Assets Recovery Agency v Otieno; Yugni Holdings Limited & another (Interested Parties) [2024] KEHC 1155 (KLR) | Proceeds Of Crime | Esheria

Assets Recovery Agency v Otieno; Yugni Holdings Limited & another (Interested Parties) [2024] KEHC 1155 (KLR)

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Assets Recovery Agency v Otieno; Yugni Holdings Limited & another (Interested Parties) (Miscellaneous Application 51 of 2019) [2024] KEHC 1155 (KLR) (Anti-Corruption and Economic Crimes) (8 February 2024) (Judgment)

Neutral citation: [2024] KEHC 1155 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Anti-Corruption and Economic Crimes

Miscellaneous Application 51 of 2019

EN Maina, J

February 8, 2024

Between

The Assets Recovery Agency

Applicant

and

Jared Kiasa Otieno

Respondent

and

Yugni Holdings Limited

Interested Party

Cleanen Limited

Interested Party

Judgment

Introduction 1. This matter concerns the forfeiture application of two motor vehicles registration numbers KCD 966L Porsche Panamera and KCU 966C Bentley Continental GT belonging to the Respondent but registered in the names of the Interested Parties. The vehicles are alleged to be proceeds of crime.

2. On 22nd August 2019, the Applicant herein obtained a preservation order in respect of the two motor vehicles vide HCACEC Civil Application Number 36 of 2019, Assets Recovery Agency Vs Jared Kiasa Otieno. The order was granted under Sections 81, 82 and 83 of the Proceeds of Crime and Anti-Money Laundering act (the POCAMLA).

3. However, through a ruling delivered by Onyiego J, on 20th November 2019 in the same matter, the preservation order in relation to motor vehicle Registration Number KCD 966L was rescinded and set aside for reason that the motor vehicle was not tied to any criminal activity and was not therefore a proceed of crime. The preservation order in regard to motor vehicle KCU 966C was however maintained. It is intimated that the Applicant appealed the ruling of Onyiego J, to the Court of Appeal through Nairobi Civil Appeal No. 604 of 2019. The appeal is still pending.

The Parties 4. The Applicant is the Assets Recovery Agency established under Section 53 of the POCAMLA, as a body corporate with the mandate of identifying, tracing, freezing and recovering proceeds of crime. The agency has authority to institute civil proceedings for the recovery of proceeds of crime and to seek orders for their forfeiture to the government where there are reasonable grounds to believe that such property constitute proceeds of crime or instrumentalities of crime. The agency is also granted police powers under Section 53A of the POCAMLA to enable it investigate, identify, trace, freeze and recover proceeds of crime.

5. The Respondent is a Director of the 1st Interested Party, and is described in the Originating Motion as being the beneficial owner of motor vehicles KCD 966L Porsche Panamera and KCU 966C Bentley Continental GT. It is alleged that the Respondent is “part of an international syndicate which has been in existence since 2013 fraudulently obtaining from investors monies on pretense that they have precious metals including gold for sale”.

6. The 1st Interested Party is the registered owner of motor vehicle KCU 966C.

7. The 2nd Interested Party is the registered owner of the motor vehicle KCD 966L.

The Applicant’s case 8. The Applicant’s Originating Motion is premised on grounds that:- that the agency opened an inquiry file No. 8 of 2019 to investigate and inquire into the activities of the Respondent from the year 2014 with a view of identifying, tracing, freezing and forfeiture of proceeds of crimes under the POCAMLA; that the investigations arose from suspicion that the Respondent was part of an international syndicate which had been in existence since the year 2013 and which was fraudulently obtaining monies from investors on the pretext that it had precious metals, such as gold for sale; that investigations established that the Respondent acquired the motor vehicles in order to conceal, disguise the nature, source, location and disposition of funds from the unlawful activities through proxies and third parties including the law firm of Okundi and Company Advocates.

9. That the Respondent was charged with the offences of Conspiracy to defraud contrary to Section 317 of the Penal Code, obtaining money by false pretences contrary to Section 313 of the Penal Code and Counterfeiting trademarks contrary to Section 38 as read with Section 36 of the Penal Code vide Nairobi Chief Magistrate criminal case No. 844 of 2019.

10. That the Respondent had no source of legitimate income and had been filing nil tax returns with the Kenya Revenue Authority (KRA) during the period the said motor vehicles were acquired and the period of investigations.

