LAND CASE NO 190 OF 2022 scanned

IN THE HIGH COURT OF TANZANIA

LAND DIVISION (AT DAR ES SALAAM) LAND CASE NO 190 OF 2022 ABBAS AWES OMAR............................................ PLAINTIFF

VERSUS DEZO CIVIL CONTRACTORS CO. LTD................ 1st DEFENDANT DIAMOND TRUST BANK TANZANIA LTD........................... 2nd DEFENDANT

JUDGMENT 22/7/2024 & 21/8/2024 A, MSAFIRI, J. This is a judgment on the suit which was instituted in the court by the herein above plaintiff against the defendants seeking for a declaratory order that the renewal and mortgage of the plaintiff's 6 apartments on the 1st,3rd and 4th floors in a building located on Plot No.31 Kariakoo area in Dar es Salaam with Title Deed No. 54439, LO No. 193545 (herein as suit property/ suit premises), for enhancing overdraft facility from 2016 onward by the 2nd defendant to the 1st defendant is illegal null and void. That the defendants be ordered to pay the plaintiff USD 78,297,8723 being loss of profit following illegal withholding of the plaintiff's Tile Deed No. 54439, LO No. 193545; that the defendants be ordered to pay interest of 12% per month, general damages and costs of the suit. -Jy I 7 i No. 54439, LO No. 193545; that the defendants be ordered to pay interest of 12% per month, general damages and costs of the suit. The defendants filed their written statements of defence in which they vehemently denied each and every allegation by the plaintiff and put him to strict proof. They prayed for the dismissal of the suit in entirety with costs. At the hearing, the plaintiff was represented by Mr. Juma Nassoro, learned Advocate, the 1st defendant was represented by Mr. Geofrey Lugomo learned Advocate and the 2nd defendant was represented by Mr. Peter Swai, learned Advocate. Before the trial, four issues were framed by the court which are:- 1. Whether the renewal of the Loan Agreement between the 1st and 2nd defendants and mortgage of the suit property was entered with a consent of the plaintiff.

2. Whether the plaintiff's Title Deed No. 54439 with L.O No. 193345 Plot No. 31 Kariakoo Area at Dar es Salaam was Illegally withheld by the 2nd defendant.

3. To what reliefs are the parties entitled to. To establish his claims, the plaintiff was a sole witness in his own case and he testified as PW1. He said that he is the lawful owner of the suit 2 property. He said that the Title Deed of the suit property is in custody of the 2nd defendant. PW1 said further that he knows Dezo Civil Contractors Ltd who is the 1st defendant. That he knows Sheikh Mohamed Bawazir and Premji Pindoria as Directors of the 1st defendant. He said that Sheikh Mohamed Bawazir is his friend and they have known each other for a long time and they are like brothers. PW1 said further stated that in 2014 he was in need of money and the Directors of the 1st defendant lend him a total of TZS 150 million which he guaranteed with his house, the suit property hence the Title Deed of the same was in the hands of the 1st defendant. That in May 2015, he was told by Bawazir that they (1st defendant) were in need of money and asked him to guarantee the loan they intended to secure from the Bank and he, PW1 agreed. That the loan facility was issued by Diamond Trust Bank (the 2nd defendant). That he went at the 2nd defendant Bank where he guaranteed the 1st defendant for a loan of TZS 600 Million on 12 months duration and mortgaged the suit property as a security to a loan. That he was told by the 2nd defendant that his Title Deed to the suit property will be returned to

him by the 1st defendant after discharge of the loan. mW- 3 PW1 said that after the period of 12 months was over, he contacted Bawazir who came with the offer of buying PWl's house, the suit property. That it was on 15/6/2016 when the 1st defendant offered to purchase the suit property in consideration of USD 465,000.00, the offer which was accepted by PWl.That the sale agreement was put into writings and he produced the sale agreement as exhibit Pl. PW1 said that the 1st defendant told him that they are going to retrieve the Title Deed of the suit property from the 2nd defendant. That in same year 2016, the Directors of the 1st defendant came to the plaintiff's office and asked the plaintiff to sign some papers so that they can get a Title Deed of the suit property back from the Bank. That he signed the said papers and gave them back to the Directors of the 1st defendant. PW1 testified that the 1st defendant failed to pay him the agreed purchase price hence in 2021, he contacted Bawazir and asked him to return back his Title Deed of the suit property since they have failed to pay him the agreed purchase sum on the suit property. That Bawazir replied that they could not return the Title Deed as they have used it to enhance/renew the loan. PW1 said that he was never informed and was unaware of the loan enhancement by the 1st defendant and that the he knew the loan which 4 was

