[2021] KECPT 540 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL AT NAIROBI

TRIBUNAL CASE NO.299 OF 2020

ISAAC MURUNGI .......................................................................CLAIMANT

VERSUS

DILIGENCE TRANSPORT SERVICES AND CREDIT

C0-OPERATIVE SOCIETY LIMITED..................................1ST RESPONDENT

PATRICK MWENDA MWITI...................................................2ND RESPONDENT

ANTONY KIMATHI....................................................................3RD RESPONDENT

MWITI MAGIRI.......................................................................4TH RESPONDENT

RULING

1. The Applications before court is dated 30. 9.2020 and filed on 2. 10. 2020 and Application dated 20. 8.20 filed 17. 9.2020.

a. That this Application be certified as very urgent and the same be heard as a matter of priority;

b. That this Honorable Tribunal be pleased to set aside the Order No. 7 issued to the Claimant on 21st September 2020 setting and or lifting the suspension of the Claimant from the 1st Respondent pending the hearing and determination of this Application;

c. That this Honorable Tribunal be pleased to set aside the Order No. 7 issued to the Claimant on 21st September 2020 setting and or lifting is suspension of the Claimant from the 1st Respondent pending the hearing and determination of this suit.

d. That costs for and incidental to this Application be costs in the case.

2. The Respondents filed a Replying Affidavit dated 26th October, 2020 opposing the Application.

The Respondents filed a Preliminary Objection dated 30th September 2020.

The Preliminary Objection is for irregular enjoinment of parties to a suit.

The Respondent further filed Notice of Motion dated 30. 9.2020 filed on 2. 10. 2020.

3. We shall deal with the Preliminary Objection first.

A Preliminary Objection must raise purely points of law. If evidence is required to substantiate an objection then such a Preliminary Objection must fail.

Aviation & Allied Workers Union Kenya- vs- Kenya Airways Limited & 3 others [2015] eKLR.

The supreme court stated:

“ Thus a Preliminary Objection may only be raised on a “pure question of Law” to discern such a point of law , the court has to be satisfied that there is no proper contest to the facts.”

4. In the case of Mukhisa Biscuit Manufacturers Limited -vs- West End Distributors Limited

it was stated a Preliminary Objection is one which if argued may dispose of the suit.

HCC. NO. 1 OF 2017- VOI

Wilmot Mwandilo & 3 others - vs- Eliud Timothy Mwangi Justice J. Kimaru did not uphold a Preliminary Objection citing it draconian and there were other substantive issues that had emerged and needed to be determined.

The current case the mere fact that the 2nd, 3rd and 4th Respondents are challenging their being enjoined in this suit can only be determined at the hearing and/or through an Applicant Application by the aggrieved parties.

For this reason the Preliminary Objection dated 30th September, 2020, is not merited and is dismissed.

5. Now to the Application dated 20. 8.2020 and filed on 17. 9.2020 where it is seeking for orders:

1. Spent

2. Spent

3. That pending hearing and determination of this suit, this court be pleased to issue an order quashing the suspension of the Claimant and compel the 2nd, and 3rd and 4th Respondents to reinstate the applicant as a member of the 1st Respondent.

4. That pending hearing and determination of this application, this court be pleased to issue and order barring the Respondent/ defendants, their agents and/or servants from dealing with affairs of the 1st Respondent.

5. That pending hearing and determination of this suit, this court be pleased to issue an order barring the Respondent/defendants, their agents and/or servants from dealing with the affairs of the 1st Respondent.

6. That pending the hearing and determination of this suit, this Honourable court be pleased to issue and order requiring the current the 2nd , 3rd and 4th Respondents to produce all such cash accounts, audited books/report, investment report, documents and securities of the society, and furnish such information in regard to the affairs of the society, as the person holding inquiry may require to issue.

7. That pending the hearing and determination of this suit, this Honourable court be pleased to appoint a competent person (s) to manage the affairs of the 1st Respondent and to exercise all the powers of the society to the exclusion of the current board of directors, including use of the corporate seal of the society.

8. That pending the hearing and determination of this Application, this Honourable court be pleased to issue an order for inquiry or direct any person authorized by them in writing to hold an inquiry, into the by-laws, working and financial conditions of the 1st Respondent.

9. That costs of this Application be borne by the Defendants/Respondents.

6. Replying Affidavit dated 30. 9.2020 filed on 2. 10. 2020by the Respondent sworn by Poly Kagwiria the CEO of the 1st Respondent opposed the Application and brought in new twist in the case/application.

