filed an Application, Notice of Motion dated 11/6/2025 which sought for the following orders:1. Prayer 1 – Spent2. Prayer 2 – Spent3. That this proceeding is premature and an abuse of the process of this Tribunal.4. That pending herein and determination of this Application , the Tribunal be pleased to vacate its orders of 20th February, 2025. 5.That no member can act contrary to a resolution of majority members at a General meeting.6. That costs of this application be borne by the Claimant.The said Application, Notice of Motion was supported by the annexed Affidavit of Matilda Walegwa sworn on 24th June, 2025.

7. The deponent stated she is the interim chair of Kishushe Ranching cooperative society Limited requesting to be enjoined in the proceedings and in paragraph 4 of the supporting affidavit stated they were associating themselves with the commissioner for cooperatives Development requesting for the proceedings to be struck out because they are premature and the Appeal is an abuse of the Tribunal.The deponent further stated the appellant had not yet been surcharged and thus he cannot appeal a process that is not complete.She further states the Appellant’s term came to an end in February when elections were held and is now trying to hold on to office illegally and wants tribunal to assist him.

8. The Appellant filed a Replying Affidavit sworn on 14/6/2025 in response to the Application dated 11/6/2025. The Appellant avers he filed an Appeal in his capacity as a member of 2nd Respondent and not an official capacity. He states the Appeal filed goes beyond issues surcharge and extend to procedure leading to Respondent’s decision to surcharge the Applicant.

9. The Applicant states the 2nd Respondent lacks locus to challenge the Applicant’s Appeal.The 2nd Respondent does not have any legal stand in the proceedings before the Tribunal and the 2nd Respondent will not be prejudiced if its Application is dismissed.The Applicant/2nd Respondent filed a Supplementary Affidavit sworn by Matilda Walegwa on 24/6/2025 who stated they are key players in the Appeal as the Appellant has referred to them.Parties were directed to file and serve Written Submissions with the Applicant filing Written Submissions dated 12/6/2025 and 2nd Respondent filing Written Submissions dated 11/6/2025. When the Tribunal gave directions on 12/6/2025 the 1st Respondent that is, the Commissioner for Co-operative Development chose to associate with the 2nd Respondent’s assertions and not file any documents.

10. It is important to note the 2nd Respondent filed a Preliminary Objection dated 11/6/2025 together with its responses and afore mentioned Application.The gist of the Preliminary Objection dated 11/6/2025 is challenging1. Jurisdiction of the tribunal to entertain the Appeal, stating it is contrary to Section 74 Cooperative Societies Act.2. Appellant is yet to comply and cannot comply with rule 8(3) Cooperative Tribunal (Practice and Procedure) Rules 2009, which states;“at the time of filing the Memorandum of Appeal before setting down the Appeal for hearing, the Appellant shall file a Record of Appeal in five sets and serve all parties. The Record of Appeal, properly indexed and paginated, shall contain –a.The Memorandum of Appealb.The Inquiry Orderc.The Inquiry and/or Inspection Reportd.The minutes of the general meeting whose decision is appealed againste.The Notice of Intention to Surchargef.The Surcharge Order; andg.Any other relevant documentsAs is procedure, the Tribunal will first deal with the Preliminary Objection dated 11/6/2025 filed in response to Appellants Notice of Motion dated 19/2/2025. A Preliminary Objection is described in the case of Mukisa Biscuits Manufacturing Ltd –vs- West End Distributors [1969] ES 69. “… a Preliminary Objection consists of a point of law which has been pleaded or which arises by clear implication out of pleadings and which if argued as a preliminary point may dispense off the suit.”The Supreme court in the case of Hasan Ali Joho & Another vs Suleiman Said Shabal & 2 others Supreme Court Petition No. 10 of 2013 [2014]eKLR held that “… a Preliminary Objection consists of a point of law which has been pleaded or which arises by clear implication out of pleadings and which if argued as a preliminary point may dispose of the suit…”

