Shah & 4 others v Republic [2022] KEHC 12004 (KLR)

Shah & 4 others v Republic (Criminal Appeal E027 of 2022) [2022] KEHC 12004 (KLR) (Crim) (8 June 2022) (Judgment)

Neutral citation: [2022] KEHC 12004 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Criminal

Criminal Appeal E027 of 2022

JM Bwonwong'a, J

June 8, 2022

Between

Sunil Narshi Shah

1st Applicant

Kamal Narshi Punja Shah

2nd Applicant

Henry Munyoki Kavita

3rd Applicant

Magnesh Kumar Verma

4th Applicant

United Millers Limited

5th Applicant

and

Republic

Respondent

(Being a ruling from the judgement of the Hon Roseline A Oganyo, CM, dated 9/2/2022 in Nairobi Chief Magistrate’s Court at Nairobi City Court in Criminal Case No E528 OF 2021 Republic v Sunil Narshi Shah & 4 Others)

Judgment

Introduction 1. The 1st to the 4th appellants/applicants were convicted of forgery, conspiracy to defraud and uttering a false document more particularly as set out in the order of the trial court dated February 9, 2022. In respect of sentence the natural persons (the 1st to 4th appellants/applicants) were each placed on probation for two years each.

2. The 5th appellant being a limited liability company was sentenced to an order to pay compensation to the complainants the disputed claim in Kisumu High Court Civil Suit No 38 of 2015 pursuant to section 175 (2) of the Criminal Procedure Code(Cap 75) Laws of Kenya. In respect of this order the court stated that “As a follow up on the implementation of this sentence, this case will be fixed for a further mention in the next three (3) months as directed.”

3. Finally, the trial court released the appellants/applicants upon their application on bail pend pending the hearing and determination of their appeal under section 356 (1) of the Criminal Procedure Code (Cap 75) Laws of Kenya.

The appellants/applicants application. 4. The applicants moved this court pursuant to the provisions of article 50 (2) (q), 165 (3) (e) of the 2010 Constitution of Kenya, section 357 (1) of the Criminal Procedure Code (Cap 75) Laws of Kenya and all other enabling provisions of the law, under certificate of urgency, seeking the following orders.1)Spent2)An order suspending the order of the lower court dated March 7, 2022pending the hearing of the present application inter partes.3)An order to stay the execution of the order of compensation of the lower court against the 5th appellant/applicant made in favour of the complainants in respect of the disputed special claim in Kisumu High Court case within the next three months; pending the hearing and determination of this application.4)An order to suspend the execution of the compensatory order made in favour of the complainants against the 5th appellant/applicant by the lower court in respect of the disputed special claim in a Kisumu High Court case within the next three months pending the hearing of the current criminal appeal.5)An order to stay the execution of the compensatory order made in favour of the complainants against the 5th appellant/applicant by the lower court in respect of the disputed special claim in Kisumu High Court case within the next three months pending the hearing of the current criminal appeal.6)An order be made to provide for costs of this application.

The case for the appellants/applicants 5. The application is supported by 45 grounds that are set out on the face of the notice of motion and a 47-supporting affidavit of the 1st applicant sworn in his own behalf and in behalf of the co-appellants/applicants.

6. The major grounds in support of the application are as follows. The trial court disregarded or failed to apply the evidence of Ruth Wambui Muriuki (Pw 7) on behalf of Wama General Merchants and Richard Mwangi (Pw 3) on behalf of Alkins Enterprises and Hon Pauline Mbulika (Pw8), the Deputy Registrar of the High Court, Kisumu in respect of forgery regarding the LPOs of Wama General Merchants and Alkins Mini Price Shop. Counsel for the appellants has stated that Pw 7 testified that the relevant LPO for Wama General stores originated from her shop and that the order written on the LPO was placed by her husband. Pw7 also testified that she personally signed it. The evidence of Pw 7 does not support the allegation of forgery in respect of local purchase order No 099 for Wama General Merchants.

7. Furthermore, Pw 8 (Deputy Registrar) confirmed that Kisumu High Court Civil Suit No 38 of 2015 was compromised by way of a consent order between the parties and that the suit did not go for trial. Pw 8 also confirmed that the 5th appellant/applicant filed photo copies of the LPOs together with the plaint but the original LPOs were never produced in court and that they do not form part of the exhibits in the matter at hand. Counsel therefore submitted that the trial court erred in law in finding that the impugned LPOs had been produced as exhibits in the matter and that they were relied upon by the applicants in their conspiracy to defraud the complainants.

