[2020] KECPT 6 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL AT NAIROBI

TRIBUNAL CASE NO. 296 OF 2019

REV.FR.DR.SIMON NJUGUNA MBURU.............................................CLAIMANT

VERSUS

ORIENT SACCO LIMITED..............................................................RESPONDENT

JUDGMENT

The Claimant’s case vide the statement of claim dated 6. 6.2019 filed on the same date is for :

(a) Kshs.1,000,000/= with interest thereof at the agreed rate of 3% per month from November 2016 to the date of payment in full.

(b)Costs of the suit.

(c)Any other or further relief that this Honourable court may deem fit to grant.

The Respondent denied the claim vide the defence dated 6. 8.2019 and sought for the claim to be dismissed.

The matter came up for hearing after setting aside the summary judgment. CW1 Rev.Fr. Dr. Simon Njuguna stated that on 3. 12. 2015, he opened a fixed deposit account and deposited Kshs.1. 5m and was issued with a Fixed Deposit Certificate. He was to receive 3% per month interest for 3 months. In August 2016, he withdrew Kshs.827,000/= and they were to roll-over the money from September 2016. He requested for his statement of account and it was dated 30. 11. 2016. He wanted to withdraw his money but he was told that the Board had to deliberate on it. That his money was never reimbursed.

That the CEO signed the agreement for 3% interest per month and he prays for the principle amount plus interest accrued.

The Respondent’s Witness RW1 Rev. Samson Maina, the Chairman of the Board stated that in 2016, they had liquidity challenges. A Special General Meeting was called and the entire management was created with him being the Chairman. He stated that Orient Sacco offers loans at 1% Reducing Balance. That the Claimant’s agreement was to have 3% interest per month for 3 months and for a Roll-over, a new agreement had to be filled and signed. That the pursued claimed was included in the agreement and that there was no evidence of the contract beyond the 3 months (Roll-over). That the Claimant was not a member but he had an account with the Respondent.

The parties filed written submissions. The Claimant filed on 24. 7.2019 and 12. 8.2020 and the Respondent filed on 23. 7.2019.

The issues raised for determination are:

1. Whether the Tribunal has jurisdiction to hear and determine the matter.

2. Whether the Claimant is entitled to the interest claimed in the light of the contract.

3. How much the Claimant is entitled to.

4. Who should bear the costs?.

(1) Jurisdiction of the Tribunal

The Respondent avers that the Claimant was not a member of the Orient Sacco hence the Tribunal has no jurisdiction in the matter as per section 76 Co-operative Societies Act .

That the Claimant did not join the Sacco in the Application for the registration. That he did not demonstrate how he was a member of the Sacco. That he deposited the money which was to generate interest for him.

The Claimant in their submissions to this point of Law. That this issue was only raised in the submission whilst the statement of defence dated 6. 8.2019, the Respondent admitted the contents of Paragraph 7 and 8 of the Statement of Claim and that the Tribunal had jurisdiction to determine the claim. That the Fixed Deposit Account issued indicates that the Claimant’s membership number was 004196. That the Respondent is therefore estopped from pleading otherwise.

We have considered the submissions of both parties and the evidence on record. It’s true that the Fixed Deposit Certificate indicates that the Claimant had member number 004196.

It’s also clear that the Respondent in paragraph 7 of their defence, admitted the jurisdiction of the Tribunal.

Its trite law that any point of law a Preliminary Objection on the issue of jurisdiction, being a point of law must be raised at the earlier point and pleaded.

In MUKISA BISCUIT MANUFACTURING COMPANY LIMITED - VS- WEST END DISTRIBUTORS LIMITED [1969] EA.

“......a Preliminary Objection consists of a point of law which has been pleaded, or which arises by clear implication out of pleadings and may dispose of the suit....”

The issue of jurisdiction is merely a point of law. A party should not by their pleadings admit jurisdiction and then midway through trial, deny the jurisdiction during the hearing of the matter. The hearing of the matter. The chairman of the Respondent in his evidence, during cross- examination stated that he did not know what transpired during the making of the agreement. That the Claimant’s case was genuine, even though he referred to him as an ‘investor’.

