1. The two appellants were charged jointly with another 3 co- accused.
2. The appellants and the co- accused were all convicted save for the 5 th accused, whom the court acquitted stating that it had not found any evidence to connect her with the offence she had been charged with.
3. The appellants aggrieved by the decision of the learned Honorable magistrate appealed against both conviction and sentence on the following grounds;-
a). The Learned trial Magistrate erred in law and in fact in making a finding that the Prosecution and its witnesses proved the Charges against the Appellant herein beyond reasonable doubt.
b). The Learned trial Magistrate erred in law and in fact in failing to appreciate that the key ingredient of the counts against the Appellant was in fact missing and hence arrived at a wrong determination.
c). The Learned Magistrate erred in law and fact in applying the wrong principles of Law in its determination on the counts against the Appellant and hence arriving at a wrong decision.
d). The Learned Magistrate erred in law and in fact in totally disregarding the Appellant's sworn defense hence arriving at a wrong decision.
e). The Learned trial Magistrate totally failed to consider the Appellants submissions on record leading to a wrong decision.
4. The parties to this appeal elected to file submissions which they relied on entirely at the hearing of the appeal.
1 st APPELLANTS CASE
5. According to the 1 st appellant the prosecution failed to prove its case beyond a reasonable doubt and that the trial court failed to appreciate that essential ingredients of the offences were not proved.
6. The appellant also contended that the court erred by applying wrong principles of law in the analysis of evidence and the conclusions drawn therefrom.
7. The 1 st appellant also submitted that the trial court disregarded his sworn defense.
8. The appellant further submitted that this being a first appeal, the court is obliged to re-evaluate the entire evidence tendered before the subordinate court and draw its own conclusions from the evidence.
9. According to the 1 st appellant the charges revolved around three sets of payment vouchers and their corresponding transport analysis sheets, namely Payment Voucher No. 179531 dated 9th June 2009 for Kshs. 363,615.00, Payment Voucher No. 165260 dated 30th March 2009 for Kshs. 493,339.00, and Payment Voucher No. 165242 dated 31st March 2009 for Kshs. 264,789.00.
10. The amounts were derived from several invoices which were supported by Receiving Advice documents. It was alleged that some of the Receiving Advices attached to those invoices had been altered by changing the names of transporters to that of Bernard Mungai, the 4th accused.
11. With respect to Payment Voucher No. 179531, the appellant’s position was that although an alteration was detected on Receiving Advice No. 897949 relating to a sum of Kshs. 5,445.00, the issue was reported by him before payment was made.
12. He went on to submit that the voucher was consequently rejected and no money was paid out. The 1 st appellant maintained that he was the one who raised the alarm by reporting the alteration to the Verification and Examination Auditor, which report was escalated to management. Following this, the Chief Accountant ordered an audit. The appellant argued that it was therefore erroneous for the trial court to find him culpable in respect of a voucher that was never paid and whose rejection followed his own report.
13. As regards Payment Vouchers Nos. 165260 and 165242, the appellant acknowledged that the vouchers were paid and that alterations were later discovered on Receiving Advice Nos. 144922 and 173404 respectively. However, his case was that the alterations were not obvious and escaped detection by multiple senior officers and departments involved in the payment process. Evidence showed that the vouchers passed through inventory, operations, verification and examination, internal audit, authorization, and passing for payment, with several senior officers appending their signatures without noticing any irregularity. The alterations were only discovered during a subsequent special audit ordered months later.
14. The appellant emphasized that under the Managing Director’s Circular C.26/4 dated 26th October 1993 and other relevant circulars, responsibility for ensuring the genuineness of documents lay with several officers, including inventory accountants, verification and examination officers, authorising officers, and auditors. He contended that the trial court erred in finding that he had final authority over payments, contrary to both documentary evidence and witness testimony showing that final authority lay with senior management officers above his rank.
15. On criminal intent, the appellant maintained that there was no evidence that he altered any document or that he knew of the alterations at the time the vouchers were processed.
16. He argued that the payment vouchers and analysis sheets themselves were accurate, properly tabulated, and free from alteration, and that the alterations were confined to the Receiving Advices.
17. According to him Evidence from several prosecution witnesses suggested that alterations could have occurred at the inventory section and that specific individuals were mentioned as having made or been associated with alterations, yet no investigations were conducted against them.
18. The appellant further pointed out that the document examiner did not examine the altered Receiving Advices and that the investigating officer failed to direct such examination despite instructions from the Chief Accountant.
19. The 1 st appellant also highlighted evidence that funds wrongly paid were later recovered from subsequent invoices and paid to the rightful transporters, a fact he argued was confirmed by the Chief Accountant.
20. He argued that this negated any inference of fraudulent intent on his part. He further complained that the prosecution failed to produce certain audit reports by a three-member audit team which were acknowledged by witnesses to exist and which were relevant to the issues before court.
21. On procedure, the 1 st appellant submitted that the trial magistrate failed to consider his sworn defense, ignored material evidence from prosecution witnesses that exculpated him, and failed to address or analyse his written submissions and the authorities cited therein. He further contended that the trial court impermissibly shifted the burden of proof to him, instead of requiring the prosecution to prove its case beyond reasonable doubt.
22. In conclusion, the appellant’s case was that the evidence on record did not establish criminal intent, knowledge of alterations, or unlawful authority on his part, and that the trial court overlooked material facts and misapplied the law. He therefore urged the appellate court to find that the appeal had merit, to quash the convictions and sentences imposed, and to acquit him of all the charges.
2ND APPELLANT’S CASE
23. In his appeal, the 2nd appellant challenged the trial court’s findings on several grounds, contending that the court erred in law and fact in concluding that the elements of the offence of Making a false document under section 357(a) of the Penal Code had been proved.
24. He invoked the duty of a first appellate court to re-evaluate the evidence afresh and reach its own independent conclusions, relying on established authorities including Okeno v Republic {2024} KEHC2894
25. According to the 2 nd appellant the offence under Section 357(a) requires proof that a document was made without lawful authority or excuse and that it was made with intent to defraud or deceive. He asserted that the essential ingredients of the offence are proof of the act of making the document, lack of authority, and the requisite criminal intent.
