[2025] KECPT 208 (KLR)

Lemunke v Metropolitan National Sacco Limited (Tribunal Case 543/E692 of 2023) [2025] KECPT 208 (KLR) (27 March 2025) (Judgment)

Neutral citation: [2025] KECPT 208 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 543/E692 of 2023

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

March 27, 2025

Between

Lucy Nashipae Lemunke

Claimant

and

Metropolitan National Sacco Limited

Respondent

Judgment

1. The Claimant was a member of the Respondent’s Sacco 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 on 2nd October, 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. 470, 155. 33/=

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. 470, 155. 33/= plus interest at the rate of 14% from 2nd October 2022 until payment in full.

4. This Tribunal on 17th September, 2024 gave directions for the Respondent to file and serve their Defence, 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 she was a member of the Respondent society Member No. 09298 and her total savings as at the time of withdrawing her membership amounted to Kshs. 470, 155. 33/=b.That the Claimant was no longer a member of the Respondent Sacco as her contribution to the Respondent had ceased by August, 2021 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 October, 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

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

6. The Respondent did not file a Defence or Statement of Accounts, but filed their Written Submissions dated 19th September 2024 stating among others:a.That the Claimant has not proved or sufficiently established that the Respondent is in possession of his shares/savings and or deposits and without prejudice has not satisfied/met the condition for a refundb.That by-laws of the Respondent provide that shares are non-refundable and cannot be withdrawn even on exit from the Sacco but can be transferred to another member of the Sacco, facts that are within the knowledge of the Claimantc.That as per the resolutions of 21st April 2022 AGM, members resolved and agreed to stop all further refunds as the same is unsuitable taking into account the large number of former members exiting the Sacco. This has been brought by the liquidity challenges facing the Respondent, a fact that is well known and within the Claimant’s knowledged.That an inquiry report published vide Gazette notice 4558 and dated 22nd April 2022 was to the effect that the Respondent Sacco is not in a position to clearly determine members who took loans and or who guaranteed other members and as such the Respondent cannot tell which members are deserving of refunds and those who are note.That the Claimant has not disclosed to the Honourable Court that she secured a loan from the Respondent Sacco and or guaranteed another member and she is not deserving of any refundsf.That the new management are new in office and it is only prudent that they be given time to recover the critical documents which include members statements of accountg.That on without prejudice basis, should the Tribunal find that there is any money owed to the Claimant, the Respondent pleads with the Tribunal that it can only manage a payment schedule and or to settle the sum in terms of 2,000/- to 5, 000/- per month and this is due to the numerous cases of withdrawal by its members.

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

8. We note that the Claimant did properly withdraw from the Respondent by issuing a handwritten letter dated 2nd October, 2021 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.

9. 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.”Final Ordersi.The Claimant’s Statement of Claim dated 1st December, 2024 succeedsii.Judgment is entered in favour of the Claimant for the sum of Kshs. 470, 155. 33/= 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 Kanyoro advocate for the Claimant.Gitonga Muriuki advocate for Respondent – No appearanceHON. J. MWATSAMA - DEPUTY CHAIRPERSON SIGNED 27. 3.2025