[2021] KECPT 530 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL AT NAIROBI

TRIBUNAL CASE NO. 57 OF 2018

BONIFACE M. KARANJA

(Suing as liquidator Nkuene farmers’

Co-operative Society Limited)..................CLAIMANT

VERSUS

MIKUMBUNE FARMERS CO-OPERATIVE

SOCIETY LIMITED .........................RESPONDENT

RULING

Vide the Application dated 29. 6.2020,the Claimant has moved this Tribunal seeking for Orders inter alia:

1. That the Respondent’s counter claim be struck out with costs to the Claimant;

2. Costs;

The Application is supported by the grounds on its face and the Affidavit sworn by the Claimant on 29. 6.2020. The Respondent has opposed the same vide the Replying Affidavit sworn by David K. Mugiira on 7. 9.2020.

Vide the directions given on 27. 7.2020, the Application was canvassed by way of written submissions. The Claimant filed their written submissions on 8. 10. 2020 while the Respondent did so on 5. 11. 2020.

Claimant’s Contention

The Claimant has taken issue with the counterclaim dated 25. 4.18 as amended on 13. 12. 2019on the grounds that he Tribunal does not have jurisdiction to entertain the same. That the same invite the Tribunal to exercise powers which are exclusively preserved to the Liquidator.

The Claimant has brought to our attention the provisions of Sections 65, 68and69 of the Co-operative Societies Act. He specifically contend that Section 69 of the Act precludes this Tribunal from delving into matter, touching on liquidation. That by dint of Section 68, the liquidator is subject to the limitations imposed by the Commissioner. That any member who has an issue with the Liquidator must first raise the same with the Liquidator. That if is after the Liquidator makes a finding that the member can seek refuge in the Tribunal.

That the claims (especially ...at paragraphs 15,16,17,18and19 of the counter claim cannot be handled by the Tribunal without firstly being dealt with by the liquidator or Commissioner for Co-operative Development. That matters touching on land are spelt out under Section 66 (k). he cited the decision of the court in Moses Mukhaya & 2 others -vs- Johnson Miano Gatu & 3 others.

Respondent’s Case

The Respondent has opposed the Application on grounds that the Counterclaim raises triable issues worthy of being tried and determined. That the Applicant, as Liquidator of Nkuene Farmer’s Society,was bestowed with a fiduciary and statutory obligation to account for the mother society’s assets and financial affairs during and even after its liquidation which he has breached as follows:

(i) Failing to pay besides others the terminal dues owed to the former employees leading to execution proceedings against it in Nyeri ELC NO. 49/13;

(ii) Failing to comply with a court order to file a scheme of arrangement on the payment of final dues to the mother society’s former employer as ordered by the court.

That Section 69 and 76 of the Act donates to this Tribunal the jurisdiction to determine disputes between Liquidators and their members.

That to the extent that the Claimant did not account for the cash and proceeds from the sale of its Assets, the Respondent is entitled to the balance of the payment.

That to the best of the knowledge the Claimant did not hold any meetings with the liquidation committee and give appropriate disclosure of his dealings with the assets.

Issues for determination

We have framed the following issues for determination:

a. Whether the Tribunal has jurisdiction to entertain the counterclaim filed by the Respondent vide the statement of Defence and counter claim filed on 23. 1.2020.

b. Who should meet the costs of the Application?

Jurisdiction

Jurisdiction is everything. Without it a court of Law downs its tools. This was the holding in the celebrated case of the Motor Vessel Lilian “s”[1989]KLR. The question abound as to whether we have jurisdiction to entertain the matters raised in the counter claim filed on 23. 1.2020.

Part XIII of the Co-operative Societies Act deal with liquidation of Co-operative Societies. Section 65 thereof provide for appointment of a liquidator while Section 66 sets out his powers. Section 68 of the Act provides for the powers of the Commissioner for Co-operative Development during liquidation process. They include.:

a. Rescind or vary any order made by the liquidator or make a new order he thinks proper;

b. Removes the liquidator from office and appoint a new liquidator in his place;

c. Call for all books, documents and assets of the Society;

d. At his discretion, require accounts to be rendered to the Commissioner by liquidator;

e. Procure the auditing of the liquidator’s accounts and authorize the distribution of the assets of the society.

f. Make an order for the remuneration of the liquidator;

Section 69 of the Act provides that any person aggrieved by an order of the Commissioner or the Liquidator may Appeal to the Tribunal within 30 days of the said order or decision.

What we decipher from the provision of Section 68 of the Act is that at all times, the powers of a Liquidator are under the control and/or supervision of the Commissioner for Co-operative Development. What this mean is that if a member of a Co-operative Society subject to liquidation has an issue regarding the manner in which the Liquidator is discharging its mandate, then the first part of call is the office of the Commissioner of Co-operatives.

We have perused the paragraphs 15-19 of the Counter-claim, the Respondent is seeking orders against the Claimant regarding the manner in which he discharged his duties. As stated above, we do not have jurisdiction to deal with such matters. The same falls within the exclusive domain of the Commissioner of co-operatives.

Conclusion

With the foregoing finding in mind, we agree with the Claimant that we do not have jurisdiction to entertain the counterclaim. We accordingly strike it off with no orders as to costs. Orders accordingly.

RULING SIGNED, DATED AND DELIVERED VIRTUALLY THIS 4TH DAY OF MARCH, 2021.

Hon. B. Kimemia Chairperson Signed

Mr. P. Gichuki Member Signed

Mr. B. Akusala Member Signed

Mugambi for Respondent

Getange advocate for Claimant

Hon. B. Kimemia Chairperson Signed 4. 3.2021

Pre- trial on 26. 5.2021.

Hon. B. Kimemia Chairperson Signed 4. 3.2021