Thianyu & 11 others v Ena Irrigation Multipurpose Cooperative Society [2025] KECPT 363 (KLR)

Thianyu & 11 others v Ena Irrigation Multipurpose Cooperative Society (Tribunal Case 241. E290 of 2022) [2025] KECPT 363 (KLR) (At Nairobi) (26 June 2025) (Judgment)

Neutral citation: [2025] KECPT 363 (KLR)

Republic of Kenya

In the Cooperative Tribunal

At Nairobi

Tribunal Case 241. E290 of 2022

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

June 26, 2025

Between

Venazio Gacego Thianyu & 11 others & 11 others

Claimant

and

Ena Irrigation Multipurpose Cooperative Society

Respondent

Judgment

1. The Statement of Claim herein dated 19th April 2022 was filed by the Claimants on 27th April 2022. Therein, the Claimants prayed for judgment against the Respondent for:a.A permanent injunction restraining espondent from suspending or in any other manner interfering with the claimants’ membership and/or registration of new members in view of the designed irrigation water project irrigation plan.b.general damages for loss of Farming produce from the time the respondent dis connected the water supply to the claimant’s land parcels.c.cost of this suitd.Any other relief that this honorable court may deem just and fair to order.

2. The Claimant claim that they are members of the respondent and they bought member shares in the society after their membership Applications were approved having fulfilled the prerequisites of qualifying to be admitted as members under membership numbers 279 280 281 282, 284 285 286 287 288 289 290, 291 and 292.

3. The Claimants avers further that on 8th February 2022 the respondent issued the Claimants with a letter of even date claiming that the Claimants were not bonafide members of the irrigation project and that the irrigation water connected to the Claimants was due for disconnection by virtue of the special general meeting held on 30th September 2021 that the action by the respondent is illegal and unlawful as the respondent in the letter dated 8th February 2022 makes generalized and unfounded allegations justifying their illegal actions on an audit forensic report delivered on 30th September 2021 claiming that 18 members were illegally registered under the respondent whereas till date of suit only 12 members water connections had been disconnected by the respondent; that as a result of the respondents actions the claimants have suffered loss and damage as most of their cash crops have dried up and their livestock have suffered from malnourishment.

4. Owing to the fact that water being a precious commodity has been lacking and which they claim from the respondent; that unless the respondent is stopped in its tracks by the court, the claimants stand to suffer loss and damage; that despite numerous demands and notice of intention to sue, the Respondent has been a adamant, necessitating this suit.

5. In response to the statement of claim the Respondent on 8th December 2022 filed a Defence dated 23rd September 2022 to the Claimant’s Statement of Claim. Therein, the Respondent denies the Claimants averments in the claim including the averment that the Claimants were members of the Respondent who were allowed to buy shares and were admitted after they fulfilled the prerequisites of membership.

6. Further, the Respondents admits in the Defence that it issued the notices of disconnection of the claimants irrigation Water by virtue of the special general meeting held on 30th September 2021 and finally on a without prejudice basis avers that the claimants were fraudulently registered as members of respondent Society and therefore are not bonafide members and the disconnection of the irrigation water supply to the Claimants was lawful as per the respondents by laws and the claimants are put to strictly prove the contrary .

7. The case proceeded to full hearing and both sides Witnesses adduced evidence.

CLAIMANT'S CASE. 8. The Claimant called three Witnesses CW1 Venasio Gacego Thianyu adduced sworn evidence on 24th April 2024 and stated that he had authority to plead on behalf of the other claimants; that he is member number 289 of the Respondent.

9. The witness produced the witness statement dated 28th June 2022 as his evidence in chief and the list of documents dated 19th April 2022 as evidence and marked the documents there in as the claimants bundle A and further list of documents dated 26th June 2022 as bundle B. CW1 prayed that the claimants be recognized as members of the respondents and be allowed to enjoy all the privileges of the society.

10. On cross examination CW2 confirmed that he is aware of the provisions of the By-laws on how one becomes a member of the respondent; that the management sold to him shares; that he filled an application form and was recommended by two members; we left two forms with the management committee ;that he did not have in court the documents showing the process and approval but he joined by buying shares; that the project was for 314 members as per the plan design report approved by the ministry of water and irrigation ; that the self-help group which obtained the design approval mutated into the Respondent Cooperative Society that he was aware of the special general meeting held on 30th September 2021 which passed a resolution that illegal members who joined the society from the Year 2018 would be removed from membership.

