Kenyan Law of Business Association II: Surcharge and Settlement of Disputes, Lecture notes of Business and Labour Law

Download Kenyan Law of Business Association II: Surcharge and Settlement of Disputes and more Lecture notes Business and Labour Law in PDF only on Docsity! LAW OF BUSINESS ASSOCIATION II Lecture 7 2nd August 2004 SURCHARGE Under Section 73 BA it is provided that where it appears that any person who has taken part in the organization or management of a society or any past or present officer or member has misapplied or retained or become liable or accountable for any money or property or the society or has been guilty of misfeasance or breach of trust in relation to the society the registrar may of his own accord or on the application of the liquidator or of any creditor or member inquire into the conduct of such person and report his findings and recommendations at a general meeting of the society convened for that purpose. If the registrar’s findings or recommendations indicate that the person be required to repay or restore the money or property to the society with interest as determined by the registrar or to contribute such sum to the assets of the society by way of compensation for the misapplication, retainer, dishonesty or breach of trust, the matter shall be determined by the general meeting in accordance with the society bylaws. For this purpose the registrar shall have the power to direct the secretary and/or the chairman of the society concerned to convene a general meeting of that society. If they do not call such a meeting then they shall be guilty of an offence. The decision taken hereof shall not prejudice the fact that the same act or default upon which the decision or action was based may constitute an offence under some other law for which the person has been prosecuted or is being or is likely to be prosecuted. A person aggrieved by the decision taken by the general meeting may appeal to the minister with the final appeal to the tribunal. Any money ordered by an order made hereon to be repaid or contributed to the society shall without prejudice to any other mode of recovery be a civil debt recoverable summarily. SETTLEMENT OF DISPUTE Under Section 76 of the Statute it is provided that if any dispute concerning the business of a cooperative arises (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; or (c) Between the society and any other cooperative society it shall be referred to the tribunal. 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 member whether such a debt or demand is admitted or not is a dispute. Section 77 established the cooperative tribunal consisting of a chairman and deputy chairman appointed by the Chief justice , 3 members appointed by the minister or of whom shall be legally qualified and at least one of whom shall be an advocate of the high court of Kenya. 1 However, no person shall be qualified for appointment as chairman or deputy chairman unless he holds or has held for a total period of not less than 5 years the qualifications specified in sections 12 and 13 of the advocates Act. All appointments to the tribunal are by Gazette notice issued by the minister for a period of 3 years. The officer of a member of the tribunal shall become vacant under the following circumstances; a. at the expiration of 3 years from the date of his appointment; b. if he accepts any office the holding of which if he were not a member of the tribunal would make it ineligible for appointment to office of a member of the tribunal; c. If he is removed from membership for failure to discharge the functions of his office whether arising form infirmity of body or mind or from any other cause or for misconduct; d. If he resigns from office. In its proceedings the tribunal is not bound by the rules of evidence. Section 78(2) provides as follows the tribunal shall upon an application made to it in writing by any party or a reference made to it by the commissioner, the registrar or any committee or officer of a society on any matter relating to the Act, the rules or bylaws inquire into the matter and make an award thereon and every award made shall be notified to the parties concerned. The tribunal sits at such times and in such places as it may decide. Currently they are sitting at Re insurance plaza. The proceedings of the tribunal are open to the public except where otherwise directed by the Tribunal. Except as expressly provided the tribunal regulated its own procedure. Under Section 79 the Tribunal may 1. Make such orders for the purposes of securing the attendance of any person at any place, the discovery or production of any document or the investigation of contravention of the Act as it deems necessary or expedient; 2. The tribunal may take evidence on oath and for that purpose administer oaths; or 3. On its own motion summon and hear any person as a witness. Any person who under paragraph 79(2) (a) fails to attend to the tribunal after being summoned; (b) Refused to take oath or to answer satisfactorily to the best of his knowledge and belief any question lawfully put to him in any proceedings before the tribunal; or to produce any article or document when required to do so or (c) Knowingly gives false evidence or information which he knows to be misleading or; (d) At any sitting of the tribunal wilfully insults any member or officer or wilfully interrupts the proceedings or commits contempt of the tribunal shall be guilty of an offence. For the purposes of hearing and determining any cause or matter the chairman and two members form a quorum. Provided that where for any reason either or both of the members is or are not present for any part of the hearing the jurisdiction of the 2