IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA IN THE DISTRICT REGISTRY

AT MWANZA CRIMINAL APPEAL NO. 85 OF 2020 (Original Criminal Case No. 214 of 2018 of the District Court of Nyamagana District at Nyamagana)

SAYI SIO KAPALE PESA APPELLANT VERSUS: THE REPUBLIC RESPONDENT

JUDGMENT

Date of last order: 02/09/2020 Date of Judgment: 25/09/2020

F.K. MANYANDA, J

In Criminal Case No. 214 of 2018 the Appellant Sayi slo Kapale Pesa was on Ogth April, 2020 convicted with the offence of Kite Flying; Contrary to Section 3328(1) and (3) of the Penal Code, [ Cap. 16. R. E. 2002J with which he was charged. He was sentenced to serve a term of three years imprisonment.

He is aggrieved by the said conviction and sentence hence he has preferred this appeal on four grounds namely:-

1. That, the conviction and sentence were wrongly based on unsupported charge as no evidence showing mobile phone transaction was to led prove (sic) whether the appellant had ever

Page 1 of 10 sh authorized drawing of whatever money deposited into the

account in question on the alleged date. 2. That, the presiding Court erred in law and facts when failed to detect and fairy resolved (sic) upon the facts that the charged offence was fraudulently made out of pre agreement between the two parties i.e. appellant and complainant; after his insiders ailments (sic) as the installment payment on the claimed transaction was on move (sic). 3. That, the crux on failure to refund money on time as agreed was/is obviously known as was caused by ailments (sic) on the part of the appellants siblings, this criminal intent and/or guilty conscious was not proved. 4. That, the appellant's strong and probable defence was unfairly being rejected into the Court (sic) though it reflects real situation instead the conviction and sentence was wrongly based on prosecution case which was/is too shaky, dubious and uncorroborated as a matter of law, facts and precedents.

At the hearing the appellant Sayi Kapale Pesa argued his appeal orally in person while the Respondent was represented by Ms. Ajuaye Bilishanga, Senior State Attorney.

The appellant argued his appeal grounds seriatim, so did the Senior State Attorney I will also compose my judgment under the same flow.

In ground number one the Appellant argued that there is no evidence showing that he directed transfer of money because there was no mobile phone produced as exhibit. He denied also to have dialed to the Mikoani

Page 2 of 10 5fv Traders Ltd Market Officer to withdraw money. Instead he agreed with them to repay the money and actually did pay Tsh. 100,000/= into the Mikoani Traders Ltd bank account. Later on he paid Tshs. 400,000/= to Omari Bagibeli who was the Manager of Mikoani Traders Ltd. He also deposited Tshs. 1,000,000/= and pledged a motorcycle which was taken as security. He blamed the trial court for convicting and sentencinq him despite all this evidence.

The Senior State Attorney argued that there was ample of evidence which proved the offence beyond all reasonable doubts, therefore the trial Court was justified in law to convict and sentence him.

Ms. Bilishanga strongly argued that there was evidence which shows that the appellant issued a postdated knowing that he had insufficient funds in his bank account. The cheque had a date for it to be honoured. That on that date the cheque was not honoured because the bank account of the appellant had no enough money. He was notified about his bounced cheque but he failed to make good within the period of eight (8) days from the date of notice. With regard to the defence evidence the appellant gave, Ms. Bilishanga said that he failed to deposit money in the account because he was attending his sick wife and mother. She was of the view that this defence has nothing to do with the elements of the offence which were adequately proved. The Appellant knew that he had insufficient funds in his account, why then did he drew up the cheque? He could not have drawn and postdated the cheque. The views of the Senior State Attorney were that this ground is devoid of merit. tv Page 3 of 10 I have navigated through the evidence in this case and found that the Appellant is a businessman who was involved in business with the complainant Mikoani Traders Ltd who on 23/04/2018 supplied to him various goods valued at Tsh 7, 800,000/=. The Appellant after dully receiving the goods issued a postdated cheque No. 000291 dated 30/04/2018 valued at TShs. 7, 800,000/= payable to Mikoani Traders Ltd bank account No. 20606600200 maintained by the NMB Bank PLC at Kenyatta Road Branch, Mwanza. When the said cheque was presented by the Mikoani Traders Ltd at their banker it was revealed that the Appellant bank account number 30110002920 maintained by the NMB Bank PLC, Bunda Branch had no funds, hence the cheque was endorsed "refer drawer" meaning that it was dishnoured (exhibit PA).

