[2023] KECPT 452 (KLR)

King'oo v Boots Sacco Society Limited (Tribunal Case 284 of 2018) [2023] KECPT 452 (KLR) (27 April 2023) (Judgment)

Neutral citation: [2023] KECPT 452 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 284 of 2018

BM Kimemia, Chair, J. Mwatsama, Vice Chair, B Sawe, F Lotuiya, P. Gichuki & PO Aol, Members

April 27, 2023

Between

Peterscott King'oo

Claimant

and

Boots Sacco Society Limited

Respondent

Judgment

1. The matter for determination is a Statement of Claim dated June 13, 2018 filed on June 18, 2018. The Claimant claim to be a member of the Respondent that is, Boots Sacco. The Claimant lodged his notice of withdrawal on September 25, 2017. Claimant claims the Respondent owes Kshs 86,500/=. His prayers are for :a)Specific performance by the respondent by payment of Kshs 86,500b)Cost of the suitc)Interest in (a)(b) aboved)Any other relief this honorable court may deem fit.The Respondent filed an Amended Statement of Defence dated August 16, 2018 and stated the Claimant was former secretary of Respondent who applied for a loan of Kshs 7,000,000/= from Cooperative Bank. The Respondent further states the Claimant &3 other officials that is:'Harison Mulela –ChairpersonCharles Kimani –Vice chairpersonJoseph Owiti- Treasurer'Misappropriated the loan of Kshs 7,000,000/= for their benefits & the Respondent seeks for Kshs 86,500/= to be offset from the Kshs 1,750,000/=. The Respondent prays for the claim to be dismissed with cost & Claimant to pay Respondent the misappropriated funds when in office.

2. The Claimant filed a Reply to the Defence and Counter -Claim and Counter- Claim and stated Respondent is attempting to distort the true fact of the claim by making such baseless false allegations.Claimant averse he is not liable to the Respondent to a tune of Kshs 1,663,500/= and prays for a counter claim to be struck out.

3. The matter come for hearing on April 21, 2022. The Claimant testified as Claimant witness 1- Peterscott King’oo adopting his witness statement dated October 19, 2021 as his evidence- in- chiefOn cross examination the Claimant confirmed he was secretary to the Respondent.He confirmed the 7 Million was not a loan to the individual but for the Respondent society which was for the purchase of the vehicles to benefit members as loans.The purpose of the Vehicles was to be used as car hire business. He confirmed members of the Respondent were not aware and later members agreed to sell the vehicles.He further stated on cross examination that he had no documents to show the vehicles were sold.He stated when questioned about Kshs 7,000,000/= that the money was deposited back to the account as per page June 11, 2008. When questioned about the Inspection Report form in page 9 to 15 in Respondent Documents, the report showed the cars was bought in the Claimant’s name he denied the sameFurther when asked about his loan of Kshs 902,970/= he stated he had paid all his dues.

4. The Respondent called one witness RW1 Witness 1-George Ochieng who was vice Chairman of Respondent.He adopted his Witness Statement dated April 21, 2022 as his evidence in chief and produced his List of Documents dated August 16, 2018 and Supplementary List of Documents dated August 29, 2018 produce as REX 1&2 respectively.On cross exam he stated the loan of Kshs 7,000,000/= was taken on July 10, 2017 and was disbursed to the Respondent bank account.He stated they (officials) can only take loans on behalf of Sacco if approved by the members in an Annual General Meeting.He stated they were still trying to bring a case against Claimant for the misappropriation.He claims Respondent owed Kshs 1. 400,000/= but did not have the documents.On the car importation of Vehicles, the Annual General Meeting given a mandate and some vehicles were sold i.e'KAZ xxxx sold at Kshs 650,000KAZ xxxx sold at Kshs 660,000KAZ xxxx sold at Kshs 770,000'For the 4th Car the Treasurer Joseph Owiti was to surrender the proceed but has not done so.He confirmed Joseph Owiti was to pay the debt and remit cost for the 4th vehicle.He confirmed the Claimant is not amongst those officials who were barred.

5. Parties filed Written Submissions, with Claimant filing written submissions dated August 11, 2022 filed on August 17, 2022. The Respondent filed Written Submission dated August 31, 2022. Having perused the pleading and considering the evidence by parties as well as written submission filed by the parties and the issue forIssue one.Whether the Claimant owes any fund to the Respondent?Issue two.Whether the Claimant is entitled to his refund?

Issue one - Whether the Claimant owes any fund to the Respondent? 6. The Respondent averred the Claimant owed the money that he was in the Management Committee of Respondent and they misappropriate funds.We have considered the evidence adduced and Respondent Witness 1, on cross examination stated the claimant was not part of the Inspection Report (CS/No3011), the proceeds from the sale of machines was reimbursed less an amount that the Treasurer was yet to pay This exonerates the Claimant from any claim.Despite the Respondent claiming money was misappropriated their report as produced does not mention the Claimant.As such we are not convinced that the Claimant owes the Respondent the monies misappropriated if at all.We are not sure why the Respondent have not taken any action against the Claimant and the other officials and why there is no Inquiry Report as yet from the committee and no Surcharge Order.We are not doubting the Respondents claim of misappropriate the funds whereas the same ought to be taken care off under section 73 of Cooperative Societies Act on surcharge and misappropriation.'(1)Where it appears that any person who has taken part in the Organization or Management of a Co-operative Society, or any past or present officer or member of the society—(a)Has misapplied or retained or become liable or accountable for any money or property of the society; or (b) has been guilty of misfeasance or breach of trust in relation to the society, the Commissioner may, on his own accord or on the application of the liquidator or of any creditor or member, inquire into the conduct of such person.(2)Upon inquiry under subsection (1), the Commissioner may, if he considers it appropriate, make an order requiring the person to repay or restore the money or property or any part thereof to the co-operative society together with interest at such rate as the Commissioner thinks just or to contribute such sum to the assets of the society by way of compensation as the Commissioner deems just.(3)This section shall apply notwithstanding that the act or default by reason of which the order is made may constitute an offence under another law for which the person has been prosecuted, or is being or is likely to be prosecuted.'Nothing has been shown that ties the Claimant to the said misappropriation, if at all and even if it did there, no proof of the same as per the law.

Issues Two -Whether the Claimant owes any funds to Respondent? 7. Claimant filed a claim for his refund.Respondent stated the Claimant cannot be refunded, the Responded said the claim had a loan however despite in their written submission stating claimant did not give evidence, the Respondent also have not given any documents to support a claim of a loan outstanding.We find the Respondent have not convinced us there is a loan outstanding.Balance therefore shifts to Respondent to prove why they are not paying the Claimant his refund.

Up shot 8. We find in favor of the Claimant against the Respondent for Kshs 86,500/= plus cost and interest of the suit.

RULING SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 27TH DAY OF APRIL, 2023. HON. BEATRICE KIMEMIA CHAIRPERSON SIGNED 27. 4.2023HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 27. 4.2023HON. BEATRICE SAWE MEMBER SIGNED 27. 4.2023HON. FRIDAH LOTUIYA MEMBER SIGNED 27. 4.2023HON. PHILIP GICHUKI MEMBER SIGNED 27. 4.2023HON. PAUL AOL MEMBER SIGNED 27. 4.2023Tribunal Clerk Jemimah/JonahAdvocate for ClaimantMbuthia advocate for the RespondentMbuthia advocate – We pray for 30 days Stay of Execution and copy of Judgment.Karanja advocate - Not available.TRIBUNAL :30 days Stay of Execution granted.Respondent to apply for the certified Judgment and Proceedings from the Registry.HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 27. 4.2023