20150121 TZHC Dar es Salaam

:.- .. ~ IN THE HIGH COURT OF TANZANIA (DAR ES SALAAM DISTRICT REGISTRY)

AT DAR ES SALAAM CRIMINAL APPEAL NO. 166 OF 2012 [Appeal from Criminal Case No. 152 of 2010 in the Court of Resident Magistrate of Dar es Salaam Region at Kisutu (Katemana, RM)] DIRECTOR OF PUBLIC PROSECUTIONS ........................... APPELLANT

VERSUS JUSTICE LU MINA KATITI ........................................ 1ST RESPONDENT FORTUNATUS FAUSTINE MUGANZI ........................ 2ND RESPONDENT ROBERT PHARES MBETWA ..................................... 3RD RESPONDENT GIDION WASONGA OTULLO .................................... 4TH RESPONDENT GODWIN MGONDA PAULA ...................................... 5TH RESPONDENT Date of last order: 04/08/2014 Date of ruling: 15/01/2015

JUDGMENT F. Twaib, J: The Director of Public Prosecutions (OPP) ("the appellant") is aggrieved by the judgment and orders of the Resident Magistrate's Court, Dar es Salaam Region, at Kisutu (Katemana, RM). In his judgment dated 5th September 2012, the learned Resident Magistrate acquitted all the accused persons (herein the respondents) who were facing various charges, namely: As against all respondents: First count: conspiracy to defraud, contrary to section 306 of the Penal· Code (''Cap 16''); Fourth count: Obtaining money by false pretenses; Page 1 of 11 'I Seventh and eighth counts: money laundering; Ninth count (in the alternative to 8th count, in respect only of the 3rd and 4th respondents): transfer of proceeds of corruption, contrary to section 34 (1) of the Prevention and Combating of Corruption Act, No. 11 of 2007 (''Act No. 11 . of 2007"); Tenth count (.in the alternative to the fourth count): transfer of proceeds of corruption, contrary to section 34 (1) of Act No. 11 of 2007. Furthermore, as against the 5th respondent only: Second count: forgery, contrary to sections 333, 335 (a) and 338 of Cap 16; and Third count: uttering a false document, contrary to section 342 of the Penal Code. The fifth and sixth counts were against the first respondent only: use of documents intended to mislead the principal, contrary to section 22 of Act No. 11 of 2007. The prosecution's

case against the respondents would run thus: Form E17 is the document which is used by Barclays Tanzania Ltd. to transfer funds from one account to another. In this case, a sum of Tshs. 338,935,327,461/=, was supposed to be remitted into Account No . .9921133501 belonging to the Commissioner for Large Taxpayers at TRA vide a genuine Form E17 (Exh. P3). Instead, a forged Form E17 (Exh. PS) was used, which resulted in the transfer of funds being made instead to Account No. 01J21186000 at CRDB Bank operated by East African Procurement Services (T) Ltd. ("EAPS''), which is owned by the 4th accused. Part of this money was paid to Romos Technology, a company owned and operated by the 3rd respondent, and part of it (Tshs. 65,700,000/=) was paid to Just Investment Ltd. and finally to the pt respondent, who owns it. So, according to the appellant, the whole episode began with the forgery of form E17 through Exh. PS, replacement of Exh. P3 with Exh. PS, the Page 2 of 11 ) use of Exh. PS to transfer funds to EAPS and ultimately the transfer and withdrawal thereof, some of which went into the hands of some of the respondents. After hearing evidence from twenty nine prosecution witnesses and all the respondents in their respective defences, the learned RM did not entirely agree with the prosecution story on the involvement of the respondents, and acquitted them all. The DPP has thus filed

the present appeal against all the original accused persons, citing ten grounds. In their submissions in support of the appeal, however, learned State Attorneys who represented the DPP abandoned grounds 9 and 10 and remained with eight grounds. He also essentially withdrew the appeal as against the 2nd respondent Fortunatus Faustin Muganzi. Mr. Oswald Tibabyekomya, learned Principal State Attorney, led the team of State Attorneys who ably represented the DPP in this appeal. Leading the team of learned advocates representing the respondents was Mr. Richard Rweyongeza for the 1st, 3rd , 4th and 5th respondents, and Mr. Majura Magafu for the 2 nd and 4th respondents. I have not been able to discuss all the points raised by counsel for both sides of this appeal· as I did not deem it necessary, but I must acknowledge the hard work that must have been put into the preparation of written submissions filed by them all. In his submissions, Mr. Tibabyekomya combined all the eight remaining grounds and argued them together, following a pattern that addressed the counts instead of the grounds of appeal. This stance prompted an argument from Mr. Magafu, learned advocate. He contended that this approach was wrong and a failure on the part of the appellant to invite the court "to re-evaluate the evidence on record, but rather [the appellant has] decided to make [his] submission relying on