Stating the Diligence Energy Self Help Group & Meru Services Self Help Group were separate and distinct from the 1st Respondent.

She denied any misappropriation of funds by the 1st Respondent and that the suspension of the Claimant /Applicant was put to a vote in a meeting held on 18. 7.2020.

7. The Applicant filed a further Affidavit sworn on 2. 11. 2020and filed on 17. 11. 2020 which has also been taken into consideration.

8. Having looked at all the pleadings and annextures herein we note that there are audited accounts attached by the Respondents for the years in question by the Applicant.

We further note there are certificates showing the existence of two Self Help Groups connected to the 1st Respondent

1. Diligence Energy Self Help group

2. Meru services Self Help Group

which groups forms part of the issues to be addressed herein:

9. The issues for determination are thus:

a. Was the suspension of the Claimant/Applicant lawful

b. Have funds of 1st Respondent been misappropriated by 2nd -4th Respondents.

10. Issue 1:

The Claimant/Applicant having been suspended as member of the 1st Respondent.

It is not in contention whether the applicant was suspended what is in contention is whether the suspension was lawful and/or done in accordance to the by-laws of the 1st Respondent.

11. Article 16 of the By-laws of Diligence Transport Services Sacco provides for the procedure of suspension and expulsion of members of the 1st Respondent.

We find a 30 days written notice was not given to the applicant, stating reasons for the proposed expulsion.

We ask ourselves was the Applicant given an opportunity to defend himself? The same is negative.

With this in mind we find the suspension was not lawful and did not follow the laid out procedures.

12. Issue 2:

Whether there has been misappropriation of funds by 2nd, 3rd, and 4th Respondents.

Having considered the applicant’s affidavits and the annextures therein nothing shows the 2nd, 3rd and 4th Respondent have misappropriated funds of 1st Respondent in carrying out their day to day activities.

13. The Applicant avers no audited accounts have been presented/done over the years.

However, the Respondent have attached Audited Account for the year 2017, 2018 and 2019 as per the Department of Trade, Tourism and Co-operatives Development. (Audit Services Division) Meru in the Farmers Association of 1st Respondent.

14. To this end we find if there is or was any misappropriation of funds as alleged by the Applicant the same would have been reflected in the audited accounts.

We therefore find no evidence of misappropriate if at all by 2nd, 3rd and 4th Respondents.

15. Issue 3:

Appointment of new officials to manage the affairs of the 1st Respondent.

Noting that we have not been convinced of misappropriation of funds by the 2nd, 3rd, and 4th Respondents the issue of appointing new officials would have to fail.

We now look into the Application dated 30. 9.2020 filed on 2. 10. 2020 which was requesting for orders:

a. That this Application be certified as very urgent and the same be heard as a matter of priority;

b. That this Honorable Tribunal be pleased to set aside the Order No. 7 issued to the Claimant on 21st September 2020 setting and or lifting the suspension of the claimant from the 1st Respondent pending the hearing and determination of this application;

c. That this Honorable Tribunal be pleased to set aside the Order No. 7 issued to the Claimant on 21st September 2020 setting and or lifting is suspension of the Claimant from the 1st Respondent pending the hearing and determination of this suit.

d. That costs for and incidental to this Application be costs in the case.

The said Application seems to have suspension of the Applicant upheld. The issues therein have been discussed above while dealing the issue No. 1.

The upshot of the above:

16. 1. Application dated 20. 8.2020 prayer No. 3 is allowed.

Pending hearing and determination of the suit the court quashes the suspension of the claimant and reinstate claimant/applicant as member of 1st Respondent.

2. Prayer 6 is allowed.

Court orders for an inquiry to be done by the Commissioner of Co-operatives into the accounts, investment reports and all affairs of the 1st Respondent within 60 days hereof.

3. Prayer 4 and 5,7fails Costs allowed in the cause.

17. The Application dated 30. 9.2020 is disallowed with no orders as to costs.

Ruling signed, dated and delivered virtually this 6thday of May, 2021.

Hon. B. Kimemia Chairperson Signed 6. 5.2021

Hon. J. Mwatsama Deputy Chairperson Signed 6. 5.2021

Mr. P. Gichuki Member Signed 6. 5.2021

Tribunal Clerk R. Leweri