11. That the motor vehicle registration number KCU 966C Bentley Continental GT 2019 which was purchased for a sum of USD. 453,907. 84 and registered in the name of Yugni Holdings Limited (1st Interested Party), to which the Respondent is a director, is a proceed of crime.

12. That the motor vehicle registration number KCD 966L Porsche Panamera 2015 purchased for Kshs. 16,731,000 which was initially registered in the name of the Respondent but currently registered in the name of Cleanen Limited (the 2nd Interested Party) is a proceed of crime.

13. It is also the Applicant’s case that while the investigations were ongoing, the Respondent conspired to have motor vehicle registration number KCU 966C Bentley Continental GT 2019 registered in the name of Yugni Holdings Limited, the 1st Interested Party, with the intention of disrupting and evading investigations and to conceal, hide and disguise its ownership.

14. The Applicant conceded that the preservation order in respect to motor vehicle KCD 966L Porsche Panamera was vacated by the court but contends however that there are reasonable grounds to believe that the motor vehicles are proceeds of crime.

15. It is the Applicant’s case that it is in the public interest that the orders sought are granted and the vehicles be forfeited to the Applicant; that there are justifiable reasons and grounds to warrant the issuing of the orders sought.

16. The application is supported by the affidavit of Cpl. Sautet Jeremiah, a police officer attached to the Applicant, sworn on 19th December 2019 which reiterates the grounds upon which the application is made and to which he has annexed served documents in support of the Applicant’s case.

17. Cpl. Sautet Jeremiah also deposes that on 24th May 2019 he obtained orders through CMMisc. Appln. No. 2203/2019 to investigate and inspect an account number 0100005472468 held at Stanbic Bank Limited in the name of Okundi and Company Advocates; that the investigations established that a company known as Simoung Company Limited transferred USD 3,051,281 to the said account; that subsequently, two instalments of USD 1,000,000 and 2,051,281 were transferred to the Respondent’s account; that USD 50,000 and USD 40,000 was then withdrawn from the law firm’s account by one Victoria Achieng’ Ramogi as business income and that there were fifteen other suspicious withdrawals from the same account by the same person between 1st March 2019 and 8th April 2019.

18. In regard to the purchase of the impugned vehicles, Cpl. Sautet deposed that the payments for the motor vehicles was done in instalments between 9th March 2018 and 16th April 2019 through the firm of Okundi and Company Advocates which firm was acting for the Respondent in the transaction. Cpl. Sautet reiterated that the motor vehicle Reg No KCU 966C Bentley was purchased for USD 453,897 and registered in the name of the 1st Interested Party, Yugni Holdings Limited, to which the Respondent is a director, while the Agency’s investigations were ongoing; that the motor vehicle KCU 966C was so registered on 8th April 2019; that the Respondent was arraigned and charged in Court on 21st May 2019; that as evidenced by CPR/2015/180948 the motor vehicle was then transferred to Cleanen Limited, 2nd Interested Party, which was not party to the sale agreement, which raises suspicion and constitutes reasonable ground to believe that the funds used to purchase the motor vehicle was proceeds of crime.

19. He further deposed that the Respondent has no known source of income as he had been filing “Nil Tax Returns” with KRA since 2014, when the subject motor vehicles were acquired; that the Respondent has no taxable income yet the combined value of the subject motor vehicles is approximately Kshs. 62,121,784 is also a reasonable ground to believe that the vehicles are proceeds of crime and thus the Applicant has proved on a balance of probabilities that the two vehicles are proceeds of crime.

20. Cpl. Sautet annexed the orders obtained in Misc Application 4415 of 2019 and Misc Application 4454 of 2019, which authorized the Agency to investigate and inspect NCBA Bank Account number 1000233826 and Prime Bank Account Number 300000307 both in the name of Okundi & Company Advocates. He also annexed a letter dated 17th December 2019 from the KRA confirming that the Respondent filed “Nil Tax Returns” from the year 2014 to the date of the Letter and an agreement for motor vehicle KCD 966L marked “SJ4” indicating the name of the Respondent as the customer and the price as USD 357,897.

21. Also annexed is a payment schedule in respect of the motor vehicle KCU 966C, the log book for the vehicle, agreements in respect of the purchase of vehicle, the price and the mode of payment. Also annexed are statements of the bank accounts from which the monies were paid and a charge sheet evidencing the arraignment of the Respondent in court for various offences.