26. On the question of authority, the appellant maintained that the evidence on record demonstrated that he was authorized to prepare Transport Analysis Sheets and Payment Vouchers as part of his duties at the National Cereals and Produce Board.
27. It was not disputed that he was employed in January 2009 and that, at the material time, he had been assigned to assist in the Transport Payments Section due to the urgency of processing transporters’ payments. His role, as explained in his testimony and confirmed by his immediate supervisor, included preparation and signing of the relevant documents.
28. The appellant pointed to Circular No. C26/4 dated 26th October 1993, which governed the processing of transporters’ payments and authorized Transport Accounts Clerks, under supervision, to prepare such documents. No prosecution witness testified that the 2 nd appellant lacked authority, and the trial court itself acknowledged that preparation of Transport Analysis Sheets fell within his mandate.
29. Regarding intent to defraud or deceive, the appellant argued that the trial court failed to establish this essential element.
30. The prosecution evidence showed that some Receiving Advice notes had been altered, but no evidence was led to show that the appellant altered them or had knowledge of the alterations.
31. The appellant stated that he did not notice any alterations, and this position was consistent with the evidence of senior officers, including the Operations Manager, who also failed to detect the alleged alterations despite handling the same documents.
32. The appellant contended that, at most, the evidence suggested possible negligence or lack of due diligence, which could not amount to criminal intent under Section 357(a) of the Penal Code.
33. The appellant further pointed out that responsibility for verifying the genuineness and accuracy of documents lay with other officers in the payment process, including the Transport Accountant and the Inventory Section, as set out in the governing Circular and as confirmed by prosecution witnesses.
34. He noted that internal disciplinary proceedings had been initiated against him on grounds of lack of due diligence, reinforcing the position that the issue was administrative rather than criminal.
35. He also argued that investigations failed to establish who altered the Receiving Advice notes, raising concerns of selective prosecution given that several officers handled the same documents.
36. The 2 nd appellant also highlighted an inconsistency in the trial court’s findings, noting that he was acquitted on counts of obtaining money by false pretences on the basis that he did not receive any money. He argued that, in the absence of any benefit or gain, there was no discernible motive to defraud or deceive.
37. He further challenged the differential treatment between himself and the 5th accused, despite evidence that they performed similar duties at the same stage of the payment process.
38. On the burden of proof, the appellant submitted that the prosecution failed to discharge its obligation to prove the case beyond reasonable doubt.
39. He maintained that the failure to prove intent, knowledge of alterations, or lack of authority created serious doubt as to his guilt and he ought to have been accorded the benefit of doubt.
40. In conclusion, the appellant’s case was that the prosecution failed to prove the essential elements of the offences under section 357(a) of the Penal Code.
41. He urged this court to find that the convictions were unsafe, allow the appeal, set aside the convictions on counts 1, 2, 4 and 5, and order his acquittal, together with a refund of the fine paid.
RESPONDENT’S SUBMISSIONS
42. The respondents through Ms Ogega indicated that they had filed submissions but upon checking on the CTS the court was not able to find them and neither was there a copy in the court file.
43. However, the court took into account the expression by the respondents that they were opposed to the appeal and thus supported the conviction and sentence.
44. The court has weighed the evidence tendered by the prosecution and the submissions by the appellants carefully in arriving at its decision in this appeal.
SUMMARY OF THE PROSECUTION’S CASE
45. The prosecution called a total of 26 witnesses who testified in support of the charges,
46. PW1 Ambrose Muinde, stated that he is an Assistant Internal Auditor at the National Cereals and Produce Board (NCPB), where he has worked for eighteen years as an auditor.
47. He gave a detailed explanation of the NCPB transport system, stating that transportation of produce between depots is carried out by registered transporters whose details are kept in a transporters’ register. He explained that movement of goods is authorized through a transfer order approved by the Operations Manager, after which a dispatch advice is raised at the dispatching depot upon loading of the goods. The dispatch advice contains the name of the transporter, driver, commodity, depots of dispatch and receipt, lorry registration number, quantity transported, and reference to the transfer order. Once signed by the stores clerk, the dispatch advice is entered into stock records and stock cards, the lorry is recorded at the gate and weighed, and the driver is issued with a dispatch advice attached to a receiving advice to be completed at the receiving depot after confirmation and off-loading. These documents are serialized, produced in four copies, and the transporter’s red copy is used for invoicing.
48. PW1 testified that upon receipt of an invoice, the Chief Accountant verifies the same by confirming receipt of goods through dispatch and receiving records and stock cards, after which payment is authorized and made either by cheque or in equivalent stock.
49. PW1 identified all the five accused persons in court and stated that the 1st accused was a payments clerk in the accounts section at NCPB, the 2 nd accused worked in the inventory accounts section, the 3 rd accused was the transport payments accountant, the 4th accused Bernard Mungai was a registered transporter, and the 5th accused was an accounts supervisor in the transport payments section. PW1 went on to state that on 23 June 2009 he received a memo from the Chief Accountant, Cornel Ngelechei, raising concerns over falsification of transport documents involving the 4 th accused, Bernard Mungai, and directing the internal audit, credit, and security managers to conduct a detailed audit of all payments made to the 4 th accused between 1 st July 2008 and 23 rd June 2009. The audit reviewed payments between 1 st July 2008 and 31 st July 2009 and established that the 4 th accused had been paid a total of Kshs. 17,278,553 and had unpaid invoices amounting to Kshs. 6,392,038, with one payment specifically queried, leading to investigations into three transactions involving Kakamega/Chavakali, Machakos, and Nakuru.
