AMENDED RULING HARPAL SINGH VIRDEE AND BANSONS ENTERPRISES LTD MISCELLANEOUS COMMERCIAL CAUSE NO

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA (COMMERCIAL DIVISION)

AT DAR ES SALAAM MISCELLANEOUS COMMERCIAL CAUSE NO. 42 OF 2023 HARPAL SINGH VIRDEE……………………….……………………………PETITIONER

VERSUS RAJINDER KAUR BIRDI ………………………………………………1ST REPONDENT BANSONS ENTERPRISES LIMITED………………………………..2ND RESPONDENT

RULING Date of last Order: 02/12/2024 Date of Ruling: 31/01/2025 GONZI, J. The petitioner filed the petition at hand and prayed for orders against the 1st and 2nd Respondents as follows: - (a) A declaration that the actions of the 1st respondent is prejudicial and unfair to the affairs of the 2nd respondent. (b) The 1st respondent be compelled to cooperate with the petitioner for the purpose of resolving the company's managerial issues including filing of annual reports. 1 In the alternative: (c) The Honourable Court be pleased to make an order allowing the petitioner to make a single shareholder resolutions and act on behalf of the 2nd respondent. (d) That the costs of the petition be provided for. (e) Any other reliefs the Court may deem fit to grant. The 1st and 2nd Respondents also Cross-Petitioned against the Petitioner praying for the following orders: (a) A declaration that the Petitioner is not a member or director of the 2nd respondent company. (b) Issuance of a restraint order against the Petitioner preventing him from illegally and unfairly acting for and on behalf of the 2nd Respondent Company. (c) An order be issued to allow the 1st Respondent, as the sole Member and Director of the 2nd Respondent Company, to convene a single shareholder meeting; to appoint another person as a director and to allot some shares as are necessary to regularize the affairs of the

company. (d) The costs of the Cross Petition be provided for. 2 As gathered from the contents of the Amended Petition alongside the affidavit verifying the same, the 2nd Respondent Company was incorporated on 2nd November 1977 in Tanzania as a Private Company Limited by shares. According to Annexture “C” to the Petition, the official search report from the office of the Registrar of Companies which is dated 11th June 2020, the 2nd Respondent Company has a share capital of TZS. 100,000/= divided into 5,000 shares of TZS. 20/= each. The shareholders are indicated to be Saroop Singh Birdi holding 1 ordinary share and Rajinder Kaur Birdi holding 1 ordinary share. The two were a husband and wife respectively until the demise of the late Saroop Singh Birdi in 2009 whereupon the Petitioner who is their son, became the administrator of estate of the late Saroop Singh Birdi. The Directors of the 2nd Respondent Company are shown in annexture “C” to the petition to be Harpal Singh Virdee, who is the Petitioner herein and Rajinder Kaur Birdi, who is the 1st Respondent. They are a son and his mother respectively. The search report from the Registrar of Companies, in addition to providing the above said particulars relating to the 2nd Respondent Company, also contains a Note at the foot to the effect that: 3 “The company subsequently submitted Annual Returns and other statutory Forms

indicating different changes, but the same not registered due to anomalies such as: i. Change of Principal place of business. ii. Allotment of shares Form is filled partially.” As stated above, the Petitioner is an administrator of estate of his late father one Saroop Singh Birdi who died at the Aga Khan Hospital in Dar es Salaam on 5th June 2009. On 1st June 2011 the Petitioner, Harpal Singh Virdee, was appointed by the High Court of Tanzania at Dar es Salaam in Probate and Administration Cause No.24 of 2011 as the Administrator of estate of the late Saroop Singh Birdi. This is as per Annexture “A” to the Petition. In that capacity as an administrator of estate of the late shareholder, the Petitioner became a beneficial shareholder of the 2nd respondent alongside the 1st Respondent who is one the original two members and shareholders in the 2nd Respondent Company. The name of the Petitioner is yet to be entered into the Register of Members of the 2nd Respondent Company. Even the latest records from the Registrar of Companies as per Annexture “C” to the petition presented to Court by the Petitioner himself bear that fact. However, the Petitioner is a director of the 2nd Respondent 4 Company. It was not explained in Court as to how and when did the Petitioner become a director in the 2nd Respondent Company. The records from the Registrar of Companies as per the official search

report brought to Court as Annexture C to the Petition disclose the fact that the 1st Respondent and the Petitioner are the only Directors of the 2nd Respondent Company. The major complaint of the Petitioner is that the 1st Respondent has consistently sidelined the Petitioner by refusing to cooperate with him as directors of the 2nd respondent company rather that she has been taking unilateral decisions which are not sanctioned by resolutions of members or board of directors. The Petitioner alleged that in the year 2012, through mutual consent between the Petitioner and the 1st respondent, the petitioner filed annual returns with the office of the Registrar of the Companies showing appointment and termination of the 2nd respondent company's directors and secretary. He also paid all the then pending statutory fees. However, the 1st respondent desisted from participating in the company’s affairs including not attending meetings when she was invited and refusing to provide particulars and sign the necessary documents. It was complained further by the Petitioner that the un-cooperative attitude of the 1st Respondent has hindered the opening of an online ORS Account for the 2nd Respondent 5 Company which involves providing personal information of the shareholders and directors. Also, the Petitioner complained that the lack of cooperation on the part of the 1st Respondent, has made

it impossible for the 2nd Respondent Company to file various documents with the office of the Registrar of Companies through the online registration system (ORS. It was complained further by the petitioner that without the involvement of the petitioner and without any resolution of the 2nd respondent company, the 1st respondent entered into an agreement with another company namely J.W. LADWA (1977) LIMITED for the purpose of disposing off the 2nd respondent company's assets to it. The Petitioner complained that the 1st respondent's conduct does not only violate the company's management procedures but also sabotages the interests of the 2nd Respondent Company and its shareholders as the 1st Respondent has chosen to side with the 2nd Respondent company's adversaries who have always been in Court trying to deprive the 2nd Respondent company of its assets. It was stated as an example that in Land Case No. 3 of 2017, the said J.W.Ladwa (1977) Limited was sued for trespass towards the 2nd respondent's landed properties on Plot 273 Block “C” Chang’ombe area, Dar es Salaam whereby the 2nd respondent company 6 prevailed in the suit and was declared the lawful owner of the plot. The Petitioner stated further that the actions of the 1st respondent, if not controlled by an order of the Court, may very likely damage the affairs of the 2nd respondent company and of the petitioner too. Hence,

it was stated, the petition has been made for the purpose of asking the Court to make an order compelling the 1st respondent to provide her cooperation so that the 2nd respondent company can be properly managed and or alternatively, that the petitioner be allowed to act and make resolutions as a single director of the company for the purpose of meeting the statutory requirements and defending the 2nd respondent company's affairs and assets. On the other hand, the 1st and 2nd Respondents did not only resist the petition, but also they cross-petitioned against the Petitioner. From the Answer to the Amended Petition and the Cross Petition read together with the affidavit verifying the same, it was stated that the petitioner is a mere administrator of estate of the late Saroop Singh Birdi, but that he is conducting himself against the affairs of the company and those of the real member of the company, that is the 1st Respondent. It is was stated further, 7 through the cross petition, that the petitioner is not a member, shareholder or a director of the 2nd respondent company but that the petitioner has been illegally assuming the roles and responsibilities of the rightful director and member of the company who is the 1st Respondent. It was stated that the conducts of the petitioner are unfair and prejudicial to the well-being of the 2nd Respondent company, as well as the rights and

interests of its members. The Respondents therefore, prayed for an order declaring the Petitioner not a member or director of the 2nd respondent company. Also, the Respondents prayed for issuance of a restraint order against the Petitioner preventing him from illegally and unfairly acting for and on behalf of the 2nd Respondent Company. Further, an order was sought to allow the 1st Respondent, as the sole Member and Director of the 2nd Respondent Company, to convene a single shareholder meeting; to appoint another person as a director and to allot some shares as are necessary to regularize the affairs of the company. The respondents also craved for costs, among other reliefs. The hearing of the petition and the cross petition proceeded jointly and by way of written submissions. Mr. Thomas Eustace Rwebangira, Learned Advocate, represented the Petitioner. The Respondents cum Cross- petitioners, were represented by Mr. Robert R. Rutaihwa, Learned Advocate. 8 I thank both Learned Counsel for their useful submissions in respect of both the Petition and the Cross-Petition. It was submitted for the Petitioner that the Petitioner is a director in the 2nd respondent company as confirmed by Annexture ‘C” to the Amended Petition which is an official search report from the Registrar of Companies. It was also submitted that the petitioner is an administrator of the estate of the late Saroop

