Misc

IN THE HIGH COURT OF TANZANIA LAND DIVISION AT DAR ES SALAAM MISC. LAND APPLICATION NO. 23662 OF 2024 (Originating from Land Case No. 22185 OF2024) AL KARIMO INVESTMENT LIMITED.............................................................IstAPPLICANT SARAH INVESTMENT LIMITED.................................................................... 2ndAPPLICANT HYDERALI FIDAHUSEIN KHAKI................................................................. 3rdAPPLICANT MUNTAZIR HYDERALI KHAKI..................................................................... 4thAPPLICANT VERSUS INTERNATIONAL COMMERCIAL BANK....................................................... 1stRESPONDENT ALIASGHER F. KADIBHAI........................................................................... 2ndRESPONDENT NUTMEG AUCTIONEERS & PROPERTY MANAGERS CO. LTD.................................................................................... 3rdRESPONDENT RULING 11/11/2024 & 16/12/2024 N.E MANDIA, J This is an application for temporary injunction filed under Order XXXVII Rule 1 (a) and (b) of the Civil Procedure Code [Cap 33 R.E 2019] and any other enabling provision of the law. The applicant is seeking for an order of temporary injunction to restrain the respondents, her agents, workmen, assignee and or any person working under the respondent's instruction from evicting the applicants from and i transferring ownership of and or anyhow tempering with the property described as Unit Apartment No. IOC on 10th Floor, on Plot No. 827/22 FLUR II, CT No. 166900/1/25, City Center, Dar es Salaam; costs of the application; and any other relief(s) deemed fit and equitable to grant. The application is supported by affidavit of Hyderali Fidahussein Khaki, the Principal Officer of the 1st and 2nd applicants and the 3rd applicant himself, and reply to counter affidavit affirmed by Waleed Farhad Kadu, also principal officer of the 1st and 2nd applicants, and is opposed by the counter affidavit of BAHATI MAKAMBA, legal officer of the 1st respondent. Hearing of the application proceeded by way of written submissions. Mr. Charles Mutakyahwa, learned counsel represented the applicants while Mr. Richard Madibi, learned counsel acted for the 1st respondent. The 2nd and 3rd respondents were duly served but they neither appeared in court nor filed any document hence, hearing proceeded ex parte against them. In support of the application, Mr. Mutakyahwa prayed to adopt the contents of the affidavit and reply to counter affidavit in support of the application to form part of his submission. The counsel submitted further that submitted that before granting temporally injunction, there are factors and or principles that must be met by the applicants and which 2 are condition precedent to the court. The conditions have been laid down in the case of Atilio vs Mbowe (1969) HCD, 284, as follows: - 1. That the facts establish a serious issue /question to be tried by the court and a probability that the plaintiff will be entitled to the relief sought, 2. That the temporally injunction sought is necessary in order to prevent some irreparable injury before the sought legal right is established, 3. That on the balance, greater hardship and mischief is likely to be suffered by the Plaintiff if temporally injunction is withheld than may be suffered by the Defendant if the order is granted. On the first condition, Mr. Mutakyahwa submitted that the facts as contained in the plaint, establish a serious issue /question to be tried by this court and a probability that the plaintiff will be entitled to the relief sought. That paragraphs 2 to 18 of the affidavit in support of the application, and paragraph 1 to 14 of the reply to counter affidavit in support of the application, the applicants have shown how on the 26th February, 2016, the 1st applicant applied for and obtained a Term Loan Facility from the respondent to partly finance the construction of a residential cum commercial building project described as Plot No. 1374/208, with CT. No. 186003/79, Central Area Dar es Salaam. That the 1st respondent was incapable of further financing the 1st applicants project beyond the already issued of USD: 1.7 million. That the applicant 3 solicited additional financing from the CBA bank and was further required to secure an amount of TZS 690,000,000 to cover costs to be incurred in processing the loan from CBA bank and transfer of USD 1.7 million from the 1st respondent directly to CBA bank. He submitted further that the 1st respondent agreed and granted the 1st applicant the said amount through a third party in the name of Salvatory Celestine Rwabizi t/a Thesa Construction Company. That to secure the said over draft facility, the applicant's pledged as security, a deed of mortgage in favour of the 1st respondent over CT.No. 166900/1/25, Apartment No. 10C, 10th Floor, Plot No. 827/22 City Centre FLUR II Area, Ilala Municipality, Dar es Salaam. That the Applicant drew and utilized USD 70,000 from the overdraft facility, to cater for the tender purposes of the 1st applicant and the amount was not repaid to the extent of accruing interest and at the time of alleged auction, it had reached an amount TZS 400,000,000. That the 1st and 3rd respondents auctioned the said property at a tune of USD 100,000 equivalent to TZS 265,000,000.00, which is far below the market value or forced market value of the property. That according to the valuation report, at the time of filing this application, the property had a market value of 404,000,000 and a forced market value of 343,000,000. That the applicants are disputing the said auction to the effect that the