https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/11441

**REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA AT ELDAMA RAVINE (SUB-REGISTRY)** **HCCRA CASE NO.E008 OF 2025** **SKYLINE DT SACCO SOCIETY LIMITED…............…….. APPLICANT** **VERSUS** **DCI KOIBATEK.............................................................ACCUSED** **RULING** The trial court in Eldama Ravine Misc. Criminal Application No. E043/2025 dealt with an application for search warrant dated 6/10/2025. The application had been brought under Section 118 and 121 (1) of the Criminal Procedure Code, Section 23 of the Anti-Corruption and Economic Crimes Act and Section 34 of the Sacco Societies Act that the court allowed the application and granted the orders that were sought. The respondent moved the same court seeking the review or setting aside of the orders. The court considered Section 118 of the Criminal Procedure Code, Section 180 (1) of the Evidence Act, and a few authorities :– that the ground for the application was that a whistle blower had reported that the respondent/applicant had a created a product by name Green Gold that was not approved by SASRA, and had granted the sum of kshs. 303,000,000/=. Upon hearing the application for review the court found that the earlier application had not been specific and did not have a return date for the search Warrant. The court then proceeded to grant the following order:- *The application partially succeeds to the effect that a fresh order shall issue directed to the respondent/applicant capturing the details in paragraph 10 of the supporting affidavit, that is to say the respondent/applicant through the Chief Executive Officer shall supply to the applicant/respondent certified copies of the following in addition to any relevant material relating to the investigation:* *a) Loan application forms (for un approved Loan product) b) Loan approval forms signed by board approving loans.* *c) Loan disbursement vouchers and schedules d) Loan repayment schedules and statements e) Minutes of Board of Directors approving loans since inception of the unapproved loan product.* *f) Minutes of Credit committee meetings. g) Attendance registers for Board/committee sittings h) Internal memos on loan approvals and policy changes i) Sacco loan policy j) Sacco by-laws and constitution k) SASRA directives, inspection reports and compliance* *correspondences in relation to loan product in question . l) Cash book and general ledger* *m) Trial balances during the material period n) Internal audit reports o) Auditor correspondences with Sacco management p) Sacco bank reconciliation statements including bank instructions from management q) Register of members/borrowers of loan through the loan product r) Declaration of interest/conflict of interest forms. s) Insurance policies, broker agreements and payments records t) Sacco asset registers. u) Procurement and building acquisition records including tender minutes for a building that was acquired and renovated by Sacco v) Detailed records of companies that are beneficiaries through the unapproved loan product effective 31st May, 2023 to date.* *The matter shall be mentioned on 24th November 2025 to confirm compliance.* The applicant was aggrieved by the above orders and filed Notice of Motion dated 25/11/2025 seeking orders:- 1. *That pending the hearing and determination of the appeal, this Honourable Court be pleased to issue an order of stay of execution of the orders issued on the 17th of November, 2025 and all consequential orders arising therefrom issued by the Magistrate in Eldama Ravine Miscellaneous Criminal Number E043 of 2025.* The grounds for the application were inter alia that; 1. *That the terms of the order issued on the 17th of November, 2025 are vague and overboard as it authorizes the Respondent to seize every record at the Respondent’s premise to aid in an investigation where the name of the complainant has not been disclosed, further, there is no specific period for the documents sought by the Respondent to be supplied to them but generally states documents that aid in the running of the SACCO.* 2. *That while issuing the impugned orders, the court failed to satisfy itself as to the correctness of the allegations enumerated by the Respondent when they obtained the search and seizure orders as there was no complaint lodged against the Appellant/Applicant but whistle blower reports by criminal employees who were lawfully sacked.* 3. *That the regulator has never flagged any transaction within the Appellant/Applicant and there is therefore no reasonable explanation why the Respondent should be allowed to search and seize the records and documents of the Appellant/Applicant.* 4. *That the Appellant/Applicant stands to suffer substantial loss as its operations will be greatly affected if the orders sought are not granted.* 5. *That further the Appellant/Applicant who is a custodian of various vital and sensitive information belonging to the masses that are its customer base stands to suffer substantial loss as all trust lent to it by the public as a custodian would be materially lost.