https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/12296

REPUBLIC OF KENYA IN THE HIGH COURT OF KENYA AT NAIROBI ANTI-CORRUPTION AND ECONOMIC CRIMES DIVISION ACEC SUIT NO. **E039** OF 2025 ASSETS RECOVERY AGENCY……………….…...…………...……….APPLICANT -VERSUS- VINCENT ODHIAMBO NYADERO……………….................................RESPONDENT AND CAR HOUSE LIMITED…………………………………...……INTERESTED PARTY **JUDGMENT** The applicant, a statutory body established under Section 53 of Proceeds of Crime Anti-Money Laundering Act (hereinafter referred to as ‘POCAMLA’) has a statutory mandate of identifying, tracing, freezing and recovering proceeds of crime pursuant to which it has brought originating motion dated 23rd October 2025 praying for the following orders; 1. **THAT** this Honourable Court be pleased to issue orders declaring motor vehicle registration number **KDP 137N,** Toyota Mark X chassis number GRX130-6103945, registered in the name of **CAR HOUSE LIMITED** as proceeds and/or instrument of crime liable for forfeiture to the Government of Kenya. 2. **THAT** this Honourable Court be pleased to issue orders of forfeiture of motor vehicle registration number **KDP 137N,** Toyota Mark X chassis number GRX130-6103945, to the Assets Recovery Agency on behalf of the Government of Kenya. 3. **THAT** this Honourable Court be pleased to issue an order directing the Director General of the National Transport and Safety Authority to transfer title/ownership of the motor vehicle in prayer 1 above to the Assets Recovery Agency on behalf of the Government of Kenya. 4. **THAT** the Honourable Court makes any other ancillary order it may deem fit for the proper, fair and effective execution of its orders. 5. **THAT** costs be provided for. ***The parties’ evidence*** In addition to the 19grounds on which the motion was based, the applicant’s investigator one Bedford Muriuki swore an affidavit dated 23rd October 2025 in which he made averments to show that the motor vehicle registration number KDP 137N (hereinafter referred to as ‘the vehicle’) was used in commission of an offence of conveying of prohibited narcotics drugs. The deponent of the supporting affidavit stated that on 4th February 2025, the applicant received a duplicate file from the Directorate of Criminal Investigations in respect of a case of suspected trafficking narcotic drugs involving one Chrispinus Onyango Barasa (hereinafter referred to as ‘Çhrispinus’) and the vehicle. The applicant opened an inquiry file and established that on 14th January 2025, officers from Directorate of Criminal Investigations in Malindi received information that the vehicle was being used to traffic narcotics drugs within Kijiwetanga area in Malindi Sub-County upon which they gained access to a homestead in the area where they recovered the vehicle loaded with rolls of plant material and when they searched Chrispinus, they found in his right pocket, ignition key of the vehicle. It is averred further that the police recovered two sacks of rolls of dry plant materials from the vehicle, a national identity card number 28428657 belonging to Crispinus, driving licence also belonging to Chrispinus and an insurance sticker for the vehicle. The plant material which weighed 58 kilograms was after laboratory tests found to be cannabis sativa valued at Kshs 1,758,000.00. He added that following the recovery, Chrispinus was arrested and charged on 15th January 2025 in the Chief Magistrate’s Court at Malindi with offence of trafficking in narcotics drugs contrary to Section 4(a)(ii) of the Narcotic Drugs and Psychotropic Substances (Control) Act vide criminal case number E037 of 2025. The applicant has averred that after establishing the above, it obtained warrants to investigate the respondent’s bank and mpesa accounts in criminal miscellaneous application number E374 of 2025. The investigations revealed that the respondent’s account had suspicious deposits, withdrawals and transfers from several individuals including Chrispinus which were typical and had characteristics of money laundering activities. This was followed by the applicant obtaining preservation orders in this court’s miscellaneous civil application number E029 of 2025 which it duly gazetted as per the provisions of POCAMLA. The deponent added that the respondent’s Mpesa account number 0113275791 received Kshs 22,655,656.45 and sent Kshs 22,535,429.79 between 4-01-2022 and 31-01-2025. The account sent money to Chrispinus amounting to Kshs 1,370,850.00 between 16-05-2022 and 10-01-2025. The respondent also received a sum of Kshs 1,303,730.00 from two mpesa accounts belonging to Chrispinus between 16-05-2022 and 8-01-2025. There were also suspicious deposits in respondent’s bank from Chrispinus. The deponent goes on to give a breakdown of the transactions between the respondent and Chrispinus. From analysis of the transactions between the respondent and Chrispinus and the fact that Chrispinus was using the vehicle to convey the drugs, the applicant believed that the respondent should have known that the vehicle was being used for unlawful business. It is also averred that the motor vehicle is beneficially owned by the respondent although