[2022] KEHC 10766 (KLR)

Kinyua v Republic (Anti-Corruption and Economic Crimes Appeal 15 of 2019) [2022] KEHC 10766 (KLR) (Anti-Corruption and Economic Crimes) (9 June 2022) (Judgment)

Neutral citation: [2022] KEHC 10766 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Anti-Corruption and Economic Crimes

Anti-Corruption and Economic Crimes Appeal 15 of 2019

EN Maina, J

June 9, 2022

Between

John Faustine Kinyua

Appellant

and

Republic

Respondent

((Being an Appeal from the Judgment of the Chief Magistrates Court at Nairobi in ACC No. 17 of 2012 before Hon. F.W Macharia delivered on 23rd April 2019))

Judgment

Introduction 1. The respondent, John Faustine Kinyua was charged in Acc. Case No. 24 of 2007 with Unlawful Acquisition of Public Property contrary to Section 45(1)(a) as read together with Section 48(1) of the Anti-Corruption and Economic Crimes Act No. 3 of 2003 (ACECA). The particulars of the offence were that on 12th of June 2006, at the Kenya Reinsurance Corporation Offices in Nairobi within Nairobi Province, being a person employed by a public body, to wit Kenya Reinsurance Corporation, as the Director of Finance and Corporation Services, fraudulently acquired public property by instructing Mr. Isaac Tigimo, a cashier with the said corporation, to credit his account with Kshs. 1,835,978 being proceeds of cheque No. 002492 paid by Trident Insurance Co. Ltd as 18% compulsory treaty shares which sum was meant for Kenya Reinsurance Corporation.

2. The respondent pleaded not guilty to the offence and the case proceeded to full trial after which he was convicted. Being aggrieved he appealed the conviction in High Court Criminal Appeal No. 305 of 2009 and the Court set aside the conviction and ordered a re-trial. The respondent was subsequently retried in Cr. Case No. 17 of 2012 and was subsequently acquitted under Section 215 of the Criminal Procedure Code in a judgment delivered on 23rd April 2019.

3. Being aggrieved with the acquittal the State preferred this appeal by petition dated 2nd May 2019. The grounds of appeal are:-“a) That the learned trial magistrate erred in law and in fact in acquitting the respondent under section 215 of the Criminal Procedure Code without considering that the prosecution had proved its case beyond reasonable doubtb) That the learned trial magistrate erred in law and in fact by holding that the respondent did not illegally acquire Kshs.1,835,978 from Kenya Re.c) That the learned magistrate erred in fact and in law in failing to appreciate or to appreciate fully submissions by counsel for the appellant that the prosecution had failed to discharge the said count 2 on the charge sheetd) The learned trial magistrate erred in law and fact by finding that the respondent was not aware that the amount of Kshs.1,835,978 existed on his mortgage accounte) That the learned trial magistrate erred in law and in fact by relying on insufficient evidence of the prosecution in total disregard of the appellant’s defence and sworn statement.f) The learned trial magistrate erred in law and in fact in finding that the respondent never came into possession of Kshs. 1,835,978 which was the property of Kenya Re.”

4. By this appeal the State has urged this court to reverse or set aside the judgment dated 23rd April 2019 acquitting the respondent; that the respondent be convicted and sentenced as per the evidence adduced and that the court issues any such other orders as it may deem appropriate in the interests of justice.

5. The Appeal was canvassed through written submissions.

Appellant’s Submissions 6. Learned Counsel for the Appellant started by urging this court to submit the evidence in the trial court to a fresh and exhaustive examination and reach its own conclusions bearing in mind that it did not have the advantage of seeing or hearing the witnesses. She relied on the decision in the case of Okeno v Republic(1957) EA 336.

7. Counsel then argued on all the listed grounds of appeal as a whole for the reason that the appeal mainly centers on whether or not the prosecution’s evidence was to the required standard that is, beyond reasonable doubt. Counsel submitted that Section 45(1) as read with Section 48(1) of the Anti-Corruption and Economic Crimes Act provides that a person who unlawfully or fraudulently or otherwise acquires public property or public service or benefit is guilty of an offence. Counsel stated that the definition of public property within the meaning of Section 45(3) of the Act is “real or personal property, including money, of a public body or under the control of, or consigned or due to, a public property.” Counsel stated that it is not in dispute that Kenya-Re was a public corporation and that at the time of the incident between 2003 and 2007 in question, the respondent was the Director of Finance.

