https://new.kenyalaw.org/akn/ke/judgment/kecopt/2026/283

Aluoch v United Millers Sacco Society Ltd (Tribunal Case E054 of 2025) [2026] KECOPT 283 (KLR) (25 June 2026) (Judgment) Neutral citation: [2026] KECOPT 283 (KLR) Republic of Kenya In the Cooperative Tribunal Tribunal Case E054 of 2025 J Mwatsama, Chair, B Sawe, F Lotuiya, M Chesikaw & PO Aol, Members June 25, 2026 Between Gerald Okoth Aluoch Claimant and United Millers Sacco Society Limited Respondent Judgment Judgement Of The Tribunal 1.The claim herein is brought by way of a Statement of Claim dated 8th May, 2025. 2.Further to the Statement of Claim, the Claimant filed a List of Documents dated 20th July, 2025. 3.The Claimant states in the Statement of Claim that he was a member of the Respondent since the year 2007, paying monthly member deposits; that as at 20th November, 2024, the nominal value of the Claimant’s deposits with the Respondent was Ksh. 604,212/=; that on or about 20th November, 2024, the Claimant wrote a letter to the Chairperson of the Respondent, intimating his resignation; that the Claimant is yet to receive a response from the Respondent concerning the payments of its dividends as well; that in line with the by-laws of the Respondent, resignation of a member translated to a refund of the Claimant’s total nominal value of deposits with the Respondent. 4.The Claimant’s claim against the Respondent is a refund of the nominal value of deposits with the Respondent which amount to Ksh. 604,212/= and Benevolent Fund contributions of Ksh. 17,800/=. 5.The Claimant avers that despite repeated demand for refund of the said amount, the Respondent has refused, ignored or neglected to do so. 6.The Claimant prays for Judgement against the Respondent for:a)Kenya Shillings Six Hundred and Four Thousand, Two Hundred and Twelve (Ksh. 604,212.00) being the total nominal value on deposits.b)Kenya Shillings Seventeen Thousand Eight Hundred (Ksh. 17,800.00) being the Benevolent Fund Contribution.c)Dividends for the year 2023 and 2024.d)Costs of the Suit.e)Interest on (a) and (b) and (c) above at court rates from the year 2007 until payment in full.f)Interest on (d) above at court rates from the year 2007 until payment in full. 7.In Response to the Claim, the Respondent filed a Statement of Defence dated 20th July, 2025, wherein it admitted that the Claimant was a member of the Respondent contributing monthly and that the Claimant’s deposits as at 20th November, 2024 were Ksh. 604,212/=. 8.The Respondent avers further that the Claimant received communication on how his dues will be paid; that the Claimant is well aware that after the covid-19 pandemic the Respondent through an AGM decision made a resolution that ALL refunds to Ex-members will be paid in installment basis on a first resignee first paid basis to keep the Sacco afloat; that the Claimant’s claim for total deposits and benevolent savings is against the Respondent by-laws and resolutions where the Respondent upon resignation of a member holds a non-refundable shares and recoverable Benevolent fund; that at no point has the Respondent refused and/or refuted the Claimant’s claim on savings and there has not been repeated demands on the same. 9.The Respondent prays the Tribunal to:a.Allows the parties to amicably register a consent to pay agreement with the Tribunal and abide to it.b.Dismiss Claimant’s claims as they are premature based on the Respondent payment and schedule.c.Each party to meet their cost 10.The parties were directed to canvass the application by way of written submissions. As at the time of writing this judgement, the Claimant had filed written submissions dated 22nd May, 2026 while the Respondent had not complied. Claimant’s Submissions 11.The Claimant raises several issues for determination:a.Whether the Claimant validly and lawfully resigned from the Respondent SocietyThe Claimant states in his submissions that the Respondent was duly served with a Notice of Withdrawal by the Claimant, dated 20th November, 2024 which was duly received and bears the Respondent’s stamp; that the Respondent acknowledged receipt of the said letter in its letter dated 22nd February, 2025 and intimated acceptance; that the Claimant therefore lawfully resigned from the Respondent.The Claimant cited Tribunal decisions to support his contention that there is not standard form provided for a notice of withdrawal from a Sacco, as such, a Claimant’s letter is sufficient for withdrawal and submits that the Claimant validly and lawfully resigned from the Respondent Society.b.Whether the Claimant is entitled to a full and immediate refund of his accumulated deposits, Benevolent Fund Contributions and DividendsThe Claimant avers that as per his statement, his dues are Deposits of Ksh.604,212/= and Benevolent Fund Contributions of Ksh. 17,800/; that the Claimant also seeks dividends of the years 2023 and 2024; that the Respondent, in its