Singh Birdi who was a shareholder and director of the 2nd respondent as evidenced by annexture A to the affidavit. It was, therefore, submitted that the petitioner is currently a beneficial shareholder of the shares falling under the estate of his late father Saroop Singh Birdi, the deceased shareholder. Mr. Rwebangira, Learned Advocate for the Petitioner, submitted that for a company to operate, the directors of the company are required to work together, make resolutions for the smooth running of the company and ensure statutory compliance. He argued that annexture B to the Petition, shows the last filed annual returns of the 2nd Respondent Company dated 9th June 2016. He argued that as per annexture C to the Petition, which is the official search report from the Registrar of Companies, the annual returns 9 filed were not registered by the Registrar of Companies as they contained anomalies some of which required to be rectified by the directors of the 2nd Respondent Company, namely the petitioner and the 1st respondent. It was argued that, unfortunately, the 1st respondent was not ready to corporate with the Petitioner in that regard despite several calls for her to do so. Mr. Rwebangira, Learned Advocate for the petitioner, referred the Court to annexture D which is a letter calling the 1st respondent to work along with the petitioner for the compliance of the 2nd

respondent's particulars in the office of the Registrar of companies for the purposes of creating an Online Registration System (ORS) Account for the 2nd Respondent Company. He argued that despite the letter, the 1st respondent refused to sign the required documents and has refused to date. Mr. Rwebangira, Learned Advocate, submitted further that the petitioner has been a key protector of the existence of the 2nd respondent company and its properties from alienation. He referred the Court to annexture ‘G’ to the Petition in that regard. He submitted that in addition to the 1st Respondent’s lack of cooperation by not signing the necessary documents for the ORS Account update, she has also been involved in a sabotage of the company's efforts to protect the company’s assets. He 10 referred the Court to paragraph 8 of the amended petition and pointed that without any company’s resolution, and without consulting the petitioner, the 1st respondent unilaterally signed an agreement with J.W. LADWA (1977) Limited for sale of all properties of the 2nd respondent company and those of Terrazzo Paviors Limited, a sister company of the 2nd respondent. It was submitted that the actions of the 1st respondent were intended to prejudice the affairs of the 2nd respondent company as well as to sabotage the petitioner's efforts. It was submitted that in all what the 1st respondent did, there was no

meeting or resolution of the 2nd Respondent Company but that she did everything on her own, involving other persons who are not members of the 2nd Respondent Company. It was submitted further for the Petitioner that, as a consequence of the actions of the 1st respondent, the 2nd respondent company is at risk of being put on the list of companies to be de-registered and further that for the period during which the company has been unable to file the required annual returns with the Registrar of Companies, the 2nd respondent company is running the risk of the being penalized for late filed annual returns fees. 11 Mr. Rwebangira, Learned Advocate, submitted further that the 2nd respondent being a business entity has been denied the opportunity of engaging itself in the business of the company since the petitioner alone cannot transact business for the 2nd respondent company. He added that, as a result, this has denied the government and the general public income for non-payment of taxes. He submitted further that the 2nd respondent company is also suffering from accumulated penalties and fines due to tax payment delays. Mr. Thomas Rwebangira, Learned Advocate, concluded by advancing the Petitioner’s prayers that, in the circumstances, the Court be pleased to make a declaration that the conduct of the 1st respondent is prejudicial to the affairs of the 2nd respondent and that the

1st respondent be compelled to cooperate with the petitioner for the purpose of resolving the company’s managerial issues including filing of annual reports. It was submitted that for the sake of survival of the company, the petitioner is ready to work with the 1st respondent if she agrees. In the alternative, the petitioner also prayed for the Court to make an order allowing the petitioner to make a single shareholder resolutions and 12 act for and on behalf of the 2nd respondent company. Mr. Rwebangira, Learned Advocate, reasoned that the 1st respondent is recognized by the Petitioner as a shareholder and, therefore, if the alternative prayer is granted, she will lose nothing as her interests will remain protected without any problem. Mr. Rwebangira, Learned Advocate, concluded by submitting that the petition at hand is actually brought under section 233(1) of the Companies Act which empowers the Court, if satisfied that the petition is well founded, to make such interim or final order as it sees fit for giving relief in respect of the matters complained of. By passing, Mr. Rwebangira, Learned Advocate, hinted also that the Respondents’ Answer to the petition, which also contains the Cross Petition, was not verified by way of an affidavit verifying the Petition something which is contrary not only to the law but also to the Court order that had ordered amendments in that

respect. The petitioner prayed that the petition be allowed and the cross petition be dismissed with costs. Mr. Robert Rutaihwa, Learned Advocate, submitted in reply for the respondents. He started by arguing that while the petitioner contends that 13 the actions of the 1st Respondent are prejudicial and unfair to the 2nd Respondent, there is no pleading, suggestion and or submissions of any wrong done by the 1st Respondent to the petitioner to entitle him file the present petition. He submitted that the petition was brought contrary to the spirit of Section 233(1) of the Companies Act which requires that for a complaint to be made under that provision, it must affect the members of the company or some part of its members which include at least the petitioner himself. Mr. Rutaihwa, Learned Advocate, submitted that the petitioner is not a member of the 2nd Respondent Company but is an administrator of the estate of a deceased member and shareholder. As such, he argued, in order to succeed in his petition, the Petitioner ought to have shown how the unfair prejudices complained on affect the estate of the late Saroop Singh Birdi on the part of the shares held in the company. Mr. Rutaihwa, Learned Advocate, submitted that upon reading the pleadings and all the submissions, there is nothing of assistance in responding to the aspect. He referred the Court to the rule in Velisa

Elizabeth Deflosse Ingletion (petitioning as legal representative under power of attorney of Gorden McClymont) vs. Joseph Ignatius Noronka and 2 Others, Misc. Commercial Cause No. 20 14 of 2021 HC where at page 7 of the ruling, this Court set the 4 criteria for a petition for unfair prejudice to succeed under section 233 of the Companies Act. He argued that one of the criteria is the petitioner being a Member. He submitted that all what has been complained of in the cross petition and verified through an affidavit, demonstrate that, the petitioner assumed the affairs of the company and conducted them, including filing Court cases or supervising the same, filing different forms and representing himself as a member and director of the company while he is not. Further, it was submitted that the said conducts affect the company and are unfair to the 1st Respondent as a member of the company. Mr. Rutaihwa, Learned Advocate, submitted that if the cross-petition is granted in terms of section 233 (2) and (3) of the Companies Act, the Court has such wide discretion to grant the reliefs. He submitted that, specifically, the Respondents deserve the reliefs claimed in the cross petition namely for an order declaring the Petitioner not to be a member or director of the company so as to avoid the petitioner’s fraudulent representation that he is a member or director of the company while he

is not. Also, he submitted that the cross petitioners are entitled to a restraint order against the petitioner from illegally and unfairly acting for the company. He reasoned that a mere 15 legal representative has no such right and is not recognized in law. He argued that the petitioner should thus be prohibited from such unfair and prejudicial conducts affecting the company and the rightful member of the company. Mr. Rutaihwa submitted that the third prayer is the Respondents’ claim for the order allowing the 1st Respondent who is a member and Director of the 2nd Respondent company to convene a single shareholder meeting in terms of Section 137 (1) (2) and (3) of the Companies Act so as to appoint another person as a director and allot some shares as are necessary to regularize the affairs of the company so as to allow the company to meet it’s legal requirements in the subsequent meetings. Mr. Rutaihwa, Learned Advocate, submitted that through annexure BANSON 3 attached to the Amended Answer to Amended Petition, which is a decision of the Court of Appeal of Tanzania, the petitioner while testifying as reflected in the records of that case, had testified that the directors of the 2nd Respondent Company were two namely the late Saroop Singh Birdi and Rajinder Kaur Singh and, therefore, upon death of the Petitioner’s father, as of 27.08.2012, it was only the petitioner’s mother

who was the director of the 2nd Respondent Company, and not the Petitioner. 16 Mr. Rutaihwa, Learned Advocate, submitted that the quoted passage from a valid judgment of the Court of Appeal speaks louder in the words of the petitioner himself that since 2012 to the date of testifying in 2016, to the date of hearing of the appeal in 2023, the director of the Company was only one namely the 1st Respondent. It was submitted that the information contained in annexure ‘C’, the search report from the office of the Registrar of Companies, are incorrect to the extent that the same indicate the petitioner to be a Director of the 2nd Respondent Company. He submitted further that the petitioner has been misconducting himself by presenting different documents to the Registrar of Companies trying to effect changes in the company’s records - a thing he knows to be illegal. Mr.Rutaihwa, Learned Advocate, pointed to Annexure B to the amended petition purporting to be the annual returns of the 2nd Respondent Company, and reasoned that just like the other documents attached to the amended petition, it reflects changes in the company and names the petitioner as a Director therein. He submitted that the purported annual returns were prepared and filed by the petitioner unlawfully representing himself to be a member and Director of the 2nd Respondent Company while he is not. He referred the Court

to Annexure C to the Petition, which is an official search 17 report from the Registrar of companies and which does not recognize the Petitioner as a member or shareholder in the 2nd Respondent Company. It was further submitted by Mr.Rutaihwa, Learned Advocate for the respondents, that if the petitioner knows that one director or member cannot validly sit to pass a resolution for the company, how did the Petitioner get appointed and approved as a director of the 2nd respondent company as to validate the contents of annexure ‘C’ to the amended petition? He submitted that it all demonstrates an illegal acting, unfair prejudice and attracts a criminal offence of giving false information or forgery and perjury on the part of the petitioner. It was submitted further by Mr. Rutaihwa, Learned Advocate, that the petitioner had never ever become a properly appointed director of the company, and if at all annexure ‘C’ was procured from the Registrar of Companies, it was out of the petitioner’s self-invitation and superimposition to that position, a fact which vindicates unfair prejudice on the part of the Respondents. It was argued that all what the petitioner has been doing are illegal for want of proper appointment just like what the Court found in the matter illegally filed by the Petitioner for the company. Mr. Rutaihwa relied 18 on the decision of the Court of Appeal of Tanzania

which he submitted that it was attached as annexure BANSON 3 to the Amended Answer to the Petition, as being conclusive on the issue of who are the directors of the 2nd Respondent Company. He submitted that this Court is estopped from giving another finding to contradict the position of the decision by the Court of Appeal. He relied on the principle in Issa Athuman Tojo V. R. (Criminal Appeal No. 54 of 1996), decided by the Court of Appeal of Tanzania at Dar es Salaam, whereby at pages 7 to 8 thereof the Court of Appeal addressed the principle of issue estoppel and found that: “Where an issue of fact has been tried by a competent Court on a former occasion and a finding has been reached … such a finding would constitute an estoppel”. Mr. Rutaihwa, Learned Advocate, submitted that the petitioner should be estopped from departing from his previous statements regarding directorship of the 2nd respondent company. He called upon the Court to declare that the petitioner’s ingress in the company was illegal and unfair to the Respondents. He submitted that the 1st Respondent is currently the sole 19 director of the company who is seeking permission to convene a meeting to appoint another person to fill in the position of the late Saroop Singh Birdi. It was submitted by Mr. Rutaihwa, Learned Advocate for the Respondents that if this Court finds the petitioner not to be a member of