* 6. *That if execution of the orders issued on the 17th of November, 2025 and/or search and seizure of the Respondent’s books, records, files and other evidential materials is allowed to proceed, the Appellant/Applicant’s application and intended appeal will be rendered nugatory.* The application is supported by the affidavit of Lillan Kiplagat Mitei the Chief Executive Officer of the applicant/appellant sworn on 25/11/2025. He reiterates the grounds on the face of the application. He has annexed the applicant’s petition of Appeal where he has wet out the grounds of appeal. 1. *That the Learned Magistrate erred in law and in fact by failing to properly evaluate all the materials placed before the court before making the impugned ruling. 2. That the Learned Magistrate erred in law and in fact by failing to consider the provisions of sections 118 and 118A of the Criminal Procedure Code on the procedure for issuance of search warrants. 3. That the Learned Magistrate erred in law and in fact by failing to consider that there was no complaint lodged against the Appellant but only frivolous whistle blower reports prepared by criminal employees who had been lawfully sacked.* *4. That the Learned Magistrate erred in law and in fact by failing to consider that at the time of obtaining the search and seizure warrant, the Respondent had not disclosed the complaint and/or the offence committed by the Appellant/Applicant to aid in justification of getting the search warrants. 5. That the Learned Magistrate erred in law and in fact by failing to satisfy himself as to the correctness of the allegations enumerated by the Respondent before granting the order of search and seizure. 6. That the Learned Magistrate erred in law and in fact by failing to satisfy himself that no reasonable grounds had been raised to warrant the issuance of the search warrants. 7. That the Learned Magistrate erred in law and in fact by issuing an order directing the Appellant through its Chief Executive Officer to supply the Respondent with documents and records which are sensitive and necessary for its day to day operations.* *8. That the Learned Magistrate erred in law and in fact by issuing an order which authorizes the Respondent to seize records at the Respondent’s premise to aid in an investigation where the name of the complainant has not been disclosed.* *9. That the Learned Magistrate erred in law and in fact by failing to consider that by seizing the books, records, files, electronic data, correspondences and other evidential material of the Appellant it would paralyse its operations.* *10. That the Learned Magistrate erred in law and in fact by failing to consider that regulator has never flagged any transaction within the Appellant/applicant.* *11. That the trial court exhibited naked bias and prejudice against the Appellant*. The application is opposed by the Replying Affidavit of No. 99510 PC Richard Cheruiyot of DCI Koibatek. He depones inter alia: *1. That I am the Investigating Officer in this matter duly authorized and competent to swear this affidavit in opposition to the application dated 25th day of November, 2025 filed by the Respondent/Applicant through the firm of GKL ADVOCATES LLP.* *2. That: on 6th October 2025, the SPM’s Court Eldama Ravine issued lawful and valid orders in Misc. Application No. E043 of 2025 compelling the Appellant/applicant Sacco to avail to me certified copies of documents to facilitate ongoing investigations.* *3. That: the said orders were duly served upon the Sacco CEO, and to date they have not been complied with, without any lawful justification.* *4. That: instead of honouring the court orders, the Sacco filed an application seeking stay of execution, raising issues that were comprehensively responded to in my replying affidavit on record during the hearing of the Miscellaneous Application.* *5. That: the matter came up for mention on 17th November 2025 for delivery of the Court’s ruling, wherein this Honourable Court dismissed the Sacco’s application, reaffirmed the validity of the orders issued on 6th October 2025, and directed that the Sacco must fully comply with the same (Annexed and Marked RC.1 is a copy of the Ruling delivered on 17th November, 2025).* *6. That: following the said ruling, I visited the Sacco premises on 20th November 2025 for purposes of enforcing the court orders, but the Sacco again refused to comply and declined to provide the documents, despite the existence of a clear and binding order of this Honourable Court.* *7. That: the allegation that no specific period of documents was provided is incorrect, as I expressly stated in Miscellaneous Application No. E043 of 2025 that the request concerned GREEN GOLD Loan product records from 31st May, 2023 to 30th September, 2025 and not all Sacco records.