selling 4 of the said property was extremely under value at their detriment. The counsel was of the view that these contradictory facts of the value of the suit property present a prima facie case which need the intervention of this court. On the second condition, Mr. Mutakyahwa submitted that basing on the fact contained in the affidavit and reply to counter affidavit the applicants have shown the existence of serious issues to be determined by this court. That if no injunctive order is issued, the respondents will evict the applicants from the property and further transfer the interest in the property to the 2nd respondent, the alleged buyer. The counsel contended that if this situation is left to happen before the determination of the suit, then it will occasion an irreparable loss upon the applicants. That the main concern is auctioning the applicants' mortgaged property below the forced market value hence, making the applicants unable to settle their liability which attracts interest on daily basis at the detriment of the applicants. On the third condition, Mr. Mutakyahwa submitted that the applicants stand to suffer more if the injunctive orders sought are not granted owing to the fact that the property is likely to be transferred to the 2nd respondent and the applicants are likely to be evicted from the suit property. That on the other hand, the non-cleared balance 5 continues to attract interest at the detriment of the applicants and another property of the applicant is likely to be auctioned in the like manner hence, occasioning economic hardship and irreparable injury to the applicants. He cited the case of Kenafric Industries Ltd vs. Lakairo Investments Group Company Ltd and Another Misc. Application No. 279 of 2018 HCT, Commercial Division, (unreported), and Suryakant D. Ramji vs. Savings and Finance Ltd and Others, Civil Case No. 30 of 2000, HCT, Commercial Division (unreported). The counsel also referred in the case of Channel Tunnel Group Ltd vs. Balfour Bealty Construction Ltd (1993) ac 334 at pp 360- 362z where it was held that: - "The right to an interlocutory injunction, cannot exist in isolation but is always incidental to and dependent on the enforcement of a substantive right, which ... not invariably takes the shape of cause of action." Mr. Mutakyahwa submitted that this application has met the conditions that warrants the court's discretion to grant an order of temporary injunction. He prayed for the court to grant the application with costs. In rebuttal, Mr. Madibi prayed to adopt the counter affidavit sworn by Bahati Makamba as part his submission. He admitted that before 6 granting temporary injunction the conditions stated in the case of Atillio vs. Mbowe (supra) must be met. On the first condition, Mr. Madibi contended that the applicants have failed to show the triable issue in the main suit. That the applicants in the main suit allege that the 1st respondent failed them in obtaining a loan from CBA bank while on record the applicants have failed to give evidence of the same in their Affidavit. That there is no any evidence as to the said allegation. The counsel submitted further that there was no contract between the applicants, 1st respondent and CBA bank for loan financing hence, there is no any serious question to be tried by this court which can lead the court to issue an interim injunction. That in the entire affidavit in support of the application, nowhere is shown that the 1st respondent communicated with CBA bank asking them not to grant loan to the 1st applicant. That the claims are just mere statements with no any justification and proof and there is no triable issue that need to be determined by this court. Mr. Madibi contended that the averments by the applicants about the market value and forced market value of the mortgaged property at the auction is a mere afterthought after the 1st respondents decided to auction the property in order to recover the amount claimed. He contended further that the suit property was sold as per the market value of USD 100,000 which was not enough to settle 7 the accrued debt of almost TZS 400,000,000. That auction of the property was done in the exercise of the 1st respondent right under the mortgage and, the same cannot be termed a serious question to be tried by this court. That the 1st respondent did what the market wanted and she was egger to realize her money after the default. Mr. Madibi submitted that the applicants cannot dispute the price of the suit property at this time while they had a chance to sale the same and pay the debt. That they received a default notice and notice of public auction over the suit property and failed to take steps to stop the 1st respondent from selling the property hence, they were willing to allow the 1st respondent to sale the property and they knew that she could not recover her money over it. He referred in the case of Mariam Christopher vs. Equity Bank Tanzania LTD & Christopher Edward Makundi Misc. Land Application No. 1070 of 2017, to bolster his argument. He was of the view that the pleadings and the affidavits do not raise a serious question for determination hence, the application be dismissed with costs. On the second condition, Mr. Madibi contended that for this condition to be met by the applicants, they have to state the particulars of the loss to be encountered for the court to realize how serious is the loss. That a mere statement that one will suffer irreparable loss does not 8 help the court to understand the seriousness of the loss. The counsel contended further that the applicants have miserably failed to give a clear account