The prosecution witness one Fesser Baghir the operation Manager of Mikoani Traders Ltd served the appellant with a notice to make good the account within eight days (Exhibit PE). The eight days elapsed hence a report was made to police. The investigator of this case F. 1568 D/Cpl. Robert testified that in his investigation he found the appellant's bank account statement had nothing on 30/04/2018 when he drew up the cheque and remained with no money until on 05/07/2018 when Tshs. 100,000/= was deposited and automatically debited in repayment of an outstanding loan the appellant had in his bank account.

The appellant defended on this allegations that he did not have money in his account and that he did not deposit any either because his wife and his mother were sick. However, no any medical chit was tendered sh; Page 4 of 10 to prove this contention in order at least to cast doubt on the prosecution's case.

The offence of kite flying is a young criminal offence in our land. It found its way in the Penal Code via Act No. 17 of 1990. Prior to that such offences would be termed as offences under sections 301-310 of the Penal Code.

Such offences were also created in various other jurisdictions in order to protect the from been defrauded. For example in the USA this offence is known as check kiting, in India and Bangladesh is known as dischonoured cheque offence. In Africa especially in Nigeria it is also known as a offence. A dishonoured cheque offence deals with the individual victim as well as the bank itself.

Before I go to analyzing the evidence, let me explain a little about a cheque because I will be using some terms concerning payments using . A cheuqe or check (American English) may simply be defined as a document that orders a bank to pay a specific amount of money from a person's bank account to the person whose name the cheque has been issued. The person who is the author of the cheque is called the "Drawer." The person whose favour the cheque is signed is called the "Payee" and the bank which is directed to pay the amount is called the "Drawee"

A cheque may be returned by the drawee bank unpaid. When such a situation occurs the cheque is said to be dishonoured. A cheque may be dishonouerd on any of the following or a combination thereof namely, A cheque may be returned by the drawee bank because of any of the

Page 5 of 10 +v following reasons: Insufficient Funds; Non-Applicability of Funds; Irregular Signature; Alterations in the Cheque; Stale Cheque; Frozen Account; and Account Closed, to mention a few. When a cheque is dishonoured then the drawee bank issues a cheque return notice or an endorsement to that effect on the cheque giving the reasons for return.

Cheques have become an integral part of our day to day transactions. Cheques are widely used especially by business men who operated current account with banks. As said above, the rationale for introduction of this offence is to protect banks from losing money through the fraud of check kiting during float. Float in respect of cheque payments is a period which a drawee bank takes for clearing a cheque from the drawer's bank. The fraud is perpetrated when the drawee bank pays the payee and after clearance it is found that the drawer's account has no or has insufficient funds thereby causing an unauthorized to the drawer's bank. The fraud is minimized where float is minimized by paying cheques after clearance.

Back to our case, Section 332B(1) of the Penal Code which creates the offence of kite flying reads:-

"3328(1) Subject to subsection (3) any person who fraudulently obtains credit or money from a banker by means of kite flying is guilty of an offence and liable on conviction to imprisonment for a term not exceeding ten years.//

Section 33B(3) reads:

'~ person shall be presumed fraudulent and guilty of an offence under this section if the cheque drawn by him section is not honoured for reason of lack or insufficiency of funds in Page 6 of 10 >h the account and within eight days after he is informed of the dishonoured cheque he fails or refuses to make good on the account"

This offence is defined under section 332B(5) of the Penal Code which reads:-

"3328 (5) for the purposes of this section the expression kite-fyling means obtaining money or credit by cheque on an account which insufficient or no funds at a/~ thereby causing an unauthorized overdraft to the banker."

