Izwe Loans Kenya Limited v County DCI, Turkana County & another [2022] KEHC 13993 (KLR)

Izwe Loans Kenya Limited v County DCI, Turkana County & another (Criminal Revision E118 of 2021) [2022] KEHC 13993 (KLR) (13 October 2022) (Ruling)

Neutral citation: [2022] KEHC 13993 (KLR)

Republic of Kenya

In the High Court at Lodwar

Criminal Revision E118 of 2021

JK Sergon, J

October 13, 2022

(Formerly Kitale High Court Criminal Review No. 254 of 2021)

Between

Izwe Loans Kenya Limited

Applicant

and

County DCI, Turkana County

1st Respondent

Executive Officer Finance County Government of Turkana

2nd Respondent

Ruling

1. By a Notice of Motion dated November 18, 2021, together with a Supporting Affidavit sworn by Ms Melanie Chepkoech Limo, evenly dated; the Applicants sought for, inter alia, the following orders:i.Spentii.This Honourable Court be pleased to stay the ex-parte orders of the Chief Magistrate's Criminal Court at Lodwar issued on October 8, 2021 in Miscellaneous Criminal Application No E 077 of 2021 DCI Turkana County -versus- The Manager lzwe Loans Lodwar Branch and The Executive Officer Finance Turkana County pending the hearing and determination of this Application.iii.This Honourable Court be pleased to call for the court file of the criminal proceedings in Miscellaneous Criminal Application No E 077 of 2021 DCI Turkana County - versus- The Manager lzwe Loans Lodwar Branch and The Executive Officer Finance Turkana County for purposes of examination and revision.iv.This Honourable Court be pleased to examine and revise the record of the criminal proceedings in Miscellaneous Criminal Application No E077 of 2021 DCI Turkana County -versus- The Manager lzwe Loans Lodwar Branch and The Executive Officer Finance Turkana County for the purpose of satisfying itself as to the correctness, legality or propriety of the findings in the order issued on or about October 8, 2021 in which the Honourable Magistrate improperly, unprocedurally and unlawfully issued ex-parte orders of permanent injunctions directing the 2nd Respondent to immediately cease or stop the monthly deductions based on an alleged criminal complaint by Omar Wayu Abio payroll number xxxxxxx.v.This Honourable Court be pleased to vacate, revise, review and set aside the ex-parte orders of permanent injunctions dated October 8, 2021 directing the 2nd Respondent to cease or stop the monthly deductions based on an alleged criminal complaint by Mr Omar Wayu Abio of payroll number xxxx and to dismiss the application in Miscellaneous Criminal Application No E077 of 202l DCI Turkana County - versus- The Manager lzwe Loans Lodwar Branch and The Executive Officer Finance Turkana County.vi.The costs of this Application be provided for.

2. On December 9, 2021, this court allowed prayers for: to stay the ex-parte orders of the Chief Magistrate's Criminal Court at Lodwar issued on October 8, 2021 pending the hearing and determination of this Application; and called for the court file of the Magistrates criminal proceedings for purposes of examination and revision.

3. The Application is unopposed.

4. The Applicant’s case was that on various dates between January 15, 2018 and July 19, 2021, Mr Omar Wayu Abio, the complainant herein, borrowed and guaranteed from the Applicant various salary backed loan facilities aggregating to a sum Kes 3,386,000 on contractual agreement that he will repay the same on monthly instalments to be deducted from his salary.

5. That on October 8, 2021, the Honourable Chief Magistrate's Criminal Court at Lodwar, issued an order allowing No xxxx PC Mubarak Mumbo to access the loan application forms, statement of accounts, Applicant's stamp impressions, specimen of known signatures of Applicant's officials that is, Benson Lomong, Linda Cherugut, and Elimo Loor. That further, the Honourable Magistrate's Court further issued an ex-parte permanent injunction order directing the 2nd Respondent to immediately cease or stop the monthly deductions of Mr Omar Wayu Abio's salary towards repayment of the loan as per the loan agreement.

6. It is the Applicant’s case that the above orders in question were issued unprocedurally and unlawfully on the premise that an investigation is being undertaken by DCI Turkana County on account of malicious and false complaint lodged by Mr Omar Wayu Abio against the Applicant.

7. The Applicant asserted that it is not aware of any criminal investigations lodged against it, as it has not been summoned by the DCI Turkana County to record statement, to assist where necessary in any alleged investigations being undertaken. That proper investigations would have revealed that the Complainant is acting in bad faith and there is no basis whatsoever for lodging a complaint with the police.

8. That in any event, the complaint by Mr Omar Wayu Abio is still under investigations and as such issuing the Ex parte orders ceasing or stopping payment of the loan facility is drastic yet the borrower has enjoyed and continues to enjoy the various loan facilities.