response to the Claimant’s resignation letter acknowledges the deposits of Ksh. 604,212/= and states that it intends to remit the same, less the shares of Ksh. 2,000/=; that the Respondent acknowledges the Benevolent contributions of Ksh. 17,800/= and states that it intends to remit the same less the sum of Ksh. 3,000/=; that the Respondent acknowledges interest and dividends of the year 2023 being Ksh. 4,491/=; that in its said letter dated 22nd February 2025the Respondent is willing to pay a total of Ksh. 621,313/=.The Claimant argues further that the Respondent’s admission of a debt creates an immediately enforceable obligation; that the Respondent has not made paid any installment to the Claimant as confirmed by the list of refundees; that the Claimant is entitled to payment of his full deposits, Benevolent Fund contributions and dividends in full at Ksh. 622,012/=.c.Whether the Respondent’s reliance on an installment payment schedule and AGM resolutions constitutes a lawful defence to this claimThe Claimant faults the Respondent’s contention that following an AGM resolution made after the Covid-19 pandemic, all refunds to ex-members are to be paid on a first resignee first paid basis in installments and submits that AGM resolutions do not amend statutory obligations; that the Respondent’s obligations to refund deposits within 60 days is imposed by Section 21(6) of the Sacco Societies Act; that an internal resolution cannot override an Act of Parliament. The Claimant cited the case of Atieno v Metropolitan Sacco Limited (Tribunal Case No. 46/E026 of 2023) [2025] KECPT 174 (KLR) and the case of Ngesa v Metropolitan National Sacco Limited (Tribunal Case E636 of 2024 [2025] KECOPT 573 (KLR.The Claimant further asserted that in the absence of any evidence that a by-law amendment was registered, the resolution is of no legal effect and cannot avail the Respondent a defence; that further, financial difficulty does not extinguish a legal obligation; that the evidence on record demonstrates that the Respondent is not financially incapacitated as the Cooperative Bank statement reveals substantial inflows and outflows running into millions of shillings in the period of April to May, 2025; that the Respondent is simultaneously receiving deposits and making numerous payments to members; that the Respondent cannot in good faith plead inability to pay the Claimant a sum of Ksh. 622,012/= when it is transacting in millions monthly.d.Whether the Respondent’s position that shares and Benevolent Fund contributions are non-refundable is supported by evidence and lawThe Claimant submits that the Respondent’s failure to produce a certified copy of its by-laws to demonstrate the specific provision making shares non-refundable por Benevolent Benefits recoverable, is fatal to the Respondent’s position; that the Respondent has admitted in his letter dated 22nd February, 2025 that the Fund contributions are recoverable and only the non-refundable share amount of Ksh. 2,000/= is to be deducted; that the Claimant is entitled to the full sum of his deposits less only lawfully established non-refundable shares and to a full extent of the recoverable Benevolent Benefit Fund; that as per the Respondent’s own computation, the Claimant is owed Ksh. 621,313/=; that the Tribunal should find that the Claimant’s claim for Ksh. 622,012/= is well founded and supported even by the Respondent’s own correspondence.e.What reliefs the Claimant is entitled to, including costs and interest.The Claimant submits that he is entitled to that reliefs sought as he has sufficiently proven his case on a balance of probabilities. The Claimant has submitted in support of award of interest, dividends and costs of the suit. Analysis And Determination 12.We have considered the Statement of Claim, the Response to Statement of Claim, the Claimant’s Submissions and the documents filed with the parties’ pleadings. 13.The issue for our determination is whether or not the Claimant’s Claim against the Respondent has merit. 14.It is not in dispute that the Claimant was a member of the Respondent and made contributions to his deposits and to the Benevolent Fund. 15.It is also not in dispute from the evidence on record, that the Claimant withdrew from the Respondent Sacco. We are in agreement with the Claimant’s submissions that a member’s letter is sufficient notice of withdrawal. 16.It is on record that the Respondent acknowledged the withdrawal of the Claimant and responded to the Claimant’s withdrawal vide a letter dated 22nd February, 2025 17.Having withdrawn from the Sacco, the Claimant was entitled to the payment of his dues less any debt owed to the society or under any guarantee to other members. There is no indication that the Claimant owed any debts, hence his deposits were free for withdrawal. 