11. That he was aware of the forensic audit which led to the Special General Meeting that he is a bonafide member as he paid for membership aligned the relevant forms and the committee installed his water and there was no complaint about the Claimant membership; that as the Claimants were accepted to membership the Claimants took it that the committee had the mandate; that the Claimants did not doubt the decision of the committee; that shares were being sold and he bought them; that after he was informed about the sale he went to the society's office where it was explained to him the procedure that he was issued a payment receipt and sale agreement signed with the society; that since then, the Claimants have participated in the activities of the Respondent and they are usually duly invited; that he was present at the 2021 Special general meeting that the forensic audit was conducted by a Mr. Nyaga though he was not aware of the audit before then; that at the special general meeting it was indicated in the report that 18 members were not the bonafide but there were no details that there were no formal communication about the said 18 members that there are 292 members in the society.

12. The Claimant's second witness CW2 was Alfred Njeru Kathara a farmer from Kawangue sublocation Runyenjes. CW2 stated that he knows the Claimants as members of the respondents that he was a member of the management as a chairman from 1995 to 2020. CW2 produced the witness statement dated 28th June 2022 and adopted it as his evidence in chief.

13. On cross-examination CW2 stated that the society was registered in the year to 2007 that he was a member and the chairman; that he's aware of the By-Laws then formulated that as per the By-laws new applicants to membership were required to write a letter for approval and there were compliance forms in the office. that sale of shares was decided in the annual general meeting that it was the duty of the management committee register new members as empowered by the annual general meeting that the membership at inception reduced from 314 to 278 as those who did not pay their loans were removed; there was no design for 278 members the committee increased the members to 298 that he was not there during the meeting of 3/9/2021 as they the committee were removed in 2020; that he came to know about the forensic audit but did not complain about it as it was not approved by the commissioner; that Society shares were being sold at Kshs 200,000/= cover the expenses; that the agreement did not indicate who was being replaced; that the claimants are bonafide members as their names are in the register of members; that he is not aware the special general meeting declared them illegitimate.

14. The Witness on re-examination stated that the 36 members who were removed from the society were struck off the Register; that as his mandate was to replace the removed members with new members; that the new members signed agreements and presented their cards that he got his mandate from the management committee; that the membership of 314 was approved by the ministry of Agriculture ;that the 314 membership was initially made up of members who crossed over to the society from the self-help group . The claimants third witness CW3 was Anthony Njeru Rutere, who introduced himself as a civil servant and farmer from Runyenjes -Embu County ;that he is the 10th claimant and became a member of the respondent in the year 2019; that he was recommended by Gilbert and Peter Ndung'u, he paid Kshs 200,000/= when he joined and was issued with membership number 288 and parcel no. 329/ kagare/ kigara and has been paying monthly fees through Equity Bank. He appeared before the management committee; they were 5 people in total that he was issued with the receipt for the sum of Kenya Shillings 200,000/=.

15. That he signed the register of members by the management committee. that the By-Laws were read to him by the committee; that he sued as the respondent after its leadership changed and it was decided that members who joined the scheme were not recognized; that he found it unfair. CW3 produced his witness statement dated 20th June 2022 produced as his evidence in chief and also produce the list of documents and marked as Claimants exhibit bundles A and B. On clarification sought by members CW3 stated that he was paying subscription fees monthly into the same account you pay the Kenya Shillings 200,000/= into.

RESPONDENT CASE 16. The respondent had three Witnesses in the hearing. The first witness RW2 was Taracisious Nyaga Muthathai who in his sworn evidence stated that he is the chairman of the respondent Ena irrigation multipurpose society; that he became interim chair on 4th February 2020 and was elected 30th September 2021. RW1 further stated that he has been a member of the respondent since inception in the year 2007.

17. That the membership was limited to 278 members because of the volume of water and the design ;that the by-laws were formulated in the year 2007 ;they States how many members would be admitted and that if an old member failed to meet the obligations he would be replaced; that the claimants were illegal members as the procedure was not followed and they joined above the required number of 278; that the flow of the water was impacted by the number and it affected the project; that the procedure used when they were joining was against the By-Laws they were not introduced by two block leaders and did not pay 200/= shillings and were not referred to the committee to decide on their membership; that money they paid was paid illegally before they were admitted into the society; that the Said 200,000/=shillings paid did not appear in the account that they were not supposed to pay Kshs.200,000/= that the forensic audit did not find the money; that they were paying monthly full subscriptions but were not members, the claimants existence was discovered upon the Audit; that when the forensic report was read on 30th September 2021 it was resolved to disconnect the Claimants water. The respondent Witness on cross examination stated that he was the chair of the interim committee.