the company, then the petition presented be found to lack legal basis and deserves to be dismissed. Mr. Rutaihwa, Learned Advocate for the Respondents, submitted that the cross-petition is well founded in both law and fact since the Petitioner as an administrator of the estate is not a member or a shareholder of the company but that he is deemed to be a member for the purpose of petitioning for unfair prejudice only but he cannot exercise the rights and duties as a member of the company. He submitted that the Petitioner is in control of the assets of the company but he is not the director nor a shareholder thereof, thus he is denying the rightful member the use of the properties of the company for the benefit of the company. In further reply submissions, Mr.Rutaihwa, Learned Advocate for the Respondents, submitted that the petitioner is complaining of the 1st Respondent not being cooperative to him in managing the affairs of the 2nd Respondent Company. He submitted in response that this complaint could not constitute an unfair prejudice in law. He called upon the Court to uphold 20 the principle that “he who goes for equity must have clean hands”. He submitted that the petitioner who is not a director or member in the company but who has superimposed himself in the directorship of the company and is referring himself as a member of the company, is complaining of lack

of cooperation from the only lawful director and member of the company! Mr. Rutaihwa, Learned Advocate, queried as to how could the 1st Respondent cooperate with a person not legally appointed and who has not followed the procedure to be part of the company? He argued that until the requested single member and single director meeting is held by the 1st Respondent, and the 1st Respondent is allowed to regularize the affairs of the 2nd Respondent Company, only then can the petitioner complain of lacking cooperation from the 1st Respondent. Mr. Rutaihwa, Learned Advocate, submitted that the 1st Respondent was right in not cooperating with the petitioner as that would have been illegal and a nullity. From this argument, the Respondents, through their cross petition, prayed for the 1st Respondent to be given mandate to hold single shareholder and single director meetings so as to regularize the structure of the company so that the Respondents can be able to comply with the law. He argued that unless this Court gives sanction to allow the 21 1st Respondent to sit and have the affairs of the 2nd Respondent regularized, the petitioner has no right to interfere with the affairs of the company. Mr.Rutaihwa, Learned Advocate, submitted that the argument that the company is at risk of being de-registered, is not backed by the pleadings. He submitted that, deregistration could possibly be

caused by the illegal acting of the petitioner for and on behalf of the 2nd respondent Company without authority thereby misleading the Registrar of Companies and the general public. He argued that, at any rate, the act of the petitioner assuming responsibilities without authority is dangerous to the Respondents, third parties dealing with the company and the responsible authorities regulating the affairs of the company. He submitted that the prayer to allow the 1st Respondent to sit and regularize the affairs of the 2nd respondent company will respond to the cry by the petitioner, if at all the Court finds anything to rule out. In respect of the argument that the government is losing revenues in the form of taxes, Mr.Rutaihwa submitted that the rule is that parties are bound by their pleadings and cannot be allowed to raise a fresh case which is not part of the petitioner’s complaint in the amended petition. He added 22 further, that the arguments, at any rate, do not constitute unfair prejudice to the petitioner even if he is found to have interest in the company. Mr. Rutaihwa, Learned Advocate, submitted that there is no unfair prejudice which has been demonstrated by the petitioner to affect his rights or the rights of the company. Also, he submitted that the 1st Respondent cannot be compelled to cooperate with a person who is not a member or director properly so called. He

argued that the petitioner, even though the administrator of the estate of the deceased Member, cannot sit in the Annual General Meeting and pass a resolution because he is not a member of the company. Therefore, he argued, anything to be done by the petitioner will be void for want of authority. He also submitted that, by any stretch of imagination, the petitioner cannot be allowed to convene a single shareholder meeting on behalf of the 2nd Respondent Company. He prayed for the petition to be dismissed and for the cross petition to be allowed, with costs. By way of rejoinder, Mr. Thomas Rwebangira, Learned Advocate, submitted that the respondents’ reply submissions are based on factual issues un-supported by evidence due to their failure to file in Court the affidavit verifying the Answer to the petition. He also submitted that the cross 23 petition remains a mere statement which has no evidential value for the same reason. He submitted that as the learned counsel for the respondent did not respond on this aspect then it should be taken as a sign of an admission by the learned counsel that no affidavit verifying the Answer to the Petition and the Cross Petition was filed. Mr. Rwebangira, Learned Advocate, went on and submitted that the petitioner is not a mere administrator of the estate of the late Saroop Singh Birdi who was a shareholder and a director of the 2nd

respondent company. He submitted that as an Administrator of estate, it cannot be said that the Petitioner is not a member of the Company while he is holding the interests of the beneficiaries of the deceased Member in the 2nd respondent company. He submitted that the contents of Annexture ‘E’ to the Petition, which is an affidavit of the 1st respondent, recognizes that the petitioner was entrusted with the affairs of the 2nd respondent company by the 1st respondent. Hence, he argued, it cannot be said that the petitioner is a stranger in the business of the 2nd respondent. He added that the 1st respondent, by an affidavit, stated that the petitioner was given the power to run the business of two companies including the 2nd respondent company. 24 Mr. Rwebangira, Learned Counsel, submitted that in 2011 the petitioner herein was appointed as the Administrator of estate of the late Saroop Singh Birdi. However, after his appointment, at no time did the 1st Respondent write to the Registrar of companies for recognition of the Petitioner as a shareholder nor did the 1st Respondent initiate the internal procedures to have the Petitioner or any other beneficiary to whom the share of the deceased member were given, recognized as a shareholder through transmission. Mr. Rwebangira, Learned Advocate, reiterated that until the date of receiving the written submission in support of the cross

petition, the respondents had not filed in Court the affidavit verifying the cross-petition as ordered. Hence, he submitted, there is no cross-petition before the Court as the same is not supported with an affidavit verifying the cross-Petition and the Amended Answer to the Amended petition. He submitted that this omission contradicts the holding of this Court when deciding the preliminary objections in this very petition whereby it was held that if the respondents in this case fail to file affidavits verifying the Amended Answer to the Amended Petition and the Cross Petition, the two documents would thereby be rendered mere papers with no evidential value and the respondents would 25 be debarred from relying thereon in making their submissions or challenging any factual arguments which might be raised by the petitioner. Mr. Rwebangira, Learned Counsel, therefore argued that the written submissions which are squarely based on facts, remain unsupported hence the respondents should not be allowed to rely on factual issues while determining the Petition and the Cross Petition. Mr. Rwebangira, Learned Advocate, responded to the argument that the petitioner is not a member or director of the 2nd respondent company. He submitted that this is a factual issue which requires proof. He referred the Court to the contents of annexture ‘C’ in the amended petition which is a public document

issued by the Registrar of Companies indicating that the directors of the 2nd Respondent Company are Harpal Singh Virdee (Petitioner) and Rajinder Kaur Birdi, the 1st respondent. He submitted that these records have never been challenged in any way and the records have become so intact for years. He submitted that, in any event, mere words either written or stated orally cannot contradict the written records. He argued that a documentary evidence can only be contradicted by a written document not otherwise. He relied on sections 61 and 63 of the Evidence Act (Cap. 6 R.E. 2019). 26 Mr. Rwebangira, Learned Advocate, submitted that the petitioner is not a stranger in the business and affairs of the 2nd respondent Company. He referred the Court to the contents of Annexture “E” to the amended petition where the 1st Respondent in her affidavit stated that Mr. Harpal Singh Virdee had been entrusted with affairs of Terrazo Paviors Limited and other family estates in 2011 after the demises of the Petitioner’s father who was the 1st Respondent’s husband. Mr. Rwebangira, Learned Advocate, submitted that the affidavit of the 1st respondent was made on 6th July, 2020. He argued that the affidavit shows that prior to 6th July, 2020 the 1st respondent had allowed the petitioner to manage the 2nd Respondent Company and was working with the petitioner. It was submitted that the 1st respondent

has not brought any evidence to indicate that she has done anything for the well- being of the company since year 2009 when Mr. Saroop Singh Birdi passed away. It was submitted further that despite the fact that she is a shareholder and director of the 2nd respondent company, the 1st Respondent has been silent and has remained dependent upon the petitioner to operate the 2nd respondent company and that is why she has never complained about anything. 27 It was submitted by Mr.Rwebangira, Learned Advocate, that the petitioner had filed in Court Civil Appeal No. 20 of 2020 between Banson Enterprise Limited vs. Mire Artan, for the purpose of preservation of the property of the 2nd respondent and it was sanctioned by both the petitioner and the 1st respondent. He argued that it is not a crime for a person to defend the properties of the company from alienation. Mr. Rwebangira, Learned Advocate, submitted that the contents of Section 137(1) (2) and (3) of the Companies Act, 2002 as cited by the Learned Counsel for the 1st respondent, do not favour the 1st respondent since the 1st respondent is not a fit person to be entrusted with the total business of the 2nd respondent as she will dispose of all properties without following the procedures. Mr. Rwebangira, Learned Advocate, concluded his rejoinder by praying for the petition to be allowed and for the cross petition to be dismissed

