Automated Summary
Key Facts
The case involves Isiolo Teachers Sacco Society Limited seeking recovery of a surcharge amount (Kshs 1,086,884/80) from Galgalo S Matoye, a former Vice-Chairman of the society. The Tribunal ruled that the Respondent failed to appeal the Surcharge Order within the 30-day period under the Cooperative Society Act, allowing the Claimant to recover the amount as a civil debt. The Tribunal found the Notice of Motion application dated March 20, 2020, was properly served and granted as prayed.
Issues
- A core issue was the respondent's procedural non-compliance. The claimant argued that the respondent filed a notice of appointment instead of the required Memorandum of Appearance under Order 1 Rule 1 of the Civil Procedure Rules, rendering their defense invalid. The Tribunal agreed, noting the claimant's right to strike out the improperly filed defense and proceed with judgment entry.
- The Tribunal considered whether the Surcharge Orders issued by the Commissioner for Cooperative Development were validly served on the respondent. The respondent argued they were not served with the Surcharge Orders and thus could not appeal, while the claimant maintained proper service via a delivery book. The Tribunal found that the notice and orders were served as per the delivery book, and the respondent's failure to appeal within the 30-day period under Section 74(1) Cooperative Society Act rendered the surcharged amount recoverable as a civil debt under Section 75(1).
- The Tribunal determined its jurisdiction was limited to summary recovery of the surcharge under Section 75(1) after no appeal was filed against the Surcharge Orders. The court cited Alfayo Nyairo v Nyabomite Farmers Cooperative Sacco Limited [2021] eKLR to affirm that once the 30-day appeal period passes, the Tribunal must facilitate recovery as a civil debt without reassessing the validity of the original surcharge.
Holdings
- The Tribunal ruled that the Notice of Motion application dated March 20, 2020, was allowed as prayed, with costs. Judgment was entered in favor of the Claimant against the Respondent for the surcharged amount, costs, and interest as specified in the claim.
- The Tribunal found that the Respondent, as a Board member and custodian of the society, was aware of the Inquiry and its outcome, and thus liable for losses under Section 28(6) of the Cooperative Society Act. The Respondent's failure to appeal the Surcharge Order within 30 days as required by Section 74(1) left the Tribunal with jurisdiction only for summary recovery under Section 75(1). The Tribunal confirmed proper service of the Surcharge Notice and Order via the delivery book, and dismissed the Respondent's challenge to the service procedure.
Remedies
- The Notice of Motion application dated March 20, 2020 seeking orders to strike out the respondent's defence and enter judgment is allowed as prayed.
- Judgment entered in favor of Isiolo Teachers Sacco Society Limited against Galgalo S Matoye for Kshs 1,086,884/80 plus costs and interest as prayed in the claim.
- The costs of the Notice of Motion application are awarded to Isiolo Teachers Sacco Society Limited.
Monetary Damages
1086884.80
Legal Principles
The Tribunal determined that under the Cooperative Society Act, specifically sections 74 and 75, a surcharge order becomes recoverable as a civil debt if no appeal is filed within 30 days. Since the Respondent did not appeal the surcharge order, the Tribunal had mandatory jurisdiction to facilitate its summary recovery without re-evaluating the fairness of the original decision. The ruling emphasized procedural compliance with the Act's requirements for service and appeal timelines.
Precedent Name
- Alfayo Nyairo versus Nyabomite Farmers Cooperative Saco Limited
- Felix Otande versus Commissioner for Cooperative Development
Cited Statute
Cooperative Society Act
Judge Name
- Gitonga Kamiti
- BM Kimemia
- M. Mbeneka
Passage Text
- The essence and duty of the Tribunal after the issuance of a Surcharge Order is either to adjudicate upon the Appeal under section 74 or to recover the sum surcharged summarily under section 75 Cooperative Society Act.
- There having been no appeal against the Surcharge Orders, the Tribunal is vested only with the jurisdiction of summary recovery of the surcharge amount under Section 75(1) Cooperative Society Act.
- We find that the Notice of Motion application dated March 20, 2020 is allowed as prayed with costs. Judgment is entered as prayed in favour of the Claimant against the Respondent for Kshs 1,086,884/80 plus costs and interest as prayed in the claim.