secured in 2015 and nothing more. That the Bank, 2nd defendant never informed him about the 1st defendant's loan or the payment progress. PW1 told the court that the circumstances of the matter shows that there was a conspiracy between the 1st defendant and 2nd defendant to take his lawful property (suit property) because they agree on loan variations without informing the plaintiff who is the owner of the Title Deed. PW1 testified that on 01/11/2021, the plaintiff and the 1st defendant entered into conciliation agreement that the 1st defendant should either pay the purchase price on the suit property or return the Title Deed on the suit property. He produced the photocopy of the agreement as the original one was said to be lost. The same was admitted in court as exhibit P2. He said that the 1st defendant failed to honour the said agreement of 2021. He prayed to the court to grant him the reliefs as prayed. In cross examination by the advocate for the 1st defendant, PW1 said that in 2016 he was given some papers to sign by the Directors of the 1st defendant after he was told that the papers were needed to release the Title Deed of the suit property from the Bank. That he came to know later in 2021 that the papers he signed were of loan extension secured by the Title Deed of the suit property. He said further that he signed the papers. 5 without knowing the contents. That when

he signed the papers, there was no loan officers from the Bank, (the 2nd defendant) as it was in the first loan. In cross examination by the counsel for the 2nd defendant, PW1 said that he and his wife consented to the first loan of 2015. That in 2016 he signed the documents not knowing the contents. That he didn't remember if he signed another documents in 2017. He agreed that he received some amount of money from the 1st defendant as purchase price of the suit property but did not remember the amount and admitted to never refund the amount to the 1st defendant. In re-examination, PW1 said that the second loan (the extended one) is illegal as the extension was done without his consent and knowledge. The 1st defendant also called one witness one Premji Ravji Pindoria who testified as DW1. He said that he has known the plaintiff Abbas Aweso for more than 13 years. That Sheikh Mohamed Bawazir is his co-Manager at Dezo Civil Contractors and that plaintiff and Bawazir are like brothers and have known each other for much longer. DW1 said that at one time in 2014 they (as 1st defendant) were in financial difficulties hence they asked their friend the plaintiff to lend them some money. That the plaintiff didn't have money so he gave them a Title Deed- 6 to his property (suit property) as a security to a loan from the Bank. That they took the plaintiff's Title and used it to procure a

loan from the Bank. That they first took TZS 150 million from Amana Bank and they used the disputed Title. That later they realized that the money were not enough hence they transferred the mortgage from Amana Bank to Diamond Trust Bank (the 2nd defendant). That the said loan of TZS 150 million was renewable after every year. That they informed the plaintiff about the Amana Bank loan and also when they transferred the loan to the 2nd defendant, they also informed the plaintiff. DW1 said that they took the loan of TZS 600 million. That they also took a loan of TZS 1.6 Billion and they secured it with a Title Deed of another property. That in total, the loan amount which was secured by the 1st defendant was 2.2 Billion which included TZS 600 million. That they informed the plaintiff about the loan and that it was renewable. DW1 said the purpose of the loan was to finance the construction project known as Dege Eco Village at Kigamboni which was later stopped by the Government. That at the time the project was stopped, the 1st defendant has already put the money into the said project. That after that they could not took the secured Title from the 2nd defendant hence they entered. 7 agreement with the 1st plaintiff to purchase the suit property from the plaintiff. That they agreed to pay the plaintiff USD 485,000 as consideration. That they started to pay by instalments and they