The remedy to the banks is found in section 332 B (4) of the same Act which reads:-

"3328(4) where any person is convicted of an offence under section the Court shall order the forfeiture to the United Republic of any money, goods or property obtained in the course of or after the commission of the offence/ as well as full compensation to the bank in respect of the money

involved in the kite-flying. 11

The elements if the offence of kite flying thus are as following:-

i, The accused has to obtain money or credit of any amount. ii. That credit or money must have been obtained from a banker. iii. The obtaining must be fraudulent. iv. By means of a kite flying.

The act is said to be fraudulent if the cheque drawn is not honoured for reason of lack or insufficient funds in the account and within 8 days after been informed he fails to make good the same.

Page 7 of 10 kY By means of a kite flying means he used a cheque of which account has no funds or insufficient funds thereby causing an overdraft without the bankers authority.

The evidence in this case led by the prosecution is to the effect that on 23/04/2018 the appellant ordered and was supplied with various commodities valued at Tshs. 7, 800,000/= and promised to pay the same by cheque. After the commodities were supplied to him he issued a cheque number 000291 dated 30/4/2018. The said cheque was to be paid from his bank account number 30110002920 maintained by the NMB Bank PLC at Bunda Branch which was the Drawee. The Payee was the Mikoani Traders Ltd.

When the Payee presented the cheque to the Drawee NMB Bank PLC Kenyatta Road Branch, Mwanza the same was dishonoured due to insufficient funds in the drawer's account. PW1 notified the appellant who promised to deposit money in his account and requested PW1 to be patient. However seen time was going without the appellant depositing money in his account. DWl reported to police. PW2 Eliet Pius Kabyemela testified that after receiving the cheque number 000291 immediately checking in the system and found that the appellants account (drawer) had no sufficient money to meet payment of Tshs. 7,800,000/= she dishonoured the cheque and endorsed "refer to the drawer".

By the evidence of PW2 the Bank didn't make any payment to the payee, Mikoani Traders Ltd instead she advised the payee to go back to the drawer, the appellant, and find another alternative of payment.

Page 8 oflO ~ In the evidence of PW2, the Bank did not make any payment. Therefore neither the appellant nor the Mikoani Traders Ltd received any money from the NMB Bank PLC, Kenyatta Road Branch. As seen above the ingredients of the offence require the accused to obtain the money or credit from the bank. It is obvious that this ingredient was not established by evidence. It could have been established if let us say the appellant after drawing a dub cheque and presented to the payee then the drawee ie NMB Bank PLC, Kenyatta Road Branch in Mwanza opted to pay Mikoani Traders Ltd pending clearance of the cheque from NMB Bank PLC, Bunda Branch. When the bank pays during float and then later on the clearance report reveals that the drawer's bank account has insufficient fund, then the bank is required to notify the drawer to make good his accounts within 8 days. If the drawer fails, the offence is completed.

In the instant case the very important ingredient of a person obtaining money or credit money from the Bank was not established. What was established is that the accused obtained the commodities from PW1 (Mikoani Traders Ltd). With intent to defraud Mikoani Traders Ltd, he falsely pretended to pay by cheque while he knew that the cheque was false, which to his knowledge it was containing false information. This is an offence under sections 301 and 302 of the Penal Code known as obtaining goods by false pretences.

Having discussed deeply this first ground which as I said above, it is the very important ingredient of the offence of kite-flying I find that there is no need of continuing with the other grounds of appeal. It is my firm

Page 9 of 10 ~ view that there is merit in this ground and the same suffices to dispose of the matter.

In the upshot for reasons stated above, I allow the appeal. I do hereby quash the conviction and set aside the sentence. The appellant is to be released from prison unless otherwise lawfully withheld for other reasons not this mater. Order accordingly.

/,' f' F.K.~NDA JUDGE 25/09/2020

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