[2023] KECPT 441 (KLR)

Owiti v Migori Teachers Sacco Society Ltd (Tribunal Case 236 of 2016) [2023] KECPT 441 (KLR) (15 June 2023) (Ruling)

Neutral citation: [2023] KECPT 441 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 236 of 2016

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

June 15, 2023

Between

Rodah Adhiambo Owiti

Claimant

and

Migori Teachers Sacco Society Ltd

Respondent

Ruling

1. This Ruling dispenses with the Notice to Show Cause dated August 16, 2021.

2. The brief background of this matter is that the Claimant filed a Statement of Claim dated May 18, 2016, and filed on the same day. In her Statement of Claim, the claimant prays for judgment against the Respondent for Kshs. 194,850 plus costs and interests. She claims that she was a member of the respondent. That in 2012, the claimant wrote to the respondent expressing her wish to withdraw membership and get her refunds. However, the respondent is yet to refund her shares.

3. The hearing proceeded ex parte due to non attendance by the respondent and judgment was entered on December 14, 2017 for the claimant for a sum of Kshs. 193,750 plus interests and costs against the respondent.

4. A Notice to Show Cause why execution should not be granted was issued and served on the respondent, at which point the respondent filed the affidavit of Means dated 2nd December 2021.

5. The affidavit is sworn by one Jacob Adendi Ngwala, the Chairman of the respondent. In the affidavit, the Chairman depones that there are various cases pending in court by members seeking refund for their shares. He also depones that there are various decrees pending settlement by the Respondent. He avers that the respondent is in poor financial shape due to mismanagement, and the proceedings due to mismanagement are currently pending at High Court Kisii. It is his position that the respondent has no income, and is not in a position to honor the decree herein and seeks the indulgence of the court to allow the Respondent to be paying the claimant in installments of Kshs. 5,000/- every month.

6. Both the claimants and the respondents filed submissions.

7. In the claimant’s submission, she contends that the last Annual General Meeting was held in 2017, and that has prevented the respondent from addressing most of the issues that affect the respondent. She also notes that the members have not been told the status of the surcharged officials and this could have made members to be in the know of the status of the respondent. She also submits that the respondent has not made any effort in the recovery of funds for the Sacco and neither have they been receiving dividends, nor the status of the dividends.

8. In the respondent’s submissions, they contend that they are on the verge of liquidation. They have also not received any money from the surcharged officials since they moved to the High Court to Appeal the decision of the Commissioner. They also submit that they have devised a way of refunding the members’ deposits via instalments since there are many members, some before this court who have come to seek for their deposits and some are even before this court. The Respondents have submitted a proposal for paying the claimant herein, Kshs. 5000/- per month.

9. The Tribunal have considered the submissions of both the claimant and the submission. The claimant was a member of the respondent and willingly made deposits to the respondent with the aim of benefiting from dividends, loans or in any other way members benefit from their Sacco. At the moment when the claimant wants her deposits back, the Respondent claims that he is not in apposition to repay the same. The question before this Tribunal is whether the respondent has presented a sufficient case for consideration on why the execution should not issue and whether they be allowed to pay in instalments. In the case of Tarpo Industries Ltd vs Picasso Products Limited the court held that:-“the Judgment debtor’s bond fides (good faith) is the most important consideration when the court considers whether some indulgence can be fairly given to the judgment debtor without unreasonably prejudicing the decree holder.”Further in the case of Lavington Security Limited vs Nairobi City Water & Sewerage Co. Ltd(2014) eKLR, the court defined what amounts to “sufficient cause” to include: the debtor is unable to pay lump sum, the debtor can pay by reasonable monthly installments and the application is made in utmost good faith.The respondent, in his submissions, relied on the case of Freight Forwarders Ltd vs Elsek & Elsek (K) Ltd(2012) eKLR. In that case, the court held as follows regarding payment in instalmentsa)Whilst creditors rights must be considered, each case must be considered on its own merits and discretion exercised accordingly;b)The mere inability of a debtor to pay in full at once is not a sufficient reason for exercise of discretion;c)The debtor should be required to show his bona fides by arranging prompt payment of a fair proportion;d)Hardship of a debtor might be a factor, but it is a question in each case whether some indulgence can fairly be given to the debtor without prejudicing the creditor.

10. After considering the above submissions and authorities, the Tribunal notes that the respondent has shown its inability to pay the whole sum at once. It has also noted that although the inability to pay at once is not sufficient reason on its own to allow installments, the debtor, in this case, has shown that the inability to pay is temporary as its officials has been surcharged but appealed the Surcharge Order. The debtors contend that there is a matter in the High Court addressing the question of surcharge for previous officials and the tribunal notes this.

11. In the upshot of the foregoing, the Notice to Show Cause dated 16. 8.2021 is set aside, and the respondent is allowed to repay the deposits in instalments of Kshs. 10,000/- by every 5th day of the month and pay Kshs. 50,000/= on or before 30. 7.2023 until repayment in full. An interest of 10% on a reducing balance is levied on the decretal sum.

RULING SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS15TH DAY OF JUNE,2023. HON. BEATRICE KIMEMIA CHAIRPERSON SIGNED 15. 6.2023HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 15. 6.2023HON. BEATRICE SAWE MEMBER SIGNED 15. 6.2023HON. FRIDAH LOTUIYA MEMBER SIGNED 15. 6.2023HON. PHILIP GICHUKI MEMBER SIGNED 15. 6.2023HON. MICHAEL CHESIKAW MEMBER SIGNED 15. 6.2023HON. PAUL AOL MEMBER SIGNED 15. 6.2023TRIBUNAL CLERK JONAH