the charges ... which is [contrary to section 378 (1) and (2) of the Criminal Procedure Act, Cap 20]". Page 3 of 11 I would agree with Mr. Tibabyekomya, learned Principal State Attorney, that there is nothing wrong in the approach they have adopted, so long as the submissions did not go outside the scope of the grounds of appeal to raise new grounds. There is also no indication that it in anyway prejudiced the respondents in their response to the appeal. Mr. Magafu himself did not say that any of these things happened. I would thus ignore his complaints and proceed to determine the appeal on merit. It is common ground that the centerpiece of the case is in the second count, which relates to a document termed "Form E17", which was admitted as Exh. PS. The prosecution alleged that the 5th respondent Godwin Mgonda Paula, an official with Barclays Bank Tanzania Ltd., forged Exh. PS and uttered it, with intention to defraud, purporting to show that Tourism Promotion Services (Tanzania) Ltd. requested Barclays Bank to pay East Africa Procurement Services Ltd. a total of Tshs. 338,935,337.46 for the supply of camp tents and hotel equipment. . As I shall explain later on in this judgment, I also consider that the fourth count to be significant, since it seeks to connect all the accused persons to the alleged benefits of the proceeds of the alleged fraud constituting the second

count. Four of the prosecution witnesses testified in support of the second count: PWS Neema James Saria, PW6 Upendo Jackson Mushi, PW 26 Johanes Joseph Mgendi and PW29 Christian Nyakizee. From the evidence on record, it seems that there is no dispute that Exh. PS was a forgery. The question is: was there evidence sufficient to prove, beyond reasonable doubt, that the 5th respondent was its author and utterer and that he had done so with intent to deceive or defraud? The appellant quotes the trial magistrate (page 73 of the judgment) as stating that the evidence on record "suggest that [Exh. PS] was prepared by the 5th accused and presented to PWS and PW6 for authorization, and that is according to the testimonies of PWS, PW6 and PW 29 as well as PW26, a handwriting expert." Page 4 of 11 ' . However, the learned trial magistrate expressed doubt about relying on Exh. PS due to the following facts: • The address used in Exh. PS as that of Tourism Promotion Services (T) Ltd. (Ohio Branch, P.O. Box 15081, Dar es Salaam), was wrong. The correct address should have been P.O. Box 2551 Arusha. PWS and PW6 had the duty to ensure that Exh. PS was proper, but failed . to do so and thus allowed it to pass and be used for purposes of transfer of funds by signing it. The court went as far as suggesting that PWS and PW6 were accomplices who should have been charged as well. • There was no

indication in the TT Register (Exh. P8) that it was the 5th respondent who submitted Exh. PS to PWS and PW6 at the payment desk at Barclays Bank, Ohio Branch, Dar es Salaam. Even though it had a stamp number purportedly used by the 5th respondent, the document was not signed by him. • There was doubt in the evidence of the handwriting expert, PW 26, because no photographic enlargement was attached to his report and he in fact admitted that he had not attached any, reason being lack of ink to print the photographs. This denied the court an opportunity to see and compare the relevant handwriting since, ultimately, it is the court and not the expert witness who decides whether there was a forgery. The magistrate thus found it unsafe to rely on the expert's report. The appellant DPP has attacked this reasoning, arguing that the prosecution was able to prove that the 5th respondent had forged Exh. PS through four out of five modes recognized by law. These four modes are: by the opinion of PWS and PW6 who worked with the 5th respondent; internal evidence afforded by the contents of the document (rubber stamp number 4, which was used by the 5th accused); opinion of the Page 5 of 11 handwriting expert (PW 26); and circumstantial evidence (that PWS gave the 5th respondent the genuine Form E 17, Exh. P3, which was the electronic evidence of fund transfer from TPST to TRA), that the

