Robert Kanogu Muthoni v Kiambu Savings & Credit Co-operative Society Ltd . Defendant

Defendant claims is fictional and exaggerated. In any event, the Plaintiff avers that it was never served with any Statutory Notices or a Valuation Report before the purported exercise of Statutory Power of Sale. The Defendant on the other hand contends that the Plaintiff defaulted in repayment, prompting the intended realization of the security. 4. The Defendant now challenges the jurisdiction of this Court to hear the dispute, arguing that the same falls squarely within the exclusive jurisdiction of the Co-operative Tribunal as provided under Section 76 of the Co-operative Societies Act. Defendant/Applicant’s Submissions 5. In its submissions dated the 5th May 2025, the Defendant submits that by virtue of Section 76(1) and (2) of the Co-operative Societies Act, disputes relating to the business of a co-operative society between a member and the society are to be referred to the Co-operative Tribunal. The Defendant contends that this dispute arises directly out of the Plaintiff’s membership and financial dealings with the Sacco, and therefore falls within the ambit of the said section. Reliance has been placed on the Court of Appeal decision in the case of Owners of the Motor Vessel “Lillian S” –vs- Caltex Oil (Kenya) Ltd [1989] KLR 1, where it was held that “jurisdiction is everything and without it, a court must down its tools.” 6. The Defendant has further relied on the case of Royal Housing Co-operative Society Limited –vsNational Co-operative Housing Union Limited & 2 Others[2019] eKLR, where the Court held that disputes among or between co-operative societies and their members ought to be first referred to the Co-operative Tribunal, being the forum specifically established by statute for that purpose. As such, the Defendant has urged this Court to find that it lacks jurisdiction and to strike out the suit with costs. Plaintifi/Respondent’s Submissions 7. The Plaintiff through his submissions dated 10th June, 2025 opposed the Preliminary Objection, submitting that this Court is properly vested with jurisdiction to hear and determine the dispute. He argued that while Section 76 of the Co-operative Societies Act establishes the Tribunal, the nature of the present dispute transcends ordinary membership disagreements as it involves questions touching on property rights, which fall within the jurisdiction of the High Court. 8. The Plaintiff cited Article 165(3) of the Constitution, which confers upon the High Court unlimited original jurisdiction in civil matters, save for those expressly excluded under Article 165(5). It was his submission that the Co-operative Tribunal’s jurisdiction is statutory and limited, and does not extend to granting equitable remedies such as injunctions over land registered under the Land Registration Act. 9. Counsel has further invoked Republic –vs- Karisa Chengo & Another [2017] eKLR, where the Supreme Court emphasized that the jurisdiction of various courts and tribunals fiows from the Constitution and Statute, and that such jurisdiction cannot be implied or arrogated. 10. It is the Plaintiff’s position that since the cause of action involves a threatened sale of immovable property and the enforcement of a statutory power of sale, the High Court’s jurisdiction under Article 165(3)(a) of the Constitution and the Civil Procedure Act is properly invoked. He has therefore urged that the Preliminary Objection lacks merit, is misconceived in law, and should be dismissed with costs. Analysis and Determination 11. Having considered the pleadings and submissions made on behalf of the parties herein, this Court finds that the main issue that arises for determination is whether this Court has jurisdiction to entertain this dispute in light of Section 76 of the Co-operative Societies Act. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19389/eng@2025-11-03 2

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12. Jurisdiction is the cornerstone of judicial authority and as was stated in the celebrated case of Owners of the Motor Vessel “Lillian S” –vs- Caltex Oil (Kenya) Ltd [1989] KLR 1, jurisdiction is everything and without it, a court must down its tools. A determination on jurisdiction must therefore precede any consideration of the merits of the case. 13. The Defendant’s objection is premised on Section 76(1) of the Co-operative Societies Act (Cap 490), which provides that:76. (1) 14. a. among members, past members and persons claiming through members, past members and deceased members; or, b. between members, past members or deceased members, and the society, its committee or any officer of the society; or, c. between the society and any other co-operative society; it shall be referred to the Tribunal.” Subsection (2) further defines a “dispute” to include claims for debts or demands due to or from a member of the society and reads as follows: “ 2. 15. “If any dispute concerning the business of a co-operative society arises— A dispute for the purpose of this section shall include; a. A claim by a Cooperative Society for any debt or demand due to it from a member or past member, or from the nominee or personal representative of a deceased person, whether such debt or demand is admitted or not; or, b. A claim by a member, past member or the nominee or personal representative of a deceased member for any debt or demand due from a Cooperative Society, whether such debt or demand is admitted or not. c. A claim by a Sacco Society against a refusal to grant or revocation of license or any other due, from the Authority. From the record, this Court has read through the Plaint filed herein and established that it seeks the following orders from this Court: a. A declaration that the notification of sale issued to the Plaintiff on the 14th day of February 2023 is illegal, null incapable of enforcement. b. A declaration that the impending advertisement, sale and/or transfer of LR. No. Ndeiya/ Ndeiya/2898 is illegal, null and incapable of enforcement. c. A permanent injunction restraining the Defendant by itself, its employees and or agents from advertising, attaching, auctioning, selling by private treaty and/or transferring the Plaintiff’s property known as LR. No. Ndeiya/Ndeiya/2898 and/or interfering with the Plaintiff’s right to quite possession. d. An Order compelling the Defendant to reverse all of the Plaintiff’s debits other than the loan’s interest. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19389/eng@2025-11-03 3