50. PW1 then gave detailed evidence on the Kakamega–Chavakali transaction, the Machakos transaction, and the Nakuru transaction, in which he demonstrated through dispatch advices, receiving advices, transport analysis sheets, invoices, payment vouchers, cheques, stock records, stock cards, weighbridge tickets, and transporter registers that in each instance the transporter’s red copy of the receiving advice was altered to substitute the name of the genuine transporter with that of the 4th accused, alter vehicle registration numbers, routes, product descriptions, product codes, and dates, and that payments were processed and made to the 4th accused based on those altered documents, even though the original brown depot copies and stock records confirmed that the goods were transported by other registered transporters. PW1 further testified that cheques number 266073 dated 2 April 2009 for Kshs. 264,789 and cheque number 266070 dated 2 April 2009 for Kshs. 493,339 were both issued in the name of the 4th accused and cleared through NCPB’s Kenya Commercial Bank account number 1107165679 at Moi Avenue Branch on 6 April 2009, and that the 4th accused personally collected and signed for those cheques at the NCPB cash office.
51. PW1 concluded his evidence by stating that the three transactions amounted to fraudulent claims arising from alterations of transport documents at the NCPB head office in favour of the 4th accused, that NCPB suffered financial loss because it paid the 4th accused while remaining liable to pay the genuine transporters, and that he prepared and submitted an internal audit report reference number 1A/112 dated 11 August 2009 to the Chief Accountant in accordance with NCPB Circular C35/4 dated 26 October 1993 and Circular C26/4. He produced all documents referred to in his testimony as exhibits MFI.1 to MFI.10.
52. PW1 was cross-examined by Mr. Kiprono , during which he stated that the transport documentation process, confirmed that the transporter’s red copy of the receiving advice is used for invoicing, and stated that alterations to the red copy of receiving advice number 173404 occurred within the finance department after Pajaber Hauliers Limited had submitted its invoice dated 10 January 2009. He testified that Pajaber Hauliers Limited was entitled to Kshs. 90,066 but was not paid, and that the altered receiving advice was instead used to pay the 4th accused. He further stated that although he could not identify the specific officer who made the alterations, the responsibility lay within the transport payments section, and that the 1st, 2nd, and 3rd accused were required under NCPB procedures to ensure that all documents tallied before payment. He stated that the Nakuru transaction originally involved Summit Core Line Company transporting 670 bags of CAN fertilizer on 9 October 2007 and that alterations later converted the transaction to DAP fertilizer and attributed it to the 4th accused. He testified that the Board lost money and that recovery from the 4th accused was recommended but not effected.
53. PW1 was further cross-examined by Mr. Muilu , during which he explained the roles of the inventory accounts section, transport payment section, verification section, and chief accountant, and testified that multiple officers across departments were involved in processing transport payments. He stated that certain alterations were not easily detectable, that the transactions constituted fraud, and that although previous preliminary audit reports dated 17 July 2009 and 29 July 2009 existed, his final audit report dated 11 August 2009 was comprehensive and not intended to victimize any accused person.
54. PW1 was then cross-examined by Mr. Kariuki , during which he explained the transporter registration process, stating that registration required submission of documents and payment of a registration fee of Kshs. 1,000 per vehicle. He testified that invoices are not altered, that payment is based on figures in the transport analysis sheet, and that the 4th accused’s invoices passed through all procedural stages before payment. He further testified that during the first audit the 4th accused was asked to produce delivery documents and that a preliminary audit report had recommended that if satisfied, the 4th accused be paid.
55. PW1 was finally cross-examined by Mr. Ngaiwa , during which he testified that the 5 th accused was employed in January 2009 and was under probation at the time of the March 2009 transactions, working under supervision. He stated that Circular C26/4 placed ultimate responsibility for accuracy of transport payments on the Chief Accountant, that the alterations in receiving advice number 897949 related to the Chavakali transaction, and that both the transport payment accountant and clerks were under a duty to exercise due diligence.
56. PW2, Mbwana Munyi Kombo stated that he was a records clerk with the National Cereals and Produce Board (NCPB) and had served in that same position since 2009, then stationed at the Mombasa depot. He explained that in 2009 NCPB was dispatching maize from Mombasa to various parts of the country using dispatch advice documents. The process involved the depot manager first confirming that a transporter was registered, after which an order would be issued, received by PW2, and a dispatch advice prepared to authorize loading of the lorry.
57. PW2 identified the accused persons in court, stating that he knew the 2 nd accused as his colleague at the Mombasa depot, whom he still met at headquarters, knew the 3rd accused who was an accountant in the Mombasa area, and also knew the 5th accused as a colleague, but did not know the 1st accused. He testified that on 3 January 2009, while on duty, he dispatched white maize packed in 90-kilogram bags using Dispatch Advice No. 173404 to transporter Bajaba. The truck used was registration number KBD 436 with trailer number ZC 4555, driven by Mutito Nzuki, ID number 12648890, telephone number 0712341034. A total of 305 bags were dispatched to Machakos depot. He produced the dispatch advice as Prosecution Exhibit 7(a). He also filled in the stock card to reflect the dispatch, showing that there had been 1,701 bags in store and that 1,396 bags remained after dispatching the 305 bags, which stock card was produced as Prosecution Exhibit 7(c). He explained that four copies of the dispatch advice were generated: the first copy, white in colour, was retained at the depot; the second copy was red and went with the transporter; the third copy was green; and the fourth copy was brown and remained as the book copy. He further identified a receiving advice bearing the same number 173404 for receipt of the 305 bags of maize at Machakos, produced as Prosecution Exhibit 7(d), but stated that he did not know that document.
58. PW2 was first cross-examined by Mwilu, during which he stated that the transporter used the red copy of the dispatch advice to claim payment and that NCPB did not send its copies to headquarters to assist in payment, nor did they confirm whether goods reached their destination.
59. He was then cross-examined by Wabale , where he clarified that dispatch advice was in four differently colored copies, that the first copy went to the receiving depot, and that follow-up on receipt of goods was done by other officers, particularly the manager.
60. He was further cross-examined by Kairuki, during which he stated that he filled and signed the stock card at the end of his shift and also signed the dispatch advice, and that when releasing goods, they only dealt with the driver and turnboy and not the transporter.