with costs. I will determine both the petition and cross petition together. Firstly is on lack of affidavit verifying the Answer to the Amended Petition which also contains the Cross Petition filed by the Respondents. Mr. Rwebangira, 28 Learned Counsel for the Petitioner, has argued that the Respondents’ Answer to the petition which also contains the Cross Petition, was not verified by way of an affidavit verifying the Petition. Mr.Rutaihwa, Learned Advocate for the Respondents, opted not to respond to this argument. I have looked at the records of the Court. On 23rd August 2024 in my Ruling in respect of the preliminary Objection raised by Mr.Rwebangira that the Answer to Petition and the Cross Petition were not verified by way of an affidavit verifying the petition, the Court held and ordered that: “The factual substance of the petition exists only where it is converted into evidence by way of an affidavit verifying the petition. It is for all these practical purposes that I stand guided by the decision of the Court of Appeal of Tanzania in the case of Mohamed Abdillah Nur & Others vs Hamad Masauni & Others (Civil Appeal No. 630 of 2023) [2024] TZCA 129 (26 February 2024) and I subscribe to the rule therein stated that it is the usual judicial practice that applications of this nature are determined through affidavits, the basis of the Judge's findings is on the evidence on

record through the affidavit verifying petition and the affidavit verifying answer to the petition. In order for a petition to be determined on 29 merit, there must be an affidavit verifying the petition. I therefore uphold the preliminary objection raised by Mr. Rwebangira, learned Advocate for the Petitioner, and I find the Respondent’s Answer to the Amended Petition and the Cross Petition were defective for not being accompanied with their respective verifying affidavits. Therefore, I uphold the preliminary objections raised by Mr. Rwebangira, learned Advocate with costs. I order the Respondent to file affidavits verifying the Cross Petition and the Answer to the Amended Petition within 7 days from the date of this Ruling. It is so ordered.” Now, while arguing on the merits of the Petition and Cross Petition, Mr.Rwebangira, Learned Advocate, has hinted that the Respondents have failed or neglected to comply with the above stated order of the Court and thus they have not filed the affidavit verifying the Answer to the Petition which also contains the Cross Petition embedded in it. Although this was a new issue raised by the Learned Counsel outside the scope of the substance of the petition and cross petition, the same was raised in submissions in chief and thus the Respondents were accorded an opportunity to respond through their reply submissions, hence were not prejudiced.

Therefore, I will determine the same. The question is whether or not the above said order 30 was complied with by the Respondents/ Cross Petitioners? I have looked at the electronic case file and found that there is in place an affidavit verifying the Answer to the Amended Petition in which also the Cross Petition is embedded. It was filed on 30th August 2024. The affidavit verifying the Answer to the Petition and the Cross Petition in it, was affirmed by the 1st Respondent and it reads in part that: “I, RAJINDER KAUR BIRDI an adult, Female, hindu and currently residing in the United Kingdom do hereby AFFIRM and STATE as follows: - 1. That, I am the above named 1st Respondent and the Director of the 2nd Respondent. I am also the cross petitioner and the duly authorized principal officer to depone for the company which is the 2nd cross- petitioner hence well conversant with the facts of the matter herein.

2. That, I know for fact that, he (the Petitioner above named) has petitioned against the Respondents in a petition for unfair prejudice but also, I and the company have cross-petitioner against him in the 2nd Respondent (the company).

3. That, I state for my own and on behalf of the 2nd Respondent cum petitioner in the cross petition, that, 31 the averments contained in paragraphs 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, of the Answer to amended petition and paragraphs 12, 13, 14, 15 i), ii), iii), iv), v), vi) 16, 17, and 18 of the cross petition are true and correct to the best of my own knowledge.” It is therefore my finding that the preliminary issue raised by Mr. Rwebangira, Learned Advocate, in his submissions, is not supported by the factual reality obtaining in the electronic case file. The Answer to the Petition and the Cross-Petition in it are actually verified and therefore the factual statements therein were thereby effectively converted into evidence which the Court can consider in the determination of the petition and cross petition on their merits. Having disposed of the preliminary issue raised by Mr. Rwebagira, Learned Counsel, I now proceed to consider another preliminary issue raised by Mr. Rutaihwa, Learned Counsel for the Respondents/ Cross Petitioners as part of the merits of his submissions and which was well argued by both sides. This preliminary issue is so fundamental that even if not argued by either side, it would still have been the duty of the Court to consider the same. It is on the locus standi of the petitioner to petition under section 233(1) of the Companies Act on the claim of

unfair prejudice. In his 32 submissions, Mr.Rutaihwa, Learned Advocate, submitted that the Petitioner as an administrator of the estate, is not a member or shareholder of the company. On the other hand, it was the argument of Mr. Rwebangira, Learned Advocate, that the facts confirming the Petitioner’s directorship and Membership in the 2nd respondent company are confirmed by Annexture ‘C” to the Amended Petition, which is the search report from the Registrar of Companies. It was also submitted that the petitioner is an administrator of the estate of the late Saroop Singh Birdi who was a shareholder and director of the 2nd respondent hence the petitioner is currently registered as a beneficial shareholder of the shares falling under estate of the deceased shareholder. Now, I must firstly resolve the issue of membership of the Petitioner in the 2nd Respondent Company since the same has a bearing to his locus standi in this matter and locus standi is a rule rooted in jurisdiction. In that regard, the same should always be considered first even if no party raises it. In case I find that the petitioner has no locus standi, I will have to dismiss the petition and determine the cross petition alone since I will lack the requisite jurisdiction to entertain the petition. Like I have just said locus standi is a principle that touches on jurisdiction of the Court. In Peter Mpalanzi

vs 33 Christina Mbaruku (Civil Appeal 153 of 2019) [2021] TZCA 510 (23 September 2021), it was held that: “ Locus standi is a rule of equity that a person cannot maintain a suit or action unless he has an interest in the subject matter. Unless a person stands in a sufficient close relation to the subject matter so as to give a right which requires protection or infringement of which he brings the action, he cannot sue on it- see Godbless Lema v. Mussa Hamis Mkanga and 2 Others, Civil Appeal No. 47 of 2012 (unreported). Further, locus standi is a point of law rooted into jurisdiction. It is for that reason that it must be considered by a Court at the earliest opportunity or once it is raised.” (Emphasis supplied) The pertinent question is who has the locus to petition for unfair prejudice under section 233(1) of the Companies Act? I reproduce the relevant part of section 233(1) and (2) of the Companies Act, CAP 212 thus: “233.-(1) Any member of a company may make an application to the Court by petition for an order on the ground that the company's affairs are being or have been conducted in a manner which is unfairly prejudicial to the interests of its members generally or of some part of its members (including at least 34 himself) or that any actual or proposed act or omission of the company (including an act or omission on its behalf) is or would be so prejudicial. If the

Court is satisfied that the petition is well founded, it may make such interim or final order as it sees fit for giving relief in respect of the matters complained of. (2) This section shall apply to a person who is not a member of a company but to whom shares in the company have been transferred by operation of law, as those provisions apply to a member of a company; and references to a member or members are to be construed accordingly.” Section 233(1) and (2) of the Companies Act, CAP 212 dictates that the petition for unfair prejudice may only be brought by a member of the company or by a person who is not a member of the company but to whom shares in the company have been transferred by operation of law. Those are the only two persons who have locus standi to petition for unfair prejudice under section 233(1) of the Companies Act. Is the Petitioner a Member of the 2nd Respondent Company? The relevant question is who is a member of a company in law? Section 24(1) and (2) of the Companies Act, Cap 212 defines a member thus: 35 “The subscribers to the memorandum of a company shall be deemed to have agreed to become members of the company, and on its registration shall be entered as members in its register of members. 24 (2) Every other person who agrees to become a member of a company, and whose name is entered in its register of members, shall be a member of

the company.” Therefore, in terms of section 24 of the Companies Act, CAP 212, a Member of the Company is either a subscriber to the memorandum of association of the company at the time of its incorporation or a person who subsequent to the incorporation of the company agrees to become a member therein and whose name is entered as a member in the Company’s register of members. Being a shareholder or an administrator of estate of the deceased shareholder, does not make a person a member in a company unless his name is entered in the register of members of the company. The High Court of India in the case of Kedar Nath Agarwal v. Jay Engineering Works Limited (1963) 33 Com Case 102 Cal., Gowans,J., observed that: “in some situations and contingencies, the “member” may be different from a “holder”. A 36 member may be a holder of shares but a holder may not be a member…”member” has a distinct connotation in the Companies Act. He is either a subscriber of a memorandum of a company or a person who agrees to become a member of a company and whose name is entered in the register of members.” In the case of Ashura Saidi Ndundu versus Buyuni Company Limited, Misc. Civil Cause No. 508 of 2020, High Court of Tanzania, Dar es Salaam District Registry, his Lordship Mlyambina,J., at page 7 quoted with approval the holding in the English case of Gursharan Randhawa and Another v. Andrew Turpin

and Another (2017) EWCA, Civil 1201, where the Court of Appeal Civil Division stated: “The administrators of the deceased shareholders of the Company will only become members after being appointed so and not by merely being granted letters of administration.” Therefore, Membership in a company is attained by one’s name being entered in the register of members of the company. The register of members of the company is the one maintained by the Company itself in terms of section 115 of the Companies Act and which all companies are required to 37 keep and maintain at the registered office of the company. I reproduce the relevant part: 115. Every company shall keep a register of its members and enter in it the following particulars (a) the names and addresses of the members, and in the case of a company having a share capital a statement of (i) the shares held by each member, distinguishing each share by its number (so long as the share has a number), and where appropriate by its class, and (ii) the amount paid or agreed to be considered as paid on the shares of each member; (b) the date at which each person was entered in the register as a member; (c) the date at which any person ceased to be a member: Provided that where the company has converted any of its shares into stock, the register shall show the amount of stock held by each member instead of the amount of shares and

