https://new.kenyalaw.org/akn/ke/judgment/kecopt/2026/307

REPUBLIC OF KENYA IN THE COOPERATIVE TRIBUNAL AT NAIROBI TRIBUNAL CASE NO. E535 OF 2025 RUTH NDINDA MWANGI………………. …………………………...CLAIMANT -VERSUS- QONA DEPOSIT TAKINGS SACCO LIMITED alias SAFARICOM SACCO LIMITED..…. ……………………………..RESPONDENT (Coram: Hon. J. Mwatsama- Chairperson, Hon. B. Sawe- Member, Hon. F. Lotuiya- Member, Hon. M. Chesikaw- Member and Hon. P. Aol- Member.) JUDGEMENT 1. The matter for determination is a Statement of Claim dated 3 rd June 2025. In the Statement of Claim, the Claimant claims that she was a member of the Respondent, member number 011132 until March 2025, after she submitted a withdrawal request signed on 11th December 2024. That the withdrawal request is a CTC NO. E535 OF 2025 1 sixty day notice thus her membership was to automatically cease in March 2025, or thereabous. That prior to the termination request, she had applied for and received ksh. 820,000/- as advance rebate/dividents, and she expected the same to be processed together with her final dues. That the same was withheld for no apparent reason, and thus the Claimant is aggrieved and prays for: a) A declaration that the Claimant; Ruth dinda Mwangi is entitled to payment of rebate/or Dividend amount of Ksh. 820,000.00. b) That the Respondent be and is hereby directed to forthwith process and pay the Claimant; Ruth Ndina Mwangi Ksh. 820,000.00 plus interest at court rate from 3rd December 2024. c) Costs and Interest of the Claim. d) Any other relief(s) this Tribunal may deem fit and just. The claimant filed a witness statement and a list of Documents in support of her claim. CTC NO. E535 OF 2025 2 2. The Respondent entered appearance and filed a Statement of Defense dated 28th August 2025. In their Response, the Respondent aver that the Claimant’s membership lawfully ceased on 18th December 2024 when her deposits were refunded and her account closed. The Respondent further avers that the Claimant has misconstrued the concept of rebates advance, loan and rebates payment, in that rebates are just loan products just like any other loan, and that no member is allowed to withdraw from a Sacco before clearing all loan balances, if any. Further that according to their by-law 68(d) interest on deposits, rebates and dividends on shares is paid to valid members on the members register as at the close of the financial year, which in this case was 31st December 2024. 3.This being a matter for refund, the Tribunal directed that the same be canvassed by way of written submissions, and both parties filed their submissins. 4.The Claimants filed their submissions dated 28th January 2026. In their submissions, the Respondent relies on the doctrine of legitimate expectation, the constitution and section 1A, 1B, and CTC NO. E535 OF 2025 3 3A of the Civil Procedure Act. They submit that each party is bound by their own pleadings and cannot be allowed to raise a different or fresh case without due amendment. They submit that the Respondent has not denied that it had floated an offer for an advance rebate requests for members with certain interest charged and that the Claimant had received Ksh. 820,000/-. Also that the Respondent did not communicate to the Claimant when it ended or concluded the exit process but the written request for withdrawal expressly provide for a sixty day notice. 5.The Respondent also filed its submissions dated 12th May 2026. In their submissions, they seek to answer the question on whether the Claimant was a member as at 31st December 2024, and whether the Claimant is entitled to rebates and/or Dividends for the financial year ending December 31st, 2024. They aver that under Section 40 of the Co-operative Societies Act, membership records must reflect the date a member ceases to be a member. Further, that under their By-Laws at By- law 15, there is a clear procedure on how a member can CTC NO. E535 OF 2025 4 formally withdraw from the society, in which a member is to give a notice of sixty days. Further, that Section 13 of the Co- operative Societes Act provide that By-laws once registered bind the society to the same extent as if they were signed by each member. It is their submission that once withdrawal is effected and dues settled, membership terminates, and the law does not recognize automatic cessation after two months. They also submit that Section 48 of the Act provides that the distribution of any net balance be done after allocation to the reserve fund and other statutory requirements, and that By-law 63(d) reinforces this position. ANALYSIS 6.The question before this Tribunal is whether the Claimant is entitled to the relief sought. The Claimant’s claim is for the payment of rebate/dividend amounting to Ksh. 820,000/-. 7.There is no dispute that the Claimant was a member of the Respondent and that she filled a membership withdrawal request dated 10th November 2024. Further it is not disputed that the Claimant was advanced a rebate on 3rd December CTC NO. E535 OF 2025 5 2024, and the same was deducted from her savings before refund. It is also not in dispute that the Sacco By-laws of Respondent provide that interests on deposits, rebates, and and dividends on shares shall be paid to valid members on the members register as at the close of the said financial year. 8. To answer the question herein, this Tribunal ought to determine whether the Claimant was still a member of the Respondent as at 31st December 2024. 9.This Tribunal is then drawn to the Membership Withdrawal Request form that is provided by the Respondent to its members to fill out when they wish to withdraw from membership. In that form, there is a term to the effect that “A member may at any time withdraw from the society by giving a written notice of 60 days………….and thereafter the notice period a member shall be refunded his monies within 60 days (emphasis ours). 10. From a literal interpretation of the above term, a member ought to issue a first 60 day notice to exit, and after the notice period the Respondent can then refund the member’s monies CTC NO. E535 OF 2025 6 within 60 days. The by laws, on the other hand at by-law 15 is silent on the further 60 days after the 60 day notice period. These two provisions, though crucial in the determination of whether the Claimant was still a member on 31st December 2024, are contradictory. 11. According to the Claimant, a notice period is a period to inform the Co-operative Society of one’s impending exit, but one remains a member during the period. According to the Respondents on the other hand, once a person is paid their dues, they cease being a member regardless of whether the notice period has lapsed or not. If we use the the contra proferentem rule, which states that an ambiguity in a contract is to be construed unfavourably to the drafter, then we will agree with the Claimant that her membership in the Respondent would run for two months after 11th December 2024, running all the way to 11th February 2024, after which the Respondent would process her dues within two months. This means that the Claimant was a member at the year end, 31st December 2024. CTC NO. E535 OF 2025 7 12. The Upshot is that we find merit in the Claimant’s Claim, and make the following orders: a) The Claimant is entitled to the payment of rebate amount lf Ksh. 820,000/-. b) The Respondent is hereby directed to process and pay the Claimant, Ruth Ndinda Mwangi, Ksh. 820,000/- plus costs. c) Interest on (a) above from the date of judgement till payment in full. Judgment dated and delivered virtually at Nairobi this 25th day of June, 2026. Hon. J. Mwatsama Chairperson signed 25.6.2026 Hon. Beatrice Sawe Member signed 25.6.2026 Hon. Fridah Lotuiya Member signed 25.6.2026 Hon. Michael Chesikaw Member signed 25.6.2026 CTC NO. E535 OF 2025 8 Hon. P. Aol Member signed 25.6.2026 Tribunal Clerk Jemima CTC NO. E535 OF 2025 9