61. PW3, Erick Omore Machora stated that he was a shipping clerk with NCPB stationed at the Mombasa depot. His duties included clearing and forwarding goods, storage, and dispatch. He explained that in the dispatch process he first sought authority to load from the depot manager, which authority was given to the transporter and then brought to him together with the details of the driver and the transporting vehicle, after which he filled the dispatch advice. He stated that the dispatch advice comprised copies in red, green and brown. He testified that he did not know any of the accused persons in the dock.
62. PW3 further stated that on 2 September 2009, two CID officers went to the Mombasa depot and interrogated him concerning a dispatch advice he had issued. He identified Dispatch Advice serial number 144922, produced as Exhibit 9(b), which he had issued to Summit CDF for the dispatch of 670 bags of CAN fertilizer to Nakuru using railway wagon number CLBR 56008. He stated that he entered the quantity dispatched into the stock card, which he produced in court as part of the exhibit. He further testified that the brown copy of the dispatch advice was forwarded together with the red copy, and that he also produced a receiving advice, Exhibit 9(n), which he had issued in blank to Summit CDF. He stated that the information on the receiving advice should have been the same as that on the dispatch advice but pointed out several discrepancies: the dispatch advice was dated 9 October 2007 while the receiving advice was dated 23 March 2009; the dispatch advice indicated wagon number CLBR 56008 while the receiving advice indicated a truck number; the dispatch advice was issued to Summit CDF while the receiving advice was issued to B. Muigai; the dispatch advice related to CAN fertilizer while the receiving advice related to DAP fertilizer; and the product code on the dispatch advice was 7202 whereas the product code on the receiving advice was 7201.
63. PW3 was cross-examined by Mwilu , during which he stated that he did not know who received the fertilizer, did not know where authorization for receipt was made, and that it was not his duty to follow up on receipt of goods.
64. He was then cross-examined by Wabale, where he stated that he gave the transporter the red copy of the dispatch advice to attach black copies of the receiving advice of a similar serial number and that he did not know what documents were sent back thereafter.
65. PW4, Kiprotich Ngeleabey stated that he worked at NCPB and in 2009 was the Chief Accountant, in charge of the finance department and a signatory to payment vouchers, and that he had served NCPB for 23 years. He further stated that he was currently the Acting Managing Director. He identified the accused persons, stating that the 1st accused was a clerk in the transport section, the 2nd accused worked in the inventory section, the 3rd accused was the accountant in the transport and payment section, the 4th accused was one of NCPB’s transporters, and the 5th accused also worked in the transport section.
66. PW4 testified that in June 2009 it was brought to his attention that a payment voucher had been prepared using supporting documents belonging to other transporters. Attached to it was Receiving Advice No. P97949, produced as Prosecution Exhibit 3(a), which was attached to Payment Voucher No. 179531 dated 9 June 2009, payable to the 4th accused and produced as Prosecution Exhibit 3(d). He observed obvious alterations on the transporter’s name to that of the 4th accused. He stated that the receiving advice existed in four copies and that another copy he saw bore the name A.O. Bayusuf as the transporter and was the red copy, produced as Exhibit 4(a), while all other details were the same.
67. PW4 stated that he suspended the transporter and wrote a letter dated 23 June 2009 to the operations manager, produced as Prosecution Exhibit 1, and instructed the auditor and security manager to investigate the 4th accused’s invoices and suspended further payments. Investigations revealed that the receiving advice had earlier been processed through Payment Voucher No. 165936 dated 4 May 2009, produced as Exhibit 2(e), and paid to A.O. Bayusuf. He further stated that the initial receiving advice number 119497 from Mombasa for fertilizer had been paid to A.O. Bayusuf and that two receiving advices had been attached for fertilizer transported from Mombasa to Kakamega via Chavakali.
68. PW4 further testified that a transport analysis sheet dated 9 June 2009, produced as Prosecution Exhibit 3(c), showed that receiving advice number 897949 had been processed under Benard Mwangi. He stated that A.O. Bayusuf’s payment did not include the altered receiving advice. He further identified another receiving advice number 173404, produced as Exhibit 7(j), which had similar alterations and which records showed was processed under Payment Voucher No. 165242, produced as Exhibit 7(m). He testified that cheque number 266073 dated 7 April 2009 was issued to the 4th accused in respect of that voucher, produced as Exhibit 7(n).
69. He further stated that Payment Voucher No. 165260, produced as Exhibit 9(q), for KShs. 493,339 was paid through cheque number 266070 to the 4th accused, and that he signed both cheques. He stated that an internal audit report was later submitted to him and that the monies paid to the 4th accused were subsequently recovered from his invoices. He concluded that officers responsible for verification before payment, as well as the 4th accused, were to blame for the alterations and loss suffered.
70. PW4 was cross-examined by Kiprono, during which he stated that he could not recall the exact date the 1st accused joined NCPB but confirmed it was in 2009. He stated that his role was to pass payments, that there were several checks and balances, that he confirmed correctness of amounts and availability of funds, and that he did not check all attached documents in detail. He stated that the altered documents were obvious when compared and that the monies in question were eventually recovered by NCPB, and that he could not take responsibility.
71. He was cross-examined by Mwilu, stating that the 2nd accused worked in the inventory section within the finance department and had not more than ten colleagues. He explained that payment vouchers had invoices, receiving advices, weighbridge letters and analysis sheets attached, that inventory preparation required stock records, receiving and dispatch advices, and that records at the time were not computerized. He stated that A.O. Bayusuf never complained of non-payment.
72. PW4 was cross-examined by Wambale, during which he explained the payment process, stating that documents were first received at the reconciliation section, endorsed and processed, then forwarded to the payment section where the 3rd accused worked, and that verification and analysis were conducted in accordance with a 1993 circular. He stated that inventory confirmation was done thereafter, that he also did some confirmation before signing vouchers and cheques, and that the 3rd accused, as head of his section, had verification responsibilities.