The Respondent’s case 22. The Originating Motion is vehemently opposed. In his replying affidavit dated 5th April 2022 filed herein on even date, he deposes that he is the Director of the 1st Interested Party competent to swear an affidavit on its behalf and that he bears the authority of the 2nd Interested Party to swear an affidavit on its behalf; that he is an honest businessman with lawful dealings locally and internationally; that he was tax compliant and had a tax compliance certificate as proof; that the Applicant has not demonstrated a causal link between the criminal case and the impugned vehicles on a balance of probabilities; that he never had dealings with the complainant in the criminal case; that he was neither a party nor a witness to the transaction and loan agreement that is the subject of the criminal case and that the only nexus between him and Rose Adhiambo Omamo was that they shared legal representation by the firm of Okundi & Company Advocates.

23. He further deposed that motor vehicle KCD 966L was purchased in the year 2015, four years before the criminal allegations. He contended that the Applicant has not established any causal link between the purchase of that vehicle and any criminal offence or illegal activity and thus it has not discharged its burden of proof.

24. As regards the registration of the motor vehicles in the name of the Interested Parties, he explained that it was done in good faith without any intention of disrupting investigations as alleged by the Applicant. He contended that inclusion of motor vehicle Registration Number KCD 966L to these forfeiture proceedings is in violation of Section 90(1) of the POCAMLA given that the preservation order concerning it was rescinded by the Court.

25. The Respondent filed a Supplementary Replying Affidavit dated 11th September 2022. According to the CTS (Case Tracking System) the said supplementary replying affidavit was filed on 18th September 2023 at 12. 10hrs. In the affidavit he reiterated the contents of his replying affidavit and further deposed that the monies paid on his behalf by Okundi & Co. Advocates to the dealers of Bentley, RT (East Africa) Limited, was an agent commission duly earned by himself in a land transaction between Kanaiya Ole Rotiken Sapuru and Euro Ceramics Limited; that he acted as an agent in that transaction. He annexed the said sale agreement to the affidavit. He urged this court to dismiss the Originating Motion.

26. Learned Counsel for the parties filed written submissions in support of their cases.

The submissions of the Applicant 27. Mr. Githinji, Learned Counsel for the Applicant, submitted that the Respondent is the beneficial owner of the impugned vehicles having purchased both of them; that the Respondent entered into an agreement with one Sounthorn Chantavong, a Director of Simoung Company Limited, for advancement of USD 3,000,000, where Okundi & Company Advocates who acted for both parties, received the funds and distributed to several beneficiaries; that the motor vehicle KCD 966L was purchased through two payments/instalments of Kshs.10 million by the firm of Okundi & Company Advocates, while payment for MV KCU 966C was in several instalments.

28. Counsel argued that there is reasonable suspicion that the transactions in respect to the purchase of the motor vehicles is dubious, scrupulous and hence constitutes reasonable grounds to believe that the source of funds is crime. Counsel relied on Section 92(1) of the POCAMLA which provides that:-“The High Court shall make an order for forfeiture, if it finds on a balance of probabilities that the property concerned: -a.Has been used or is intended to be used in the commission of an offense; orb.Is proceeds of crime.”

29. Counsel further submitted that forfeiture proceedings are civil in nature and the standard of proof is on a balance of probabilities. For this he placed reliance on the case of Director of Assets Recovery and Others, Republic -v- Green & Others (2005) EWHC 3168 as cited in the case of Assets Recovery Agency -v- Pamela Aboo, EACC (Interested Party) (2018) eKLR where the Court held: -“In Civil proceedings for recovery under Part 5 of the Act, the Director need not allege the Commission of any specific criminal offense but must set out the matters that are alleged to constitute the particular kind or kinds of unlawful conduct by or in return for which the property was obtained. The proceedings before this court are to determine the criminal origins of the property in this issue and are not a criminal prosecution against the Respondent where presumption of innocence is applicable.”

30. Counsel submitted that the position in the above case is anchored in Section 92(4) of the POCAMLA which provides that “the validity of an order under sub-section (1) is not affected by the outcome of criminal proceedings, or of an investigation with a view to institute such proceedings, in respect of an offense with which the property concerned is in some way associated.”

31. Counsel contended that the subject vehicles are proceeds of crime, derived from the offenses of money laundering contrary to Section 16 of the POCAMLA and Obtaining Money by False Pretenses contrary to Section 313 of the Penal Code.

