The High Court has overturned a Sh5.1 million award against the Central Bank of Kenya (CBK) over the alleged malicious prosecution of a former official linked to the suspected theft of electronics from Imperial Bank’s Likoni branch during receivership.
The court ruled that the CBK merely provided information to police, who conducted independent investigations before the Director of Public Prosecutions (DPP) decided to charge the official, Naaman Muguna.
“I am not satisfied that the prosecution constituted an abuse of the court process,” said the judge, setting aside a 2023 magistrate’s decision awarding Muguna damages.
The court affirmed CBK’s right to report missing property.
The case stemmed from allegations that Muguna, then an assistant bank officer seconded to the Kenya Deposit Insurance Corporation (KDIC), removed a 54-inch Samsung television, a colour printer, and a coffee maker from Imperial Bank’s Likoni branch without authorisation.
The CBK alleged he took the items to his house for personal use without notifying management or the KDIC regional manager. He had been deployed as receiver manager at Imperial Bank’s Likoni branch while it was under receivership.
Muguna, who served as receiver manager at the branch, was arrested in May 2018 and charged with theft or an alternative charge of handling stolen property.
Eleven prosecution witnesses testified, but the trial court acquitted him, finding insufficient evidence and that the criminal intent was lacking.
He sued the CBK and Attorney General for malicious prosecution, and the magistrate awarded him Sh5.15 million, citing the prosecution’s failure to meet legal thresholds and reliance on “underwhelming” evidence.
It held both defendants jointly and severally liable for Muguna’s malicious trial.
The magistrate reasoned that the police investigative report had not been produced and stated the prosecution threshold had not been met.
On appeal, the Central Bank argued it did not prosecute Muguna and that the decision to charge belonged to the DPP. It said it reported missing property after an audit and that the items were later recovered from Muguna’s house.
It said the Magistrate misapplied the law on malicious prosecution by treating Muguna’s acquittal as proof of malice and by ignoring evidence that he removed the bank’s items without following procedure.
The bank also faulted the award as baseless, saying the trial court made findings unsupported by evidence and against the weight of the record.
The High Court agreed with the bank's arguments, restating the elements of malicious prosecution and stressing that the burden lay on the claimant.
“The only person who can be sued… is the person who prosecutes,” said the court, adding that the DPP generally bears that role. The court found no proof that the bank misled police or withheld material facts.
“There is no evidence that the appellant deliberately deceived the police by supplying false information,” it stated, adding that where police conduct independent investigations, liability cannot be shifted to the complainant.
The record showed a security officer had recorded the removal of items in the occurrence book, and that staff only learned the items’ whereabouts after confronting the official. A police officer testified he received the report and proceeded to recover the items with other officers.
Muguna had acknowledged possession and that he took the items for repairs at Kongowea. It was his evidence that he had the items because the stalls at Kongowea, where he had taken the items for repair, had been demolished.
Further, it was claimed that when he left the bank, two years after he had been deployed, he handed over these items, amongst other items, to the officer who took over from him.
In a letter responding to a show-cause notice, he said he took the items “in good faith for repairs” and regretted the delay in returning them. He also said he was “very remorseful.”
The High Court held that those circumstances justified a report to the police.
“All the appellant did was merely to give information,” the court said, noting the DPP’s constitutional independence under the Office of the Director of Public Prosecutions Act.
