[2024] KECPT 897 (KLR)
The Tribunal found that the process leading to the surcharge of the Respondent was conducted in accordance with the procedures laid down in the Cooperative Societies Act. The Tribunal was satisfied that the Respondent was given notice and an opportunity to challenge the surcharge but failed to do so. There was no...
Source-derived case information.
- Citation
- [2024] KECPT 897 (KLR)
- Parties
- Applicant: Orient Sacco Society Limited; Respondent: Charles Kagu Gakahu
- Court
- Cooperative Tribunal
- Jurisdiction
- Kenya
- Case Number
- Tribunal Case 65 of 2021
- Procedural Posture
- Tribunal Claim / Final Judgment
- Outcome
- judgment for applicant
- Judges
- Janet Mwatsama, B Sawe, F Lotuiya, P. Gichuki, M Chesikaw, PO Aol
- Legal Topics
- Cooperative Societies, Surcharge Procedure, Internal Governance, Statutory Inquiries
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Orient Sacco Society Limited
Applicant
Charles Kagu Gakahu
Respondent
Procedural Posture
Tribunal Claim / Final Judgment
Legal Issues
- 1 Whether the Respondent should pay the surcharged amount as determined by the Commissioner of Cooperatives.
- 2 Whether the surcharge process followed due procedure under the Cooperative Societies Act.
Ratio Decidendi
The Tribunal found that the process leading to the surcharge of the Respondent was conducted in accordance with the procedures laid down in the Cooperative Societies Act. The Tribunal was satisfied that the Respondent was given notice and an opportunity to challenge the surcharge but failed to do so. There was no evidence of irregularity or arbitrariness in the inquiry or surcharge process. The Tribunal held that it was not the appropriate forum to re-examine the merits of the inquiry report or the surcharge orders in the manner presented by the Respondent. Consequently, the Tribunal entered judgment in favour of the Claimant for the surcharged sum, finding the Respondent liable for the...
Court Disposition
judgment for applicant
Orders
- The Statement of Claim dated 26th January, 2021 succeeds.
- Judgment is entered against the Respondent for the surcharged sum of Kshs. 1,201,501.58.
Full Case Text
Judgment text and source record
28 paragraphs
Orient Sacco Society Limited v Gakahu (Tribunal Case 65 of 2021) [2024] KECPT 897 (KLR) (30 May 2024) (Judgment)
Neutral citation: [2024] KECPT 897 (KLR)
Republic of Kenya
In the Cooperative Tribunal
Tribunal Case 65 of 2021
Janet Mwatsama, Chair, B Sawe, F Lotuiya, P. Gichuki, M Chesikaw & PO Aol, Members
May 30, 2024
Between
Orient Sacco Society Limited
Claimant
and
Charles Kagu Gakahu
Respondent
Judgment
FACTS OF THE CASE. 1. The Respondent is a former supervisory committee member of the Claimant, a position he has served from 2008 to 2017. Around 2016, member of the Claimant Society expressed dissatisfaction with the services being offered to them and petitioned the Commissioner of Cooperatives to call for a Special General Meeting. At the Special General meeting, members of the Society suspended from office the entire management and Supervisory Committees pending investigations.
2. In March 2017 after the investigations were done, another Special General Meeting passed a vote of no confidence on the Management, Supervisory Committee and the Chief Executive Officer and made recommendations to the Commissioner of Cooperatives to conduct an inquiry.
3. The Commissioner of Cooperatives conducted an inquiry and presented his report on 11th April, 2019. The report was unanimously adopted. The report Surcharged the Respondent and others for the loss of the Society’s money. The Respondent was surcharged the sum of Kshs. 1,201,501. 58/=.
4. On 9th May, 2019, the Commissioner formally issued the Respondent with a Notice of Intention to Surcharge for the sum of Kshs. 1,201,501. 58/=.
5. On 28th January, 2021, the Claimant instituted this suit to recover the said sum and when the Respondent did not enter appearance or file a Defence, the Claimant requested this Tribunal to enter judgement for failure to enter appearance and file a Defence. On 13th April, 2021, this Tribunal entered judgement and issued a decree for the said sum.
6. On 26th April, 2021, the Respondent filed a Notice of Motion seeking stay of the execution and setting aside of the decree of 13th April, 2021 based on the claim that he was not served with the Statement of Claim or the Summons to enter appearance.
7. This Tribunal on 17th February, 2022 made a ruling which set aside the decree of 13th April, 2021 and also allowed the Respondent to file his Statement of Defence.
8. In the Statement of Defence, the Respondent stated that no proper procedure was followed and the entire process upto the surcharge was arbitrary and draconian with the intent of making him a scapegoat for sins of the past regime.
9. At the hearing, evidence was availed to confirm that a lot of money was misappropriated especially during the migration from Jinasoft and five extreme.The issue for determination is:
Issue one Whether the Respondent should pay the surcharged amount. 10. The process of surcharging or of challenging a surcharge is an elaborate process that go in stages beginning with recommendations for inquiry being made to the Commissioner of Cooperatives.
11. In this particular case, we are satisfied that the process was conducted diligently in line with the laid down procedure in the Cooperatives Societies Act.
12. First, members expressed dissatisfaction with services that were being offered. Secondly, the Commissioner was petitioned to conduct the inquiry through the Special General Meeting. Third, after the inquiry was done, the report was taken back to the membership of the Claimant and they passed it unanimously. Fourth, the commissioner informed the Respondent of the notice to surcharge and gave him the opportunity to give his side of the story. Fifth, the Respondent was surcharged after he failed or ignored the opportunity to challenge the surcharge.
13. This Tribunal has looked at the inquiry report, the process of inquiry leading to the recommendation to surcharge and the opportunity that were provided to challenge the inquiry or the surcharge and we find nothing irregular or arbitrary in the process or the findings. The Respondent was not denied the opportunity to challenge the inquiry or the surcharge, which opportunities he didn’t take. The Respondent is late in time and this Tribunal is not the right forum for challenging the inquiry report and the surcharge orders in the format in which he is challenging them with the evidence he is challenging them with. Final orders Judgment entered in favour of Claimant against Respondent.i.The Statement of Claim dated 26th January, 2021 succeeds.ii.Judgment has been entered against the Respondent for the surcharged sum of Kshs. 1,201,501. 58/=iii.Parties to bear their own costs.
JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 30TH DAY OF MAY, 2024. Hon. J. Mwatsama - Deputy Chairperson Signed 30. 5.2024Hon. Beatrice Sawe - Member Signed 30. 5.2024Hon. Fridah Lotuiya -Member Signed 30. 5.2024Hon. Philip Gichuki - Member Signed 30. 5.2024Hon. Michael Chesikaw - Member Signed 30. 5.2024Hon. Paul Aol - Member Signed 30. 5.2024Tribunal Clerk JonahJudgment delivered in the absence of parties.Hon. J. Mwatsama - Deputy Chairperson Signed 30. 5.2024