8. Counsel then rehashed the evidence of the 17 prosecution witnesses and surmised that in his capacity as the Director of Finance at Kenya Re the Respondent instructed PW8, a cashier to deposit the cheque for Kshs.1,835,975 into his mortgage account. That the evidence of all employees working at Kenya Re and the banks involved indicated that the cheque in question was drawn in favour of Kenya Re, by Trident Insurance Company but found its way into the Respondent’s mortgage account under his instruction as demonstrated by P.Ex No. 27. Counsel stated that the respondent’s defence that he had no knowledge of the deposit made into his mortgage account was discounted by the evidence of the document examiner PW10 who confirmed that the respondent was the author of the note instructing the cashier PW8 to credit the cheque to his mortgage account.

9. Counsel submitted that the court trial magistrate erred by admitting DMI-14, a clearance form into evidence yet the same was not produced during trial and had only been marked for identification. Counsel submitted that the respondent must have known that the subject funds were in his mortgage account whereas the cheque in question was not entered into the Kenya Re system. That he made a deposit into the same account and the total sum reflected as Kshs.2,000,000 hence he cannot deny knowledge of the money belonging to Kenya Re as well as the illegal deposit. Counsel asserted that had the transaction been regular, it should have gone through the normal process as inferred from the evidence on record and the testimony from the witnesses. She relied on the case of Boniface Okerosi Misera & Another v Republic(2018) eKLR to support her submissions.

Respondent’s Submissions 10. Learned Counsel for the respondent submitted that it is never the duty of an accused person to prove his innocence; that the burden of proof rests on the prosecution throughout the trial save where there are admissions by the accused person. Counsel submitted that as the Court of Appeal in the case of Philip Nzaka Watu v Republic (2006) eKLR the trial court has to be satisfied of an accused person’s guilt beyond reasonable doubt before it can convict.

11. Counsel stated that the appellant did not prove its case beyond reasonable doubt as the evidence tendered by the witnesses confirmed that money never came into the possession of the respondent. That, PW 6 stated that the cheque was cleared and the proceeds thereof remitted in favour of Kenya Re Insurance account at KCB Moi Avenue while PW 7 confirmed that the aforementioned cheque was paid to Kenya Re and it was cleared on 20th May 2006. Counsel stated that this was also confirmed by PW9, PW 13 and PW17. Counsel argued that PW 8 on the other hand claimed to have received a banking slip showing money was deposited in the Kenya-Re account at KCB Moi Avenue on 29th May 2006. Counsel submitted that in cross-examination, PW8 admitted that he was not instructed by the Respondent to make the writings on the sticky note stating the purpose of the money deposited and also that he accepted the money as a transfer and not direct banking with no explanation given. Further, that PW 9, PW14 and PW17 confirmed that whereas Kshs. 2,000,000 was credited into the respondent’s mortgage account the respondent’s mortgage account was fully repaid as at 22nd November 2015 and therefore the Kshs. 2,000,000 was not to reduce the mortgage and remained as a book entry on the ledger. In addition, the mortgage account was an internal arrangement with the Kshs. 2,000,000 paid into the corporation’s account which is still reflected as such. Consequently, the respondent could not withdraw the money from the account unless Kenya-Re would withdraw it and give it to him. Counsel submitted that PW 17 confirmed that the Kshs. 2,000,000 was posted on 12th June 2006, several months later; that Lack of control over the Kenya Re account meant that the respondent did not at any time acquire the money.

12. The respondent concluded by giving the meaning of “possession” as defined in Section 57(4) of the Penal Code which states:-“be in possession of” or “have in possession” includes not only having in one’s own personal possession, but also knowingly having anything in the actual possession or custody of any other, or having anything in place (whether belonging to or occupied by oneself or not) for the use or benefit of oneself or of any other person.”

13. Counsel submitted that in light of the foregoing, the respondent did not come into the actual possession or custody of the impugned funds. Counsel urged this court to dismiss the appeal for lack of merit.

