[2025] KECPT 341 (KLR)

Elburgon Thathaura Self Help Group v Rongai Rural Sacco Limited & another (Tribunal Case 710. E018 of 2023) [2025] KECPT 341 (KLR) (Civ) (26 June 2025) (Ruling)

Neutral citation: [2025] KECPT 341 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Civil

Tribunal Case 710. E018 of 2023

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

June 26, 2025

Between

Elburgon Thathaura Self Help Group

Claimant

and

Rongai Rural Sacco Limited

1st Respondent

David Gichangi Kibe

2nd Respondent

Ruling

1. This ruling dispenses with the notice of Preliminary Objection dated 21st November 2023. The objection is raised on the following grounds:a.That the Sacco is a legal entity that can be sued in its own capacity dint of section 4 (2) (a) of Sacco society act no. 14 of 2008 laws of Kenya.b.That the claimant has wrongly sued the 2nd Respondent contrary to section 4 (2) (a) of the Sacco society act no. 14 of 2008 laws of Kenya as the remedies they are seeking cannot lie against him.c.That the Application is inherently bad in law.

2. The objection is premised on the grounds on its face which are inter alia that: The second Claimant has been wrongly sued as the remedies sought cannot lie against him. Also, that the Sacco is a legal entity that can be sued in its own capacity.

3. The brief background of this matter is that the Claimant, via a Statement of Claim dated 13th September 2023 instituted a claim against the Respondents for the refund of Kshs. 146,840/- which had been deposited as shares.

4. The 2nd Respondents filed their submissions.

5. In their submissions, the 2nd Respondent urges this court to uphold the preliminary objection herein and strike out the 2nd Respondent from the suit. They base their argument on section 4(2) of the Sacco Societies Act which states, among others, that a Sacco is a body corporate with perpetual succession and a common seal. They also relied on the case of Salomon v Salomon & Co. Ltd [1897]AC 22 where it was held that a corporation is a separate legal entity distinct from its members and officers.

Analysis 6. This Tribunal has considered the Application and the Submissions of the Applicant. The question that this Tribunal has to answer is whether the Applicant’s application is merited and whether the 2nd Respondent ought to be struck from the Claim.

7. This Tribunal notes that the sections of the law the Applicant has brought to the attention of this court, to wit, Section 4(2) of the Sacco Societies Act refers to the nature of the Sacco Societies Regulatory Authority (SASRA) and not to the nature of Corporations like the Claimant that are formed under the Cooperative Societies Act. However, in the interest of justice, this Tribunal will proceed to see whether there are similar provisions in the Cooperative Societies Act.

8. Indeed section 12 of the Cooperative Societies Act Co-operative society to be body corporate Upon registration, every society shall become a body corporate by the name under which it is registered, with perpetual succession and a common seal, and with power to hold movable and immovable property of every description, to enter into contracts, to sue and be sued and to do all things necessary for the purpose of, or in accordance with, its by-laws.

9. Indeed, from the above provision of the Cooperative Societies Act, the 1st Respondent is a body corporate capable of suing and being sued. In the Claim the Claimant has informed this Tribunal that they had contributed monies which the Respondent has refused or neglected to pay. They did not disclose which Respondent. However, from the documents filed which include a Passbook, it is clear that the monies were allegedly deposited to the 1st Respondent.

10. Further, the Claimant did not inform this court the capacity in which the 2nd Respondent is sued. Order 4 Rule 4 of the Civil Procedure Rules, provides that the Claim should show the capacity in which each party is sued, and partly states as follows“……..Where the defendant is sued in a representative capacity the plaint shall state the capacity in which he is sued, and in both cases it shall be stated how that capacity arises”. Order 4 Rule 5 of the Civil Procedure Rules further states that “The plaint shall show that the defendant is or claims to be interested in the subject-matter, and that he is liable to be called upon to answer the plaintiff’s demand.”.

11. The Claim neither states the Capacity in which the 2nd Respondent is sued, nor shows how he is liable to be called upon to answer to the Claimant’s demand. The above provisions of the law are clear and we are inclined to believe that the Claimant is not aware of the 2nd Respondent’s liability in this Claim and is out on a fishing expedition.

12. In the upshot of the foregoing,a.We find merit in the Notice of Preliminary Objection dated 21st November 2023, and the 2nd Respondent is hereby struck out of the Claim.b.The 2nd Respondent is awarded costsc.Pre-trial directions on 8. 9.2025. Notice to issue.

RULING 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. P. Aol Member Signed 26. 6.2025Tribunal Clerk GechikoMwangi advocate for 2nd RespondentElburgon Thathaura Self Help Group- No appearanceHON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 26. 6.2025