32. Counsel also relied on the case of Revision of People -v- Laito (Appeal No. 291/2014) (2015) zmsc 26 (1 June 2015) where the Supreme Court of Zambia stated:-“To prove reasonable suspicion under Section 71(1) of the act, therefore, the prosecution does not have to show the link between the source of the money or the accused to possible criminal conduct. It is sufficient that possession and reasonable suspicion are proved”.

33. Counsel further submitted that the burden of proof is on a balance of probabilities and there is an evidential burden of proof on the Respondent to demonstrate how they came into possession of the property in question. For this Counsel relied on the case of Assets Recovery Agency -v- Quorandum Limited & 2 Others [2018] eKLR where the Court stated: -“Civil proceedings are proceedings in rem (against the property ... The proceedings are to determine the criminal origins of the property in issue and are not a criminal prosecution against the respondents where presumption of innocence is applicable.”

34. The Applicant submitted that in this case it had discharged its burden of proof on a balance of probabilities and urged this court to allow the Originating Motion.

35. In support of his submissions Counsel also placed reliance on the following cases: - Schabir Schaik & Others -v- State Case CCT 86/06 (2008) ZACC 7

Director of Assets Recovery and Others -v- Green & others (2005) EWHC 3168

ARA & Others -v- Audrene Samantha Rowe & Others Civil Division Claim No. 2012 HCV 02120 the Court of Appeal of Jamaica

Abdulrahman Mahmoud Sheikh & 6 Others -v- Republic & Others (2016) eKLR

Miller -v- Minister of Pension (1947)2 ALL ER 372

ARA -V- Fisher, Rohan and Miller, Delores, Supreme HCV Court of Jamaica, Claim No. 2007 HCV003259

Kenya Anti-Corruption Commission -v- Stanley Mombo Amuti (2017) eKLR.

The submissions of the Respondent and the Interested Parties 36. Mr. Ong’undi, Learned Counsel for the Respondent and the Interested Parties, submitted that the preservation order over motor vehicle KCD 966L was rescinded before this Originating Motion was filed upon the Court finding that it was not a proceed of crime. He contended that the current application in so far as it concerns that motor vehicle is in breach of Section 90(1) of the POCAMLA which states that: “If a preservation order is force, the Agency Director may apply to the High Court for an order forfeiting to the Government all or any of the property that is subject to the preservation order.”

37. Counsel submitted that the POCAMLA provides a clear sequence on how and when forfeiture applications should be instituted that the Applicant has to start with an ex parte application for preservation orders as provided in Section 82 of the Act before instituting a forfeiture application under Section 90; that the application for forfeiture can only be made after preservation orders have been issued and are in force; that in this case, the preservation order in respect to motor vehicle KCD 966L was rescinded before the forfeiture application was made and as such the current proceedings against the motor vehicle are Res Judicata and are a nullity. Counsel contended that the court determined on merit that motor vehicle KCD 966L was not a proceed of crime and the Applicant should not be allowed to invite this court to sit on appeal against its own finding. For this Counsel relied on the case of Henderson v Henderson (1843) 67 ER 313 cited with approval in the case of Dioceses of Eldoret Trustees (Registered) v Attorney General (on behalf of the Principal Secretary Treasury) & another [2020] eKLR and where it was held: -“The pleas of Res Judicata applies except in special cases, not only to points upon which the court was actually required by the parties to form an opinion and pronounce a judgement, but to every point which properly belonged to the subject of litigation, and which the parties exercising reasonable diligence, might have brought forward at the time.”

38. Counsel submitted that the Applicant did not adduce any new evidence in regard to the motor vehicle KCD 966L other than that which was relied on in the application for preservation orders.

39. As regards motor vehicle KCU 966C, Counsel submitted that the Applicant did not demonstrate the correlation between it and the alleged USD 3,000,000 that is subject of the criminal proceedings. Counsel contended that the criminal investigations commenced in the year 2019 whereas the Respondent explained that he purchased the motor vehicle with Kshs. 22,000,000 which he earned as an agent commission in a land transaction in 2018. Counsel argued that this position was not rebutted by the Applicant. He asserted that the Respondent made a full disclosure of the source of funds used to purchase the motor vehicle.

40. Counsel further submitted that the Respondent was not a party to the alleged fraudulent loan agreement for USD 3,000,000 neither was he a witness or guarantor.