Analysis and Determination 14. As the first appellate court my duty is to reconsider and evaluate the evidence in the trial court while keeping in mind that I did not see or hear the witnesses. I have also considered the grounds of appeal, the rival submissions and the law. From the evidence there is no doubt that the Respondent was at the time in issue an employee of Kenya Reinsurance corporation. There is also no doubt that on 15th May 2006 the appellant received two cheques whose total aggregate was Kshs.2,000,000 from Trident Insurance Company being a payment due to Kenya Reinsurance Corporation from the said insurance company. I also have no doubt in my mind that the two cheques were credited in Kenya Reinsurance Company’s KCB account. I also find it a fact that the sum total of the cheques was credited into the respondent’s mortgage account by the then Kenya Re-Insurance Corporation cashier (PW8). The issues that arise for determination are as follows:i.Whether it was the respondent who gave instructions for the deposit of the Kshs.2,000,000 into his account.ii.Whether by so doing the appellant unlawfully acquired the said funds the property of Kenya Re-insurance Corporation.

15. In summary the prosecution’s case was that Kenya Re-insurance Corporation (Kenya-Re) was by law entitled to 18% of all insurance companies and that by a letter dated 16th May, 2006 (exhb 10) a cheque for Kshs.1,835,978 was sent to Kenya-Re from Trident Insurance Company and the same was duly received at Kenya-Re. According to PW1 as the secretary the cheque was received by the respondent when she stepped out of her office. She testified that it was her duty to receive mail but whenever she was not in, the respondent who occupied the office close to hers would receive the same. The prosecution led evidence that on 29th May 2006 two cheques, one for Kshs.1,835,978 and the other for 164,022/= were deposited into Kenya-Re’s account at KCB Moi Avenue Branch. PW8 testified that on 12th June 2006 the respondent presented to him the banking slip dated 29th May 2006 with a handwritten note instructing him to deposit the sum total of the two cheques which was Kshs. 2 million in his (respondent’s) mortgage account. PW8 stated that he did as instructed and that he generated a receipt and issued it to the respondent. He stated that the receipt he generated was No.0010204682 dated 12th June in the name of John Faustine Kinyua. The court also heard that as at the time PW8 alleges to have credited the respondent’s mortgage account the same was long fully repaid and that the Kshs.2 million did not leave Kenya-Re’s account.

16. In his defence the respondent conceded that at the time in issue he was the corporations Director of Finance. He stated that however his services were terminated in the year 2007 upon the recommendation of the Ethics and Anti-Corruption Commission. He stated that he duly cleared with the corporation and that he did not have any liability save for a loan balance of Kshs.308,356/75 owed to Kenya-Re Co-operative Society. He also stated that the Legal Division confirmed that his mortgage had been redeemed on 22nd November 2005. He stated that on 3rd February 2017 Kenya Re paid him a sum of Kshs.841,560/20 net all the deductions through a cheque no. 042402 whereupon he was asked to sign a discharge form. The Respondent admitted that he deposited the two cheques the subject of this case in Kenya-Re’s KCB account and stated that the original deposit slip was handed over to the cashier at Kenya-Re. While conceding that he wrote a routing slip for Kshs.164,022 being his salary advance he denied that it was him who gave the slip to the cashier. It was his evidence that he merely put it in the out-tray on his desk and left it to the secretary or whoever was responsible to take it to the relevant office. He also admitted that he wrote the yellow sticker which was produced as Exhb. 19 but stated that it was not in relation to the banking slip for KCB but for post-dated cheques he had previously issued to the cashier. He stated that he had made a recommendation for PW8’s and the ICT officer one Peter Wambui’s services to be terminated. He stated that the sum of Kshs. 2 million was wrongly credited in his account and that he only became aware of it after the matter was taken to the Ethics and Anti-Corruption Commission.

17. The Respondent was charged with the offence of Unlawful Acquisition of Public Property contrary to Section 45(1) (a) of the Anti-Corruption and Economic Crimes Act which states:-“45. Protection of Public Property and revenue, etc.(1) A person is guilty of an offence if the person fraudulently or otherwise unlawfully –a. Acquires public property or a public service or benefit;……”

18. The facts material to this case are that on 12th June, 2006 the respondent having received and deposited cheques one of which was for a sum due to Kenya Re-Insurance Corporation from Trident Insurance Company passed over the banking slip to the Corporation’s cashier and instructed him in writing (through a note produced as ExbP.19) to credit the sum total of the two cheques, to with Kshs. 2 million, to his (respondent’s) mortgage account.

