[2024] CPT 1715 (KLR)
The Tribunal found that the Claimant failed to provide evidence that the Inquiry Report, which formed the basis for the surcharge order, was properly adopted by the members of the Society at a general meeting as required by law. The minutes presented from the 2016 Special General Meeting did not reference or adopt...
Source-derived case information.
- Citation
- [2024] CPT 1715 (KLR)
- Parties
- Applicant: Orient Savings and Credit Co-operative Society; Respondent: Mary Njeri Gikonyo
- Court
- Copyright Tribunal
- Jurisdiction
- Kenya
- Case Number
- Tribunal Case 153 of 2021
- Procedural Posture
- Tribunal Claim / Judgment
- Outcome
- claim dismissed with costs to the respondent
- Judges
- BM Kimemia, Janet Mwatsama, B Sawe, F Lotuiya, P. Gichuki, M Chesikaw, PO Aol
- Legal Topics
- Cooperative Societies, Surcharge Orders, Internal Governance, Inquiry Reports
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Orient Savings and Credit Co-operative Society
Applicant
Mary Njeri Gikonyo
Respondent
Procedural Posture
Tribunal Claim / Judgment
Legal Issues
- 1 Whether the Respondent is liable to pay the surcharge amount of Kshs 4,205,400.00 as ordered by the Commissioner for Co-operatives.
- 2 Whether the adoption of the Inquiry Report and issuance of surcharge orders complied with the requirements of the Cooperative Societies Act.
Ratio Decidendi
The Tribunal found that the Claimant failed to provide evidence that the Inquiry Report, which formed the basis for the surcharge order, was properly adopted by the members of the Society at a general meeting as required by law. The minutes presented from the 2016 Special General Meeting did not reference or adopt the 2019 Inquiry Report. Since the statutory process for adoption of the Inquiry Report and subsequent issuance of the surcharge order was not followed, the Tribunal held that the surcharge order was invalid. Consequently, the claim for enforcement of the surcharge against the Respondent could not succeed.
Court Disposition
claim dismissed with costs to the respondent
Orders
- The Claim is dismissed with costs to the Respondent.
Full Case Text
Judgment text and source record
21 paragraphs
Orient Savings and Credit Co-operative Society v Gikonyo (Tribunal Case 153 of 2021) [2024] CPT 1715 (KLR) (3 October 2024) (Judgment)
Neutral citation: [2024] CPT 1715 (KLR)
Republic of Kenya
In the Copyright Tribunal
Tribunal Case 153 of 2021
BM Kimemia, Chair, Janet Mwatsama, Vice Chair, B Sawe, F Lotuiya, P. Gichuki, M Chesikaw & PO Aol, Members
October 3, 2024
Between
Orient Savings and Credit Co-operative Society
Claimant
and
Mary Njeri Gikonyo
Respondent
Judgment
1. Matter for determination is Statement of Claim dated 28/1/2021 filed on 17/3/2021. The Claimant aver that the Respondent was a former FOSA Manager for the Claimant and her employment number was 3274 and ID number 24071778. The Respondent was FOSA Manager from 10th January, 2013 – 13th March, 2017. The Claimant was not satisfied with the Respondent’s services and got complaints from the members of the Claimant.The Claimant then petitioned Management Committee through the Commissioner of Co-operatives to call for a Special General Meeting on 7/12/2016. An inquiry was done into the business in February – March 2018 and a report prepared and presented before the members on 11/4/2019 which recommendations were unanimously adopted to Surcharge the Respondent for loss of money.The Inquiry Report was presented on 11/4/2019. On 9/3/2019 the Commissioner of Co-operatives issued the Respondent with a Notice of Intention to surcharge for the loss of Kshs. 4,205,400. 00/=
2. On 18/7/2019, the Commissioner for Co-operative Development issued Surcharge order to the Respondent for loss of Kshs. 4,205,400/=. The Respondent has failed to settle the Surcharge amount as such, the Claimant prays for adoption of Surcharge Orders and Judgement against the Respondent for Kshs. 4,205,400. 00/= plus costs and interest.The Claimant further filed List of Document dated 28/1/2021 on 17/3/2021 which had the following documents;1. Inquiry report.2. Special General Meeting Minutes.3. Notice of Intention to surcharge4. Surcharge orders5. Evidence of service
3. The Respondent filed a Statement of Defence dated 6/4/2021 on 12/4/2021 where they denied the averments in the Statement of Claim. She denied misappropriating funds not caused the loss of the Respondent. She avers she has never been charged in a court of law nor subjected to a disciplinary hearing. She denies the claim.The Respondent filed List of Documents dated 1/7/2021 which had;1. Copy of letter dated 2/1/2013. 2.Copy of letter dated 30/1/20173. Copy of letter dated 8/5/20174. Copy of letter dated 13/6/20175. Copy of letter dated 20/6/20176. Copy of application dated 23/4/20197. Copy of supplementary Affidavit dated 15/5/20198. Copy of Judgement with ELRC No. 272 of 2017
4. Parties on 23/11/2023 were directed to file Written Submissions in a bid to dispense off the claim. The Claimant filed Written Submissions dated 15/2/2024 on 19/2/2024 and the Respondent filed Written Submissions dated 11/7/2024 on 12/7/2024. Having considered all pleadings in the suit, the matter for determination is;Issue One.Whether the Respondent is to pay for the surcharge amount of Kshs 4,205,400. 00/=What is a Surcharge and when does it arise?Surcharge orders of Commissioner for Cooperatives under Section 58 and 73 Cooperative Societies Act provided for:Issuance of Surcharge orders is mandated to the Commissioner of Co-operatives Development who appoints inquiry officers followed by a resolution issued by members of the Society in an Annual General Meeting or Special General Meeting.
5. Upon perusal of the Claimant’s documents indeed there are minutes filed, minutes for a Special General Meeting held on 7/12/2016. On a closer perusal of the Document we need, there was no agenda of Surcharge Orders neither was there any discussion on the same.We then ask ourselves at what point did the Respondent’s members adopt the Inquiry Report for the Surcharge orders to take effect?This is not in the minutes as tabled by the Claimant on 7/12/2016. The Inquiry Report of intention to surcharge is dated 9/5/2019. There is no way the minutes of the year 2016 can be used for the adoption of an Inquiry Report dated 2019.
6. We shall not look any further to the Respondent’s Defence or documents as the Claimants have not provided a fundamental element in the issue of giving Surcharge Order or how things ought to be done. We therefore, on the onset find the Claim has to fail and is dismissed with costs to the Respondent.
JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 3RD DAY OF OCTOBER, 2024. HON. B. KIMEMIA CHAIRPERSON SIGNED 3. 10. 2024HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 3. 10. 2024HON. BEATRICE SAWE MEMBER SIGNED 3. 10. 2024HON. FRIDAH LOTUIYA MEMBER SIGNED 3. 10. 2024HON. PHILIP GICHUKI MEMBER SIGNED 3. 10. 2024HON. MICHAEL CHESIKAW MEMBER SIGNED 3. 10. 2024HON. PAUL AOL MEMBER SIGNED 3. 10. 2024Tribunal Clerk MutaiMs. Kiongera advocate for the RespondentOrient savings & Credit Sacco limited- No appearanceHON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 3. 10. 2024