[2023] KECPT 824 (KLR)

Ndungu v Commissioner for Cooperative Development & another (Civil Appeal 4 of 2019) [2023] KECPT 824 (KLR) (31 August 2023) (Judgment)

Neutral citation: [2023] KECPT 824 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Civil Appeal 4 of 2019

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

August 31, 2023

Between

Eunice Muthoni Ndungu

Appellant

and

Commissioner for Cooperative Development

1st Respondent

Endarasha Farmers Coop.Society Ltd

2nd Respondent

Judgment

1. The present appeal is brought vide a memorandum of appeal dated 15/03/2019 and filed on 15/03/2019. The appeal is brought on the following grounds:i.The Respondents erred in law and fact by failing to accord the appellant a fair hearing as envisaged by Article 50(1) of the Constitution of Kenya.ii.The Respondents erred in law and fact by serving the notice of intention to surcharge simultaneously with the order of surcharge.iii.The Respondents erred in law and fact in failing to accord the appellant her fair administrative action rights as envisaged by Article 47 of the Constitution as read together with the provisions of the Fair Administrative Action Act.iv.The Respondents erred in law and fact by failing to take into account that the Appellant had already retired and been cleared by the co-operative society.v.The Respondents erred in law and fact by failing to appreciate that the Appellant was not covered by the enquiry report.vi.The Respondents erred in law and fact by failing to appreciate that the Claim against her was time-barred.vii.The Respondents erred in law and fact by failing to appreciate that the 1st Respondent and the Endarasha Farmers Co-operative Society Limited having cleared the appellant at retirement without any complaint were estopped from surcharging her.viii.The Respondents erred in law and fact by acting on recommendation of the inquiry and the resolution of the co-operative society that the Appellant be surcharged for cash shortage that occurred in the financial year 2015/2016 when she had already retired.ix.The Respondent erred in law and fact by failing to consider the Appellant’s defense and thereby fell into error and arrived at the t wrong decision.x.The decision of the Respondents is against the weight of the evidence.

2. The Memorandum of Appeal is accompanied by the record od appeal dated 01/09/2021 and filed on the same date. The record of appeal compromised of the memorandum of appeal, inquiry report, minutes of the General Meeting, Notice of Intention to surcharge, Notice to Show Cause from the Commissioner of Co-operatives and Surcharge Order

3. The 2nd Respondent raised a Preliminary Objection vide a Notice of Preliminary Objection dated 03/02/2022 and filed on 16/03/2022. The Preliminary Objection was raised on the following grounds.i.The Appeal is filed out of time and in particular contrary to Section 74 of the Co-operative Societies Act.ii.The Appeal is incurably defective in law and fact.

4. Parties were directed to dispense the Preliminary Objection through written submissions which were filed accordingly. Further the parties also filed written submission to dispense with the substantive appeal.

Analysis And Determination. 5. Section 74 of the Act requires any requires any person aggrieved by an order of the Commissioner under 73(1) may, within 30 days, appeal to the Tribunal. In the present case, the surcharge order was served on 19/02/2019 and the Memorandum of Appeal was filed on 15/03/2019. This was within the statutory time limit. It is therefore, the Tribunal’s view that the Preliminary Objection lacks merit and consequently dismissed.

6. Looking at the substantive appeal, the Tribunal will first interrogate the question of jurisdiction.

7. In Motor Vessel Lilian’s vs Caltex Oil (Kenya) Limited, the Court held that:“Jurisdiction is everything. Without it a court has no power to make one more step”

8. Under Section 74(1), any person aggrieved by an order of the Commissioner under Section 73(1) may within 30 days appeal to the Tribunal.

9. The Appellant in the present circumstances seems to be appealing against the process that led up to the surcharge order. The process involves administrative decisions that will ideally fall under Judicial Review. In R v National Land Commission Ex parte Krystalline Salt Limited [2015] eKLR“Judicial Review is available where a public body or Tribunal has acted illegally, unreasonably or failed to comply with rules of natural justice”

10. Further, the Appellant is appealing against the inquiry report and the resolution of the Special General Meeting and not the surcharge order as expected by Section 74(1). In Felix Otande v Commissioner for Co-operative Development & Another [2021] eKLR, this Tribunal held that“We also find that the Appeal against any Inquiry Report does not lie with the Tribunal. The Appellant had sufficient time and opportunities to challenge the Inquiry Report after it was presented to the members, or after an Intention to Surcharge was issued.

11. We find that the Appellant seeks for the Resolution of 2nd Respondent be set aside and the Inquiry Report be dismissed. In this regard, we find that the Annual General Meeting of the members is the supreme authority of the Cooperative Society and that any Resolution of this supreme cannot be set aside unless its illegal or contravenes the laws and rules of natural justice. In the circumstances, we find that the being the supreme authority in the members society, they passed a Resolution and the same was implemented by the Commissioner for Cooperatives Development.

12. We find that the minutes of the Special General Meeting held on 3. 6.2016 is in regard to the voting on the no Confidence Motion as per the notice dated 16. 5.2016.

13. The Surcharge Order is dated 23. 1.2019 and the same was received by the Appellant on 19. 12. 2019. The minutes of the meeting adopting the Inquiry dated 22. 5.2018 has not been filed together with the Memorandum of Appeal as required under Rule 8 (3) Cooperative Tribunals (Practice and Procedure) Rules 2009.

14. We find that this rule is drafted in mandatory terms and therefore failure to comply with the Rule has consequences and it is not curable. We are therefore not able to comprehend what transpired in the Annual General Meeting without the said minutes.

15. In that regard therefore, noting that the prayers in the appeal are not therefore properly presented to the Tribunal in the manner articulated in the Cooperative Tribunal (Practice and Procedure) Rules.

16. The Annual General Meeting minutes being very critical and having not been availed, we find that there are unable to comprehend what transpired in the Annual General Meeting and how the Resolutions were reached in order to determine their validity or otherwise.

17. We also note that the issue of retirement of the Appellant raises no arguable ground since the Appellant was cleared for retirement before the Inquiry was conducted. Section 28 Cooperative society’s Act is clear in regard to the responsibilities of the Management Committee Members during their period of service. We therefore find that retirement of the Appellant does not give her immunity to escape from the liability as provided under Section 28 Cooperative Society’s Act.

18. We therefore find that the Appeal lacks merits and is accordingly dismissed with costs.

19. We order for the Appellant to pay the surcharge amount Kshs. 153,500/=.

JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 31ST DAY OF AUGUST, 2023. HON. BEATRICE KIMEMIA CHAIRPERSON SIGNED 31. 8.2023HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 31. 8.2023HON. BEATRICE SAWE MEMBER SIGNED 31. 8.2023HON. FRIDAH LOTUIYA MEMBER SIGNED 31. 8.2023HON. PHILIP GICHUKI MEMBER SIGNED 31. 8.2023HON. MICHAEL CHESIKAW MEMBER SIGNED 31. 8.2023HON. PAUL AOL MEMBER SIGNED 31. 8.2023TRIBUNAL CLERK JEMIMAHMs. Wothaya advocate for AppellantNo appearance for Respondent.Judgment as read out on 31. 8.2023. HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 31. 8.2023