[2024] KECPT 1526 (KLR)

Mwangi v T-Ken Coop Society Credit Limited (Tribunal Case 333 (E445) of 2023) [2024] KECPT 1526 (KLR) (26 September 2024) (Judgment)

Neutral citation: [2024] KECPT 1526 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 333 (E445) of 2023

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

September 26, 2024

Between

Salim Mburu Mwangi

Claimant

and

T-Ken Coop Society Credit Limited

Respondent

Judgment

1. The facts giving rise to this suit are not disputed by the Respondent who filed a Memorandum of Appearance dated 4. 7.2023 on 7. 7.2023 but failed to file a Defence.

Claimant’s Case 2. Through a Statement of Claim dated 24. 4.2023 filed on 14. 6.2023, the Claimant moved the Tribunal and sought for judgment against the Respondent for:a.A refund of Kshs.586,000/= being deposits owed to the Claimant.b.Payment of Kshs.58,600/= being dividends for the year 2022 due to the Claimantc.Cost of the suit.d.Payment of interest on (b) and ( c) till final payment in full.e.Such other orders as the Tribunal may deem fit and just to grant.

3. To support the claim, the Claimant filed a Verifying Affidavit dated 24. 4.2023, List of Witnesses and List of Documents both dated 24. 4.2023.

4. On 14. 6.2023, the Tribunal summoned the Respondent to enter appearance within 15 days from the date of the service of the summons.In compliance to the summons, the Respondent filed on 7. 7.2022 Memorandum of Appearance application dated 4. 7.2023.

5. Upon failure by the Respondent to file a Defence or appear on the mention dates provided by the Tribunal, the Claimant filed an application dated 29th August 2023 and requested for judgment while anchoring his application on the provisions of Order 10 Rule 9 of the Civil Procedure Rules 2010.

6. As requested, the Tribunal entered into an interlocutory judgment on 30. 1.2024 in favour of the Claimant against the Respondent for the refund of Kshs. 592,200/= and directed the Claimant to file proof of claim before the matter is fixed for Formal Proof.However, a Formal Proof hearing was fixed to take place on 5. 8.2024.

7. Upon reading the records in the file, and examining the Claimant’s supporting document, we find that the matters for our determination are:a.Whether the Claimant should be refunded his deposits of Kshs. 586,000/=?b.Whether the Claimant should be paid Kshs. 58,600/= being dividends for the year 2022 and interest?c.Who should bear the cost of this suit?

Analysis and Determination Whether the Claimant should be refunded his deposits of Kshs. 586,000/=? 8. First, because this suit is undefended by the Respondent the Tribunal is guided by the provisions of Order 10 Rule 4 (1) which provide as follows:“where the plaint makes a liquidated demand only and the defendant fails to appear on or before the day fixed in the summons or all the defendants fail so to appear, the court shall as request in form No. 13 of appendix A enter judgment against the defendant or defendants for any sum not exceeding the liquidated demand together with interest thereon from the date of the suit, at such rates as the court thinks reasonable to the date of the judgment and costs. “In the present suit paragraph 7 of the Statement of Claim is in the nature of a liquidated demand and should therefore enjoy the provisions of Order 10 Rule 4.

9. Furthermore, under paragraph 8 of the Claimant’s Statement of Claim dated 24. 4.2023, the Claimant state that the Respondent had acknowledged the cumulative deposit owed to the Claimant and proposed to a payment plan which was counter proposed by the Claimant that he be paid on a one-off payment of Kshs. 586,000/= or on two (2) equal monthly installment of Kshs. 293,000/=. The parties exchanges of emails dated 28. 2.2023 and 9. 2.2023 relating to this matter attests to the Respondent admission of the debt.

10. The acknowledgement of the deposit of Kshs. 311,219/= by the Respondent via an email dated 9. 2.2023 without adding anything else is an admission of the claim of which we invoke the provisions of Order 13 Rule 1 of the Civil Procedure Rules which state as follows:“any party to a suit may give by his pleadings or otherwise in writing that he admits the truth of the whole part of the case of the any party”The Respondents acknowledgement of the Claimants deposit contributions via the email dated 9. 2.2023 is an unequivocal admission. Given that the Respondent failed to defend this suit and provide the Tribunal with the Claimant’s member statement we are inclined to give the benefit of doubt to the Claimant by finding that he is entitled to the refund of Kshs. 586,000/= as stated in his Statement of Claim.

Issue Two Whether the claimant should be paid Kshs. 58,600/= being dividends for the year 2022 and interest? 11. As is commonly known in the Cooperative movement in Kenya, the issue of declaration and payment of dividends is internal affairs management on the cooperatives Societies most saccos in Kenya have different by-laws which speak to the issue of the declaration and payment of dividends and we have not had the benefit to see or read the by-laws of the Respondent.In absence of the Respondent’s by-laws, we are unable to discern at what point does the Respondent declare dividends to be paid to her members.

12. Further, a reading of Section 46 (2) of the Cooperative Societies Act Cap 490 provide as follows:“No Cooperative Society shall pay dividend, bonus or distribute any part of its accumulated funds without a balance sheet and audited account and report disclosing the surplus funds out of which the dividend, bonus or distribution is to be made.”This means that the dividends that the Claimant’s is claiming would only have been declared after the books of accounts of the Sacco were audited. On the same note, on 5. 8.2024 the Tribunal gave directions to the Claimant to file and serve the Respondents audited accounts for the year 2022 and 2023 which he failed to comply.

13. In view of the lack of filing of the Respondent’s audited accounts as ordered and the fact that the Tribunal has not sighted any approval of the declaration of interest and payment by the Annual General Meeting of the Respondent as provided under Section 46 (3) of the Cooperative Societies Act Cap 490 we find that this claim is unsupported and must fail.

14. Having briefly analyzed the foregoing, we find that the Claimant has established his claim on prayer 1 on the balance of probability and we therefore enter judgment in favour of the Claimant against the Respondent for Kshs. 586,000/= plus cost and interest at the Tribunal rate.Interest to be calculated from the date of filing the claim.

JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 26TH DAY OF SEPTEMBER, 2024. HON. B. KIMEMIA CHAIRPERSON SIGNED 26. 9.2024HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 26. 9.2024HON. BEATRICE SAWE MEMBER SIGNED 26. 9.2024HON. FRIDAH LOTUIYA MEMBER SIGNED 26. 9.2024HON. PHILIP GICHUKI MEMBER SIGNED 26. 9.2024HON. MICHAEL CHESIKAW MEMBER SIGNED 26. 9.2024HON. PAUL AOL MEMBER SIGNED 26. 9.2024TRIBUNAL CLERK JEMIMAHMs. Matu advocate holding brief for Wangui Kuria advocate for the Claimant.T-Ken Cooperative Society - No appearanceMs. Matu advocate- When matter was last in court the Claimant was to file Audited Account of 2023/2024. However, Respondent have frustrated our efforts.Tribunal Orders:Judgment is read.HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 26. 9.2024