41. Counsel stated that the Applicant had failed to link the Respondent with any criminal activities and the application is premised on mere suspicion and postulation. He opined that Section 92 of the POCAMLA places a duty on this court to satisfy itself that the motor vehicle has been used or is intended for use in the commission of an offense or is a proceed of crime.

42. Counsel also submitted that the Applicant failed to consider the rules of evidence as provided in Sections 107 and 108 of the Evidence Act, which sections place the burden of proof on the person alleging the facts to prove them. He urged this court to strike out the Originating Motion with costs.

43. Counsel cited the following cases in his submissions: - Henderson v Henderson (1843) 67 ER 313

Haryanaa v Mukesh Kumar & others

Evelyn College of Design Limited v Director of Children’s Department & anor (2013) eKLR.

Bahadurali Ebrabim Shamii y, A Noor Jamal & 2 others (1998) eKLR.

Ethics and Anti-Corruption Commission v Joseph Chege Gikonyo & Anor (2016) eKLR.

EACC V Ministry of Medical Services & Anor (2012) eKLR.

Director of Assets Recovery and others v Green R Others (2005) EWHC 3168.

The Issues for determination 44. Having considered all the material placed before me by this court I opine that the issues for determination are:-i.Whether motor vehicle KCD 966L and KCU 966C are proceeds of crime liable for forfeiture to the Government.ii.Who should bear the costs of these proceedings.

Issue (i) - Whether motor vehicle KCD 966L and KCU 966C are proceeds of crime liable for forfeiture to the Government. 45. On this issue Learned Counsel for the Respondent submitted that the POCAMLA, anticipates a sequence within which property that is used, intended to be used, or is proceeds of crime can be preserved and then forfeited. He submitted that the preservation order in respect to subject motor vehicle KCD 966L was rescinded by a ruling delivered by Onyiego J and that once the preservation order was lifted, that vehicle could no longer be subject to an application for forfeiture. On his part, Counsel for the Applicant argued that the Applicant had appealed the decision of Onyiego J. However, there is no evidence that the decision was lifted or stayed by the Court of Appeal and whereas Section 97 of the POCAMLA are to the effect that the preservation order still subsists, the decision being that of a court of concurrent jurisdiction this court has no alternative but to give deference to it as doing otherwise would be akin to sitting on appeal over it which I cannot do. In the premises, I find that motor vehicle registration No. KCD 966L cannot be the subject of these proceedings and shall be so excluded.

46. As for motor vehicle KCU 966C, it is alleged that it was acquired with proceeds of a fraudulent transaction which is the subject of criminal proceedings in Nairobi Chief Magistrate’s Crim. Case Number 844 of 2019; that the funds were fraudulently obtained from one Simoung Company Limited and deposited into the account of Okundi and Company Advocates before being paid to the sellers. The Applicant contended that it had discharged its burden of proof by demonstrating that the Respondent had no declared source of income as he filed nil tax returns with the KRA yet he was able to purchase the subject motor vehicles; that the Respondent was involved in a scheme to defraud Simoung Limited. The Respondent disputed those allegations and contended that the money used to purchase the motor vehicle was a commission earned from a land transaction where he acted as an agent; that it is just a coincidence that the consideration for the vehicle was paid through the firm of Okundi & Company Advocates which is the same firm that handled the transaction the subject of the criminal case where he is one of the accused persons.

47. I have considered the evidence by both sides carefully. The place to begin is Section 2 of the POCAMLA which defines “proceeds of crime” to mean:-““"proceeds of crime" means any property or economic advantage derived or realized, directly or indirectly, as a result of or in connection with an offence irrespective of the identity of the offender and includes, on a proportional basis, property into which any property derived or realized directly from the offence was later successively converted, transformed or intermingled, as well as income, capital or other economic gains or benefits derived or realized from such property from the time the offence was committed.”

48. For this court to forfeit any property, it must be satisfied that the property is a proceeds of crime as defined above or that it has been used or is intended to be used in the Commission of an offence. The standard of proof is on a balance of probabilities as provided in Section 92(1) of the POCAMLA.

49. Section 92(4) of the POCAMLA however makes it clear that the Applicant need not prove the commission of an offence. The Section states: -“(4)The validity of an order under subsection (1) is not affected by the outcome of criminal proceedings, or of an investigation with a view to institute such proceedings, in respect of an offence with which the property concerned is in someway associated.”