19. The cashier duly complied and issued him with a receipt No. 0010204682 of even date a copy of which was tendered in evidence as exhibit 20. On his part the Respondent admitted to writing the instructions on the sticker note produced as exhibit 19 but denied that the same was in regard to the deposit slip the subject of this case. He also denied having received a receipt for the credit to his mortgage account and stated that in any event he had by the paid off his mortgage and there was no way the amount would have gone to his mortgage account.

20. I have carefully considered the evidence and submissions by both sides and I find it a fact that the respondent indeed instructed the cashier (PW8) to credit his account with the Kshs. 2 million the sum total of the cheque which he had received and deposited on behalf of Kenya Reinsurance Corporation. It is my finding that his own admission that he wrote the note (exhibit 19) is proof that PW8 was a witness of truth whose evidence is trustworthy and reliable. I am not convinced that the note was for instructions he had given to PW8 previously. He alluded that PW8 may have lied against him because he had recommended the termination of his (PW8) and another officer’s employment. However, there is nothing to show that this was the case. Whereas the burden of criminal cases rests solely with the prosecution it shifts to the accused person when it comes to a fact within the special knowledge of the accused. It behoved the respondent therefore to adduce evidence that he had indeed recommended the sacking of PW8. In the absence of such proof I find that the witness (PW8) had no reason to lie against him and that indeed he issued the instructions for money belonging to the corporation to be credited to his account which in effect was him passing himself as the one that was repaying his mortgage whereas he was not. It is my finding that the trial magistrate mis-directed herself when she stated that because the KCB statements (Exhb. 21) did not show a transfer as was the case in the receipt (ExhB. 20) then it was not a credit to the account. To the contrary it is my finding that the money having already been in the corporation’s account the transfer was indicative of the movement of that money from the corporation’s account as a credit to the respondent’s account. The respondent was well aware of this as he accepted the receipt issued to him by PW8 on the same date his instructions were acted upon.

21. What about the fact that his mortgage account had already been paid off or the evidence of John Mbugua (PW9) in cross examination that the respondent could not withdraw the money from the Kenya-Re account? My finding is that the fact that the mortgage had already been paid off or that he could not get out the money from the account does not negate that he intended to commit the offence. It only goes to show that he did not get an opportunity to complete the offence and in my view the trial court erred in holding that no offence was proved and acquitting him under Section 215 of the Criminal Procedure Code. On my part I find that an offence of attempting to commit the offence prescribed in Section 45(1) (a) of the Anti-Corruption and Economic Crimes Act was proved beyond reasonable doubt. Section 47 A(2) of the Anti-Corruption and Economic Crimes Act states: -“47A. (2) For the purposes of this section, a person attempts to commit an offence of corruption or an economic crime if the person, with the intention of committing the offence, does or omits to do something designed to its fulfilment but does not fulfil the intention to such an extent as to commit the offence.It is evident from the sum total of the prosecution’s case that the respondent intended to commit the offence but did not fulfil his intention to such an extent as to commit it. He is therefore guilty of attempting to commit the offence.

22. Section 348A (2) of the Criminal Procedure Code gives this court power to reverse the judgment of the learned trial magistrate acquitting the respondent and to substitute it with a conviction and to sentence the respondent appropriately.

23. I accordingly set aside the learned trial magistrate’s order of acquittal and substitute it with a finding of guilty for the offence of Attempting to fraudulently acquire public property contrary to Section 47 A (1) as read with Section 48 of the Anti-Corruption and Economic Crimes Act and convict the respondent accordingly.

24. Section 348 A (2) of the Criminal Procedure Code gives this court power to sentence the accused person. It is evident from the record that the respondent did not receive a quantifiable benefit from his conduct and neither did the corporation suffer a quantifiable loss as the money remained in its account. I accordingly sentence the respondent to a fine of Kshs.1 million (one million shillings) or in default to imprisonment for a term of three (3) years. Right of Appeal to the court of Appeal is explained. The Appellant shall pay the fine within 14 days of this judgment failing which a warrant of arrest shall issue against him in order to start serving the term of imprisonment.

SIGNED, DATED AND DELIVERED VIRTUALLY THIS 9TH DAY OF JUNE 2022E N MAINAJUDGE