9. In the main, the Applicant contended that the orders were excessive with key emphasis on the order of permanent injunctions stopping and/or barring the 2nd Respondent from continuing with the monthly loan deductions. Also that the adverse orders were issued Ex-parte against the Applicant without offering the Applicant an opportunity to be heard contrary to the tenets of the right to fair hearing provided under Article 50(1) of theConstitution of Kenya. 2010.

10. Additionally, that the criminal proceedings in Miscellaneous Criminal Application No E077 of 2021 are in the nature of a Miscellaneous Application, with no suit for determination, and consequently the Court cannot grant permanent orders on a miscellaneous application, as the orders lack limitation as to when they will lapse.

11. Further, that the Directorate of Criminal Investigation has no legal capacity to bring a suit on behalf of a borrower, in this case Mr Omar Vayu Abio, who contracted with the lzwe Loans Kenya Limited, Lodwar Branch, to acquire various loan facilities.

12. In the end, the Applicant posited that it was condemned unheard and the Ex parte orders issued warranted prejudice on its part occasioning injustice. Therefore, the Applicant prayed for this Honourable Court to vacate, revise, review and set aside the Ex-parte Order of permanent injunction directing the 2nd Respondent to cease or stop monthly deductions of Omar Wayu Abio's salary.

13. Further, in advancing their case, the Applicant submitted that principles of revisionary jurisdiction include: (a) Where the decision is grossly erroneous, (b) Where there is no compliance with the provisions of the law, (c) Where the finding of fact affecting the decision is not based on the evidence or it is result of misreading or non-reading of evidence on record, (d) Where the material evidence on the parties is not considered (e) Where the judicial discretion is exercised arbitrarily or perversely if the lower court ignores facts and tries the accused of lesser offence. Reliance was placed on the case of Criminal Revision No 9 of 2018- Prosecutor v Stephen Lesinko [2018] eKLR.

14. The Applicant presented the following issues for determination:i.Whether the Honourable Court Criminal Magistrate has jurisdiction to issue orders of permanent injunction barring a contractual Agreement;ii.Whether the Respondent and the prosecution have legal capacity to institute the suit on behalf of the Complainant; andiii.Whether the Ex-parte Order dated October 8, 2021 should be reviewed and varied.

15. On issue (i) as above, it was their submission that the Magistrates Court in Miscellaneous Criminal Application No E077 of 2021 lacked jurisdiction to issue the orders dated October 8, 2021, in particular the injunctions barring monthly deductions of the Complainant to the Applicant, without giving the other contracting party, being the Applicant herein, an opportunity to be heard. Further, that disputes relating to a contract are settled and/or litigated in a civil court as they are civil in nature. Reliance was placed on the case of Owners of the Motor Vessel 'Lillian S' v Caltex Oil (Kenya) Ltd (1989).

16. It was their further submission that its undisputed there is an existence of a loan agreement and a disbursed facility of aggregating to a sum Kes 3,860,000, on contractual agreement that it be repaid on monthly instalments to be deducted from his salary.

17. Further, that as a collateral to the loan facility, the loaned/complainant assigned, transferred and made over his rights, title and interest in the Credit Life Policy provided by Pan African Life Assurance Limited, and authorized the Applicant to collect and receive premium on his behalf.

18. The Applicant asserted that the instant dispute is civil in nature - arising from contractual agreement, but that the complainant is trying to settle the dispute through a criminal process. That when dealing with situations where there exist criminal and civil proceedings arising from the same facts, the court in Petition No 461 of 2012- Francis Kiri ma M'ikunyua & Others vs Director of Public Prosecutions, observed that,'It is very clear that the criminal process and the resultant court proceedings are being used to settle what is otherwise civil dispute which has been the subject of several court cases and indeed decisions. In criminal cases the State's coercive power is brought to bear upon the individual and where we have an inefficient system to settle civil claims, a person who can tie his opponent in the criminal justice system and ultimately secure a conviction will no doubt have an advantage over his opponent.'

19. It was averred that the Complainant has since owed the Applicant outstanding sums and should not use the criminal justice system through the 1st Respondent to delay his monthly remissions to the Applicant. That in Republic v Director of Public Prosecutions & 3 others Ex-Parte Bedan Mwangi Nduati & another [2015] eKLR cited with approval the High Court case of Kuria & 3 Others vs Attorney General [2002] 2 KLR 69, the court observed that,'The Court has power and indeed the duty to prohibit the continuation of the criminal prosecution if extraneous matters divorced from the goals of justice guide their instigation. The machinery of criminal justice is not to be allowed to become a pawn in personal civil feuds and individual vendetta.'