it is registered to the interested party. The vehicle was purchased on 4-02-2024 from the interested party through hire purchase where the respondent paid Kshs 650,000.00 as deposit and was to liquidate the balance by monthly installments. The applicant believes that the vehicle was obtained using proceeds from the illegal business of trading in drugs. The investigator has deponed further that on requiring Chripinus to record statement, he told him that the respondent who was his friend had loaned him some money on several occasions and that he hired the vehicle from the respondent on 7-02-2025 for six days to travel to Malindi with his family which the respondent repeated when he was called to record his own statement. Bedford added that, the two statements were inconsistent with the transactional statements for the bank account held by the respondent in Faulu Microfinance Bank and his Mpesa account. The applicant’s investigator concluded that the transactions and money trail are consistent with character of persons engaged in drug trafficking, aiding in drug trafficking and laundering proceeds of crime noting that Busia where many transactions would be done is a known main trafficking route of cannabis sativa from western to Mombasa. The respondent was duly served with the motion but did not enter appearance or file any response thereto. On 21-04-2026, the Honourable Deputy Registrar entered interlocutory judgment against the respondent for failure to respond. On its part, the interested party filed a relaying affidavit sworn by one Nicholus Ngoli Inyangala on 20th November 2025 in which he states that he is the operations and sales manager of the interested party and confirms that they interested party is a registered importer, purchaser and seller of both new and used motor vehicles. He adds that the vehicle was bought from their show room by one Vincent Odhiambo Nyadero and they do not normally investigate their customers’ sources of funds. Nichlolus pleads that if the vehicle is forfeited, their business will be prejudiced since the purchase price has not been completed and that would amount to punishing the interested party for things it had no control over yet the vehicle is still registered to it. According to the interested party, the vehicle remains its property until the purchase price whose balance is Kshs 1,905,000.00 is paid in full. He adds that there is no demonstration of collusion between the interested party and the respondent and that forfeiture of the vehicle will be unconstitutional. In rebuttal to the interested party’s affidavit, the applicant filed a supplementary affidavit sworn by one Benedict Kaulu on 30th January 2026. Benedict depones that the interested party has an inherent duty as a law-abiding entity not to facilitate money laundering activities by conducting due diligence of its customers. He adds that, the interested party has not shown absence of knowledge or absence of reasonable grounds of suspecting that the respondent was engaged in the trafficking of drugs. He adds that public interest outweighs the handing over of the vehicle to the interested party since the same had been used to facilitate heinous criminal activity that has destroyed the lives of many youths in this country. He concludes by suggesting that the interested party can pursue the balance of the purchase price as a civil debt from the respondent through other forums. ***Analysis and determination*** I have read the documents filed in support and opposition of the originating motion. I have also read the submissions of the applicant dated 17th April 2026 as well as those of the intersect party dated 2nd April 2026. There being no response to the notice of motion or submissions from the respondent, several facts remain uncontested. These are; the vehicle was impounded with 58 kilograms of cannabis sativa in it, Chrispinus was arrested while in charge or possession of the vehicle with the consent of the respondent, the vehicle was bought from the interested party and has not been fully paid, and that Chrispinus and the respondent had transacted in considerable volumes of money over a period of time. In that regard, I have discerned that the issues for determination are; 1. Whether the respondent was complicit to the unlawful use of the vehicle. 2. Whether the vehicle was proceeds of crime and liable to forfeiture. 3. Whether the vehicle can be forfeited despite it not having been fully paid. The applicant has averred that when the vehicle was impounded and Chrispinus arrested, he claimed that he had hired it from the respondent for six weeks. I have gone through the statement recorded by Chrispinus which has been exhibited as applicant’s annexure ‘BM14’. The statement talks of the hiring of the vehicle for purpose of him and his family visiting Malindi but there is no evidence of the leasing. The respondent also recorded a statement which has been exhibited as the applicant’s annexure ‘BM15’ which similarly does not contain any evidence of him hiring the vehicle to Chrispinus. Even if there was one, that alone would note exonerate or insulate the vehicle from forfeiture. Where an owner of a