Court orders NSSF to refund teachers Sacco in illegal land sale

The National Social Security Fund (NSSF) has been directed to refund over Ksh40 million to the Keiyo Teachers Co-operative Society after the Court of Appeal upheld a decision declaring that it unlawfully sold public land to the cooperative.

In a judgment delivered on February 27, the appellate court affirmed an earlier High Court decision directing NSSF to reimburse the cooperative for four parcels of land it purchased in 2004.

The Sacco had acquired the land for Ksh40 million with plans to develop it. However, officials from the prisons department later informed the cooperative that the parcels formed part of the Eldoret GK Prison reserve, making the property public land.

NSSF had argued that it issued a valid title deed to the Sacco following the transaction and maintained that the sale was lawful. However, the Court of Appeal rejected the argument, ruling that the land had never been degazetted and therefore could not be legally transferred.

The judges found that the appeal lacked merit and upheld the High Court’s order compelling state corporation to refund the Ksh 40 million plus interest from the lawsuit’s filing date.

“Regarding costs, it is trite law that costs follow the event. The event here is that the appellant’s appeal has failed. We see no reason to deprive the 1st respondent of costs,” the court stated, directing NSSF to also meet the costs of both the appeal and the High Court proceedings.

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Court records show the dispute traces back to 1994 when NSSF purchased approximately 98.8 acres of land in Eldoret from four individuals in a transaction later determined to be fraudulent.

Evidence presented in court revealed that the property had been gazetted as prison land under a Kenya Gazette notice dated December 18, 1963.

Despite this, the land was later allocated to four individuals and a company under 99 year leases beginning in 1983.

The individuals were registered as leaseholders and subsequently sold the land to NSSF on May 27, 1994 before they were formally registered as proprietors.

Records showed that the sellers were officially registered as proprietors on August 31, 1994, and transferred the property to NSSF on the same day.

In 2004, NSSF sold the land to the teachers’ cooperative as part of its asset disposal programme.

The decision now raises concerns over potential financial losses to contributors who have saved with NSSF, as the fund will now be required to refund millions of shillings following the failed transaction.

By Our Reporter