Simon Njuguna Mburu v Orient Sacco Limited [2020] KECPT 6 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL AT NAIROBI

TRIBUNAL CASE NO. 296 OF 2019

REV.FR.DR.SIMON  NJUGUNA  MBURU.............................................CLAIMANT

VERSUS

ORIENT  SACCO  LIMITED..............................................................RESPONDENT

JUDGMENT

The Claimant’s case  vide  the  statement  of claim  dated  6. 6.2019 filed   on  the same  date is for :

(a) Kshs.1,000,000/= with  interest  thereof  at the agreed  rate of 3% per month from November  2016 to the date  of payment  in full.

(b)Costs  of the suit.

(c)Any other  or further  relief  that this Honourable  court may deem  fit to grant.

The Respondent  denied  the claim  vide  the defence  dated 6. 8.2019 and  sought  for the claim  to be dismissed.

The matter  came up  for  hearing  after setting  aside  the summary  judgment. CW1  Rev.Fr. Dr. Simon  Njuguna stated that  on  3. 12. 2015,  he opened  a fixed  deposit  account  and deposited  Kshs.1. 5m and was  issued with a Fixed  Deposit Certificate. He  was to receive  3%  per month interest  for  3 months. In August  2016,  he withdrew  Kshs.827,000/= and they  were to roll-over   the money  from September  2016. He requested  for his statement  of account  and it was  dated  30. 11. 2016. He wanted  to withdraw  his money  but  he  was told  that the Board  had to deliberate  on it.  That his  money  was never  reimbursed.

That the CEO signed  the agreement  for  3% interest  per month and he  prays  for the principle amount plus interest  accrued.

The Respondent’s Witness  RW1 Rev. Samson  Maina, the  Chairman  of the Board stated that  in 2016,  they had liquidity  challenges. A Special General Meeting  was called  and the entire  management  was created  with him being  the Chairman. He stated that  Orient  Sacco  offers  loans at 1% Reducing Balance. That  the Claimant’s  agreement  was to have 3% interest  per month for 3 months and  for a Roll-over,  a new agreement  had to  be filled  and signed.  That the pursued claimed was  included in the agreement  and that  there was  no evidence  of the contract  beyond  the 3 months (Roll-over). That  the Claimant  was not a member  but  he had an  account  with the  Respondent.

The parties  filed  written  submissions.  The  Claimant filed on  24. 7.2019 and 12. 8.2020 and the Respondent  filed on  23. 7.2019.

The issues  raised for  determination  are:

1. Whether  the Tribunal  has jurisdiction  to hear  and determine  the matter.

2. Whether  the Claimant  is  entitled  to the interest  claimed  in the light  of the contract.

3. How  much  the Claimant  is entitled to.

4. Who  should bear  the costs?.

(1)    Jurisdiction  of the Tribunal

The Respondent  avers that  the Claimant  was not a member  of  the Orient  Sacco  hence  the Tribunal  has no  jurisdiction  in the matter  as per section  76  Co-operative  Societies  Act .

That the Claimant did not join  the Sacco  in the Application  for the  registration. That  he did not  demonstrate  how  he was a member  of the Sacco.  That  he deposited  the money  which  was to generate  interest  for him.

The Claimant  in their  submissions to this point of Law. That this  issue  was only raised  in  the submission whilst  the statement of  defence  dated  6. 8.2019,  the Respondent  admitted  the contents  of Paragraph  7  and 8 of the Statement of  Claim and that the Tribunal   had jurisdiction  to determine  the claim. That  the Fixed Deposit  Account issued  indicates  that  the Claimant’s  membership number  was 004196. That  the Respondent  is therefore  estopped  from  pleading  otherwise.

We have considered  the submissions  of both parties  and the evidence  on record.  It’s  true that  the Fixed  Deposit  Certificate  indicates  that the  Claimant  had member  number  004196.

It’s also  clear  that the  Respondent  in paragraph  7 of  their defence,  admitted  the jurisdiction  of the Tribunal.

Its  trite law  that any  point  of law a Preliminary  Objection  on the issue  of jurisdiction, being  a point  of law  must be raised  at the earlier point and pleaded.

In MUKISA  BISCUIT  MANUFACTURING  COMPANY  LIMITED  - VS-  WEST  END  DISTRIBUTORS  LIMITED [1969] EA.

“......a Preliminary  Objection  consists  of a point  of law  which has  been pleaded,  or which  arises  by clear  implication  out  of pleadings  and  may dispose  of the suit....”

The issue  of jurisdiction  is merely  a point  of law.  A party  should  not  by  their pleadings  admit  jurisdiction  and then  midway through  trial, deny the jurisdiction  during  the hearing  of the matter. The  hearing  of the matter.  The chairman  of the Respondent  in his evidence, during  cross- examination  stated  that he did not know  what  transpired  during  the  making  of the  agreement.  That  the Claimant’s  case was  genuine,  even though  he referred  to  him  as an ‘investor’.