18. That the purpose of the inspection committee was appointed by the office of the commissioner to conduct inspection after the memorandum was made, that the memorandum was made in 2019 and presented to the Cooperative officer at the sub County; that the memorandum was acted upon through the inspection; that he exceeded the required 90 days as an interim chairman because of circumstances; that he was there at the inception of the society and they were 278 members; that members who ceased would appoint to take over and if a member failed to meet obligations his portion of the land was let out to a person who would pay the dues to the society; that the procedure for ceasing is stated under By-law 7(1)(b) on being asked how many members had left the society ,RW1 stated that he did not know how many but stated that those who ceased were expelled illegally; that members were not supposed to be expelled for non-payment of loans ,they ought to have been let out; that complaints of reduction of water ended after the Claimants water was disconnected ;that the auditor who did the forensic audit Perminus Nyaga was in the Annual General Meeting, that though 18 persons were cited in the audit report 14 got water disconnection because there were those whose money was found to have been received; that two of the 14 people did not come to court; on clarification being sought by the members of the tribunal RW1 stated that the Block member were not part of the management committee.

19. The respondent’s second witness RW2 was Francis Simba M’meru who stated under oath that he is a retired senior head teacher and the current Secretary of the respondent since 12th February 2020 ; that from the beginning of the irrigation project the number of members was decided on basis of the amount of water and if exceeded 278 the water would not be enough; that the Claimants were not genuine members and they were joined later against the By-Laws having been illegally included after 2018 by the former chairman who in some documents appears with the Secretary and in some appears with the treasurer; that the new members were not required Kshs 200,000/=; they were supposed to pay Kenya Shillings 2000/= for registration, Kenya Shillings 3,000/= operation and 4,300 for penalties; that there was no basis for payment of Kenya Shillings 200,000/= that the 12 members were discussed in the Annual General Meeting of 30th September 2021 and it was decided that they were removed from the project and their water disconnected.

20. RW2 produced His witness statement dated 11th January 2023 as his evidence in chief.

21. On cross- examination RW2 stated that even when some members ceased the number 278 was maintained that the society has only one register of members; that if a member share is sold to another person the old entry is canceled; that there were no 2A, 2B membership but were created by the previous committee illegally and created two registers, one for the legal and another for illegal members; however the second register is not in the tribunal.

23. That the approval of 278 members into final documents: that is final design scheme 1st July 2009 paragraph 1; that the water authority gave the society the membership 278; that members who failed to pay their loans were not expelled and replaced by the claimants; that the ouster 12 members was a result of the audit; members decided to oust them, that the requirements for membership were ownership of about one acre of land over, 18 years of age, good character (previously) had to take a loan with equity bank; payment of required money; that the water connection of the claimants were done illegally and he did not know by whom; wayleaves connect the adjacent neighbour; that Anthony Rutere claimant number 10 and his brother are neighbors of RW2 and the wayleaves through their parcels to the land of RW2 were approved by them; that however, he did not have the approvals in the tribunal.

24. on clarification sought by members, RW2 stated that the 278 is the number of persons who paid for the group project; that the water was enough for the 278 and there was no provisions for growth or increase of the water; that the sum of Kshs 4,300/= penalty was the flat rate that a new member pays as he has not been attending meetings; that in the by-laws the number of shares is required to stay the same and a member could own more than one share; than elected officials must exercise mandate as given by members; that the society has not applied to expand the project and they have no capacity.

25. The Respondent’s 3rd witness Rw3 was Perminus Nyaga who adduced sworn evidence as an auditor of over 20 years of experience and stated that he recorded a witness statement dated 11th January 2023 and he adopted the same as his evidence in chief; that he conducted a forensic audit for the respondent, the report thereof is dated 30th September 2021;

26. that the instructions of the respondent received in the year 2020 were to conduct a forensic audit for the period from 2017 ,2018, 2019 to January and February of 2020 on suspicion of fraud: that the terms of reference included examination of the register; that upon examination of the member register the committee minutes, the minutes of the previous Annual General Meeting and the project design his farm prepared the report that the initial number of members at registration was 278 which number was corroborated by the design of the project; that his firm wanted to ascertain from the minutes of the previous Annual General Meeting if there was authorization of additional membership that after the committee was done, it was read out to the members at an Annual General Meeting and was adopted.