20. It was the Applicants position that the Criminal Magistrate Court cannot grant especially ex-parte orders of permanent orders of injunctions on a criminal Miscellaneous Application; and that in this case, there is no suit pending before Court for determination and the orders do not have a limitation as to when they will lapse. Further, that the permanent injunctions were granted without an opportunity for the Applicant to be heard, contrary to tenets of the right to fair hearing provided under Article 50 (1) of the Constitution of Kenya, 2010. The case of Nyamira vs The Chief Land Registrar & Another [2005] eKLR was relied upon.

21. That the Application by the 1st Respondent leading to the orders of permanent injunctions, was right from the outset, incurably defective and incompetent as the same was not in the nature to be granted as the final orders and would require further interrogations. Reliance was placed on the case in the High Court Miscellaneous Application No 236 of 2018, Anastacia Wagiciengo v Ezekiel Wafula [20I8] eKLR.

22. The Applicant prayed that this Honourable Court vacate, revise, review and set aside the ex-parte orders of permanent injunction barring the 2nd Respondent from deducting monthly instalments from Complainant's salary towards repayment of the loan.

23. That the Honourable Court in in Miscellaneous Criminal Application No E077 of 2021 DCI Turkana County -versus- The Manager lzwe Loans Lodwar Branch and The Executive Officer Finance Turkana County has no jurisdiction in the matter as it is civil in nature and the suit is a nullity ab initio and pray that the same be struck out and orders of October 8, 2021 be set aside and/or revised.

24. On issue (ii), the Applicant submitted that the 1st Respondent and the prosecution have no legal capacity to institute this suit on behalf of the Complainant; and that the actions is contrary to their mandate as envisaged in Section 35 of the National Police Service Act, 2011. That the 1st Respondent's mandate was to investigate the criminal complaint and thereafter forward the matter to the ODPP to determine whether to charge the persons complained of or not.

25. That nevertheless, on October 28, 2021, the Applicant in compliance with the court order, forwarded certified copies of all documents required by DCI.

26. It was the Applicants position that the suit is premised on an investigation undertaken by the 1st Respondent on account of malicious and false complaint lodged by the Complainant against the Applicant. Moreover, that in this case, the prosecution in the matter exercised its prosecutorial powers in the absence of proper factual foundation. Reliance was placed on R vs Attorney General exp Kipngeno Arap Ngeny, High Court Civil Application No 406 of 2001.

27. It was their further submission that the complaint and alleged investigations are an abuse of court process with a view of assisting the complainant to use the criminal court justice system to avoid repaying the loan balance. They relied on the case of Republic vs Chief Magistrate's Court at Mombasa Ex Parte Ganijee & Another [2002] 2 KLR 703

28. Also that the 1st Respondent and the prosecution abused its discretion in instituting the matter to achieve some collateral purposes and as such this Honourable Court should halt the criminal proceeding and grant our prayers sought in the Application dated November 18, 2021. Reliance was placed in the case of Republic v Director of Public Prosecutions & 3 others Ex-Parte Bedan Mwangi Nduati & another [2015] eKLR.

29. On issue (iii), It was the Applicant’s submission that the basis of the grant of order was premised on the fact that the Complainant lodged malicious and false complaint against the Applicant, and investigations were being undertaken by the 1st Respondent on account of the criminal complaint.

30. That the Order is in violation of the Practice Directions issued in the case of Hassan Mohamed -vs- Ethics and Anti-Corruption Commission & Another [2018] eKLR, which state that:i.The Order does fails to state the duration within which it shall remain in force;ii.The court failed to give a return to court date in order for: • The investigator to apprise the court on what he had done; • For the affected party, the Applicant, to raise any issues it may have.iii.The Applicant as an affected party was never served with the Application within 48 hours of issuance of the warrants.

31. The Applicant maintained that it ought to have been notified of the Application and the action being undertaken by the 1st Respondent and it would have cooperated and brought it to their attention that the matter at hand is a civil matter and the criminal complaint is not well founded.

32. That the order dated October 8, 2021 - premised on concealment of material facts by the Complainant to not only the police but also the court - is grossly erroneous, without compliance with the provisions of the law and the judicial discretion was exercised arbitrarily and perversely. To that end, the Applicant prays to this Honourable Court for granting of the prayers sought in the Application dated November 18, 2021.

33. There is no response/submissions filed on record by the Respondents.

34. The issue for determination is whether the review of the Magistrate’s Order issued on October 8, 2021 is merited.

35. The instant Application for review is brought under Article 50(1), 165(6) and (7) of theConstitution; and Section 364 and 367 of the Criminal Procedure Code Cap 75 Laws of Kenya and therefore this court has requisite jurisdiction. The High Court in Sammy Mutetu v Republic [2019] eKLR observed that,'The jurisdiction of the High Court to review or revise orders of a subordinate court or tribunal is provided for Under Article 165(6) and (7) ofthe Constitution and Section 362 as read together with Section 364 of the Criminal Procedure Code. The said provisions grant the court supervisory jurisdiction to call and examine the record of the inferior courts and tribunals to make any order or give any direction it considers appropriate to ensure the fair administration of justice. Therefore, this matter is properly before the court and the court has the requisite jurisdiction.'