The Claimant  confirmed  that investment was also part  of  the business  of the Respondent  and he was  not precluded  for  not being  a shareholder.

We note  that  the Respondent  raised the issue  of jurisdiction  in their  written  submissions. No By-laws  were produced  to give  the definition of what  membership meant to the Respondent.

However,  the Claimant  confirmed  that he had  a membership number  as per  the  Fixed  Deposit  Statement  produced.  We note  that this  fact  is satisfactory  without  any  further  prove  by the Claimant. The Said  document  originated  from  the Respondent,  they also  admitted  jurisdiction  in their  pleadings hence  this  issue  of lack  of jurisdiction  on  the basis  that  the Claimant  was not  a member  has no merits. We find  that the  Claimant  was issued a membership number  and without  any proof  to the contrary, we  confirm  that the  Tribunal  has  jurisdiction over  the matter.

(2)   Whether the Claimant is entitled to the interest claimed   in the light of the contract.

(3) How much the Claimant is entitled to?

The Claimant  submitted  that  there  was a contract  between  him  and  the Respondent. That based on this contract, he  deposited  Kshs.1. 5 Million on  3. 12. 2015  for 3 months at an interest  rate  of 3% per month. That  vide  the  Statement of Account  supplied  to the Respondent,  the Claimant  withdrew  Kshs.827,000/= leaving  a balance  of Kshs.1 Million. That  this  was as a result  of the Roll-over which happened  over and over.

That the  amount  was rolled  over on  1. 11. 2016 which  is a period  of  32 months todate.

That  the interest  earned  therefore is Kshs.960,000/= plus principal  amount  Kshs.1 Million.

The Respondent  submitted  that the  Claimant, deposited  Kshs.1. 5 Million  and  accrued  interest for  the  3 months as per  the agreement. That  it  was not  true that  there  was a Roll-over  after  the expiry. That  the Claimant  did  not introduce  any new  evidence  or a separate  agreement  varying  the initial  terms  of the  contract  and neither  did he  produce  any evidence  renewing  the terms  of the initial  contract. That  the court cannot  vary the  terms  of contract  as held in NATIONAL  BANK OF KENYA LIMITED  - VS- PIPEPLASTIC  SAMKOLIT(K) LIMITED  AND ANOTHER  CA 95/99 [2001]eKLR112 AND [2002]EA 503

We have carefully  considered  the evidence  on record  and  the documents  produced. We particularly  note  the Fixed  Deposit  Form  3,  and its contents therein,  the Fixed  Deposit  Certificate  dated 3. 12. 2015 with  computed  interest of Kshs.114,750/=. We also  note  the Statement  of Accounts  dated  30. 11. 2016.  In this document,  we note that  the Roll-over was done  for the Kshs.1 Million after  the withdrawal of Kshs.827,000/=.

The amount  Kshs.1 Million was transferred  on 1. 10. 2015 and continued  to earn  interest. As at 1. 11. 2016,  the amount  plus interest  was Kshs.1,051,031/33. Then there  was a Roll-over  on  1. 11. 2016 after which  the  money  did not  earn  interest  and the principal  amount  remained  at Kshs.1 Million and interest  accrued  at Kshs.50,516/33 as at  30. 11. 2016.  This  was the  statement  of Account  issued  by the Respondent.  We note  that after  30th November  2016 there  was no further  Roll-over and the Claimant  stated  that he  had travelled  out  of the Country.

We note that due  to  the nature  of the agreement  and the  subsequent  Roll-overs,  the Claimant  had to  give  instructions  for the Roll-over every 3  months. We can  only hold  the Respondent  responsible  to the amount  as per  the  statement  of account  which  indicates that  the amount  of interest  as at 30. 11. 2016 was Kshs.50,516/33 and  the principal  amount  was Kshs.1Million.

We note  that the Respondent  is responsible  to all the  members  of the society and  by ordering  for interest  of 3% per month todate  would strain  the membership of the Respondent  who relies  on the savings  of its  members. In the  interest  of the society  and in the interest  of justice,  we find that  the Statement  of Account gives  a true  reflection  of what  is owed  to the Claimant  as at 30. 11. 2016.

The Claimant  ought  not to  take advantage  of the lapse  in the management  of the  Respondent  and to  this  effect,  we accordingly order  for  the refund  of  the principal amount  of Kshs.1 Million and  interest  of  Kshs.50,516/33 as at  30. 11. 2016 total  Kshs.105,016/33. We  enter  judgment  in favour  of the Claimant  for  Kshs.1,050,516(1,050,516/=) against  the Respondent  plus  costs and  interest  on the awarded  amount  at court  rates,  from  the date  of filing  the suit  that is,  6. 6.2019.

Ruling  read,  dated and delivered   this 29th    day of October, 2020.

Hon. B. Kimemia          Chairperson                     Signed

Hon. F. Terer                   Deputy Chairman            Signed

Mr. P.Gichuki                   Member                           Signed

Court Assistant                C.Maina

Hon. F. Terer                   Deputy Chairman    Signed     29. 10. 2020