50. The forfeiture proceedings are not intended to establish the criminal culpability of the owner of the property but the unlawful source of the property itself. The principle was explained in the case of Director of Assets Recovery and Others, Republic v Green & Others (2005) EWHC 3168 where the court held that:“In civil proceedings of recovery . . . the Director need not allege the commission of any specific criminal offense but must set out the matters that are alleged to constitute the particular kind or kinds of unlawful conduct by or in return for which property was obtained”.

51. The position has also been followed by our courts in several cases as that indeed is the law as provided in Section 92(4) of the POCAMLA.

52. It was however explained in the case of Director of Assets Recovery and others, Republic v Green & Others (supra) that the Applicant must “demonstrate the particular kind or kinds of unlawful conduct by or in return for which the property was obtained.”

53. It is, as in all civil cases, a principle that the burden of proof first lies with the Applicant to demonstrate that the property is tainted whereupon the evidential burden shifts to the Respondent. In the recent decision of the Court of Appeal in the case of Pamela Aboo v Assets Recovery Agency & Ethics and Anti-Corruption Commission, it was held that even then the evidential burden is not static but keeps shifting between the Applicant and the Respondent. This as was held by Warsame JA, that: -“38. The legal burden lies only on one of the parties and does not shift to the other party throughout the length and breadth of the trial. Section 108 explains that the burden of proof in a suit or proceeding lies on that person who would fail if no evidence at all were given on either side.

39. On the other hand, evidential burden refers to the obligation on a party to adduce sufficient evidence of a particular contested fact in order to justify a decision on that fact in his favour. It is also elementary that in civil cases, the standard of proof required is on a balance of probabilities or on preponderance of evidence. A litigant who fails to discharge the evidential burden in a case carries the risk, he may lose the whole or some part of the case. Furthermore, unlike the legal burden, the evidential burden is not static: it keeps shifting between the parties throughout the course of the trial.”

54. Warsame JA also held that:-“In discharging its legal burden, it was therefore incumbent upon the respondent to establish the source of benefits, the type of benefit and the beneficiary. The primary issue for determination by the trial court was whether the respondent had discharged its burden by proving that the property to be forfeited is indeed the product of criminal activity. In my considered view, it must be shown that the proceeds were a product of a criminal act and there must be a causal connection between the proceeds and the offence.”

55. The Court of Appeal faulted the High Court for applying the provisions of Section 112 of the Evidence Act to find that the Respondent was obligated to explain the source of her funds. Warsame JA stated: -“59. Again, I do not agree with the respondent’s reliance on section 112 of the Evidence Act that in the circumstances where the facts in question were especially within the knowledge of the appellant, the burden of proving the legitimacy of the funds rested with her. It was not impossible, for instance, for the respondent to contact the two business partners using the contacts provided by the appellant or to establish even one of the alleged corrupt dealings of the appellant’s husband. In saying so, I am guided by the decision in Gatirau Peter Munya v Dickson Mwenda Kithinji & 2 Others [2014] eKLR where the Supreme Court clarified the invocation of section 112 of the Evidence Act as follows:

“[187] But Section 112 of the Evidence Act is not to be invoked without regard to the preceding sections, especially Section 107 (1) and (2) of the same Act which provide as follows:“(1) Whoever desires any court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts must prove that those facts exist.(2)When a person is bound to prove the existence of facts it is said that the burden of proof lies on that person”....(189)Section 112 of the Evidence Act, on which thelearned Judges of Appeal placed reliance, is an exception to the general rule in Section 107 of the same Act. Section 112 was not meant to relieve a suitor of the obligation to discharge the burden of proof. The Supreme Court of India, in Shanbhu Nath Mehra v. State of Ajmer AIR 1956 SC 404, considered the import of Sections 106 and 101 of the Indian Evidence Act (which are in pari materia with Sections 112 and 107 of our Evidence Act), as follows:“Section 106 is an exception to Section 101. Section 101 lays down the general rule about the burden of proof. ‘Whoever desires any Court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts, must prove that those facts exist.’…This lays down the general rule that in a criminal case, the burden of proof is on the prosecution and Section 106 is certainly not intended to relieve it of that duty. On the contrary, it is designed to meet certain exceptional cases in which it would be impossible, or at any rate disproportionately difficult, for the prosecution to establish facts which are ‘especially’ within the knowledge of the accused and which he could prove without difficulty or inconvenience.” 60. As was clearly and correctly held by the Supreme Court,

