gripro tanzania limited and 2 others vs amana bank limited 2021 tzhclandd 506 30 august 2021

IN THE HIGH COURT OF TANZANIA (LAND DIVISION) AT DAR ES SALAAM. MISC. LAND APPLICATION NO. 298 OF 2021 (Original Land Case No. 146 of 2019 and Misc. Land Application No. 218 of 2021) AGRIPRO TANZANIA LIMITED................ ...... . 1st APPLICANT ATHUMANI TWAHA................................................... 2nd APPLICANT TWAHA ATHUMANI....................................................3rd APPLICANT VERSUS AMANA BANK LIMITED................. RESPONDENT RULING Date of Last Order: 16/8/2021 Date of Ruling: 30/08/2021 MSAFIRI, J The applicants AGRIPRO TANZANIA LIMITED, ATHUMANI TWAHA and TWAHA ATHUMANI moved this court by way of chamber summons pursuant to Order XXXVII Rule 1(a) and 2 of the Civil Procedure Code (Cap 33 R.E 2019). The applicants seek an order for a temporary injunction restraining the respondent, her workmen, agents or anybody else from alienating or transferring the suit properties identified as; Plot No. 4 Block 27 A and Plot No. 6 Block 27A registered under Certificate of Title No. 87682 and Certificate of Title No. 84799 respectfully which belongs to the 2nd and 3rd applicants the guarantors of the 1st applicant. The application was filed under certificate of urgency, and it was argued by way of written submissions by consent of parties and leave of the court. The background of this application as extracted from the affidavit of the applicants' advocate, Mr. Mluge Karoli Fabian is that the 1st applicant has secured two different loan/credit facilities from the respondent. In the first loan facility, the 1st applicant received Tshs. 550,000,000/- and the same was guaranteed by Private Agricultural Sector Support (PASS) who guaranteed 50% of the amount and the other 50% was guaranteed by one Yohana Paul Mkindwa and Antoni Manoni who offered their landed properties as security. On the second loan, the 1st applicant again received Tshs. 525,000,000/- from the respondent. This loan was also guaranteed by PASS by 50% of the amount and the 2nd and 3rd applicants offered their landed properties as security at 50% of the total value of loan. The landed properties are on Plot No. 4 Block 27 A and Plot No. 6 Block 27A. That the loan guaranteed by the 2nd and 3rd applicants i.e. the one with offer letter referenced as No. PO 16669/03/2017 was fully paid and executed, hence the 2nd and 3rd applicants properties which were mortgaged ought to have been released. However, the respondent has withhold the security which are no longer liable, and is intending to dispose of the suit properties 2 whereby the respondent has appointed some auctioneers to sell the same by public auction. The applicants are maintaining that the loan facility which was guaranteed by the 2nd and 3rd applicants has already been paid, except for the loan facility which was guaranteed by PASS and Yohana Paul and Antoni Manoni. The applicants are apprehensive that the respondent will proceed to sell the 2nd and 3rd applicants' properties by which the loan has been fully paid. As already stated, hearing of the Application was by written submissions. The applicants were represented by Mr. Mluge Karoli Fabian, learned advocate whereas the respondent was represented by Mr. Francis Ramadhani, learned advocate. In his submission in chief, Mr. Fabian prayed to adopt his affidavit as part of the submission. He addressed this Court that in order for the Court to grant injunction, three conditions has to be proved and that in this matter, the same has satisfactorily been established. He cited cases of Atilio vs. Mbowe (1969) HCD 284 and Ibramin vs. Ngaiza (1971) HCD 249. He pointed that the stand in the cited cases herein above was elucidated in the case of T.A Kaare vs. Genera! Manager Mara Cooperative Union (1984) Ltd (1987) TLR 17 (HC) where it was held that, before granting a discretionary interlocutory injunction, the court should consider the following facts; (a) Whether there is a bona fide contest in between the parties; (b) On which side, in the event of the plaintiff's success will be the balance of the inconvenience if the injunction is not granted, and 3 (c) Whether there is an occasion to protect either of the parties from "irreparable injury". These elements were also adopted in the case of Kobo Match Group Ltd vs. H.S Impex Ltd (2001) TLR 152. Mr. Fabian submitted further that there is a substantial suit to be tried by this Court between the parties as there is a Land Case No. 146 of 2019 filed by the applicants which has been restored and the issues for determination has already been framed. He maintained that there is a bonafide claims by the applicants in the main suit and it is entertainable. Mr. Fabian argued that the respondent intends to dispose of the properties and if the same is not halted timely, the applicants will suffer because the third party who will purchase the same will be a bona fide purchaser. He insisted that if the sought order will not be granted, the applicants stand to suffer irreparable loss and the main suit will be rendered nugatory. In the reply, Mr. Ramadhani, counsel for the respondent submitted that the 1st applicant entered into facility agreement with the respondent, the facility which was guaranteed by the 2nd and 3rd applicants, by mortgaging their two herein above namely properties. He stated that it is not true that the facility granted to the 1st applicant was fully paid and executed and this is proved by Deed of Settlement which was entered between the 1st applicant and the respondent on 9th November 2020 agreeing that the loan is still outstanding. 