11. The question before the Tribunal is whether the 2nd Respondent’s Preliminary Objection is sustainable.The 2nd Respondent states the Tribunal does not have jurisdiction and further the Applicant’s appeal does not conform to Rule 8(3) Cooperative Tribunal (Practice and Procedure) Rules 2009. As to whether the Tribunal has jurisdiction, Section 73(1) Cooperative Societies Act provides for“(1)Where it appears that any person who has taken part in the organization or management of a co-operative society, or any past or present officer or member of the society— (a) has misapplied or retained or become liable or accountable for any money or property of the society; or (b) has been guilty of misfeasance or breach of trust in relation to the society, the Commissioner may, on his own accord or on the application of the liquidator or of any creditor or member, inquire into the conduct of such person. …The 2nd Respondent has quoted Section 73(1) where it starts however, go further into the said Section 73(2)“Upon inquiry under subsection (1), the Commissioner may, if he considers it appropriate, make an order requiring the person to repay or restore the money or property or any part thereof to the co-operative society together with interest at such rate as the Commissioner thinks just or to contribute such sum to the assets of the society by way of compensation as the Commissioner deems just.Section 74 Cooperative Societies Act provides for appealing against order“(1) Any person aggrieved by an order of the Commissioner under section 73(1) may, within thirty days, appeal to the Tribunal. (2) A party aggrieved by the decision of the Tribunal may within thirty days appeal to the High Court on matters of law.”The question then is, which order is this that the Commissioner makes to require a person to repay or restore money back to the Society? The order is not an Inquiry Report. The Inquiry Report is what precedes an order that is to be made by the Commissioner.As such, once a Surcharge order has been made, only then can a party Appeal.

12. An appeal without a Surcharge Order is premature to state the least. The Appellant stated she is challenging the procedure used. By the mere fact that the procedure is challenged, calls for a review and not an appeal in ordinary legal ­­parlance.Article 47 Constitution of Kenya provides for the Right to Fair Administrative Act and more so Section 7 Fair Administration Act provides for any person aggrieved by an administrative action (in the case Appellant is aggrieved by Commissioner’s actions) may apply for review of the administrative action or decision.The 1st limb of the Preliminary Objection is justified. We rely on the case on Hassan Nyage Charo –vs_ Khatib Mwashetani & 3 others [2014] eKLR where the court held“Thus, a Preliminary Objection may only be revised on a “pure question of law”. To discern such a point of law, the Court has to be satisfied that there is no proper contest as to the facts. The facts are deemed agreed, as they are prima facie presented in the pleadings as received.”The 2nd Respondent’s Preliminary Objection on jurisdiction is indeed founded on law.

13. The 2nd Respondent further refers to Rules of the Tribunal Cooperative Tribunal (Practice and Procedure) Rules 2009 at the time of filing the Memorandum of Appeal before setting down the Appeal for hearing, the Appellant shall file a Record of Appeal in five sets and serve all parties. The Record of Appeal, properly indexed and paginated, shall contain –h.The Memorandum of Appeali.The Inquiry Orderj.The Inquiry and/or Inspection Reportk.The minutes of the general meeting whose decision is appealed againstl.The Notice of Intention to Surchargem.The Surcharge Order; andn.Any other relevant documentsPreliminary Objection dated 11/6/2025 has merit and is hereby allowed.Appeal is accordingly struck out.

RULING SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 10TH DAY OF JULY, 2025. HON. J. MWATSAMA - DEPUTY CHAIRPERSON SIGNED 10. 7.2025HON. BEATRICE SAWE - MEMBER SIGNED 10. 7.2025HON. FRIDAH LOTUIYA - MEMBER SIGNED 10. 7.2025HON. PHILIP GICHUKI - MEMBER SIGNED 10. 7.2025HON. MICHAEL CHESIKAW - MEMBER SIGNED 10. 7.2025HON. P. AOL - MEMBER SIGNED 10. 7.2025Tribunal Clerk KokiGitau advocate for the appellantMs. Adam advocate for Respondent and holding brief for Mr. Mbuthia advocate for Interested PartyGitau advocate - We seek leave to appeal.Tribunal ordersLeave to appeal granted.HON. J. MWATSAMA - DEPUTY CHAIRPERSON SIGNED 10. 7.2025