73. He was further cross-examined by Mr . Kanyi, during which he stated that he knew the
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2. The appellants and the co- accused were all convicted save for the 5 th accused, whom the court acquitted stating that it had not found any evidence to connect her with the offence she had been charged with.
3. The appellants aggrieved by the decision of the learned Honorable magistrate appealed against both conviction and sentence on the following grounds;-
a). The Learned trial Magistrate erred in law and in fact in making a finding that the Prosecution and its witnesses proved the Charges against the Appellant herein beyond reasonable doubt.
b). The Learned trial Magistrate erred in law and in fact in failing to appreciate that the key ingredient of the counts against the Appellant was in fact missing and hence arrived at a wrong determination.
c). The Learned Magistrate erred in law and fact in applying the wrong principles of Law in its determination on the counts against the Appellant and hence arriving at a wrong decision.
d). The Learned Magistrate erred in law and in fact in totally disregarding the Appellant's sworn defense hence arriving at a wrong decision.
e). The Learned trial Magistrate totally failed to consider the Appellants submissions on record leading to a wrong decision.
4. The parties to this appeal elected to file submissions which they relied on entirely at the hearing of the appeal.
1 st APPELLANTS CASE
5. According to the 1 st appellant the prosecution failed to prove its case beyond a reasonable doubt and that the trial court failed to appreciate that essential ingredients of the offences were not proved.
6. The appellant also contended that the court erred by applying wrong principles of law in the analysis of evidence and the conclusions drawn therefrom.
7. The 1 st appellant also submitted that the trial court disregarded his sworn defense.
8. The appellant further submitted that this being a first appeal, the court is obliged to re-evaluate the entire evidence tendered before the subordinate court and draw its own conclusions from the evidence.
9. According to the 1 st appellant the charges revolved around three sets of payment vouchers and their corresponding transport analysis sheets, namely Payment Voucher No. 179531 dated 9th June 2009 for Kshs. 363,615.00, Payment Voucher No. 165260 dated 30th March 2009 for Kshs. 493,339.00, and Payment Voucher No. 165242 dated 31st March 2009 for Kshs. 264,789.00.
10. The amounts were derived from several invoices which were supported by Receiving Advice documents. It was alleged that some of the Receiving Advices attached to those invoices had been altered by changing the names of transporters to that of Bernard Mungai, the 4th accused.
11. With respect to Payment Voucher No. 179531, the appellant’s position was that although an alteration was detected on Receiving Advice No. 897949 relating to a sum of Kshs. 5,445.00, the issue was reported by him before payment was made.
12. He went on to submit that the voucher was consequently rejected and no money was paid out. The 1 st appellant maintained that he was the one who raised the alarm by reporting the alteration to the Verification and Examination Auditor, which report was escalated to management. Following this, the Chief Accountant ordered an audit. The appellant argued that it was therefore erroneous for the trial court to find him culpable in respect of a voucher that was never paid and whose rejection followed his own report.
13. As regards Payment Vouchers Nos. 165260 and 165242, the appellant acknowledged that the vouchers were paid and that alterations were later discovered on Receiving Advice Nos. 144922 and 173404 respectively. However, his case was that the alterations were not obvious and escaped detection by multiple senior officers and departments involved in the payment process. Evidence showed that the vouchers passed through inventory, operations, verification and examination, internal audit, authorization, and passing for payment, with several senior officers appending their signatures without noticing any irregularity. The alterations were only discovered during a subsequent special audit ordered months later.
14. The appellant emphasized that under the Managing Director’s Circular C.26/4 dated 26th October 1993 and other relevant circulars, responsibility for ensuring the genuineness of documents lay with several officers, including inventory accountants, verification and examination officers, authorising officers, and auditors. He contended that the trial court erred in finding that he had final authority over payments, contrary to both documentary evidence and witness testimony showing that final authority lay with senior management officers above his rank.
15. On criminal intent, the appellant maintained that there was no evidence that he altered any document or that he knew of the alterations at the time the vouchers were processed.
16. He argued that the payment vouchers and analysis sheets themselves were accurate, properly tabulated, and free from alteration, and that the alterations were confined to the Receiving Advices.
17. According to him Evidence from several prosecution witnesses suggested that alterations could have occurred at the inventory section and that specific individuals were mentioned as having made or been associated with alterations, yet no investigations were conducted against them.
18. The appellant further pointed out that the document examiner did not examine the altered Receiving Advices and that the investigating officer failed to direct such examination despite instructions from the Chief Accountant.
19. The 1 st appellant also highlighted evidence that funds wrongly paid were later recovered from subsequent invoices and paid to the rightful transporters, a fact he argued was confirmed by the Chief Accountant.
20. He argued that this negated any inference of fraudulent intent on his part. He further complained that the prosecution failed to produce certain audit reports by a three-member audit team which were acknowledged by witnesses to exist and which were relevant to the issues before court.
21. On procedure, the 1 st appellant submitted that the trial magistrate failed to consider his sworn defense, ignored material evidence from prosecution witnesses that exculpated him, and failed to address or analyse his written submissions and the authorities cited therein. He further contended that the trial court impermissibly shifted the burden of proof to him, instead of requiring the prosecution to prove its case beyond reasonable doubt.
22. In conclusion, the appellant’s case was that the evidence on record did not establish criminal intent, knowledge of alterations, or unlawful authority on his part, and that the trial court overlooked material facts and misapplied the law. He therefore urged the appellate court to find that the appeal had merit, to quash the convictions and sentences imposed, and to acquit him of all the charges.
2ND APPELLANT’S CASE
23. In his appeal, the 2nd appellant challenged the trial court’s findings on several grounds, contending that the court erred in law and fact in concluding that the elements of the offence of Making a false document under section 357(a) of the Penal Code had been proved.
24. He invoked the duty of a first appellate court to re-evaluate the evidence afresh and reach its own independent conclusions, relying on established authorities including Okeno v Republic {2024} KEHC2894
25. According to the 2 nd appellant the offence under Section 357(a) requires proof that a document was made without lawful authority or excuse and that it was made with intent to defraud or deceive. He asserted that the essential ingredients of the offence are proof of the act of making the document, lack of authority, and the requisite criminal intent.