paid about USD 210,000 but after the collapse of Dege Eco Project, they were unable to complete the agreed amount. In cross examination by the counsel for the 2nd defendant, DW1 said that until now he owes the Bank 2.2 Billion. He admitted that they have failed to pay the overdraft facility. In cross examination by the counsel for the plaintiff, DW1 said that in 2016, the 1st defendant signed a deed of variation where the Bank agreed to extend further credit facility of TZS 1.6 Billion but total variations was TZS 2.2 billion. He said that the one who was taking the renewal agreements to the plaintiff is the accountant of the 1st defendant one Manji Ekaria. He said that he could not know if the plaintiff signed the agreements. The 2nd defendant also called one witness to defend her case. One Cathbert Shija Emmanuel testified as DW2. Led by his advocate, DW2 told the court that he is a Loan Analyst at the 2nd defendant bank and that he has worked there for six years. He said that he knows both the plaintiff and the 2nd defendant. That the plaintiff was a guarantor to the loan. 8 issued by the Bank to the 1st defendant and that the plaintiff mortgaged his house, the suit property. That for the first time the 1st defendant took a loan in 2015 from the 2nd defendant and the amount was TZS 600 million. That the 1st defendant extended the loan in 2016 where she was issued the amount

of TZS 1 Billion by the 2nd defendant. He produced a letter of offer from the 2nd defendant Bank to the 1st defendant. It was admitted as exhibit DI. That on the extension of the loan from TZS 600 million to TZS 1 billion, the plaintiff signed the Deed of variation which showed the loan increase. The said document was admitted as exhibit D2 and it was dated 06/5/2016. DW2 said further that in November 2016, the 1st defendant requested to increase/ extend the loan from TZS one (1) billion to TZS 2.250 billion. That the Deed of variation to the loan was signed by the plaintiff and it was registered in the same month November 2016. He produced another Deed of Variation which was admitted as exhibit D3. He produced a supplementary guarantee pertaining to the loan of TZS 2.250 billion and purported to be signed by the plaintiff. The document was admitted as exhibit D4. DW2 stated that in 2017, the 1st plaintiff requested for a change of loan from 2.250 billion TZS to US Dollars which was equivalent to USD one million. He produced a copy of facility letter which was admitted as exhibit 9 D5. That the facility letter was signed by all Directors of the 1st defendant and the guarantors and their spouses. That among the guarantors was the plaintiff who have mortgaged his house, the suit property. He produced an original Title Deed of the suit property which was admitted in court as

exhibit D6. He said that currently, the balance of unpaid loan is USD 2,092,400. He prayed that the court should allow the Bank to recover the outstanding loan by disposing of the securities. In cross examination, the witness DW2 said that the loan terms by the 1st defendant were not renewed every year but the 1st defendant was requesting to increase the loan before expiry of the old one. He said that the plaintiff is not contesting the loan of TZS 600 million issued in 2015 but is disputing the subsequent loan of 2016. Having gone through the evidence both oral and documentary, which was adduced in court, I was set to determine the issues. The first issue is; whether the renewal of the Loan Agreement between the 1st and 2nd defendants and mortgage of the suit property was entered with a consent of the plaintiff. In this, the plaintiff does not dispute the first credit facility which was granted to the 1st defendant in 2015 by which the plaintiff was a guarantor. h ■ io Testifying as PW1, he said that he was never informed and was unaware of the loan enhancement by the 1st defendant and that he knew the loan which was secured in 2015 and nothing more. That the Bank, 2nd defendant never informed him about the enhancement of the 1st defendant's loan or the payment progress. However, the 2nd defendant through the witness DW2 stated that the plaintiff knew all about the

credit facility enhancement and consented to it as one among the guarantors of the facility. He said that as a guarantor, the plaintiff consented and signed the letter of offer for enhancement of overdraft facility from TZS 600,000,000.00 to 1,000,000,000.00. Again, the plaintiff consented and signed a letter of offer to accept enhancement of overdraft facility from TZS 1,000,000,000.00 to 2,250,000,000.00. The plaintiff in his evidence admitted to have signed the documents for enhancement but claim that at the time, he didn't know what he was signing. That he came to know later that he signed the credit enhancement documents. He said that the 1st defendant has lied to him and led him to believe that he was signing the documents to release the Title Deed of his property from the Bank. It is trite law that he who alleges must prove. In civil cases, the standard is on the balance of probabilities. This cardinal law is set in the Evidence Act, Cap 6 R.E Cap 2022 under Sections 110,llland 112 of the said Act.- u Under those provisions, the law places a burden of proof upon a person who desires a Court to give judgment in his or her favour and such a person who states the existence of facts has to prove existence of those facts. Such facts are said to be proved when in civil matters, its existence is established by a preponderance of probability. (See the decision of the Court of