8. Furthermore, in respect of sentence the applicants advanced the following major grounds. The learned trial magistrate did not specify what the “disputed special claim” was in the Kisumu High Court Civil SuitNo 38 of 2015, given that the prayers that were sought by the 5th applicant were as follows:a)The principal amount of Kshs 124, 106, 600. 00 which amount was paid by the complainant company pursuant to a summary judgement.b)Special damages for breach of contract being Kshs 79, 471, 000. 00. andc)General damages for loss of business. Counsel for applicants further stated that:“That notably, the prayers for special and general damages were compromised by consent of the parties on March 28, 2017 hereby the Complainant company agreed to pay the 5th applicant the sum of Kshs 50,000,000. 00 in lieu of both prayers and the complainant company has already paid the sumKshs18,000,000. 00 to the 5th applicant pursuant to the said consent order and deposited Kshs 20,000,000. 00 in a joint account of the complainant’s advocates and the 5th applicant’s advocates, and as such there is no clarity as to what the learned trial magistrate meant when she sentenced the 5th applicant to pay the “disputed special claim” in Kisumu High Court Civil Suit No38 of 2015. ” See ground 32 of the grounds in support of the application.

9. Counsel further stated that “the sentence meted out to the applicants is ambiguous and therefore the 5th applicant is not certain as to the amount that ought to be paid in compliance with the impugned sentence.” See ground 33 of the grounds in support of the application.

10. Additionally, counsel has stated that the learned trial magistrate wrongly convicted and sentenced the 4th applicant on count VII being uttering a false document, despite the fact that the 4th applicant was not charged with the said offence.

11. Counsel has also stated that the applicants have filed an appeal being Criminal Appeal No E027 of 2022 in the Nairobi High Court criminal registry. Counsel further states that the appeal has overwhelming chances of success.

12. Finally, counsel has stated that the learned magistrate has fixed for mention the Nairobi City Court Criminal CaseNo 528 of 2021 on June 10, 2022 in order to follow up on the implementation of the sentence and in particular the payment of the compensation to the complainant company.

13. The 1st applicant has deposed to a 47-supporting affidavit in his own behalf and in behalf of the co-appellants/applicants; which is a replica of the grounds stated on the face of the notice of motion which I have declined to reproduce herein.

The submissions of the applicants. 14. Counsel for the applicants (Messrs Ndegwa & Ndegwa Advocates) submitted that the applicants are set to appear before the trial court on June 10, 2022for the purposes of the trial court to make a follow upon the implementation of its orders for compensation by the 5th applicant to the complainants. The applicants are apprehensive that unless the order for compensation is not suspended by this court, the applicants may be subjected to a great miscarriage of justice, should the trial court review its sentence.

15. They have further submitted that the trial court rightly relied on section 175 (2) of the Criminal Procedure Code to make an order for compensation to the injured party. But such an order should be made judiciously according to the case ofEvans Maingi Nusu v Republic (2021) e-KLR. Counsel submitted that there are exceptions to the provisions of section 175 (2) of the Criminal Procedure Code, which include the following. The first exception is found in section 175 (3) (a) of the Criminal Procedure Code, which only allows a trial court to make an order that is within its civil monetary jurisdiction. In the instant case, the trial court’s civil monetary jurisdiction according to section 7 of the Magistrates’ Courts Act should not exceed twenty million shillings, where the court is presided over by a chief magistrate.

16. In view of the foregoing counsel submitted that the trial court which was presided over by the chief magistrate was statutory handcapped and barred from making the compensatory order because the compensatory amount contemplated is in excess of twenty million shillings; which matter is the subject of the current appeal.

17. Counsel further submitted that the sentence of the order for compensation against the 5th appellant/applicant in favour of the victims is vague as the order fails to specify the amount of money which the 5th applicant was required to pay as compensation to its victims.

18. The second exception is in terms of section 175 (4) of the Criminal Procedure Code which mandatorily directs that the order for compensation shall not take effect before the time provided for appeal has expired; or if the appeal against the conviction or sentence and the order, are still pending, the order for compensation, conviction and sentence will not take effect until they are confirmed by the court determining the appeal.