26. On the question of authority, the appellant maintained that the evidence on record demonstrated that he was authorized to prepare Transport Analysis Sheets and Payment Vouchers as part of his duties at the National Cereals and Produce Board.
27. It was not disputed that he was employed in January 2009 and that, at the material time, he had been assigned to assist in the Transport Payments Section due to the urgency of processing transporters’ payments. His role, as explained in his testimony and confirmed by his immediate supervisor, included preparation and signing of the relevant documents.
28. The appellant pointed to Circular No. C26/4 dated 26th October 1993, which governed the processing of transporters’ payments and authorized Transport Accounts Clerks, under supervision, to prepare such documents. No prosecution witness testified that the 2 nd appellant lacked authority, and the trial court itself acknowledged that preparation of Transport Analysis Sheets fell within his mandate.
29. Regarding intent to defraud or deceive, the appellant argued that the trial court failed to establish this essential element.
30. The prosecution evidence showed that some Receiving Advice notes had been altered, but no evidence was led to show that the appellant altered them or had knowledge of the alterations.
31. The appellant stated that he did not notice any alterations, and this position was consistent with the evidence of senior officers, including the Operations Manager, who also failed to detect the alleged alterations despite handling the same documents.
32. The appellant contended that, at most, the evidence suggested possible negligence or lack of due diligence, which could not amount to criminal intent under Section 357(a) of the Penal Code.
33. The appellant further pointed out that responsibility for verifying the genuineness and accuracy of documents lay with other officers in the payment process, including the Transport Accountant and the Inventory Section, as set out in the governing Circular and as confirmed by prosecution witnesses.
34. He noted that internal disciplinary proceedings had been initiated against him on grounds of lack of due diligence, reinforcing the position that the issue was administrative rather than criminal.
35. He also argued that investigations failed to establish who altered the Receiving Advice notes, raising concerns of selective prosecution given that several officers handled the same documents.
36. The 2 nd appellant also highlighted an inconsistency in the trial court’s findings, noting that he was acquitted on counts of obtaining money by false pretences on the basis that he did not receive any money. He argued that, in the absence of any benefit or gain, there was no discernible motive to defraud or deceive.
37. He further challenged the differential treatment between himself and the 5th accused, despite evidence that they performed similar duties at the same stage of the payment process.
38. On the burden of proof, the appellant submitted that the prosecution failed to discharge its obligation to prove the case beyond reasonable doubt.
39. He maintained that the failure to prove intent, knowledge of alterations, or lack of authority created serious doubt as to his guilt and he ought to have been accorded the benefit of doubt.
40. In conclusion, the appellant’s case was that the prosecution failed to prove the essential elements of the offences under section 357(a) of the Penal Code.
41. He urged this court to find that the convictions were unsafe, allow the appeal, set aside the convictions on counts 1, 2, 4 and 5, and order his acquittal, together with a refund of the fine paid.
RESPONDENT’S SUBMISSIONS
42. The respondents through Ms Ogega indicated that they had filed submissions but upon checking on the CTS the court was not able to find them and neither was there a copy in the court file.
43. However, the court took into account the expression by the respondents that they were opposed to the appeal and thus supported the conviction and sentence.
44. The court has weighed the evidence tendered by the prosecution and the submissions by the appellants carefully in arriving at its decision in this appeal.
SUMMARY OF THE PROSECUTION’S CASE
45. The prosecution called a total of 26 witnesses who testified in support of the charges,
46. PW1 Ambrose Muinde, stated that he is an Assistant Internal Auditor at the National Cereals and Produce Board (NCPB), where he has worked for eighteen years as an auditor.
47. He gave a detailed explanation of the NCPB transport system, stating that transportation of produce between depots is carried out by registered transporters whose details are kept in a transporters’ register. He explained that movement of goods is authorized through a transfer order approved by the Operations Manager, after which a dispatch advice is raised at the dispatching depot upon loading of the goods. The dispatch advice contains the name of the transporter, driver, commodity, depots of dispatch and receipt, lorry registration number, quantity transported, and reference to the transfer order. Once signed by the stores clerk, the dispatch advice is entered into stock records and stock cards, the lorry is recorded at the gate and weighed, and the driver is issued with a dispatch advice attached to a receiving advice to be completed at the receiving depot after confirmation and off-loading. These documents are serialized, produced in four copies, and the transporter’s red copy is used for invoicing.
48. PW1 testified that upon receipt of an invoice, the Chief Accountant verifies the same by confirming receipt of goods through dispatch and receiving records and stock cards, after which payment is authorized and made either by cheque or in equivalent stock.
49. PW1 identified all the five accused persons in court and stated that the 1st accused was a payments clerk in the accounts section at NCPB, the 2 nd accused worked in the inventory accounts section, the 3 rd accused was the transport payments accountant, the 4th accused Bernard Mungai was a registered transporter, and the 5th accused was an accounts supervisor in the transport payments section. PW1 went on to state that on 23 June 2009 he received a memo from the Chief Accountant, Cornel Ngelechei, raising concerns over falsification of transport documents involving the 4 th accused, Bernard Mungai, and directing the internal audit, credit, and security managers to conduct a detailed audit of all payments made to the 4 th accused between 1 st July 2008 and 23 rd June 2009. The audit reviewed payments between 1 st July 2008 and 31 st July 2009 and established that the 4 th accused had been paid a total of Kshs. 17,278,553 and had unpaid invoices amounting to Kshs. 6,392,038, with one payment specifically queried, leading to investigations into three transactions involving Kakamega/Chavakali, Machakos, and Nakuru.
