[2025] KECPT 206 (KLR)

Jepkorgat v Metropolitan National Sacco Limited (Tribunal Case 170/E295 of 2024) [2025] KECPT 206 (KLR) (27 March 2025) (Judgment)

Neutral citation: [2025] KECPT 206 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 170/E295 of 2024

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

March 27, 2025

Between

Tecla Maina Jepkorgat

Claimant

and

Metropolitan national Sacco Limited

Respondent

Judgment

1. The Claimant was a member of the Respondent’s Sacco Member No. 80149, and it was provided for in the Rules and Regulations of the Respondent that upon resignation, the Respondent would pay the Claimant her deposits or shares within 60 days from the notification date.

2. That around August 2022, the Claimant gave the Respondent the requisite notice to pay or refund her deposits, and that at the time the Claimant’s gave the notice of withdrawal the Claimant's cumulative share contribution with the Respondent were worth Kshs. 265,195. 32/=

3. That the Respondent failed, neglected and or refused to refund the Claimant her share contribution in breach of the Respondent’s by-laws despite demand made, necessitating the filing of this Statement of Claim dated 1st December, 2024 for recovery of the sum of Kshs. 265,195. 32/= plus interest at the rate of 14% from 1st November 2022 until payment in full.

4. The Respondent filed their Statement of Defence dated 17th May, 2024 stating among others that:i.The Claimant has not proved or sufficiently established that the Respondent is in possession of her shares, savings and or deposits and without prejudice has not met the condition for a refundii.The Statement of Claim is replete with outright falsehoods, misrepresentation and concealment of material factsiii.As per the Respondent’s resolutions at their AGM, members resolved and agreed to put refunds on hold until the liquidity challenges faced by the Respondent ceases and which the liquidity problems are facts which are well within the Claimant’s knowledgeiv.The Respondent never received the Claimant’s notice of withdrawal and the Claimant’s demand notice does not conform to the statutory notice envisaged under the Co-operative Societies Act, Rules and the Respondent’s by-lawsv.The Respondent has been through so much turmoil and financial challenges and is overwhelmed by various applicants seeking to withdraw from the Society as a result of mismanagement by previous committeevi.In response to the numerous cases of withdrawal by its members, it requires and it is necessary to have a more structured approach to handle the outstanding matters, failure to which the existence of the society is uncertain

5. This Tribunal later gave directions for the Respondent to file and serve Statement of Accounts within fourteen days and for the parties to file their written submissions. The Claimant filed their written submissions dated 8th October, 2024 stating among others:a.That her total savings as at the time of withdrawing her membership amounted to Kshs. 265,195. 32/=b.That the Claimant was no longer a member of the Respondent Sacco as her contribution to the Respondent had ceased by August, 2022 when her employer Teachers Service Commission stopped remitting her contribution to the Respondentc.That the Claimant has proved service of notice of withdrawal of her membership and that is clear from her handwritten letter dated 2nd August, 2022d.That the Respondent has failed to attach evidence supporting the AGM resolutions as they have not attached:i.Minutes of the alleged AGMii.The specific resolutions that agreed to schedule refunds on first come first serve basis

6. And that in the absence of minutes, the Respondent cannot justify its unlawful withholding of the Claimant’s deposits.

7. As at the date of writing this judgment, the Respondent was yet to file a Statement of Account or their written submissions.

8. Has the Claimant sufficiently proved her claim on a balance of probabilities and is she entitled to a refund?

9. We note that the Claimant did properly withdraw from the Respondent by issuing a handwritten letter dated 1st August, 2022 for a refund of her savings formally, and the Respondent has not produced anything to show that there is a standard format for notice of withdrawal from the SACCO, and as such, the said letter by the Claimant constitutes a proper Notice of Withdrawal and request for refund.

10. The Respondent has not pleaded any liability on the part of the Claimant in terms of loans and guarantees to other members, and in as much as we sympathize with the Respondent’s financial situation, we are also alive to the fact that a member has a right to her deposits. The Co-operative Societies Act is clear on the concept of voluntary membership to a Co-operative Tribunal, and as long as a Co-operative society is in operation, it is expected to honor its obligations to its members. The Legal Notice No. 82 (The Sacco Societies Act) at Section 21 (6) is also clear to the effect that:“A non-deposit-taking Sacco society shall refund to a member the amount accumulated in the member's non-withdrawable account within sixty days of receiving the written notification of the member to withdraw from membership of the Sacco society.”

11. The Claimant produced her salary slips for July and August 2022, and the Respondent did not dispute the amounts owed, and this Tribunal is inclined to believe that the Respondent owes the Claimant Kshs. 351,258. 71/= in refunds.

Final Ordersi.The Claimant’s Statement of Claim dated 19th January, 2023 succeedsii.Judgment is entered in favour of the Claimant for the sum of Kshs. 351,258. 71/= with costs and interest at Tribunal rates.

JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 27TH DAY OF MARCH, 2025. HON. B. KIMEMIA CHAIRPERSON SIGNED 27. 3.2025HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 27. 3.2025HON. BEATRICE SAWE MEMBER SIGNED 27. 3.2025HON. FRIDAH LOTUIYA MEMBER SIGNED 27. 3.2025HON. PHILIP GICHUKI MEMBER SIGNED 27. 3.2025HON. MICHAEL CHESIKAW MEMBER SIGNED 27. 3.2025Tribunal Clerk JonahChacha advocate holding brief for Solonka advocate for the Claimant.Gitonga Muriuki advocate for Respondent – No appearanceHON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 27. 3.2025