The Claimant confirmed that investment was also part of the business of the Respondent and he was not precluded for not being a shareholder.

We note that the Respondent raised the issue of jurisdiction in their written submissions. No By-laws were produced to give the definition of what membership meant to the Respondent.

However, the Claimant confirmed that he had a membership number as per the Fixed Deposit Statement produced. We note that this fact is satisfactory without any further prove by the Claimant. The Said document originated from the Respondent, they also admitted jurisdiction in their pleadings hence this issue of lack of jurisdiction on the basis that the Claimant was not a member has no merits. We find that the Claimant was issued a membership number and without any proof to the contrary, we confirm that the Tribunal has jurisdiction over the matter.

(2) Whether the Claimant is entitled to the interest claimed in the light of the contract.

(3) How much the Claimant is entitled to?

The Claimant submitted that there was a contract between him and the Respondent. That based on this contract, he deposited Kshs.1. 5 Million on 3. 12. 2015 for 3 months at an interest rate of 3% per month. That vide the Statement of Account supplied to the Respondent, the Claimant withdrew Kshs.827,000/= leaving a balance of Kshs.1 Million. That this was as a result of the Roll-over which happened over and over.

That the amount was rolled over on 1. 11. 2016 which is a period of 32 months todate.

That the interest earned therefore is Kshs.960,000/= plus principal amount Kshs.1 Million.

The Respondent submitted that the Claimant, deposited Kshs.1. 5 Million and accrued interest for the 3 months as per the agreement. That it was not true that there was a Roll-over after the expiry. That the Claimant did not introduce any new evidence or a separate agreement varying the initial terms of the contract and neither did he produce any evidence renewing the terms of the initial contract. That the court cannot vary the terms of contract as held in NATIONAL BANK OF KENYA LIMITED - VS- PIPEPLASTIC SAMKOLIT(K) LIMITED AND ANOTHER CA 95/99 [2001]eKLR112 AND [2002]EA 503

We have carefully considered the evidence on record and the documents produced. We particularly note the Fixed Deposit Form 3, and its contents therein, the Fixed Deposit Certificate dated 3. 12. 2015 with computed interest of Kshs.114,750/=. We also note the Statement of Accounts dated 30. 11. 2016. In this document, we note that the Roll-over was done for the Kshs.1 Million after the withdrawal of Kshs.827,000/=.

The amount Kshs.1 Million was transferred on 1. 10. 2015 and continued to earn interest. As at 1. 11. 2016, the amount plus interest was Kshs.1,051,031/33. Then there was a Roll-over on 1. 11. 2016 after which the money did not earn interest and the principal amount remained at Kshs.1 Million and interest accrued at Kshs.50,516/33 as at 30. 11. 2016. This was the statement of Account issued by the Respondent. We note that after 30th November 2016 there was no further Roll-over and the Claimant stated that he had travelled out of the Country.

We note that due to the nature of the agreement and the subsequent Roll-overs, the Claimant had to give instructions for the Roll-over every 3 months. We can only hold the Respondent responsible to the amount as per the statement of account which indicates that the amount of interest as at 30. 11. 2016 was Kshs.50,516/33 and the principal amount was Kshs.1Million.

We note that the Respondent is responsible to all the members of the society and by ordering for interest of 3% per month todate would strain the membership of the Respondent who relies on the savings of its members. In the interest of the society and in the interest of justice, we find that the Statement of Account gives a true reflection of what is owed to the Claimant as at 30. 11. 2016.

The Claimant ought not to take advantage of the lapse in the management of the Respondent and to this effect, we accordingly order for the refund of the principal amount of Kshs.1 Million and interest of Kshs.50,516/33 as at 30. 11. 2016 total Kshs.105,016/33. We enter judgment in favour of the Claimant for Kshs.1,050,516(1,050,516/=) against the Respondent plus costs and interest on the awarded amount at court rates, from the date of filing the suit that is, 6. 6.2019.

Ruling read, dated and delivered this 29th day of October, 2020.

Hon. B. Kimemia Chairperson Signed

Hon. F. Terer Deputy Chairman Signed

Mr. P.Gichuki Member Signed

Court Assistant C.Maina

Hon. F. Terer Deputy Chairman Signed 29. 10. 2020