4 The counsel stated that the provisions relating to injunction are provided under Order XXXVII Rule (1), (2) and sections 68 and 95 of Civil Procedure Code, (supra) and these were interpreted in the land mark case of Ati I io vs. Mbowe (supra). He reiterated/quoted the three conditions set in the cited case. Submitting on whether this application has met the three criteria /conditions as in Atilio vs. Mbowe's case, Mr. Ramadhani argued that, from the facts adduced in the affidavit by the applicants' counsel, there is no serious case to be tried. This is because it is clear that the 1st applicant did receive a facility from the respondent which was guaranteed by the 2nd and 3rd applicants by way of mortgage and the respondent still owe the applicants an outstanding loan amount of Tshs. 596,347,111.47. He argued further that this fact was not disputed by the 1st applicant as he entered a Deed of Settlement with the respondent, dated 9th November, 2020. However, the 1st applicant has failed to adhere to the terms of the Deed of Settlement. Mr. Ramadhani submitted that, on the second condition set by the law, the respondent's act of exercising her right as mortgagor will not cause the applicants any irreparable loss. This is because the securities given by 2nd and 3rd applicants were given with full knowledge that in case of default by the 1st applicant, the said securities will be realized as collaterals. He referred this Court to the case of Lububu Company Limited & 2 Others vs. Grofin Africa Fund Limited t/a Grofin Tanzania Limited whereby Masabo, J cited the Ugandan High Court case of Kakooza Abdullah vs. Stanbic Bank Uganda Limited, H.C Misc. Application No. 614 of 2012 where it was held that; "the sate of the mortgaged property pledged as security for a loan agreement or mortgage cannot lead to irreparable loss because it is the contractual arrangement or intention of the parties and is expressly provided for in the loan agreement or mortgage". On the third condition, he submitted that, should the Court refuse to grant an injunction, there will be no hardship or mischief suffered by the applicants. The applicants have defaulted and refused to pay the outstanding loan for four years now. The 1st applicant had an opportunity to enter into a settlement arrangement but still ended up defaulting on the terms. The counsel prayed that the court should not entertain this application, and it should be dismissed with costs. In his rejoinder, Mr. Fabian reiterated what is stated in his affidavit and what he submitted in the submission in chief. He added that the respondent is trying to mislead the Court as the 1st applicant agreed to be indebted but referred the loan vide offer letter referenced as No. P016669/01/2017 with the properties belonging to Yohana Paulo Mkindwa and Anthoni Manoni and not the offer letter referenced as No. PO 16669/03/2017 with the properties belonging to 2nd was 3rd respondents because the latter was fully paid and executed as agreed. He concluded that, if the disputed property on Plot No. 6 4 Block 27 A and Plot No. 6 Block 27A are settled by auction, the main land case No. 146 of 2019 which is pending before this court will be of no use. Having heard the submissions on both parties and considered the same together with the records in the court file regarding this application, the major issue is whether this application has merit. In determining this application, I have to ascertain whether the applicant has succeeded to establish the three principles in the land mark case of Atilio vs. Mbowe( supra) the principles which were again quoted in numerous cases including the case of Anastasia Lucia Kibela Makoye & 2 others vs. Veronica Lucian Kibela & 4 Others, Civil Appeal No. 46 of 2011 at Zanzibar (unreported), whereas the Court of Appeal recited the case of Attilio vs. Mbowe and went on to address the three conditions set in the latter case as thus; i) There must be serious question to be tried on the facts alleged, and a probability that the plaintiff will be entitled to the relief prayed; ii) That the Court's interference is necessary to protect the plaintiff from the kind of injury which may be irreparable before his legal right is established, and Hi) That on the balance there will be greater hardship and mischief suffered by the plaintiff from the withholding of the injunction than will be suffered by the defendant from the granting of it. Therefore, in order to secure an order for temporary injunction, the applicant has to establish in whole the three hereinabove conditions. Starting on whether there is a serious question to be tried on the facts alleged, the applicant