property leases the same to a third party who commits an offence using it, the owner must and has a duty to demonstrate that they were not aware of the intention or activities of the lessee otherwise the actions of the holder or lessee of the property would make the owner a complicit or accomplice. In this matter, the respondent has not demonstrated to this court that he was not aware of the business the vehicle would be engaged in while in the hands of Chrispinus. The claim of the respondent having leased the vehicle is more diluted by the fact that the two have been shown to have communicated and transacted even before the vehicle was purchased from the interested party. It would be safe therefore to infer that the transactions between the two were businesses which generated income which was used to purchase the vehicle. The same would go for the claim that the Chrispinus loaned the respondent to justify the transactions. In this regard, it is my holding that the respondent was complicit to the activities the vehicle was being used for including conveying prohibited drugs. On whether the vehicle could be proceeds or of crime, I don’t hesitate to answer to the affirmative. I have observed that there is no contestation on the circumstances under which the vehicle was found by the police and impounded. It was averred that two sacks of cannabis sativa weighing 58 kilograms were recovered from the vehicle in a compound which was occupied by Chrispinus. The vehicle was therefore in my view, being used to commit an offence thus liable for forfeiture under Section 92(1)(a) of POCAMLA which provides that; *‘The High Court shall, subject to section 94, make an order applied for under section 90(1) if it finds on a balance of probabilities that the property concerned has been used or is intended for use in the commission of an offence.’* That aside, the applicant has produced statements which show that the respondent and Chrispinus were engaged in undisclosed business. It cannot be a coincidence that the two were in transactions for a long period of time and the vehicle was found with Chrispnus. The nature of transactions does not depict people who made a simple transaction of borrowing from each other. Otherwise, why don’t we see the respondent sending money to Chrispinus? I have stated that there was no evidence of the alleged lease of the vehicle between the respondent and Chrispinus. The transactions go back to 2022 while the vehicle was purchased from the interested party in April 2024. The respondent alleged in his statement with the applicant that he lost his job in 2018 and lost touch with Chrispinus until 2023 when they met and he started borrowing small amounts from him. He does not disclose where he got the money to purchase the vehicle in 2024. Whatever business the two were engaged in must in my view have generated part of if not all the income which was used in acquisition of the vehicle. The totality of the above no doubt establishes a *prima fascie* case that the vehicle was acquired from illegal or unlawful sources and therefore proceeds of crime. In civil forfeiture proceedings, once the applicant establishes a *prima fascie* case, the burned shifts to the respondent to prove their source of income or that they were engaged in legitimate business from which the funds which acquired the property were derived. In ***Assets recovery Agency v Akinyi [2022] KEHC 10116 (KLR),*** it was held that; *‘The Applicant therefore bears the legal burden to prove its case against the respondent on a balance of probabilities. Once the legal burden is discharged the evidential burden shifts to the respondent to prove that the assets were acquired legally or lawfully as this would be a fact(s) within their special knowledge. It is instructive that the evidential burden does not shift to the respondent unless and until the applicant has discharged the legal burden.’* That being the case, the respondent bore the burden of establishing that the sources of funds used to purchase the vehicle were legitimate and gotten through lawful means. This is done through producing evidence before the court to show the kind of business the respondent was engaged in which was capable of and indeed generated enough income to acquire the vehicle which I find the respondent has failed to do. The only response to this motion is by the interested party but the same is restricted to the buying of the vehicle and not the sources of the funds. Actually, the interested party has deponed that it does not know and did not investigate the respondent’s sources of funds. Since the respondent has failed to demonstrate his sources of income, I have no alternative but to find that the vehicle is proceeds of crime and therefore liable to forfeiture to the state. The respondent cannot be allowed to keep and enjoy that which the court has found and declared to be proceeds of crime. This will not only go against the public policy and interest but would also promote behaviour or conduct that hurts the members of the society who stand to absorb the disastrous consequences of crime. I am in agreement with the holding of Justice PJO Otieno in ***Assets Recovery Agency v Ahmed & 2 others [2025] KEHC 4704 (KLR)*** thus; *‘To the court once a property is adjudged and declared a proceed of crime, the spirit of the statute anchored on the international statutes and other legal instruments, give no liberty to court to render otherwise, but that it becomes axiomatic, that such property be forfeited to the state on behalf of the injured and those other citizens threatened with injury by the crime, trafficking in narcotic. It follows thus, every property identified by the application in this matter as unexplained and adjudged by court as a proceed of crime is subject to and ordered forfeited.’