the particulars relating to shares specified in paragraph (a) of this subsection. 38 (2) The register of members shall be kept at the registered office of the company: In the case at hand, despite the Petitioner and the 1st Respondent being the Directors, hence custodians of the company’s documents and records, neither presented in Court a copy of the register of members of the 2nd Respondent Company. That would have been the prima fascie evidence on membership or otherwise of the Petitioner in the 2nd Respondent Company. Section 123 of the Companies Act provides that: 123. The register of members shall be prima facie evidence of any matters by this Act directed or authorised to be inserted therein. In absence of the records from inside the company itself, the Court had to take recourse to the register of companies maintained at the Office of Registrar of Companies. The register of companies is not a register of members of a company. Membership is connected with share subscription and one’s name being entered into the register of members of the company. Shares in a company are controlled by the directors of the particular company, not by the Registrar of Companies. Therefore, the register of companies maintained by the Registrar of Companies, is not the same like 39 the register of members of the company. The register of companies is fed by information received by the Registrar

of companies from the companies’ directors. The details of their indoor management affairs are communicated to the Government authority and, through it, to the members of the general public when directors of the company file various documents updating their company’s status and details with the Registrar of Companies. Any information filed with the Registrar of Companies becomes a public notice to the entire public under the doctrine of imputed or constructive notice. Since the Registrar of Companies does not himself generate the records about a particular company, the details filed with the Registrar of Companies mirror the situation obtaining inside the particular company in all crucial aspects like shareholding, capital, directorship, objectives, debentures and charges, accounts and the like. It is my finding, therefore, that prima fascie, the records maintained by the Registrar of Companies about a particular company should be taken to reflect the true status and records of that company as filed by its management unless there are inconsistent records by the company itself. Section 451 of the Companies Act, CAP 212 provides that: 40 451.-(I) There shall be kept by the Registrar a record called ''the Register of Companies'' wherein shall be entered all the matters prescribed by this Act. One of the ways by which the Registrar of Companies receives updated information to be

kept in the companies register about a particular company, is through the company’s filing of the Annual Returns. Among the matters to be communicated to the Registrar of Companies through the Annual Returns, so as to be kept in the companies register, are details of shareholding in the Company. This is a requirement of section 130(4) of the Companies Act which provides: 130.-(1) The annual return of a company having a share capital shall contain the information specified under subsections (2), (3), (4) and (5) with respect to its share capital and members. (2) The annual return shall state the total number of issued shares of the company at the date to which the return is made up and the aggregate nominal value of those shares. (3) The annual return shall state with respect to each class of shares in the company 41 (a) the nature of the class, and (b) the total number and aggregate nominal value of issued shares of that class at the date to which the return is made up. (4) The annual return shall contain a list of the names and addresses of every person who (a) is a member of the company on the date to which the return is made up, or (b) has ceased to be a member of the company since the date to which the last return was made up (or, in the case of the first return, since the incorporation of the company); and if the names are not arranged in alphabetical order the return

shall have annexed to it an index sufficient to enable the name of any person in the list to be easily found. (5) The annual return shall also state (a) the number of shares of each class held by each member of the company at the date to which the return is made up, and (b) the number of shares of each class transferred since the date to which the last 42 return was made up (or, in the case of the first return, since the incorporation of the company) by each member or person who has ceased to be a member, and the dates of registration of the transfers. (6) The annual return may, if either of the two immediately preceding returns has given the full particulars required by subsections (4) and (5), give only such particulars as relate to persons ceasing to be or be coming members since the date of the last return and to shares transferred since that date. Since the annual returns, inter alia, communicate to the Registrar of Companies the details of Membership of a particular company, including a list of the names and addresses of every person who is a member of the company on the date to which the return is made up, or who has ceased to be a member of the company since the date to which the last return was made, in absence of authentic and inconsistent records from the register of members kept by the Company, the records from the register of companies maintained by the Registrar

of Companies can be relied upon to show the Membership status in a given company. In the case at hand, no records from the Register of Members were produced in Court by the Petitioner and 1st 43 Respondent who describe themselves as the Directors of the 2nd Respondent Company. The Management of the Company has a duty to update the Registrar of Companies from time to time on the true status of their company as the general public relies on the records kept by the office of the Registrar of Companies which ordinarily mirror the situation inside the particular company. In this case, the Petitioner has presented in Court annexture “C” to the Petition being an official search report or extract from the Companies register which presumably reflects the true records submitted by the directors of the 2nd Respondent Company to the Registrar of Companies. According to Annexture “C” to the Petition, the official search report from the office of the Registrar of Companies dated 11th June 2020, the 2nd Respondent Company has a share capital of TZS. 100,000/= divided into 5,000 shares of TZS. 20/= each. The shareholders are indicated to be Saroop Singh Birdi holding 1 ordinary share and Rajinder Kaur Birdi holding 1 ordinary share. This therefore concludes that the Petitioner is not a Member of the 2nd Respondent Company as his name has not been entered in the register of Members of the 2nd

Respondent Company and that is why it does not reflect as such in the records of the register of companies kept by the Registrar of Companies. 44 Having found that the Petitioner is not a Member of the 2nd Respondent Company, the next question is whether the Petitioner has the requisite locus standi to bring the petition? Section 233(1) and (2) of the Companies Act, CAP 212 provides that the petition for unfair prejudice may only be brought by a member of the company or by a person who is not a member of the company but to whom shares in the company have been transferred by operation of law which is also known as share transmission. Under the doctrine of share transmission, upon death of the deceased shareholder, the Administrator of estate of the deceased shareholder immediately, as of the date when the death occurred, became a shareholder in the company in the place of the deceased shareholder by operation of the law. Succession is not kept in abeyance and the property of the deceased member vests in the legal personal representative on the death of the deceased member. Transmission is an automatic process; when a shareholder dies, his shares immediately pass to the personal representatives or, if a member is declared bankrupt, their shares will vest in the trustee in bankruptcy. The word 'transmission' means devolution of title to shares otherwise than by transfer, for

example, devolution by death, succession, inheritance, bankruptcy etc. While transfer of shares is brought about by delivery of a proper instrument of transfer (viz, 45 transfer deed) duly stamped and executed, transmission of shares is done by forwarding the necessary documents (such as a notarized copy of death certificate and letters of administration of estate). On registration of the transmission of shares, the person entitled to transmission of shares becomes the shareholder of the company and is entitled to all rights and subject to all liabilities as a shareholder. The Petitioner in this case is an administrator of estate of his late father one Saroop Singh Birdi who died at the Aga Khan Hospital in Dar es Salaam on 5th June 2009. On 1st June 2011 the Petitioner, Harpal Singh Virdee, was appointed the Administrator of estate of the late Saroop Singh Birdi by the High Court of Tanzania at Dar es Salaam in Probate and Administration Cause No.24 of 2011. This is as per Annexture “A” to the Petition. It follows, therefore, that the petitioner is not a member but he is a person to whom shares of a deceased member have been transferred by operation of the law and has become a shareholder as such but vested with the requisite locus standi to petition for unfair prejudice in the same way a member can. Therefore, in terms of section 233(2) of the Companies Act, CAP 212, the said

petitioner can properly petition under section 233(1) of the Companies Act. I find that the Petitioner has the requisite locus standi to petition under 46 section 233(1) read together with section 233(2) of the Companies Act and thus the Court is clothed with the necessary jurisdiction. Once a person to whom shares have been transferred by operation of the law petitions under section 233(1) of the Companies Act, for unfair prejudice, the provisions of that section which apply to a member of a company shall also apply to him in the same way as if he were himself a member and the provisions applicable to members shall be construed accordingly in relation to him. This means that the other conditions for a petitioner to meet shall also apply to him and the remedies available to members shall be available to him as well to the extent permitted by the law. The provision insists on the need for the petitioner to prove that the prejudicial conduct should have been suffered by the members generally, that is all members including the petitioner or by a part of the members including the petitioner. Reading through the petition and the cross petition, both Petitioner and Cross Petitioner complain of unfair prejudicial conduct affecting the members in general and also affecting the interest of the petitioner and the cross petitioner in particular. In this regard, they are both within the

ambit of section 233(1) and (2) of the Companies Act. 47 In the case at hand, two related points of objection were raised by the Respondent. The first one was with regard to membership of the Petitioner in the 2nd Respondent Company. The second one was with regard to directorship of the Petitioner in the 2nd Respondent Company. I have already found that the Petitioner is not a Member of the 1st Respondent Company but is a person to whom shares of a deceased person have been transferred by operation of law, hence he is a holder of shares as such. As a person to whom the shares of the deceased person have been transferred by operation of the law, the Petitioner acquires the requisite locus standi. The question of directorship of the Petitioner was also seriously argued by both sides. However, the same does not have any relationship to locus standi under section 233(1) of the Companies Act. It goes to the merits of the case and I will deal with it as such. Unlike in shareholding, there is no membership or directorship in a company which is acquired by operation of the law or by way of inheritance. One does not become a director of the company merely by being a shareholder or by being entitled to shares therein. There is no directorship by transmission. Directors are voted into office and may be removed therefrom by the Members of the Company. On the duty of directors in

a 48 company, section 181 of the Companies Act, CAP 212 provides that the directors of a company have all the powers necessary for managing, and for directing and supervising the management of, the business and affairs of a company. As to shareholding requirement on the part of directors, the law is very clear that a person may become a director of a company without holding shares therein unless the Articles of Association require that directors should also hold some shares in the company. Regard is had to section 191 of the Companies Act, CAP 212 which stipulates that: “191.-(1) It shall be the duty of every director who is by the articles of the company required to hold a specified share qualification, and who is not already qualified, to obtain his qualification within two months after his appointment, or such shorter time as may be fixed by the articles.” The above provision means that it is not mandatory for a director of the company to be a shareholder therein. It depends on the requirements of the particular company. In this regard therefore, the Petitioner could validly become a director without holding any shares in the company and without being a member in it. Directors are appointed and may be removed from office by Members of the company. Annexture “C”, an official search from 49 the office of the Registrar of Companies shows that the Petitioner is on record in the

