Tanui v Sokoro Sacco Society Limited [2024] KECPT 223 (KLR)

Tanui v Sokoro Sacco Society Limited (Tribunal Case 864/E955 of 2022) [2024] KECPT 223 (KLR) (7 March 2024) (Judgment)

Neutral citation: [2024] KECPT 223 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 864/E955 of 2022

BM Kimemia, Chair, B Sawe, F Lotuiya, P. Gichuki, M Chesikaw & PO Aol, Members

March 7, 2024

Between

Benjamin Simotwe Tanui

Claimant

and

Sokoro Sacco Society Limited

Respondent

Judgment

1. The matter for determination is a Statement of Claim dated 4th November 2022 and filed on 4th November 2022 in which the Claimant claims that he was a member of the Respondent being member number 878. The Claimant avers that he withdrew from membership in June 2022 and is yet to receive his savings amounting to Kshs. 132,650/-. The Claimant therefore prays for:a.A refund of the sum of Kshs. 132,650/=(one hundred and thirty two thousand six hundred and fifty shillings only) plus further deductions .b.Costs and interest of this suit.c.Any other relief that this court may deem fit and just to grant.The Claim is accompanied by a Witness Statement, and Documents in support of the claim.

2. The Respondent filed a Response to Statement of Claim in which they admit that the Claimant was its member. However, the Respondents deny that the Claimant is entitled to a refund because he is yet to clear his loan that stands at Kshs. 16,000/-. According to the Respondents, the loan was secured using the Claimants deposits and therefore the Claimant cannot withdraw a deposit before clearing the loans in default.

3. The matter was canvassed by way of submissions and hence there was no hearing.

4. Both parties filed their submissions. In their submissions, the Claimant asserted that the notice of the Claimant to resign was enough and that the failure of the Respondent to act on the same infringed on the rights of the Claimant pursuant to the Constitution of Kenya. They urge this court to find for the Claimant.

5. In their submissions, the Respondents submitted that they did not receive the withdrawal letter by the Claimants, and that the claimant knew very well that he was not allowed to resign to resign till his loan is fully paid. The Respondents relied on section 22 of the Co-operative Societies Act states that a member of a society shall have the obligation to observe and comply with all the societies by-laws and decisions. The Respondents further submit that the claimants owe the Sacco since he had a loan balance of Kshs. 70,000/= as at June 2022.

Analysis 6. This Tribunal has considered the submissions by the parties and the documents filed by the parties. This Tribunal notes that it is not in dispute that the Claimant is a member of the Respondent. It is also not in dispute that the Claimant has savings with the Respondents and that he has also taken a loan with the Sacco. What is in dispute is whether he wrote a letter to resign, and also whether he is entitled for a setoff of his savings with the loan and the Claimant paid the balance, if any.

7. In answering the first question, the Tribunal notes that the Claimant had written dated 21/06/2022 resigning from the Sacco, and the same is acknowledged by a red pen, that directed a Muturi to stop deductions. This Tribunal is therefore, inclined to believe that the Claimant indeed wrote a letter to resign from the Respondent. On the second question, we note that the Claimant claims that he resigns and seeks a refund of his deposits while the Respondent claims that as much as the Claimant is entitled to his deposit, he cannot be paid the same till he clears the outstanding loans.

8. This Tribunal is guided by the CooperativeSocieties Act, which at section 4(b)(1) provides that Cooperatives should incorporate the principle of open and voluntary membership in their by-laws. By-laws of a Cooperative Society is to bind each and every member as if each member signed them individually. Section 34 of the CooperativeSocieties Act, further provide that:“A co-operative society shall have a first charge upon the share or interest in the capital and on the deposits of a member or past member, and upon any dividend, bonus or accumulated funds payable to a member or past member, in respect of any debt due from such member or past member to the society, and may set off any sum credited or payable to such member, or past member in or towards the payment of any such debt”.The Tribunal notes that the law gives an obligation to the Respondent to use the deposits to offset any liability that the Claimant may have in the Respondent. The Respondent did not provide any copy of their by-laws, though it would be interesting to see how they have circumvented such a clear provision as Section 34 above. The provision under section 1 of the loan form to the effect that members cannot resign from the Respondent when they have loan balances is void as it goes in contrary to the CooperativeSocieties Act as long as the Claimant has a deposit that is more than the amount owed. The Respondent did not dispute that the Claimant has an outstanding deposit of Kshs. 132,650/-against a loan of Kshs. 17,740/= as stated by the Respondent in their statement dated 4th December 2022.

9. Flowing from above, we find merit in the Claimants Claim and order as follows:a.Judgment is hereby entered in favour of Claimant against Respondent for Kshs. 132,650/- less the amount owed of Kshs. 17,740/=, total = Kshs. 114,910/=.b.Costs of this suit and Interest from date of filing suit at Tribunal rates until payment in full.

JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 7TH DAY OF MARCH, 2024. HON. BEATRICE KIMEMIA - CHAIRPERSON SIGNED 7. 3.2024HON. BEATRICE SAWE - MEMBER SIGNED 7. 3.2024HON. FRIDAH LOTUIYA - MEMBER SIGNED 7. 3.2024HON. PHILIP GICHUKI- MEMBER SIGNED 7. 3.2024HON. MICHAEL CHESIKAW - MEMBER SIGNED 7. 3.2024HON. PAUL AOL - MEMBER SIGNED 7. 3.2024TRIBUNAL CLERK JEMIMAHAwuor advocate for RespondentNo appearance for ClaimantAwuor advocate : I pray for 30 days stay of executionOrder: 30 days stay of execution granted.