Appeal case of Ernest Sebastian Mbele vs. Sebastian Sebastian Mbele, Civil Appeal No.66 of 2019 CAT Iringa (Unreported) in which this cardinal principal on burden of proof on balance of probabilities was elaborated). In the instant suit, the evidence produced by the defence particularly the 2nd defendant shows that the plaintiff indeed was aware and signed the documents for credit facility enhancement from TZS 600 million to TZS One billion, and from One billion to 2.250 billion. All the documents shows that the plaintiff signed as a guarantor and mortgagor of the suit property. Exhibit D2 shows that the plaintiff signed a Deed of Variation of a Mortgage between him and Diamond Trust Bank. The mortgaged property is the suit property owned by the plaintiff. It was entered on 06 May 2016. Similar is to the Deed of Variation of a mortgage which was entered on 02 November 2016 between the plaintiff and the 2nd defendant signed by the said parties. This was admitted as exhibits D3 and D4. Exhibits DI and D5 shows again that the plaintiff agreed and signed for the credit­ 12 enhancement extended to the 1st defendant and guaranteed by the plaintiff with a suit property together with other guarantors. Exhibits DI and D5 shows that the wife of the plaintiff one Hawa Abdalla signed a spouse consent for mortgage of the suit property. The consent was signed on 12 April 2016 and on 13

December 2017. The plaintiff's claims that he was unaware of what he was signing cannot exempt him from the fact that he signed those documents which commits and binds him. As an adult, prudent man he should have exercised caution while signing any document. It is very difficult for the court to believe that the plaintiff just signed the documents presented before him by only trusting the 1st defendant's words without bothering to know the contents of what he was signing. As of now, it is my view that by mere verbal words, the plaintiff cannot exonerate himself from a fact that he signed the said documents agreeing and consenting to the loan enhancement and agreeing to the mortgage of the suit property. In addition, the plaintiff has claimed that he was tricked into signing the said documents by the 1st defendant but did not explain how his wife by the name of Hawa Abdalla also signed to consent the enhancement of the loan facility. When cross examined by the counsel for the 2nd defendant 13 about his wife's signing the consent, the plaintiff claimed that he remembers that his wife sign the consent once and they both went at the Bank but he did not remember whether his wife signed the consent the second time or not. The plaintiff was asked if he remembers to sign the document again in 2017 and said that he didn't remember. If the plaintiff who is to prove his case does not

remember some facts which are important to his case then who is to remember? From the above analysis of the evidence, I find that the renewal of the Loan Agreement between the 1st and 2nd defendants and mortgage of the suit property was entered with a consent of the plaintiff. The first issue is answered in affirmative. The second issue is whether the plaintiff's Title Deed No. 54439 with L.O No. 193345 Plot No. 31 Kariakoo Area at Dar es Salaam was illegally withheld by the 2nd defendant. This issue is answered in negative for the reason that the plaintiff guaranteed the credit facility Issued to the 1st defendant, mortgaging the suit property as described. On his own volition, the plaintiff mortgaged the suit property and the Title Deed of the same was issued to the 2nd defendant as security for the said loan. Therefore, the 2nd defendant as a bank did not steal or took by force the Title Deed from either the plaintiff or the 1st defendant. It was by agreement between them and which was consented by the plaintiff, the lawful owner of the 14 suit property. The plaintiff guaranteed the borrower while well aware that in case of default, the Bank as a mortgagor has a right to exercise the recovery measures over the mortgaged property. It is my finding that the 2nd defendant is not illegally withholding the plaintiff's Title Deed but it is by terms of the mortgage agreement

between them. On the third issue which is of the parties' entitlement, the plaintiff having failed to discharge his burden of proof and the evidence of the defence side being heavier, the plaintiff has no right to any of the reliefs he is praying before the court. Also since the defendants have not raised any counterclaim, then the only option this court have is to dismiss the suit in its entirety, with costs. The right of appeal is explained.

MSAFIRI

JUDGE 21/8/2024 15