has instituted a Land Case No. 146 of 2019 before this Court, on the cause of action which arose in 23rd November, 2018 in Dar es Salaam. The plaintiffs (applicants) claims that the 1st plaintiff has secured two different loans from the defendant which were guaranteed by different persons including 2nd and 3rd plaintiffs. That the loan which were guaranteed by 2nd and 3rd plaintiff who offered the disputed landed properties as security was indeed fully paid by the 1st plaintiff. On her side, the defendant is vehemently denying that the loan has been paid and have put the plaintiffs to the strict proof. The land case No. 146 of 2019 though was dismissed for non-appearance of the plaintiffs, it has since been restored and among the issues to be deliberated is whether the loan advanced to the 1st plaintiff on 02/3/2017 has been fully paid/discharged. Restraining myself from going to the merit of the main suit, I find that there is a serious question to be tried on the facts alleged, the facts which can only be tested and proved during the trial of the main case. Therefore, it is my view that from the facts adduced, there is a prima facie case to be tried although as I have warned myself, at this stage it is hardly safe to say whether the applicant is likely to succeed or not as I will be going to the merit of the main suit. 8 On the second condition on whether there may be irreparable loss to the plaintiff; counsel for the applicants stated that the respondent has appointed some auctioneers to sell by public auction the properties in dispute. And that the respondent's intent of disposing of the landed property will change the status quo of the suit land that cannot be easily reversed by monetary means. The counsel submitted further that if the Court does not interfere by granting an injunction as prayed, the applicants will suffer because third party who will purchase the same will be a bona fide purchaser, and the applicants stand to suffer irreparable loss and the main suit will be rendered nugatory. On their part, counsel for respondent argued that, if the Court interferes and grant a temporary injunction, the one to suffer the irreparable loss is the respondent. That, if there is any party to be protected then it would be the respondent who has not only loss the legitimate loan that was granted to the 1st applicant, but the Court will be used to stop the respondent from exercising legitimate recovery as a financial institution, and that will deny the respondent to proceed with her business smoothly. He added that this application should not be allowed as it aims at subjecting the respondent in bankruptcy. With respect to the submissions by the counsel for the respondent, I am not in agreement with him that the order of temporary injunction sought by the applicants will subject the respondent in bankruptcy and deny the same the right to proceed smoothly with business. 9 In my view, the 2nd and 3rd applicants will suffer more if the respondent will execute her intention of selling the disputed properties. The 2nd and 3rd respondents were the owners of the disputed properties and mortgaged the said properties as securities on a loan which is for now alleged by the applicants to be fully discharged, and vehemently denied by the respondent. Since the issues on the discharge of the debt by the 1st applicant to the respondent has not been resolved, the 2nd and 3rd applicants are at the risk of losing the ownership of the disputed properties. The disputed properties, by way of auction will be sold to another bona fide purchaser and that will raise another dispute on the landed disputed property. I am of the firm view that the temporary injunction will not prejudice the respondent because in the end the main suit will be heard and determined on the value of evidence of each party and the respondent will get her right (if any). In that circumstances, I find that the 2nd and 3rd applicants are the one who will suffer irreparable loss if the temporary injunction will not be granted. On the balance of convenience, having found that the 2nd and 3rd applicants will suffer more loss than the respondent, the balance of convenience lies on the maintenance of status quo on the disputed properties. As it is stated that the Certificates of Titles of the disputed properties are still in the possession of the respondent, the same can safely maintain the said possession until the hearing and determination of the main case. 10 In the upshot, I hereby allow this application, and order temporary injunction restraining the respondent, her agent's workmen or anybody else from alienating or transferring the disputed property comprised on the properties designated and comprised on Plot No. 4 Block 27 A and Plot No. 6 Block 27A registered under Certificate of Title No. 87682 and Certificate of Title No. 84799 until the hearing and determination of Land Case No. 146 of 2019. Costs will follow the main suit. It is so ordered. A. MSAFIRI, JUDGE 30/8/2021 Ruling delivered today on 30/8/ 2021 in the presence of Mr Mluge Fabian, advocate for the applicants and Ms. Gladness Tupa advocate for the respondent. ii