companies register as being a director of the 2nd Respondent Company. The search report does not show how or when the Petitioner acquired his directorship in the 2nd Respondent Company. The 1st Respondent did not bring inconsistent records from the 2nd Respondent company showing that the Petitioner is not a director therein. It might be that even during the lifetime of the original shareholders, the Petitioner was made a director without holding shares in the 2nd Respondent Company. At any rate, the Respondents have not brought evidence to discredit the search report from the Registrar of Companies. As already stated, the office of the Registrar of Companies does not generate its own data regarding the situation obtaining inside the companies. It receives data from the Management of those companies. The primary source of the data held by the office of the Registrar of Companies is the records kept by the management of the companies and which data are transmitted to the office of Registrar of Companies through the filing of resolutions, annual returns and other reports. If the 1st and 2nd Respondents dispute the validity of search report from the Registrar of Companies on directorship of the Petitioner in the 2nd Respondent Company, they were duty bound to produce authentic and inconsistent documentary 50 proof showing that the Petitioner is not a director in the 2nd

respondent Company. That was not done despite the 1st Respondent being a Member and director in the 2nd respondent hence capable of accessing the original records of the 2nd Respondent Company. The Court is entitled in the circumstances to believe the official search report for the Companies register maintained by the Registrar of Companies which was presented to Court as annexture “C” to the petition. The 1st and 2nd Respondents have only proved that the Petitioner is not a member of the 2nd Respondent Company. However, his not being a member does not ipso facto make the Petitioner not a director as well. The Petitioner acquired shares by transmission as an administrator of estate of his late father Saroop Singh Birdi, he attempted to file annual returns with the Registrar of Companies making himself a shareholder and member, but the Registrar of Companies refused to register those changes as they were marred by anomalies disclosed in annexture “C” to the Petition. However, the same Annexture “C” to the petition indicates that the Petitioner is a director of the 2nd respondent company. The Respondents have not challenged or contested the action of the Registrar of Companies to enter in the Companies register the name of the Petitioner as a director of the 2nd Respondent Company. The said Registrar of Companies 51 is not a party to the present petition as to be required to

explain on what basis and when he entered the name of the Petitioner into the companies register as a director of the 2nd respondent company. No details of any suit were given by the 1st and 2nd respondents seeking rectification of the register of companies on that aspect. In short the official search report from the Registrar of Companies, which remains unchallenged anywhere and anyhow, is a clear proof that it represents the true and obtaining position in the 2nd Respondent company since the members and management of the said company have not brought incompatible authentic records despite having the opportunity and means to do so. The 1st Respondent is a director of the 2nd respondent company hence a custodian of the records of the 2nd respondent company. Yet, she could not bring any documentary proof to fault the official search report generated by the office of the Registrar of Companies from the register of companies on directorship of the Petitioner in the 2nd Respondent Company. The search report from the office of the Registrar of Companies is a public document which is deemed to have been at the knowledge of the general public including the 1st Respondent since the moment the details in it were registered. By not seeking the Registrar of Companies to rectify the details kept in the Companies register on 52 directorship of the Petitioner in the 2nd respondent company,

and by not challenging the genuineness of the records in the register of companies anywhere, the 1st Respondent is now debarred from disputing the correctness of the information or details contained in the official search report which is an extract from the Companies Register. The 1st and 2nd Respondents attempted to dispute the directorship of the Petitioner in the 2nd Respondent Company by relying on the doctrine of issue estoppel. Mr. Rutaihwa, Learned Advocate, submitted that through annexure BANSON 3 attached to the Amended Answer to Amended Petition, which is a decision of the Court of Appeal of Tanzania, the petitioner while testifying in another case which lead to that appeal, had made a disposition that the directors of the 2nd Respondent Company were only two namely the late Saroop Singh Birdi and Rajinder Kaur Singh. It was testified further that upon death of the Petitioner’s father, as of 27.08.2012, it was only the petitioner’s mother who was the director of the 2nd Respondent Company. Mr. Rwebangira, Learned Advocate for the Petitioner, responded that the argument is based on the contents of Annexture BANSON 3 to the Answer to the Amended Petition. However, he argued, there is no such document attached to the Answer to Amended Petition as the same contains only one 53 annexture namely Annexture BANSON1 which is the Memorandum and Articles of Association of the

2nd Respondent Company. He argued further that assuming that the alleged decision of the Court of Appeal does exist, it cannot be taken as conclusive proof of the Petitioner not being a director in the 2nd respondent company. He submitted that Annexture “C” to the Petition is the official search report from the office of the Registrar of Companies which was part of the amended petition and it remains as the most reliable document on this issue. He reasoned that the alleged evidence was given on 27th August, 2012 while the search report from the Registrar of Companies as per Annexture C, was generated on 11th June, 2020 and it, therefore, reflects the best and conclusive information about the 2nd respondent company. I have looked at the “Amended Answer to Petition with a Cross Petition” filed in Court on 3rd April 2024 pursuant to the leave of this Court dated 28th February 2024. It is true as argued by Mr. Rwebangira, Learned Advocate, that the same contains only one Annexture namely Annexture Bansons 1 and which is the Memorandum of Association of the 2nd Respondent Company. There is no annexture Banson 3 attached to it. I agree with Mr. Rwebangira that as Annexture “C” the search report from the Register of Companies was generated by the Registrar of Companies in 2020, 54 the Court is entitled to rely on it more than the alleged recorded testimony of the Petitioner given in

Court in 2012. If the records of the 2012 testimony in Court are inconsistent with subsequent report from the register of companies made in 2020, it cannot be said that the two are incompatible. Had the situation been the other way round, the argument by Mr.Rutaihwa would have been valid. Although Annexture Bansons 3 is missing in the “Amended Answer to Petition With a Cross Petition” filed in Court on 3rd April 2024 pursuant to the order of this Court dated 28th February 2024, but as the said annexture Bansons 3 is a judicial decision, this Court decided to take a judicial Notice of the Judgment of the Court of Appeal of Tanzania in Civil Appeal No. 26 of 2020 between Bansons Enterprises Limited as the Appellant and Mire Artan as the Respondent which was an Appeal against the decision of the High Court of Tanzania Land Division in Land Case No.167 of 2012. The Petitioner had testified in that case as PW1 and another person one Malkit Singh Bansal, had testified as PW2. The Testimony of PW1 is reproduced at page 4 and goes as follows: 55 “The Plaintiff was set up by father who was one of the Directors. I was the manager of the company. My father passed away in 2009 and I am living in the UK. I am the administrator of my father’s estate…as of today, the Director of the Company Benson is called Rajinder Kaur Virdee, my mother. On 27.08.2012, it was only my mother who was and

still is the director of the Plaintiff. The Plaint was signed by my Uncle. He is in Dar es Salaam. His name is Malkit Singh Bansal.” At page 3 of the Judgment, the Court of Appeal wrote: “Before we proceed any further and for the better appreciation of the nature of the issue we have raised above, we find it appropriate to reproduce part of what was testified by PW2 and PW1 before the High Court regarding not only the relationship of PW 2 to the Company but also the status of the Company at the time the suit was being instituted”. The issue in Civil Appeal No. 26 of 2020 between Bansons Enterprises Limited and Mire Artan which was an Appeal against the decision of the High Court of Tanzania Land Division in Land Case No.167 of 2012, was whether PW 2 Malkit Singh Bansal had the requisite mandate to sign and verify 56 pleadings for the purpose of instituting the suit in the name of the Company without the said PW 2 being a Director or Company Secretary therein. At page 11 of the Judgment, the Court of Appeal held that: “Based on the above observations, the earlier posed issue is answered in the negative. We share the view with Mr. Mnyele that PW 2 was not a principal officer of the Company and since he was also neither one of the directors or the company secretary then he had no authority to sign and verify the plaint and institute the suit on behalf of the company.” Now,

Mr.Rutaihwa, Learned Advocate invoked the doctrine of issue estoppel to prevent the Petitioner from advancing inconsistent arguments to those he had given under his testimony in Land Case No.167 of 2012 in the High Court of Tanzania Land Division which later turned into Civil Appeal No. 26 of 2020 between Bansons Enterprises Limited and Mire Artan. With respect, I find that the argument by Mr.Rutaihwa, is untenable. The rule of issue estoppel is not based on the testimony of a person in the previous case. It is based on the judicial pronouncement or decision made by the Court with respect to a similar issue in the previous proceedings involving the same parties. In the case of Issa Athuman Tojo versus Republic 57 (supra) which Mr. Rutaihwa, Learned Advocate referred the Court to, it was inter alia held by the Court of Appeal of Tanzania that: “Issue estoppel can be said to exist when there is a judicial establishment of a proposition of law or fact between parties to earlier litigation and when the same question arises in later litigation between the same parties. In the later litigation the established proposition is treated as conclusive between those same parties. It can also be described as a situation when, between the same parties to current litigation, there has been an issue or issues distinctly raised and found in earlier litigation between the same parties. In order

to invoke the doctrine of issue estoppel the parties in the two trials must be the same and the fact- in-issue proved or not in the earlier trial must be identical with what is sought to be re-agitated in the subsequent trial. The judicial pronouncement by the Court of Appeal of Tanzania in Civil Appeal No. 26 of 2020 between Bansons Enterprises Limited as the Appellant and Mire Artan as the Respondent, wherein the Petitioner was not a party rather a witness, was that PW2, one Malkit Singh Bansal, was not a director or company secretary of the 2nd Respondent Company. There was no judicial 58 pronouncement that the Petitioner was not a Director of the 2nd Respondent Company. There was evidence in the record/proceedings of the High Court in Land Case No.167/2012 in the form of a testimony of the Petitioner during the hearing before the High Court saying that by 27.08.2012, it was only his mother, (the 1st Respondent herein) who was the director of the 2nd Respondent Company. If Mr.Rutaihwa, Learned Advocate, wished to rely on the rule of estoppel against the Petitioner in this case, perhaps he should have raised an estoppel by record rather than the principle of issue estoppel which does not apply at all. Looking at the matter from another angle, assuming that Mr.Rutaihwa, Learned Advocate had intended to rely on the record/ proceedings of the High Court in Land Case No 167/2012