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e. General damages. f. Costs of the suit. g. Interest on (d) and (e) above. h. Any other order that the court may deem fit. 16. It is not in dispute that the Plaintiff is a member of the Defendant which is a duly registered Cooperative Society within the meaning of the Co-operative Societies Act, Cap 490 Laws of Kenya. In Paragraph 4 of the Plaint, the Plaintiff has admitted that he obtained two loan facilities from the Defendant, which loans were secured by a charge over his property known as L.R. Ndeiya/ Ndeiya/2898. The dispute, therefore, emanates directly from a loan transaction between a member and the society concerning the repayment terms and the intended realization of security upon default. 17. Therefore, the key question that must be answered is whether such a dispute constitutes a “dispute concerning the business of a co-operative society” as envisaged under Section 76 of the Co-operative Societies Act. It is clear from the wording of Section 76(1) and (2) that the Legislature intended that all disputes arising out of the relationship between members and the co-operative society, whether concerning debts, demands, or transactions integral to the society’s operations, should in the first instance be referred to the Co-operative Tribunal. 18. The Plaintiff’s assertion that this Court has unlimited jurisdiction by virtue of Article 165(3) of the Constitution is not in itself contested. However, that jurisdiction is not absolute; it is subject to the doctrine of exhaustion and statutory ouster clauses that direct particular disputes to specialized tribunals. In the case of Speaker of the National Assembly –vs- Karume [1992] KLR 21, the Court of Appeal held that where the law provides a clear procedure for redress of a particular grievance, that procedure should be strictly followed. Similarly, in the case of Geoffrey Muthinja Kabiru & 2 Others –vs- Samuel Munga Henry & 1756 Others [2015] eKLR, the Court emphasized that parties must exhaust the mechanisms established by statute before resorting to the High Court. 19. In the present case, Section 76 of the Co-operative Societies Act creates a specialized dispute resolution framework and vests exclusive jurisdiction in the Co-operative Tribunal for disputes involving members and their societies. Therefore, the Tribunal is competent to adjudicate over disputes relating to loans, securities, guarantees, and other financial transactions that form part of the business of a cooperative society. Indeed, Section 79(5) of the Act expressly grants the Tribunal unlimited geographical and pecuniary jurisdiction in such disputes. 20. In the case of Robert Gathigani –vs- John Mutual Manda [2020] eKLR. The High Court addressed a similar question, holding that disputes arising from Sacco loans advanced to members and guaranteed by other members fall within the scope of the “business of the society” and must be resolved by the Co-operative Tribunal. The Court therein stated:“ It is evident that the dispute herein involves a Sacco loan, and in my view falls within the business of the society and therefore within the ambit of Section 76 of the Co-operative Societies Act.” 21. Likewise, in the case of Joyce Muthoni Njoroge & 2 Others –vs- Joshua Gachie & Another [2021] eKLR, the Court held that the jurisdiction of the Co-operative Tribunal under Section 76 is mandatory and must be invoked in the first instance where disputes concerning the business of a Co-operative Society arise. The Court emphasized that entertaining such matters in the High Court would not https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19389/eng@2025-11-03 4

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only contravene the law but also undermine the quasi-judicial mandate of the specialized tribunals established to ease the burden on the Superior Courts. 22. In the instant case, since the Plaintiff does not deny being a member of the Defendant Sacco, and the claim relates to a loan advanced under that membership, it then follows that the present dispute squarely falls within the purview of Section 76 of the Act. The argument that the Tribunal lacks jurisdiction to issue injunctive or declaratory reliefs is misconceived. By virtue of Section 79 of the Cooperative Societies Act and Rule 3 of the Co-operative Tribunal (Practice and Procedure) Rules, 2003, the Tribunal is vested with powers to grant orders necessary for the ends of justice, including injunctions, declarations, and other appropriate remedies. 23. Consequently, the Court finds and holds that the dispute herein concerns the business of a Cooperative Society within the meaning of Section 76 of the Co-operative Societies Act and therefore ought to have been filed before the Co-operative Tribunal in the first instance. For this reason, this Court lacks jurisdiction to entertain it. 24. While the Defendant has properly raised a Preliminary Objection on jurisdiction, the Court notes that the same was not raised at the inception of the proceedings but after pleadings had been filed. Nevertheless, jurisdiction is a threshold issue that can be raised at any stage, and once found wanting, the court must down its tools as stated in Lillian S (supra). 25. In the circumstances, this Court declines to entertain the suit herein and proceeds to strike it out with further directions that each party shall bear its own costs. It is so ordered. RULING DELIVERED VIRTUALLY, DATED AND SIGNED AT KIAMBU THIS 3RD DAY OF NOVEMBER, 2025. D. O. CHEPKWONY JUDGE In the presence of: M/s Nyagah holding brief for Mr. Okatch counsel for Plaintiff M/S Stower holding brief for Mr. Mbigi for the Defendant.Applicant Court Assistant - Martin https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19389/eng@2025-11-03 5

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