Kassim Mpanga v Uganda [1995] UGSC 14

Supreme Court · 1995 Appeal Dismissed ✦ AI-generated summary ↓ Download

Jurisdiction

Uganda

Case Type

Second criminal appeal to the Supreme Court from the High Court's dismissal of a first appeal against conviction by the Chief Magistrate's Court

Decision

Appeal dismissed; convictions and sentences on Counts I and III upheld; the trial Magistrate's compensation order set aside and a fresh compensation order in respect of Count I substituted.

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Holding

The Supreme Court dismissed the second appeal. 'Loss' in section 258(1) of the Penal Code bears its plain ordinary meaning: money is lost where diligent recovery efforts prove fruitless, and later recovery does not disprove loss. The unrecoverable overdrafts on 29 accounts amounted to financial loss, and the appellant, lending in deliberate breach of bank policy while concealing the position, knew loss would result. The Banking Act does not exonerate an individual employee who lends without authority, nor does it override the Penal Code. For abuse of office under section 83(1), no actual loss need occur; the arbitrary unauthorised unsecured lending was prejudicial. The compensation-order ground could not be raised afresh on second appeal.

Facts

The appellant was branch manager of the Libyan Arab Uganda Bank, Masaka. Between 1989 and 1992 he granted overdrafts on 65 accounts without the General Manager's required approval and without security, contrary to bank policy known to him. An inspection team found a debit difference of Shs.326m/= and recovered ledger cards the appellant had kept in his office and partly destroyed. The appellant made several written admissions acknowledging he had granted unauthorised overdrafts, diverted interest to cover overdrawn accounts, and concealed accounts from monthly returns. Recovery efforts repaid much of the sum, but overdrafts on 29 unsecured accounts totalling about Shs.151m/= proved unrecoverable, the borrowers having no security and failing to pay. The bank treated the money as lost. The appellant was convicted of causing financial loss, embezzlement, and abuse of office; the High Court quashed the embezzlement conviction but upheld the other two.

Issues

Whether the appellant's grant of unauthorised, unsecured overdrafts caused 'financial loss' to the bank within the meaning of section 258(1) of the Penal Code, given continuing recovery efforts and no formal write-off.
Whether the appellant knew or had reason to believe that his act would cause financial loss to the bank.
Whether section 258(1) of the Penal Code must be read together with the Banking Act so as to exonerate the appellant as an individual employee.
Whether the grant of unauthorised, unsecured loans was an arbitrary act prejudicial to the employer amounting to abuse of office under section 83(1), and whether actual loss is a required ingredient.
Whether a ground challenging the compensation order, not raised on the first appeal to the High Court, could be entertained on second appeal.

Orders

Appeal dismissed.
Convictions and sentences on Counts I and III upheld.
Compensation order of Shs.84m/= made by the trial Magistrate set aside under section 337(2) of the Criminal Procedure Code Act.
Substituted order that the appellant pay the Bank, as compensation for the loss suffered in respect of Count I, the sum of Shs.84m/=

Key headnotes

Causing Financial Loss — Section 258(1) Penal Code — Meaning of 'loss'

The word 'loss' in section 258(1) of the Penal Code is undefined and bears its plain and ordinary meaning; money is lost where, after diligent but fruitless efforts at recovery, recovery has become uncertain or unlikely, and subsequent recovery of the thing does not of itself disprove the loss.

Causing Financial Loss — Section 258(1) Penal Code — Knowledge as an ingredient

An accused has the requisite knowledge or reason to believe that his act will cause financial loss where he grants unauthorised and unsecured overdrafts in deliberate breach of known bank policy and takes steps to conceal his conduct.

Banking Act and Penal Code — Criminal liability of bank employee

Section 258(1) of the Penal Code imposes criminal liability on the individual bank employee, not on the bank; the Banking Act provisions permitting banking business and advances made in good faith without security do not exonerate an employee who lends without authority, and section 41 of the Banking Act does not override the Penal Code.

Abuse of Office — Section 83(1) Penal Code — Actual loss not an ingredient

Actual loss to the employer is not an ingredient of the offence of abuse of office under section 83(1); it is sufficient that the accused did an arbitrary act in abuse of the authority of his office prejudicial to the interests of his employer, such as exposing the bank to risk through unauthorised unsecured lending.

Second Appeal — Scope — Grounds not raised before the High Court

A ground not raised on the first appeal to the High Court cannot be entertained by the Supreme Court on a second appeal, though the court may exercise its powers under section 337(2) of the Criminal Procedure Code Act to vary an order or remit the matter.

Compensation Order — Section 259 Penal Code — Mandatory and count-specific

On conviction under sections 257 or 258 of the Penal Code, an order for compensation to the aggrieved party is mandatory in respect of each such count, and a compensation order that fails to specify the conviction to which it relates is erroneous in law.

Legislation cited (9)

Penal Code Act s.258(1)
Penal Code Act s.257(a)
Penal Code Act s.83(1)
Penal Code Act s.259
Banking Act 1969 s.43
Banking Act 1969 s.10(3)
Banking Act 1969 s.41
Evidence Act s.21
Criminal Procedure Code Act s.337(2)

Cases cited (1)

Holmes v Payne [1930] 2 KB 301

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