Section 112 of the Evidence Act is not a panacea for poor and disjointed investigations on the part of the respondent to just say, we think the money is illegally obtained and the court must give orders without property evidence. It was the duty of the respondent to demonstrate the monies in the account of the appellant was not proportionate to her income, therefore not a legitimate source of income. The connection or conduit must be clearly proved to the satisfaction of the court. 61. Again, the trial fell into error, with respect by saying

that the respondent has not attempted to explain the source of money. I don’t understand how the trial court arrived at the said conclusion, when the appellant gave the sources of the funds together with all details of the depositors or business partners. The moment the appellant gave the details of her business partners and sources of income, the evidential burden shifted to the respondent.”

56. Applying all the above principles of law to this case my finding is that the Applicant has discharged the legal burden placed upon it by Sections 107 and 108 of the Evidence Act. It is not disputed that the consideration for the motor vehicle KCU 966C was Kshs. 20 million paid to the seller by Okundi & Co. Advocates in two instalments. It is my finding that the Applicant has also adduced evidence, on a balance of probabilities, that at the material time the Respondent and the Interested parties were not engaged in any form of business or trade which could have afforded them that kind of money or any portion of it.

57. Section 8 (a) as read with Section 11 and 12 of the Tax Procedure Act, 2015 obligates all individuals who expect to generate an income to register as tax payers and to obtain a PIN (Personal Identification Number). Section 8 states: -“8. Registration of taxpayers (1) A person who —a.has accrued a tax liability or who expects to accrue a tax liability under the Income Tax Act (Cap. 470) or the Value Added Tax Act (Cap. 476);b.expects to manufacture or import excisable goods; orc.expects to supply excisable services;Shall apply to the Commissioner to be registered.......”Section 11of the Act states:-“11. Personal identification numberThe Commissioner shall issue a number, to be known as a personal identification number (“PIN”), to a person registered for the purposes of a tax law and that person shall use the PIN as may be required under this Act.”

Section 11 of the Act states:- 12. Issue of a PIN1. The Commissioner shall issue a PIN to a person registered under section 8. 2.A registered person shall use a PIN for the purposes of all tax laws and a registered person shall be issued with only one PIN at any time....”

58. All persons registered as tax payers are required by law to file self-assessed tax returns annually and even where a person does not generate any income they are nevertheless required by law to file nil tax returns. (See Section 24(1) and Section 28(1) of the Tax Procedures Act, 2015) The Applicant produced a letter dated 17th December 2019 (Exhibit “SJ2”) from KRA to the effect that the Respondent who is the holder of PIN A0058927304 had filed nil tax returns from 2014 to the date of the letter. It is my finding that by filing a nil tax return the Respondent was saying that he had not generated any income during that period, which period includes that which he acquired the vehicle. There is also, in my considered view, evidence that the Respondent was arrested in circumstances which gave rise to reasonable grounds to believe that he was involved in activities which may have been unlawful. It is not lost to this court that the funds from Okundi & Co. Advocates from which the consideration for the vehicle is alleged to have been derived was the subject of suspect dealings and that ultimately the Respondent was arraigned in court for fraud related offences.

59. It is my finding that the Applicant having demonstrated on a balance of probabilities that the Respondent had no legitimate source of income it has discharged the legal burden and the evidential burden therefore shifts to the Respondent to prove that he acquired the motor vehicle lawfully.

60. In his Replying Affidavit sworn on 5th April 2022 the Respondent disputed all the averments of the Applicant and deposed that he is an honest business man, that his dealings both locally and internationally were lawful and that he had been dutifully paying his taxes as evidenced by a certificate of compliance. He distanced himself from the allegation that he was involved in any fraud and stated that the only connection between him and the person to who money was fraudulently paid was that they shared an advocate, to wit, the firm of Okundi & Co. Advocates. He deposed that his relationship with the said firm had been cultivated over a period of ten (10) years when he purchased the motor vehicle KCD 966L in the year 2015, four years before the allegation made by Simuong Company Limited.