and raise an estoppel against the Petitioner, still that would not be tenable since the proceedings of the High Court in Land Case No.167/2012 were all nullified by the Court of Appeal of Tanzania through the Judgment of the Court of Appeal of Tanzania in Civil Appeal No. 26 of 2020 between Bansons Enterprises Limited as the Appellant and Mire Artan as the Respondent. At page 12 of the Judgment of the Court of Appeal it was held that: 59 “As we have alluded to above, there was no suit for the High Court to try. That being the case, we invoke our revisionary powers under section 4(2) of the AJA and nullify the whole proceedings before the High Court and quash the resulting Judgment.” The above holding by the Court of Appeal effectively abrogated the proceedings and thus record of the High Court in Land Case No.167 of 2012 on the basis of which Mr. Rutaihwa, Learned Advocate, rested his argument that the Petitioner is now estopped from denying the truthfulness of his own statement as reflected in those proceedings/ records he gave in 2012 during his testimony in Land Case No.167/2012 where he had said that the only director of the 2nd Respondent company by then was the 1st Respondent only. At any rate, as the Court of Appeal hinted at page 3 of its Judgment, that testimony after all was merely in respect of “the status of the Company at the time the suit was being instituted”. It

is my view that such status could have changed by the year 2020 when the Registrar of Companies issued the official search report showing that the Petitioner is a director in the 2nd Respondent Company. The 1st and 2nd Respondents have not brought inconsistent authentic documentary evidence based on the internal records of the 2nd respondent company to contradict the contents of the official 60 search report from the Registrar of Companies. I make a finding that based on the contents of the search report from the Registrar of Companies, extracted from the register of companies in 2020, which report remains un- contradicted by authentic inconsistent documentary evidence by the 1st and 2nd Respondents, the Petitioner is a Director in the 2nd Respondent Company. The Respondents have argued that the Petitioner has been self- imposing in the 2nd Respondent Company as a director and a member. However, it must be noted that when the Petitioner acquired shares from his late father Saroop Singh Birdi, by way of transmission, he did not thereby also acquire directorship in the 2nd respondent company. Directorship does not pass from one person to another by way of transmission. Directorship is a voted position determined by members of the company. Therefore, the process by which the Petitioner became a director and the process by which the petitioner became a shareholder are two unrelated

processes in law. Anomalies pertaining to petitioner’s attempted membership in the company, do not automatically spill over to nullify his acquired directorship in the company which, legally speaking, was acquired through a different process independent of share transmission. Annexture C to the petition, the search report from the companies register in respect of the 2nd respondent, is clear 61 that the office of the registrar of companies had refused to register changes in membership of the petitioner following the request of the Petitioner as an administrator of estate of the late Saroop Singh Birdi. Annexture “C” does not show that through the same process by which the Petitioner had attempted to make himself a member of the 2nd Respondent Company, he had also attempted to make himself a Director. Whereas his attempt to make himself a Member was not approved by the Registrar of Companies, annexture “C” does not say that his directorship was also marred by similar or related anomalies. If registration of the directorship of the Petitioner had been sought through the same process in tandem with the petitioner’s seeking membership, naturally it would also have been equally refused for the same reasons. If not refused, the 1st and 2nd respondents would have a good cause of action against the Registrar of Companies. The registered directorship of the petitioner in 2020 remains

unchallenged anywhere to date. I am satisfied that the Petitioner’s directorship was through a different process unrelated to his attempt to make himself a member of the 2 nd respondent company. The 1st and 2nd Respondents have not brought any evidence to the contrary. As it stands, therefore, the Petitioner is a Director in the 2nd Respondent Company. Also the Petitioner is a shareholder in the 62 2nd Respondent Company, but not yet a member as his name has not yet been entered into the register of members. Therefore, legally speaking, the 2nd Respondent Company has two directors currently, namely the Petitioner and the 1st Respondent. It also has two shareholders, the Petitioner (as an administrator of estate of the late Saroop Singh Birdi) and the 1st Respondent, each holding 1 ordinary share. However, the 2nd Respondent Company has only one member, namely the 1st Respondent only. This means that there is quorum deficiency in calling, holding and conducting Members’ meetings either extraordinary or annual general meetings. However, there is no quorum deficiency in respect of Directors’ meetings of the 2nd Respondent since there are two directors who are the only directors of the company and hence constitute quorum for the board of directors’ meetings. Next, I have considered the alleged unfair prejudices done by the 1st Respondents as against the Petitioner’s interests and

the Company and the alleged unfair prejudices done by Petitioner towards the 1st Respondent’s interests in the company. the phrase ‘Conduct of Company Affairs’ was described in Elly Mwaijande v. Petros Majinyori & 4 others; Misc. Commercial Cause No. 18 of 2023, TANZLII, TZHCComD 369, at page 10 that; 63 “… a phrase “company's affairs” imply multitude of things and need to be understood within the context in which it is considered. It may include decision reached by directors, removal or exclusion of a member from participation in the management of the affairs of a company and any actions taken by directors contrary to articles of association of a company may amount to unfair prejudice.” In Ebrahimi v Westbourne Galleries ([1973] AC 360, 379), Lord Wilberforce held that: “the Courts need not look exclusively at a company’s constitution when deciding the nature of the obligations undertaken by its participants. What is important is the giving of effect to the full set of terms and understandings on which it has been agreed the company will operate, be they expressed or implied. Thus, for example, where there is a reasonable expectation that all shareholders will participate in the company’s management, exclusion from management may be considered unfairly prejudicial, and a remedy will be available under s 241. This was the case in Diligenti v RWMD OperationsKelowna Ltd where the

Court concluded that, in such circumstances, there are ‘rights, 64 expectations and obligations inter se’, which are not submerged into the company structure, and these rights are enjoyed by a member as part of his status as a shareholder in the company ... Although [the applicant’s] fellow members may be entitled, as a matter of strict law, to remove him as a director, for them to do so in fact is unjust and inequitable, and is a breach of the equitable rights which he in fact possesses as a member. “ The misconducts complained of against the 1st Respondent which are injurious to the interests of the Petitioner included: (i) Not participating in the company’s affairs including attending meetings of Board of Directors. (ii) Not signing the necessary company’s documents which directors are supposed to sign. (iii) Being un-cooperative in opening the required ORS Account and filing of other documents in the office of the Registrar of Companies through the online registration system (ORS). (iv) Not providing personal in formation of the shareholders and directors. 65 (v) Not convening a Directors’ meeting to enter into the register of the company the name/names of new shareholders and members in place of the deceased member hence letting the company remain with a single member for over 14 years now. (vi) The 1st respondent unilaterally without Members’ or directors’ resolution

entering into an agreement with another company namely J.W. LADWA (1977) LIMITED for the purpose of disposing off the 2nd respondent company's assets. The unfair conducts by the Petitioner which were injurious to the interests of the 1st Respondent include: (i) The petitioner who is a mere administrator of the estate of the late Saroop Singh Virdee, assuming the responsibilities of the rightful members of the company while himself not being a Member. (ii) The Petitioner unilaterally filing annual returns with the office of the Registrar of Companies without approval or involvement of the other director. 66 (iii) The Petitioner as a director of the 2nd Respondent Company, unilaterally carrying out changes in the Membership of the 2nd Respondent company and removing the secretary of the company and seeking to register the changes at the Registrar of Companies. (iv) The Petitioner not acting with the 1st Respondent to enter in the Company register the names of the heirs of the 1 share of the late Saroop Singh Birdi as the new Member(s) of the Company. The above enumerated conducts of the Petitioner and the 1st Respondent constitute exclusion from management of the company, a breach of equitable rights of the members and shareholders, the actions taken by directors are contrary to articles of association of the 2nd respondent company and in general is violative of the rights,

expectations and obligations of the shareholders inter se. I find that the Petitioner and the 1st Respondent as Directors of the 2nd Respondent Company wherein they are a shareholder and a member respectively, in the conduct of the affairs of the 2nd respondent company, have each committed unfair and prejudicial practices against the company and against each other’s interests as a 67 shareholder and a member respectively. Each has been personally affected by the unfair prejudicial conducts of the other while acting alone as a director, shareholder or Member without resolution of the board of directors or Members’ General Meetings. In short, there are merits in both the Petition and the cross petition. I allow them both. Finally, on the reliefs or directives of the Court for the smooth and proper functioning of the 2nd Respondent company. Whereas both the petitioner and the 1st Respondent prayed for orders to allow each to conduct unilateral meetings under section 137 of the Companies Act, I find it not prudent to make such an order as circumstances do not allow. Section 137(1) of the Companies Act comes into play principally so as to enable the company to overcome practical difficulties created by the articles, shareholder agreements or the Companies Act. The scope and utility of section 137 of the Companies Act was well elaborated by the Court in the persuasive case of Wheeler

v Ross (2011) EWHC 2527 which interpreted section 306 of the Companies Act of the United Kingdom, a statute in parimateria to the Companies Act of Tanzania. The wording of section 306 of the UK Companies Act is identical to the wording of section 137 of the Companies Act of Tanzania, hence a useful external aid as an interpretational tool of the 68 relevant Tanzanian legal provision since similar language in statutes with common purpose is interpreted in the same way. In the case of Wheeler vs Ross (supra) the Court in interpreting the above provision observed that: “The purpose of the s306 order was to allow the applicant to enforce his rights as majority shareholder by overcoming the deficiency in him holding an inquorate extraordinary general meeting; the order was merely one of the steps necessary to put the governance of the company into a viable state………it must be remembered though, that the Court's power is discretionary and fact sensitive. The Courts will take a broad approach to the provisions under s.306 where they feel the provisions under the articles are being exploited. This will enable the company to overcome practical difficulties created by either the articles, shareholder agreements or the Act.” Deduced from the above quotation, it is plain that section 137 of the Companies Act, Cap 212 of the Laws of Tanzania is intended to enable a member or director of a