* The last issue is whether the vehicle is liable to forfeiture owing to the fact that it had not been fully paid. The interested party has acknowledged that it sold the vehicle on hire purchase. It is true that by virtue of Section 15(1) of the Hire Purchase Act, the property bought under hire purchase remains the property of the hirer until two-thirds of the purchase price is paid. The Section states as follows; *‘Where goods have been let under a hire-purchase agreement and two- thirds of the hire-purchase price has been paid, whether in pursuance of the agreement or of a judgment or otherwise, or has been tendered by or on behalf of the hirer or a guarantor, the owner shall not enforce any right to recover possession of the goods from the hirer otherwise than by suit.’* The interested party has claimed that the respondent is yet to pay a balance of Kshs 1,905,000.00 which would put it under the aforesaid Section and it remains its property. That may be the position but, it should be noted that the regime of civil forfeiture is interested and goes for the property rather than the individual holders and it is meant to restrict and constrict the criminal enterprise in order to prevent the offenders from enjoying fruits of their illegitimate actions. Allowing the property to remain free and available to the respondent or the interested party would defeat this purpose. Further, I do not think that the Section would be able to protect property which is illegally acquired or which has been intermingled with proceeds of crime. Owing to the above, I take the position that tying or mixing a property to or with illegality invalidates the title of its registered owner. Unless there is a clear demonstration that the titled owner did all due diligence within its human ability to establish the root of the property, the property remains proceeds of crime and liable to forfeiture. In this matter, the interested party has stated that it does not investigate the sources of funds of its customers. That in my view is a dereliction of civil duty. It is the duty of all citizens to ensure that they are not encouraging or tolerating commission of crime. Business entities may not have legal duty to investigate their customers or associates but where they fail to do so, they pose a risk to themselves of losing in the event specific transactions are found to be illegal or unlawful. The interested party has exhibited the sale agreement, deed of indemnity, the respondent’s identity card, the vehicle’s log book and the respondent’s statement of account. It has not stated the mode of payment although it would appear that the same was in cash. Where a dealer or a business entity especially in an industry that is prone to suspicious transaction or money laundering fails to conduct basic due diligence which omission enables commission of an offence, they must be ready to bear the consequences otherwise, the court will be making nonsense of the law of civil forfeiture if it upheld such negligent acts. On this basis, I find and hold that the motor vehicle is liable to forfeiture despite the same having not been fully paid for. As rightly submitted by the applicant, the interested party may pursue other means or forums for recovering its debt from the respondent. The upshot of the above is that, I find that the applicant has proved its case to the required standard and I proceed to issue the following orders; 1. A declaration is hereby issued that motor vehicle registration number **KDP 137N,** Toyota Mark X chassis number GRX130-6103945, registered in the name of **CAR HOUSE LIMITED** is proceeds and/or instrument of crime liable for forfeiture to the Government of Kenya. 2. **THAT** an order is hereby issued forfeiting motor vehicle registration number **KDP 137N,** Toyota Mark X chassis number GRX130-6103945 to the Assets Recovery Agency on behalf of the Government of Kenya. 3. **THAT** an order is hereby issued directing the Director General of the National Transport and Safety Authority to transfer title/ownership of motor vehicle registration number **KDP 137N,** Toyota Mark X chassis number GRX130-6103945, registered in the name of **CAR HOUSE LIMITED** to the Assets Recovery Agency on behalf of the Government of Kenya. 4. **THAT** I will make no orders as to costs. Dated, signed and delivered at Nairobi this **29th** day of **July** 2026. **B.M. MUSYOKI** **JUDGE OF THE HIGH COURT.** Judgment delivered in presence of Mr. Ogonda for the applicant and in absence of the respondent and the interested party.