19. Counsel also submitted that under section 175 (5) of the Criminal Procedure Code the court determining the appeal shall affirm, quash, or vary an order made under section 175 of the Criminal Procedure Code. And for this reason, counsel has submitted that this court is statutorily clothed with the jurisdiction to vary the compensatory order to ensure that justice is done.

20. Counsel also submitted that the compensatory order violates section 25 of the Victim Protection Act No 17 of 2014, which makes it very clear that such an order is not part of the sentence and is not a bar to civil proceedings.

21. In addition to the foregoing, counsel has also submitted that if the 5th applicant shall not have paid the disputed special claim as ordered the trial court is set to review its orders in terms of section 4 (3) and (4) of the Probation of Offenders Act and sentence the four natural appellants for the original offence.

22. It is for foregoing reasons that the appellants/applicants have urged this court to grant the orders sought so that their appeal is not rendered nugatory.

23. Counsel for the applicants also submitted that the learned trial magistrate became functus officioafter she sentenced the 5th appellant (a limited liability company) to pay compensation to the complainants. She therefore had no jurisdiction to set down the case for mention thereafter on June 10, 2022.

24. As regards their convictions they have pointed out that the trial court relied on extraneous matters to convict them. For instance, they have pointed out that copies of the local purchase orders, which were part of the consent order between the parties were relied upon to convict them notwithstanding that they were not exhibits in the trial court.

The submissions of the respondent 25. Counsel for the respondent (Ms Maureen Akunja) filed grounds of opposition to the application in addition to their written submissions. The substance of the grounds of opposition is that the applications are an abuse of the court process.

26. Furthermore, counsel submitted that the issues raised by the applicants go to the merits of the appeal and not to the applications. She also submitted that the issue of sentence is a matter for the discretion of the trial court in respect of which she cited Bernard Kimani Gacheru v Republic, Criminal Appeal No 188 of 2000 in support of her submission. She therefore submitted that the applicants have not demonstrated any exceptional circumstances to warrant a stay of execution of the sentence. Counsel cited the Court of Appeal decision in Fred Matiang’i Cabinet Secretary, Ministry of Interior and Co-Ordination of National Government v Miguna Miguna & 4 Others(2018) e-KLR, in which that court observed that in a criminal appeal stay is granted only in exceptional circumstances and that the threshold for the grant of such a relief such as bail pending appeal is that one needs to demonstrate an appeal with overwhelming chances of success.

27. Counsel therefore submitted that the applicants will not suffer any prejudice if this court does not grant the orders sought.

28. Counsel has therefore submitted that the applications lack merit and should be dismissed.

The submissions of the victims 29. Counsel for the victims (Prof Ojienda, SC) has submitted that the sentence meted out is lawful. He further submitted that the sentence handed down by the trial court can only be interfered with after hearing the entire appeal and not at this preliminary stage. He also submitted that under section 25 (a) of the Victim Protection Act No 17 of 2014 the order of restitution is not a sentence.

30. Furthermore, counsel cited Tariki Kirema v Republic [2021]e-KLR, which in turn cited Somo v Republic [1972] EA 476 and submitted that the applicants have not demonstrated the appeal has a high chance of success in respect of the order seeking stay of execution of the sentence. If the orders sought are not granted, the appellant/applicants will not suffer any prejudice as they are not in custody. Counsel has further submitted the 5th appellant/applicant’s management, and its employees will not be thrown into discomfiture as contended by the appellants/applicants and in particular this contention is merely founded on fears.

31. According to counsel the maxim of equity that “he who seeks equity must do equity” is applicable in this case. Counsel further contends that the appellants/applicants irregularly received shs 38, 950, 000. 00 knowing very well that the payment was unjust enrichment. Counsel has also submitted that the applicants are in contempt of a court order of the trial court and that courts do abhor such litigants. Counsel cited Fred Matiang’i the Cabinet Secretary, Minstry of Interior and Co-Ordination of National Government v Miguna Miguna & 4 others[2018]e-KLR, in which that court held in respect of those that disobey court orders that “When courts issue orders, they do so not as suggestions or pleas to the persons at whom they are directed. Court orders issue ex cathedra, are compulsive, peremptory and expressly binding. It is not for any party; be he high or low, weak or mighty and quite regardless of his status or standing in society, to decide whether or not to obey; to choose which to obey and which to ignore or to negotiate the manner of his compliance. This court, as must all courts, will deal firmly and decisively with any party who deigns to disobey court orders and will do so not only to preserve its own authority and dignity but the more to ensure and demonstrate that the constitutional edicts of equality under the law, and the upholding of the rule of law are not mere platitudes but present realities.”