50. PW1 then gave detailed evidence on the Kakamega–Chavakali transaction, the Machakos transaction, and the Nakuru transaction, in which he demonstrated through dispatch advices, receiving advices, transport analysis sheets, invoices, payment vouchers, cheques, stock records, stock cards, weighbridge tickets, and transporter registers that in each instance the transporter’s red copy of the receiving advice was altered to substitute the name of the genuine transporter with that of the 4th accused, alter vehicle registration numbers, routes, product descriptions, product codes, and dates, and that payments were processed and made to the 4th accused based on those altered documents, even though the original brown depot copies and stock records confirmed that the goods were transported by other registered transporters. PW1 further testified that cheques number 266073 dated 2 April 2009 for Kshs. 264,789 and cheque number 266070 dated 2 April 2009 for Kshs. 493,339 were both issued in the name of the 4th accused and cleared through NCPB’s Kenya Commercial Bank account number 1107165679 at Moi Avenue Branch on 6 April 2009, and that the 4th accused personally collected and signed for those cheques at the NCPB cash office.
51. PW1 concluded his evidence by stating that the three transactions amounted to fraudulent claims arising from alterations of transport documents at the NCPB head office in favour of the 4th accused, that NCPB suffered financial loss because it paid the 4th accused while remaining liable to pay the genuine transporters, and that he prepared and submitted an internal audit report reference number 1A/112 dated 11 August 2009 to the Chief Accountant in accordance with NCPB Circular C35/4 dated 26 October 1993 and Circular C26/4. He produced all documents referred to in his testimony as exhibits MFI.1 to MFI.10.
52. PW1 was cross-examined by Mr. Kiprono , during which he stated that the transport documentation process, confirmed that the transporter’s red copy of the receiving advice is used for invoicing, and stated that alterations to the red copy of receiving advice number 173404 occurred within the finance department after Pajaber Hauliers Limited had submitted its invoice dated 10 January 2009. He testified that Pajaber Hauliers Limited was entitled to Kshs. 90,066 but was not paid, and that the altered receiving advice was instead used to pay the 4th accused. He further stated that although he could not identify the specific officer who made the alterations, the responsibility lay within the transport payments section, and that the 1st, 2nd, and 3rd accused were required under NCPB procedures to ensure that all documents tallied before payment. He stated that the Nakuru transaction originally involved Summit Core Line Company transporting 670 bags of CAN fertilizer on 9 October 2007 and that alterations later converted the transaction to DAP fertilizer and attributed it to the 4th accused. He testified that the Board lost money and that recovery from the 4th accused was recommended but not effected.
53. PW1 was further cross-examined by Mr. Muilu , during which he explained the roles of the inventory accounts section, transport payment section, verification section, and chief accountant, and testified that multiple officers across departments were involved in processing transport payments. He stated that certain alterations were not easily detectable, that the transactions constituted fraud, and that although previous preliminary audit reports dated 17 July 2009 and 29 July 2009 existed, his final audit report dated 11 August 2009 was comprehensive and not intended to victimize any accused person.
54. PW1 was then cross-examined by Mr. Kariuki , during which he explained the transporter registration process, stating that registration required submission of documents and payment of a registration fee of Kshs. 1,000 per vehicle. He testified that invoices are not altered, that payment is based on figures in the transport analysis sheet, and that the 4th accused’s invoices passed through all procedural stages before payment. He further testified that during the first audit the 4th accused was asked to produce delivery documents and that a preliminary audit report had recommended that if satisfied, the 4th accused be paid.
55. PW1 was finally cross-examined by Mr. Ngaiwa , during which he testified that the 5 th accused was employed in January 2009 and was under probation at the time of the March 2009 transactions, working under supervision. He stated that Circular C26/4 placed ultimate responsibility for accuracy of transport payments on the Chief Accountant, that the alterations in receiving advice number 897949 related to the Chavakali transaction, and that both the transport payment accountant and clerks were under a duty to exercise due diligence.
56. PW2, Mbwana Munyi Kombo stated that he was a records clerk with the National Cereals and Produce Board (NCPB) and had served in that same position since 2009, then stationed at the Mombasa depot. He explained that in 2009 NCPB was dispatching maize from Mombasa to various parts of the country using dispatch advice documents. The process involved the depot manager first confirming that a transporter was registered, after which an order would be issued, received by PW2, and a dispatch advice prepared to authorize loading of the lorry.
57. PW2 identified the accused persons in court, stating that he knew the 2 nd accused as his colleague at the Mombasa depot, whom he still met at headquarters, knew the 3rd accused who was an accountant in the Mombasa area, and also knew the 5th accused as a colleague, but did not know the 1st accused. He testified that on 3 January 2009, while on duty, he dispatched white maize packed in 90-kilogram bags using Dispatch Advice No. 173404 to transporter Bajaba. The truck used was registration number KBD 436 with trailer number ZC 4555, driven by Mutito Nzuki, ID number 12648890, telephone number 0712341034. A total of 305 bags were dispatched to Machakos depot. He produced the dispatch advice as Prosecution Exhibit 7(a). He also filled in the stock card to reflect the dispatch, showing that there had been 1,701 bags in store and that 1,396 bags remained after dispatching the 305 bags, which stock card was produced as Prosecution Exhibit 7(c). He explained that four copies of the dispatch advice were generated: the first copy, white in colour, was retained at the depot; the second copy was red and went with the transporter; the third copy was green; and the fourth copy was brown and remained as the book copy. He further identified a receiving advice bearing the same number 173404 for receipt of the 305 bags of maize at Machakos, produced as Prosecution Exhibit 7(d), but stated that he did not know that document.
58. PW2 was first cross-examined by Mwilu, during which he stated that the transporter used the red copy of the dispatch advice to claim payment and that NCPB did not send its copies to headquarters to assist in payment, nor did they confirm whether goods reached their destination.
59. He was then cross-examined by Wabale , where he clarified that dispatch advice was in four differently colored copies, that the first copy went to the receiving depot, and that follow-up on receipt of goods was done by other officers, particularly the manager.
60. He was further cross-examined by Kairuki, during which he stated that he filled and signed the stock card at the end of his shift and also signed the dispatch advice, and that when releasing goods, they only dealt with the driver and turnboy and not the transporter.