36. Further, evidence from the record shows that the Magistrate’s court made its order pursuant to a Miscellaneous Criminal Application dated October 12, 2021. This court finds guidance in the case of Republic v Mark Lloyd Steveson [2016] eKLR, where it was stated that,'10. In my view, the correct reading of the section [Section 364(5) of the Criminal Procedure Code] is that a party who has a right of appeal cannot 'insist' on invoking the High Court’s power of review; in other words, such a party does not have a right to have the court review the decision s/he is aggrieved of. The only sure way to have such grievances heard and considered as a matter of right is through an appeal. The section does not, however, mean that a party which has a right of appeal cannot thereby invoke the Court’s power to review a Magistrate’s court’s order or decision.11. For clarification, it is important to state the trite position that the High Court will usually exercise its power to review or even exercise an appeal over an interlocutory matter before a magistrate’s court only in exceptional circumstances. While difficult to determine with mathematical precision when the court will use this power, it is only being sparingly used where, in the words of South African authors, Gardiner and Lansdown (6th Ed Vol 1 p 750), 'grave injustice might otherwise result or where justice might not by other means be attained.' As the authors correctly write, the Court will generally 'hesitate to intervene, especially having regard to the effect of such a procedure upon the continuity of proceedings in the court below.' Hence, the propriety of exercising revision power for interlocutory matters is decided on the facts of each case and with 'due regard to the salutary general rule that appeals are not entertained piecemeal.' (Walhaus & Others v Additional Magistrate, Johannesburg & Another, 1959 (3) SA 113(A) at 120D; S v Western Areas Ltd & Others 2005 (5) SA 214 (SCA) at 224D.'

37. From the foregoing, this instant Application for review, to my mind, fall in the exceptional circumstances that calls the High Court to exercise its power to review an interlocutory matter before the magistrate’s court.

38. To that end, this court allows prayer of examining and revising the record of the criminal proceedings in Miscellaneous Criminal Application No E077 of 2021 DCI Turkana County -versus- The Manager lzwe Loans Lodwar Branch and The Executive Officer Finance Turkana County.

39. The Applicant asserted that the adverse Magistrate’s orders were issued Ex-parte against the Applicant without offering the Applicant an opportunity to be heard contrary to the tenets of the right to fair hearing provided under Article 50(1) of theConstitution of Kenya, 2010. In review/revise prayers, my position is that alleged infringement of fundamental rights and freedom should form sufficient reason for review/revise. The High Court in Johnson Kobia M’Impwi v Director of Public Prosecution [2020] eKLR, observed that,'[10]Review of earlier decision by the court in a criminal revision should be weighed against the reasons advanced and the law. In the criminal jurisdiction discovery of new and important matter or evidence is a basis for review. I should also think that review on account of some mistake or error apparent on the face of the record is also potent ground. Any other sufficient reason should warrant a review. For instance, the gravity of the matters complained of, say, infringement of fundamental rights and freedom should form sufficient reason to review the earlier order of the court.'

40. In the instant case, the Magistrate’s court order for ceasing or stoppage of monthly deduction from the complainant’s payroll for loan repayment, was without time frame. The same would be open for different interpretations including being a permanent order. Furthermore, those orders were issued ex parte. Article 50(1) of theConstitution, 2010, provides that; Every person has the right to have any dispute that can be resolved by the application of law decided in a fair and public hearing before a court or, if appropriate, another independent and impartial tribunal or body.

41. To that end, this court is of the view that such orders as issued by the trial Magistrate court, especially being of pecuniary nature of liquidated sum, and permanent in nature, as in the instant case, cannot be properly be issued ex parte manner.

42. In the end, the motion dated November 18, 2021 is allowed thus giving rise to issuance of the following orders:i.The exparte order of injunction issued on and or dated October 8, 2021 directing the 2nd respondent to cease or stop monthly deductions based on the criminal complaint by Omar Wauy Abio of payroll no xxxx is set aside.ii.The criminal proceedings i.e Miscellaneous Criminal Application no E 077 of 2021 DCI Turkana County =vs= The Manager Izwe Loans, Lodwar Branch and The Executive office Finance, Turkana County is remitted back to the trial court to rehear the same afresh and give the parties audience.iii.Each party to bear their own costs.

DATED, SIGNED AND DELIVERED AT VIRTUALLY THIS 13TH DAY OF OCTOBER, 2022. …………………J. K. SERGONJUDGEIn the presence of:……………………………. for the Applicant……………………………. for the 1st Respondent……………………………. for the 2nd Respondent