company to overcome the deficiency in him to call or conduct a meeting of the company in which he is eligible to vote by overcoming the difficulty of lacking the requisite quorum as prescribed in the 69 articles of association of the company or as laid down in the Companies Act. The provision is intended to put the governance of the company into a viable state by overcoming practical difficulties created by the articles of association, shareholder agreements or the Companies Act. In short, the provision is intended to be used for a cause that is beneficial to the practical and viable governance of the company and not otherwise. In determining whether the Court’s discretion ought to be exercised, the Court proceeds on a holistic assessment, which entails an assessment of whether there is indeed impracticability and whether such impracticability is of a sufficient degree as to call for the intervention of the Court. I have asked myself whether there are practical difficulties created by the articles of association of the 2nd respondent company, any shareholder agreements or the Companies Act in relation to the running of the affairs of the 2nd Respondent Company in the circumstances of the present case. My answer is definitely in the negative. The 1st Respondent and the Petitioner are the only directors of the 2nd respondent company, hence, they constitute the necessary quorum to

conduct meetings of the board of directors of the company. The quorum deficiency in the Members’ meetings on the other hand has its roots in the reluctance by the two directors to convene the 70 directors’ meetings wherein they could admit new Members to the company and thereby effectively cure the quorum deficiency in the 2nd Respondent Company’s members general meetings. It is not a practical difficulty, it is an intentional neglect of duty and denial of cooperation between the two directors, each reluctant to cooperate with the other to perform the mandate and duties imposed upon them by the law. Their conduct defeats the spirit of section 181 of the Companies Act, CAP 212 which provides that the directors of a company hold the powers necessary for managing, directing and supervising the management of the business and affairs of a company. Directors have a duty in law towards the company they manage. Sections 182(1) and 183(1) and (2) of the Companies Act provide that: 182.-(1) Subject to this section, a director of a company, when exercising powers or performing duties, must act honestly and in good faith and in what the director believes to be the best interests of the company. 183.-(1) The matters to which the directors of the company are to have regard in the performance of their functions include, in addition to the interests of the members, the interests of

the company's employees. 71 (2) The duty imposed by this section on the directors is owed by them to the company (and the company alone) and is enforceable in the same way as any other fiduciary duty owed to a company by its directors. I find that the 1st Respondent and the Petitioner, as directors of the 2nd Respondent Company, have neglected their duties as directors and that is the source of the practical difficulties in the management of the affairs of the 2nd respondent company. This conduct or misconduct is prejudicial to the interests of the Members and shareholders of the company. As to the appropriate remedies, under section 233(1) of the Companies Act, the Court has broader powers to grant the suitable remedies in respect of the matters complained of. If the Court is satisfied that the petition is well founded, it may make such interim or final order as it sees fit for giving relief in respect of the matters complained of. Section 233 (3) and (4) provide: 233:- (3) Without prejudice to the generality of subsection (1), the Court's order may: (a) regulate the conduct of the company's affairs in the future, 72 (b) Require the company to refrain from doing or continuing an act complained of by the petitioner or to do an act which the petitioner has complained it has omitted to do, (c) authorize civil proceedings to be brought in the name and on behalf of the company

by such person or persons and on such terms as the Court may direct, (d) Provide for the purchase of the shares of any members of the company by other members of the company or by the company and, in the case of a purchase by the company, for the reduction accordingly of the company's capital, or otherwise. (4) If an order under this section requires the company not to make any, or any specified, alteration in the memorandum or articles, the company does not then have power without leave of the Court to make any such alteration in breach of that requirement. Now, I have considered the appropriate reliefs in the circumstances of the present case by taking into account the matters complained of. There is a quorum deficiency in the Members’ General Meetings as there is only one 73 member, despite the fact that there are two shareholders. When it comes to quorum in the company meetings (Members’ General Meetings), what really matters is one being a member in the company who is entitled to vote rather than merely being a shareholder therein. That is why the 1st respondent, despite having another shareholder in the 2nd Respondent Company, namely the Petitioner, still they cannot garner the requisite quorum to call for and conduct Members general meetings in the absence of another registered member of the company. However, the same deficiency in quorum does not exist in the meetings

of the board of directors of the 2nd respondent company since two directors exist and these are the Petitioner and the 1st Respondent herein who are actually the only directors of the 2nd Respondent Company. Having found that there is no quorum deficiency in directors’ meetings, it follows that the Board of Directors of the 2nd Respondent Company can be duly and lawfully convened and transact its business. It must be borne in mind that shares in the company are under the control of the directors. It is the directors who can decide, subject to the requirements of the articles of association, who can be become a shareholder and Member in the private company they manage. It is the directors whose duty it is to enter the names of shareholders in the register of companies hence making them members 74 of the company. If the two directors (the Petitioner and the 1st Respondent) can convene a meeting of the Board of Directors, they can legally pass the requisite resolutions pertaining to the shareholding and Membership of the 2nd respondent company and thereby cure the quorum deficiency in the Members’ general meetings. It is the Petitioner and the 1st Respondent, as Directors of the 2nd Respondent Company, who can enter the Petitioner as an administrator of estate of the late Saroop Singh Birdi, in the Register of Members of the company, as a Member holding the shares of the

deceased person for the benefit of the heirs. If the administration of estate of the late Saroop Singh Birdi is completed and the share of the deceased person has already been inherited by his lawful heirs, then the Petitioner and the 1 st Respondent, as Directors of the 2nd Respondent Company, are duty bound to enter the names of the heirs of the late Saroop Singh Birdi, who have inherited the share of the deceased person, in the Company’s Register of members and thus make them Members in the company, subject to the pre- emption clause in the Articles of Association. It is the Petitioner and the 1st Respondent, as Directors of the 2nd Respondent Company, who are mandated to issue shares to other persons, subject to the pre-emption clause in the Articles of Association. There is no quorum deficiency in the 75 Board of Directors of the 2nd Respondent Company as to justify the Court to resort to section 137 of the Companies Act and authorize single Member or single director meetings and resolutions in this case. Once the directors’ meeting is held, in respect of which, legally speaking, there is no obstacle from being convened, it holds the key to unlocking the quorum deficiency in the Members’ meetings. The only obstacle therefore is not the impracticability of the articles of association of the 2nd Respondent Company or the provisions of the Companies Act, but rather it is the

unwillingness of the Petitioner and the 1st Respondent to work together as directors of the 2nd Respondent Company despite the fact that the law imposes upon them such a duty. This in-action of the board of directors, spills over to perpetuate the apparent quorum deficiency in the Members’ General Meetings as the directors have not yet admitted new Member(s) in the place of the deceased shareholder and member. The appropriate remedy therefore is to compel the two directors to call for and hold a meeting of the Board of Directors rather than to authorize either one, as a Member or shareholder or director to hold a single Member or single director meeting under section 137 of the Companies Act. Actually, as it was correctly submitted by Mr.Rutaihwa, Learned Advocate, it would be inconceivable to authorize the Petitioner to 76 hold a single Member’s meeting while he is not even a member entitled to vote in the 2nd respondent company despite holding shares therein under share transmission process. Equally, there is no basis for the Court to authorize either the petitioner or the 1st Respondent to hold a single director’s meeting and pass resolutions simply because the Petitioner and the 1st Respondent constitute the requisite quorum to call for and hold the meeting of the board of directors of the 2nd Respondent Company. There is no practical difficult caused by Articles of

Association, the Companies Act or a shareholders’ agreement for them to hold a meeting of the Board of Directors. In fine, therefore, in accordance with section 233(1) and (3) (a) of the Companies Act, I find it best for the Court to make orders which have a bearing of regulating the conduct of the company's affairs in the future. The following orders are hereby issued: (a) The Petitioner and 1st Respondent as directors of the 2nd Respondent Company are directed, to call for and hold a meeting of the Board of Directors of the 2nd Respondent Company, under the superintendence of the Registrar of Companies and according to the requirements of the 77 Company’s MEMARTS and the Companies Act within the next 30 days from the date of this Ruling. (b) The Meeting of the Board of Directors of the 2nd Respondent Company to be held pursuant to (a) above shall, among other things, resolve and cause to be entered into the Company’s register of members the name(s) of the heir (s) of the share of the late Saroop Singh Birdi in case the inheritance process is completed or the name of the administrator of the estate of the late Saroop Singh Birdi, (as a trustee for the estate of the late Saroop Singh Birdi), in case the inheritance process thereof is not yet complete. (c) The Petitioner and 1st Respondent as directors of the 2nd Respondent Company are directed, under the superintendence of the

Registrar of Companies, to call for a meeting of the Members of the 2nd Respondent Company according to the requirements of the Company’s MEMARTS and the Companies Act within the next 60 days from the date of this Ruling. (d) The Petitioner and 1st Respondent as directors of the 2nd Respondent Company are directed, to regularize the records of the 2nd respondent company with the Registrar of Companies within 90 days from the date of this ruling. (e) The Petitioner and 1st Respondent as directors, shareholders and or members of the 2nd Respondent Company are directed 78 to desist from unilaterally conducting any of the affairs of the 2nd Respondent Company in absence of a duly passed resolution of the Board of Directors of the 2nd Respondent Company. (f) I make no order as to costs since both the Petition and cross petition are allowed and the filial relationship of the parties. It is so ordered. A. H. GONZI

JUDGE 31/01/2025 Ruling is delivered in Court this 31st day of January 2025, in the presence of Mr. Thomas Rwebangira, Learned Advocate for the Petitioner and Mr. Theodore Primus, Learned Advocate for the Respondents/Cross-Petitioners. A. H. GONZI

JUDGE 31/01/2025 79