61. PW3, Erick Omore Machora stated that he was a shipping clerk with NCPB stationed at the Mombasa depot. His duties included clearing and forwarding goods, storage, and dispatch. He explained that in the dispatch process he first sought authority to load from the depot manager, which authority was given to the transporter and then brought to him together with the details of the driver and the transporting vehicle, after which he filled the dispatch advice. He stated that the dispatch advice comprised copies in red, green and brown. He testified that he did not know any of the accused persons in the dock.
62. PW3 further stated that on 2 September 2009, two CID officers went to the Mombasa depot and interrogated him concerning a dispatch advice he had issued. He identified Dispatch Advice serial number 144922, produced as Exhibit 9(b), which he had issued to Summit CDF for the dispatch of 670 bags of CAN fertilizer to Nakuru using railway wagon number CLBR 56008. He stated that he entered the quantity dispatched into the stock card, which he produced in court as part of the exhibit. He further testified that the brown copy of the dispatch advice was forwarded together with the red copy, and that he also produced a receiving advice, Exhibit 9(n), which he had issued in blank to Summit CDF. He stated that the information on the receiving advice should have been the same as that on the dispatch advice but pointed out several discrepancies: the dispatch advice was dated 9 October 2007 while the receiving advice was dated 23 March 2009; the dispatch advice indicated wagon number CLBR 56008 while the receiving advice indicated a truck number; the dispatch advice was issued to Summit CDF while the receiving advice was issued to B. Muigai; the dispatch advice related to CAN fertilizer while the receiving advice related to DAP fertilizer; and the product code on the dispatch advice was 7202 whereas the product code on the receiving advice was 7201.
63. PW3 was cross-examined by Mwilu , during which he stated that he did not know who received the fertilizer, did not know where authorization for receipt was made, and that it was not his duty to follow up on receipt of goods.
64. He was then cross-examined by Wabale, where he stated that he gave the transporter the red copy of the dispatch advice to attach black copies of the receiving advice of a similar serial number and that he did not know what documents were sent back thereafter.
65. PW4, Kiprotich Ngeleabey stated that he worked at NCPB and in 2009 was the Chief Accountant, in charge of the finance department and a signatory to payment vouchers, and that he had served NCPB for 23 years. He further stated that he was currently the Acting Managing Director. He identified the accused persons, stating that the 1st accused was a clerk in the transport section, the 2nd accused worked in the inventory section, the 3rd accused was the accountant in the transport and payment section, the 4th accused was one of NCPB’s transporters, and the 5th accused also worked in the transport section.
66. PW4 testified that in June 2009 it was brought to his attention that a payment voucher had been prepared using supporting documents belonging to other transporters. Attached to it was Receiving Advice No. P97949, produced as Prosecution Exhibit 3(a), which was attached to Payment Voucher No. 179531 dated 9 June 2009, payable to the 4th accused and produced as Prosecution Exhibit 3(d). He observed obvious alterations on the transporter’s name to that of the 4th accused. He stated that the receiving advice existed in four copies and that another copy he saw bore the name A.O. Bayusuf as the transporter and was the red copy, produced as Exhibit 4(a), while all other details were the same.
67. PW4 stated that he suspended the transporter and wrote a letter dated 23 June 2009 to the operations manager, produced as Prosecution Exhibit 1, and instructed the auditor and security manager to investigate the 4th accused’s invoices and suspended further payments. Investigations revealed that the receiving advice had earlier been processed through Payment Voucher No. 165936 dated 4 May 2009, produced as Exhibit 2(e), and paid to A.O. Bayusuf. He further stated that the initial receiving advice number 119497 from Mombasa for fertilizer had been paid to A.O. Bayusuf and that two receiving advices had been attached for fertilizer transported from Mombasa to Kakamega via Chavakali.
68. PW4 further testified that a transport analysis sheet dated 9 June 2009, produced as Prosecution Exhibit 3(c), showed that receiving advice number 897949 had been processed under Benard Mwangi. He stated that A.O. Bayusuf’s payment did not include the altered receiving advice. He further identified another receiving advice number 173404, produced as Exhibit 7(j), which had similar alterations and which records showed was processed under Payment Voucher No. 165242, produced as Exhibit 7(m). He testified that cheque number 266073 dated 7 April 2009 was issued to the 4th accused in respect of that voucher, produced as Exhibit 7(n).
69. He further stated that Payment Voucher No. 165260, produced as Exhibit 9(q), for KShs. 493,339 was paid through cheque number 266070 to the 4th accused, and that he signed both cheques. He stated that an internal audit report was later submitted to him and that the monies paid to the 4th accused were subsequently recovered from his invoices. He concluded that officers responsible for verification before payment, as well as the 4th accused, were to blame for the alterations and loss suffered.
70. PW4 was cross-examined by Kiprono, during which he stated that he could not recall the exact date the 1st accused joined NCPB but confirmed it was in 2009. He stated that his role was to pass payments, that there were several checks and balances, that he confirmed correctness of amounts and availability of funds, and that he did not check all attached documents in detail. He stated that the altered documents were obvious when compared and that the monies in question were eventually recovered by NCPB, and that he could not take responsibility.
71. He was cross-examined by Mwilu, stating that the 2nd accused worked in the inventory section within the finance department and had not more than ten colleagues. He explained that payment vouchers had invoices, receiving advices, weighbridge letters and analysis sheets attached, that inventory preparation required stock records, receiving and dispatch advices, and that records at the time were not computerized. He stated that A.O. Bayusuf never complained of non-payment.
72. PW4 was cross-examined by Wambale, during which he explained the payment process, stating that documents were first received at the reconciliation section, endorsed and processed, then forwarded to the payment section where the 3rd accused worked, and that verification and analysis were conducted in accordance with a 1993 circular. He stated that inventory confirmation was done thereafter, that he also did some confirmation before signing vouchers and cheques, and that the 3rd accused, as head of his section, had verification responsibilities.
73. He was further cross-examined by Mr . Kanyi, during which he stated that he knew the
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