* He proceeds to list at paragraph 8 the records that the applicant is to avail to Directorate of Criminal Investigations. In a supplementary affidavit sworn on 15/5/2026 by Allan Kiplagat Mitei, CEO of the applicant, he deponed: *1. That the Appellant has neither failed nor declined to provide the documents ordered by the trial court in its ruling dated 17th November, 2025, which is the subject of this appeal. The delay has been occasioned by the Respondent who has continuously shifted the scope of their document requests, as evidenced by their letter dated 19th February, 2026. Attached herein and marked as AKM 1 is a copy of the letter dated 19.2.2026.* *2. That I am informed by my advocates on record, on whose information I verily believe to be true that during the court attendance on the 3rd of December, 2025, the court directed the Respondent to specify the exact period for which documents required from the SACCO are to be supplied, which directive is evident from the court's record.* *3. That any subsequent delay or inability to supply the documents which were not listed in the initial warrants of search and seizure stems solely from the Respondent's failure to comply with the court's explicit directions issued on 3rd December, 2025.* *4. That the Respondent cannot shift the blame to the Appellant when the non-compliance stems entirely from the Respondent's failure to follow the court's directions of 3rd December, 2025. Consequently, the Appellant prays for a stay of execution of the trial court's orders pending the hearing and determination of this appeal noting that they are the subject of the instant appeal.* *5. That complying with the ruling of 17th November, 2025 as issued if implemented will paralyze the operations of the company which is fully dependent on the electronic data of members, files, records and books for the operations and/or duties of the company to be fully implemented.* *6. That I know of my own knowledge that the release of the requested documents which emanate from the search and seizure warrants issued on the 6th of October, 2025 and subsequently upheld by the Court's ruling delivered on the 17th of November, 2025 would render the pending appeal entirely nugatory. Attached herein and marked as AKM 2(a) and (b) are copies of the order and ruling dated 6.10.2025 and 17.11.2025 respectively*. He annexed a letter from DCI Koibatek saying that they wanted all the records of the Green Gold records from its inception on 31/5/2023 to 30/9/2025. He also attached the order of the court in its Ruling of 17/11/2025 and the order sought and issued on 6/10/2025 where the learned magistrate stated:. *Whereas it has been proved to me on oath for the purpose of an* ***investigation into the commission of an offence****, it is necessary or desirable that this Honorable Court do issue a Search and Seizure Warrant authorizing the Applicant and /or any officer so authorized to enter the premise of SKYLINE DT SACCO SOCIETY LIMITED P.O. BOX 660-20103 in Eldama ravine and Seize, Secure and carry away for forensic examination all books, records, files, electronic data, correspondences and other evidential material relevant to the investigations.* Parties filed written submissions and also highlighted them. **Applicant’s** For the applicant it is submitted that the order of 6/10/2025 emanated from an exparte application which they had not been served with. That the order was draconian – and resulted in their objection, and the ruling of 17/11/2025. In support of the application for stay of execution the applicant relies on: ***Njeru v Office of the Director of Public Prosecutions (ODPP) & another (Criminal Appeal E002 of 2025) [2025] (KLR)*** *which relied on* ***Gatirau Peter Munya v Dickson Mwenda Kithinji [2014] eKLR****, in which the court outlined the principles for grant of stay of execution.* *a. The appeal is arguable and not frivolous. b.Unless stay is granted, the appeal would be rendered nugatory. c. It is in the public interest that stay be granted.* It is submitted that the applicant, through the petition of appeal has demonstrated that it has an arguable appeal , in particular because the trial court did not consider Section 118 and 118A of the Criminal Procedure Code, that there was no complainant, and no offence committed by anyone. The applicant relied on **Manfred Walter Schmitt & Another –vs- Republic & Another [2013] KEHC 5455 KLR** on the duties of the court before which an application for a search and seizure warrant is made. The judge stated: *"I would be remiss if I did not comment on the nature of the proceedings before the Subordinate Court. The duty imposed on the Judiciary to issue warrants of search and seizure is a constitutional safeguard to protect the rights and fundamental freedoms of an individual. The Court is not a conveyor belt for issuing warrants when an application is made nor must the Court issue warrant of search and seizure as a matter of course. When an application is made, the Court is required to address itself to the facts of the case and determine, in accordance with the statutory provisions, whether a reasonable case has been made to limit a person's rights and fundamental freedoms. On the other hand, the duty of the State and its agencies, in investigating and prosecuting crime, is to furnish the court with facts upon which the Court can conclude that there is* ***reasonable evidence of commission of a crime*** *by the person it seeks to implicate by the application for search and seizure."