32. Furthermore, counsel has submitted that the appellants/applicants appeal will not be rendered nugatory even if the orders sought are not granted, in respect of which he cited Hashmukhalal Virchand Shah & 2 Others v Investment & Mortgages Bank Limited [2014] e-KLR.

33. Counsel has therefore urged the court to dismiss the appeal as the appellants/applicants are on bail pending appeal and are enjoying their freedom.

Issues for determination 34. I have considered the submissions of the parties and the authorities cited. As a result, I find that the following are the issues for determination.1) Whether the appeal has overwhelming chances of success.2) Whether there are unusual or exceptional circumstances in the appeal.

Issue 1 35. I find that the applicants have demonstrated that the appeal has overwhelming chances of success. As regards sentence, the trial court sentenced the 5th applicant to pay compensation to their victims based on the “disputed special claim” in Kisumu High Court Civil Suit No 38 of 2015. ” The law in this regard is that each court must have the full freedom and independence to adjudicate the dispute before it without being interfered with from any quarter or by any person. In meting out the sentence of an order for compensation the trial court stated that the complainants were to be compensated the disputed special claim in Kisumu High Court case within three months.

36In making the compensatory order it is arguable that the trial court is interfering with the adjudication process of the High Court in that case which is yet to determine the dispute therein. As regards the trial court the dispute in the High Court is sub-judice. The sub-judice rule is intended to ensure a fair trial of the dispute before any court. The trial court might embarrass the High Court which is trying the case.

37. Furthermore, according to Terreh Mukindia v Republic[1966] EA 425 compensation in criminal cases under section 31 of the Penal Code(Cap 63) Laws of Kenya should only be ordered in favour of the person injured by the offence in the clearest cases and such damage or deprivation of property is of readily ascertainable and of comparatively small value.

38. Again, Terreh Mukindia v Republic, further held that an order of compensation should not be made where the amount of damages to be paid is in dispute and the amount of money that is recoverable has not been adjudicated upon as it would in a civil court.

39. It is arguable that since the amount of money in dispute according to Prof Ojienda is shs 38, 950, 000. , this was not a suitable case for ordering compensation; since this is a colossal sum of money.

40. It is important to bear in mind that the provisions of section 175 of the Criminal Procedure Code(Cap 75) of the Laws of Kenya merely provide the procedure for implementing the compensation that is provided for in section 31 of the Penal Code.

41. In addition to the foregoing, it is also arguable that under section 334 of theCriminal Procedure Code, the trial court was at liberty to make an order that in default of paying the compensation, the money was to be levied on the movable or immovable property of the person ordered to pay it by distress and sale under a court warrant.

42. The amount of the monetary compensation is not specified and is therefore vague. It is therefore incapable of implementation.

42. In view of the foregoing I find that the appellants/applicants have an arguable appeal. In other words, their appeal has high chances of success.

Issue No. 2 43. I find it as unusual or exceptional circumstance, the order of the trial court dated February 9, 2022 which stated that “As a follow up on the implementation of this sentence, this case will be fixed for a further mention in the next three (3) months as directed.” Instead it will have sufficed for the trial court to have further indicated that if the 5th appellant/applicant failed to pay the compensation, its property was to be attached and sold under a court warrant; instead of fixing the matter for mention in a future date being June 10, 2022 to monitor the implementation of its order. It is arguable that the trial court became functus officio after it handed down the sentence.

44. Furthermore, I also find that it is equally moot or academic to consider the attractive arguments of Mr Ndegwa and Prof Ojienda (SC); which are really good for other forums.

45. In the premises I find the application succeeds with the result that I hereby grant the application in terms of prayers No1 to 5 of the notice of motion dated March 31, 2022.

RULING SIGNED, DATED AND DELIVERED IN OPEN COURT AT NAIROBI THIS 8TH DAY OF JUNE 2022. J M BWONWONG’AJUDGEIn the presence of-Mr. Kinyua: Court Assistant.Mr. Ndegwa for the appellants/applicants.Ms Maureen Akunja for the respondent.Prof Ojienda (S. C.) for the victims