5th respondent took Exh. PS to PWS and PW6 and took it away after it was signed by both of them, gave it to PW10 who forwarded it to the swift department; that the TPST portfolio fell under him (5 th respondent) and that he admitted having received Exh. P3 which was lost in his hands because Exh. P7 and Exh. PB (the TT Register) do not show the movement of Exh. P3 after it landed in the hands of the 5th respondent. Instead, only Exh. PS features in Exhs. P7 and PB. It is thus the appellant's contention that under section 122 of the Evidence Act, an inference can be drawn that it was the 5th accused who forged Exh. PS. The appellant faults the findings of the learned trial magistrate that PWS and PW6 failed to detect the "glaring errors" on the face of Exh. PS which should have alerted them that the document was forged. The appellant is of the view that this finding was wrong because, rather than PWS and PW6, it was the 5th respondent who was responsible because it was under his portfolio that TPST fell, and that he only sought the signatures of the other two bank officers because the amount to be transferred was beyond his limit. Otherwise, he would have verified, confirmed and signed the transfer form himself. The appellant also argues that mere failure to act diligently does not make one an accomplice. At this point, let me register my agreement with the contention that it

was wrong for learned trial magistrate to treat PWS and PW6 as accomplices. But they were clearly negligent, since by signing, they were confirming the authenticity of the document. Whether they had an interest to serve that makes them accomplices is an arguable point. However, I do not think we need to be detained by it, given my findings on the other grounds of appeal as I shall endeavor to explain. The learned trial magistrate also discarded the evidence of the handwriting expert for reasons already alluded to herein. The appellant Page 6 of 11 thinks the trial court erred in taking this position, because photographic enlargement was not necessary since the author of the expert report was the one who was giving evidence. The learned Principal State Attorney cited the case of Thobias Mbilinyi Ngasimula v R (1980) TLR 129 at 131 is support of his point. However, on behalf of the 5th respondent, Mr. Rweyongeza pointed out several other reasons why the report of the handwriting expert should not be relied upon. The witness (PW26) himself made some statements that strengthened the respondent's case. Crucial among these was the admission that even when he was examining the signatures, he did not use photographic enlargements, which enlarges figures and enables the examiner to see them better. He further stated: "That it [is] true that the report has some defects due to absence of

the photographic enlargements." As argued on behalf of the 5th respondent, this statement on the part of PW26 means he was not sure about his own report. Furthermore, the respondents' counsel have attacked PW26's report on the ground that he could not state with precision, in his evidence in court, as to whether the documents tendered were the ones he had worked with when he conducted his examination. He is recorded as having told the trial court: "When I received the sealed packet, it had labelling by the investigators. Exh. PS was labelled Al4 by the investigator. What I do remember is this labelling A14 and if that is removed I cannot remember it by looking at it, it appears the labelling has covered something which I cannot tell, I cannot dispute that this is not the very form which was brought to me. At the time it brought to me it had no any other writing. Just below the mark exhibit PS it appears that there was writings which were later elapsed. I cannot tell if the document was faxed or not. I cannot remember if the form had red ink or not what I look at is the mere Page 7 of 11 writings. The mark which enabled to identify exhibit P30 is the labelling AS." This testimony does not help the appellant in the least. It raises lots of doubt about the manner in which PW26 went about his duties as a handwriting expert, and goes a long way to discredit the prosecution evidence

in respect of the second count. Indeed, it leaves me of the decided view that the learned trial magistrate was right in reaching the conclusion that the prosecution failed to prove the offence of forgery against the 5th respondent. I see no error in the decision to acquit the 5th respondent of this count. Consequently, the learned trial magistrate was also right in his finding that the third count (uttering a false document) cannot stand, as it depended on a positive finding in respect of the second count. The fourth count is, as already stated, also significant. It was brought against all the respondents. It was alleged that they obtained money (Tshs. 338,935,337.46), by false pretenses. There was evidence to the effect that the money was credited into the account of East African Procurement Services Ltd. (EAPS) at CRDB Bank, Holland House Branch, Dar es Salaam. It is common ground that it was Exh. PS, a forged Form E17, which was used to effect the transfer. The dispute lies in who obtained the money? The appellant contends that it was the 1st, 3rd, 4th and 5th respondents who were involved. He relies on the testimony of PW12 Meseyesk who told the trial court that the 4th respondent Godwin Otullo is the owner, operator and signatory of EAPS. There was evidence to the effect that not long after the money was credited into EAPS' account, it was transferred into other accounts