* It is argued that there is no reasonable evidence of the commission of a crime. Further that SASRA the regulatory body for SACCOS has never flagged the applicant for any untoward transactions. It is submitted that if stay is not granted the appeal will be rendered nugatory. That the applicant stands to suffer substantial loss of the trust lent to it by the public, and the respondent will not suffer any prejudice. For the state it is submitted that the appeal is not arguable, no chance of success. And that the respondent should be allowed to execute the order. It is submitted that the applicant was changing positions – that it had argued that compliance would render the Sacco inoperable, that now the submissions were that the respondent had not complied with Section 118 and 118A of the Criminal Procedure Code. That the respondent just wanted copies of records related to the product by the name Green Gold. That there was communication from SASRA – Letter dated 29/9/2025 that the product was not approved by SASRA. That the information was for purpose of investigations – for the benefit of members of the Sacco, that a whistle blower had booked report – OB 19/25/8/2025 at Eldama Ravine police station. That the DCI officer indicated that offences under investigations were about abuse of office – that a large amount of money from the Sacco was involved. In rejoinder counsel for the applicant submitted that they were hearing about the letter from SASRA for the 1st time. That there was no evidence that the applicant would interfere with the investigations. **Analysis and Determination** The issue for determination is whether the application for stay of execution of the order from the subordinate court pending appeal has any merit. It is a settled legal principle that the power to grant or deny stay of execution is discretionary and must be exercised judiciously. In **Butt –vs- Rent Restriction Tribunal (1982) KLR 417**, the Court held that the power of the Court to grant or refuse stay is discretionary and should be exercised in such a way as not to prevent an Appeal. Further, in **Stanley Kang’ethe Kinyanjui –vs- Tony Ketter and Others [2013] eKLR**, the Court set out the guiding principles, including: 1. *Existence of an arguable Appeal.* 2. *Whether the Appeal will be rendered nugatory.* 3. *The requirement of substantial loss.* These principles though set out mostly in Civil matters, they apply *mutatis mutandis* with necessary modifications to applications for stay of execution in Criminal matters The applicant has to establish that the intended appeal is not frivolous; that if stay is not granted the appeal will be rendered nugatory; and that this in the public interest. The subject herein is a SACCO - the allegation by DCI is that it is committing offences against its members through a product by the name Green Gold and wants a RAFT of records handed over to it to enable it investigate the allegations. In her submissions counsel for respondent gave evidence of the existence of a document from SASRA, which the applicant and the court were not aware of. More importantly it is argued that the substantial loss will be loss of trust of the members. That the basis of any banking operation is trust that the money they are handling for clients is being handled well. A look at the list of documents required includes records of members who have received the loans, their repayment schedules, it has not been established – on the face of the application that any member has complained or that the alleged product was unapproved. There is therefore nothing on record to show that the respondent had established the initial fact that the product was unapproved by SASRA to warrant the investigation. The appeal raises issues of law and fact that do not appear pedestrian. The Applicant has demonstrated, the requisite legal threshold, that the intended appeal is arguable. Allowing the respondent to proceed would render the appeal nugatory. In the circumstance, and without going into the merits of the appeal, I find that the application has merit and allow it. Costs to abide the appeal. However, the applicant is restrained from tampering in anyway with the records of the Sacco related to the alleged product–pending the hearing and determination of the appeal. **RULING** Dated, signed and delivered virtually at Eldama Ravine (Sub-Registry) on 24th July 2026**.** **MUMBUA T. MATHEKA** **JUDGE** **In the presence of**:- Court Assistant Karanja Accused – Present Ms. Omari for state Ms. Mukundi for the applicant