61. It is instructive that in the Replying Affidavit dated 5th April 2022 he makes no mention of the source of funds used to acquire motor vehicle KCU 966C preferring instead to merely depose that no causal link had been established between his property and the offence he was charged with. The averment that he acquired the motor vehicle with a commission of Kshs. 22 million earned upon him acting in a land transaction was made in a supplementary replying affidavit which though it is dated 11th September, 2022 was filed in court on 18th September 2023. In the CTS it is indicated that it was filed on 18th September 2023 at 12. 10 p.m. The interesting thing is that no leave was sought to file this supplementary replying affidavit. There is also nothing on the record to prove that the affidavit was served upon the Applicant.

62. Any pleading filed without the leave of the court is fodder for striking out and the Respondent’s Supplementary Replying Affidavit must be and is hereby struck out. My so holding finds support in the case of Assets Recovery Agency v Charity Wangui Gethi & 3 others [2020] eKLR where the Court of Appeal upheld the refusal by the High Court (Onyiego J), to rely on a supplementary affidavit which was filed, out of the time limited by the court, without leave. Onyiego J, had relied on the decision of the Court of Appeal in the case of Nicholas Kiptoo Salat v IEBC & 6 others [2013] eKLR to expunge the affidavit. His holding which was the subject of the application for revision in the Court of Appeal was:-“12. I am therefore left with the ground of whether there is any other reasonable cause persuasive enough to warrant review of the orders of 4th July 2018 declining filing and service of the further affidavit outside time. Grant of orders to extend time is an issue that falls squarely within the discretion of the court. It is a creature of equity which can be enjoyed only if one seeking to enjoy it acts equitably. Extension of time is not an automatic right to a litigant. It is subject to proof that the applicant acted reasonably in the circumstances in complying with the orders. In the case of Nicholas Kiptoo Salat vs IEBC and 6 Others (2013) eKLR the court of appeal held that courts must never provide comfort and cover to parties to exhibit scant respect for rules and time lines hence, the applicant cannot invoke Article 159 (2) (d) of the Constitution to oust mandatory rules of procedure.

13. Unfortunately, the applicant went ahead and filed a further affidavit without seeking leave to extend time. I do not find sufficient reason for the delay in filing a further affidavit for more than an year. The applicant has not demonstrated due diligence in doing what they were required to do. I have not been persuaded enough to review my orders of 4th July 2018. Accordingly, application for review dated 19th September 2018 be and is hereby dismissed and the supplementary affidavit filed on 4th July 2018 without leave of the court expunged from the court record.”

63. Having struck out the supplementary replying affidavit for being filed without leave the Respondent is left with no evidence to prove the source of funds. In any event even had I not struck out the affidavit there is nothing to prove that the Respondent in fact acted as a commission agent, let alone that he was licensed to do so. The agreement per se is not proof that he was paid Kshs. 22 million as a commission. His case is distinguishable from that of the Court of Appeal of case of Pamela Aboo (supra) in that he did not give the full particulars of the persons who he had acted for as would have enabled the Applicant to carry out further investigations. He did not also produce an agreement that he was to receive a commission. Moreover, as I have already stated this affidavit and the sale agreement was not served upon the Applicant and indeed the Applicant has made no mention of it in its submissions. It is also instructive that although his Advocate attended court on 27th September 2023 when directions in the manner of disposal of the Originating Motion dated 19th December 2019 were given, he made no mention of the Supplementary Replying Affidavit.

64. The upshot is that there is no evidence that the Respondent was engaged in any lawful business, as is evidenced by the nil tax returns, and there being no admissible evidence of him having earned a commission from a land transaction as he alleges, the Applicant’s evidence that the Respondent had no legitimate business or at all is uncontroverted. It is therefore my finding that the Applicant has proved on a balance of probabilities that the motor vehicle KCU 966C is a proceed of crime.

65. Having come to the conclusion that the vehicle is a proceed of crime, it is also my finding that it is also liable for forfeiture. As stated earlier motor vehicle KCD 966L is excluded from these proceedings in view of the ruling of Onyiego J, dated 31st October 2018.

66. Costs follow the event and the Respondent shall therefore bear the costs of these proceedings.

67. In the premises, I enter judgment in favour of the Applicant against the Respondent as follows: -1. That a declaration be and is hereby issued that motor vehicle Registration NO. KCU 966C is a proceed of crime.2. That motor vehicle KCU 966C be and is hereby forfeited to the Government.3. That the costs of these proceedings shall be borne by the Respondent.

SIGNED, DATED AND DELIVERED VIRTUALLY ON THIS 8TH DAY OF FEBRUARY 2024. .......................E N MAINAJUDGE