and withdrawn in cash. However, the entire evidence shows that it was the 4th respondent, the owner of EAPS, who did all the withdrawals and transfers. Page 8 of 11 With respect to the other .respondents, the 3rd_respondent Robert Phares Mbetwa is the co-owner of Romos Technology Co. Ltd., which received Tshs. 120 Million from EAPS. PW23 Eva Buhate testified that the 3rd respondent paid the pt respondent Justice Katiti Tshs. 65,700,000/= through a cheque (Exh. P31) The other moneys were either withdrawn personally by the 3rd respondent, or paid to persons other than the respondents. There is thus no evidence whatsoever that shows that the 2nd, 4th and 5th respondents benefitted financially from the transactions. It is the appellant's case that the evidence against the 1st respondent is "overwhelming" because: One, he, under the auspices of Just Investment Company Ltd., received part of the proceeds (Tshs. 65,700,000/=) through Romos Technology, which was later transferred to the pt respondent's personal account at Barclays Bank, and a further sum of Tshs. 6,000,000/= from Romos Technology through a cheque. However, this count depends on the finding that the money was fraudulently obtained. Given my finding on the second count (where I held that there was doubt as to the culpability of the 5th respondent in the forgery), it is difficult to say whether the money that was

transferred , to EAPS account was the proceeds of a false pretense, such that the beneficiary thereof could be guilty of false pretense. The appellant also maintains that the 1st respondent used his position as an accountant at TRA's Large Taxpayers Department and posted false information into ITAX system, purporting to show that the said money was paid into Account No. 9921133501 of the Commissioner for Large Taxpayers, a fact which he knew to be untrue. This was the gist of the fifth and sixth counts, both against the 1st respondent. The relevant evidence in this regard was given by PW16 Moses Ndile, who produced the following documentary evidence to support his testimony: Exhs. P17 (Reconciled Revenue), P18 (Statement of Tax Account) and P19 (Single Record View). There was also the evidence that Page 9 of 11 . ' the 1st respondent was supposed to post information into the ITAX system by using Bank of Tanzania Statement of Account, but did not. However, argues the appellant, PW25 Grace Senge through PACS Statement (Exh. P34, a statement of Account from BOT) showed that the sum of Tshs. 338,935,327,461/= was not paid into the account of the Commissioner for Large Taxpayers No. 9921133501 on 30 th September 2008 as alleged by the 1st respondent. Due to these false entries by the 1st respondent, argues the learned Principal State Attorney, TRA could not detect the shortfall. It

is thus the appellant's case that the pt respondent not only benefitted from the fraudulent transaction, but personally participated as a principal offender in the commission of the offences. The gist of the case lies in two counts: the second (forgery) and the fourth (obtaining money by false pretenses). Unfortunately, the prosecution failed to prove, without leaving any reasonable doubt in the process, that the respondents (or any of them) were involved in the commission on these two crimes. It was in fact the prosecution's own witnesses who failed them. I have already ruled that the second count has not been proved to the required standard, largely because of the weaknesses in the prosecution's own evidence. The situation is not different as regards the fourth count. PW 16 told the trial court that there is a head of department above the 1st respondent who was responsible for recounting the work done by those under him and in case there was anything wrong, this should have been traced during reconciliation. No evidence of the reconciliation was brought to court to show that anything was wrong. PW 14's evidence was even more significant. He testified on the position of the Commissioner for Large Taxpayers' account at BOT. In so doing, he was non-committal, and said: Page 10 of 11 "The money might not be in this account which is for large taxpayers but be in another account

depending on error by the sender." It is obvious from this testimony that the money could have been posted into a different account within BOT if there was an error by the sender. One wonders as to why, after so much time since the alleged fraud was detected, a senior officer within BOT could still come to court and tell the court that the money could in fact be lying somewhere, in some other account, within BOT. Why was there no reconciliation done during all this time, such that the court could satisfy itself that the money was in fact diverted into some other person's account and misappropriated? Since the prosecution left unanswered the question as to whether the money might be in another account belonging to TRA within BOT, is it really safe to convict the respondents? The clear answer should be in the negative. A court cannot rely on evidence that is so contradictory to convict an accused person. With the fall of these two counts, there is nothing much left in the other counts, which cannot stand alone, but in conjunction with these two. The ultimate result of all the above is that the learned RM was entitled to find all the respondents not guilty of all the offences charged. His findings and orders are thus left undisturbed. The appeal is dismissed in its entirety. DATED and DELIVERED at Dar es Salaam this 21 st day of January 2015. F. Twaib

JUDGE Page 11 of 11