18.In its Response to the claim, the Respondent admits that the Claimant’s deposits totaled up to the sum of Ksh. 604,212/= and avers that the Claimant had already been informed on how his dues would be paid. 19.Vide its letter dated 22nd February, 2025, the Respondent informed the Claimant that it would refund his deposits less the shares (read share capital) of Ksh. 2,000/= plus the year 2023 interest on deposits of Ksh. 4,491/= and Ksh. 14,600, all totaling to Ksh. 621,313/=; that however, due to unavailability of funds, the said amount would be available once scheduled and would then be paid in installments following first resigned first paid basis but depending on availability of funds. 20.It is not in doubt that to date, the Claimant has not been paid any of the said money. It is our finding that though the Covid-19 pandemic was a cause for financial distress during the pandemic, the same should not have been used as an excuse up to five years since the pandemic. Our perusal of the Summary Statement produced by the Respondent reveals a list that does not disclose the dates of resignation of the persons listed in support of the Respondent’s First Resignee First basis argument. Our perusal also reveals haphazard rather than structured payments such that some members whose names appear down the list have almost been paid in full while others on the top of the list have received small amounts and yet some members like the Claimant have not received any payment. We find that the schedule lacks clarity and consistency required where structure and schedule are required. 21.The Respondent has not demonstrated that it is still in financial hardship and no reason is given why the Claimant has not received any portion of his dues to date. 22.We therefore hold that the Claimant is entitled to the payment of his dues in full. 23.The Sacco Societies Act describes “Deposit” as a sum of money received or paid on terms under which it shall be repaid, with or without interest, a return or premium and either on demand or at a time or in circumstances agreed by or on behalf of the person making the payment and the person receiving it. 24.There is no dispute that the Claimant is entitled to his deposits. The Claimant has not disputed the Respondent’s averment in the letter dated 22nd February, 2025, that the Deposits amount to Ksh. 602,222/=. 25.Neither of the parties have provided this Tribunal with the By-Laws of the Sacco for reference, we shall therefore refer to the relevant law for our determination of the issues. 26.The Sacco Societies Act describes “Share Capital” as members’ equity in the form of issued and fully paid - up shares of the common stock. 27.The Sacco Societies Act describes “Core Capital” as the fully paid-up members’ shares, capital issued, disclosed reserves, retained earnings, grants and donations all of which are not meant to be expended unless on liquidation of the Sacco Society. It is therefore clear that the shares of a member form part of the core capital of the Sacco and are not expendable unless on liquidation. It is indeed standard accepted practice that share capital is not refundable on cessation of membership. 28.In the Claimant’s submissions, it is submitted that the Claimant is entitled to the full sum of his deposits less only lawfully established non-refundable shares. The Claimant has not disputed the Respondent’s averment that the shares (read share capital) of the Claimant was Ksh. 2,000/=, neither has he provided any statement or evidence that the shares were a different amount. We therefore hold that the shares of Ksh. 2,000/= are deductible from the sum of Ksh. 604,212/= 29.In regards, to the interest and dividend, we note that the Claimant has not claimed any specific sum in the statement of claim. We also note that the Claimant has not provided any evidence of the declared and issued interest and dividend for the years 2023 and 2024. We therefore hold that the Claimant is entitled only to the interest admitted by the Respondent in the letter dated 22nd February, 2025. 30.We hold that the Claimant’s claim is merited and the Claimant, being the successful party herein is entitled to the costs of the claim. We find no basis for granting any interest to the Claimant from the year 2004. 31.Consequently, we enter judgement in favour of the Claimant and against the Respondent for:a)Payment of the sum of Ksh. 602,212/= being refund of Deposits;b)Payment of the sum of Ksh.14,600/= being the Benevolent Fund Contributions.c)Payment of Ksh. 4,491/=being Interest for the year 2023;d)Costs of the claime)Interest on (a), (b) and (c) above at Tribunal rates from the date of Judgment until payment in full. JUDGMENT DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 25TH DAY OF JUNE, 2026.HON. J. MWATSAMA CHAIRPERSON SIGNED 25/6/2026HON. BEATRICE SAWE MEMBER SIGNED 25/6/2026HON. FRIDAH LOTUIYA MEMBER SIGNED 25/6/2026HON. MICHAEL CHESIKAW MEMBER SIGNED 25/6/2026HON. P. AOL MEMBER SIGNED 25/6/2026Court Assistant – Mutai