27. on cross- examination RW3 stated that he also relied on cash book, cheque books, bank statements from equity bank that he also relied on the register which had the initial 278 members and a later addition that increased the members to 296; that the 278 members had paid the dues, the rest claimed to have paid money to certain individuals, that the receipts they produced were not official and could not be traced to the records, others were duplicated, that he found 18 members to be of concern and included their names in the forensic audit report that as per the design, he found that the number of people that was supposed to get water without is 278; that is per previous minutes, the previous management committee during the period of audit added members illegally; that some receipts for Kshs.150,000/= were issued in the year of alleged payment in 2016 but year later in 2019.

28. On clarification being sought by tribunal members, RW3 stated that he doubted the previous audit report as it is contained land that did not exist. after close of the hearing, the parties were directed to file and serve written submissions in support of their cases.

29. the Claimants’ written submissions are dated 8th April 2025 while the Respondent’s written submissions are dated 25th April 2025.

ANALYSIS AND DETERMINATION 30. We have considered the documents filed by the Claimants and respondent including the written submissions of the parties’ advocates and they oral evidence of all the witnesses and it is clear to us that the gist of this matter is a membership of the respondent and the admission thereto. From the evidence before us, we note that the respondent is a society registered under the provisions of the cooperative societies act as per certificate number Cs/11320 issued on 2nd March to 2007. It therefore goes without saying that rights and obligations in the society were member based. We have looked at the final design of the irrigation project and note that it provided for 278 beneficiaries of the Infield irrigation system. The design also included the areas which would be covered under the project which were toned into blocks.

31. The Societies By -laws produced in evidence by the Claimants and the Respondent do not indicate the number of members that the society was registered with. However, the evidence adduced by during hearing by both vide of the case indicate that the membership of 314 which was for the previously existing self-help group before the society registration. I was not retained and the society was registered with a membership of 278. It is therefore clear to us that the society intended to operate within the provisions of the water irrigation design which limited the number to 278. It would therefore follows that the uncontroverted membership of the society at registration was 278 and any we concur with the Respondent in its submission that any increment would have to be duly authorized at an Annual General Meeting and the procedure set out under By- Laws of the society. By-Laws adhered to in the admission of the members. On whether or not the Claimants were lawfully admitted as members it is the Claimants case that they bought shares from the Respondent at Kenya Shillings 200,000/= which points towards the subscription of membership as stated in the witness statement of CW2. That being the case, the Claimants were required to prove and demonstrate the process which led to their admission through the said subscription, at the payment of the said sum of Kshs 200,000/=.

32. This is because, the By-laws of the society have provided only for payment by new members of registration fees of Kenya Shillings 2000/=, operation fees of Kenya shilling 3,700/= penalties for meetings when the project started being Ksh4,300/=, non -refundable application fees of Kshs 500/=.

33. In the absence of evidence to prove how the admission of the Claimants at Kenya Shillings 200,000/= and outside the provisions of By-Law 5(iv)(a)-(d), we must find regardless of whether the payments were made properly or not the Claimants were not lawfully admitted as members of the respondent and their participation in the affairs of the society does not legitimize their membership.

34. On whether or not the Claimants have suffered damages as a result of the disconnection of their water after Annual General Meeting of 30th September 2021, we find that the Tribunal having ordered for reconnection of the water and there being no evidence adduced in quantification of the loss and finally the Claimants membership having been found by this Tribunal to be unlawful; the claim for damages is unsustainable. On the issue of costs, it is trite that costs follow the cause and we do not intend to depart from that position.

35. In conclusion, we hold that the Claimants claim against Respondent has not been proved to the required standard, the same therefore

36. the same therefore lacks merit and is hereby dismissed with costs to the Respondent.

UPSHOT 37. Claim dismissed with costs to the Respondents.

JUDGEMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 26TH DAY OF JUNE, 2025. HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 26 .6. 2025HON. BEATRICE SAWE MEMBER SIGNED 26 .6. 2025HON. FRIDAH LOTUIYA MEMBER SIGNED 26 .6. 2025HON. PHILIP GICHUKI MEMBER SIGNED 26 .6. 2025HON. MICHAEL CHESIKAW MEMBER SIGNED 26 .6. 2025HON. PAUL AOL MEMBER SIGNED 26 .6. 2025Tribunal Clerk A.GechikoNo appearance by parties.Judgment delivered in the absence of parties.Hon. J. Mwatsama – Deputy Chairperson Signed 26/06/2025