of the particulars of the alleged loss. That there is no any loss which will be encountered as the 1st, 3rd and 4th applicants have no any interest in the suit properties hence, have no locus standi to claim a temporary injunction over the suit property. Mr. Madibi submitted further that the applicants will not suffer any irreparable injury arising from the 1st respondent exercising her right of sale of the mortgaged property as per section 132(1) and (2) of the Land Act [ Cap 113 R.E 2019]. That the amount owed to the applicants affect the 1st respondent lending capacity and it is actually the 1st respondent who is likely to suffer irreparable loss in case the order sought is granted. He cited the case of Christopher P. Chale vs. Commercial Bank of Africa, Misc. Civil Application No. 635 of 2017, reported in TanzLII to bolster the argument that particulars of irreparable loss have not been given for the court's exercise of its discretion in the applicants' favour. On the third condition, Mr. Madibi submitted that the applicants have failed to state the hardship and mischief likely to be suffered by them. That the applicants are not likely to suffer greater hardship and mischief than the 1st respondent because it is the 1st respondent who claim from the applicants and not vice versa. The counsel contended 9 that it would be wise for the applicants to vacate the suit premises and allow the 2nd respondent to enter into possession having lawfully purchased the said property in a public auction. That if the applicants will not vacate the suit property, then the 2nd respondent and 1st respondent will face greater hardship and mischief than the applicants. He cited the case of Agency Cargo International v. Eurafrican Bank (T) Ltd, HCT (DSM) Civil Case No. 44 of 1998(unreported) which was cited in Christopher P. Chale vs Commercial Bank of Africa (Misc. Civil Application No. 136 of 2017) [2018] TZHC 11 (13 March 2018) where it was stated at page 8 that: - "Wherein the balance of convenience test was adumbrated in an application for injunction against the bank's move to enforce recovery measures as it were in this application. This Court (speaking through Nsekela, J as he the then was) stated thus: "... The object of security is to provide a source of satisfaction of the debt covered by it The Respondent to continue being in banking business must have funds to lend and which as to be repaid by its debtors. If a bank does not recover its loans it will seriously be an obvious candidate for bankruptcy.... It is only fair that banks and their customers should enforce their respective obligations under the banking system" (at pp. 5 and 6). I entirely subscribe to the above statement for it as relevant in this application as it was in the said case. I hold that even assuming the Applicant had met the first two conditions, the application was bound to fail on the third condition." ffS 10 That the 1st respondent is going to suffer more if injunction is granted hence, the applicants are not entitled to the prayers in the chamber summons as they have failed to meet the third condition. Mr. Madibi submitted further that the applicants have failed meet all three conditions to be granted a temporary injunction. He cited the case of Carolina Alex and Others vs. Saada Thomas Maulid and Another, Misc. Land Application No. 447 of 2017, reported in TanzLII, where it was stated that: - "Of course, all the three conditions above must be met before a temporary injunction can be granted. In our legal fraternity, there is a basketful of other authorities restating these three principles." He prayed for the application to be dismissed with costs. In rejoinder, Mr. Mutakyahwa contended that what is stated in the applicants' pleadings suffices to establish the extent of injury to be suffered by the applicants. That it is the 1st respondent who disrupted the arrangement for the 1st applicant loan application to CBA bank and failure to obtain the loan led to the failure to accomplish the project and, as such the applicants have failed to realize the expected income/profit. That the 1st respondent knew that the overdraft facility was not utilized as per the agreed terms and conditions hence, selling the collateral at a throw away price is punishing the applicants twice. The counsel li submitted that the concern is auctioning the mortgaged property below the forced market value thus, unable to settle the amount of liability upon applicants. That this extent of injury suffices to grant the applicants' the order sought. The counsel reiterated the prayers in his submission in chief. Having critically examined the submission made by both counsels, the pertinent issue for determination is whether the application is meritorious. In determination of this application, I will also be guided by the conditions set forth in the famous case of Atilio vs Mbowe(supra). I response to the first condition that, it is trite law that the court has to look into the pleadings and or the affidavit of the parties in order to establish the existence of a prima facie case. In the case of the CPC International Inc vs. Zainabu Grain Millers Ltd, Civil Appeal No. 49 of 1999, (unreported) it was observed that, it will be premature to dwell in determining whether the applicant will win the suit or will obtain a decree at this stage as the parties have not adduced any evidence to prove or disprove the reliefs sought. What is important at this stage is to look into the facts of the case and see whether they disclose any serious issue for the determination by the court. It is on record as per paragraphs 2 to 18 of the affidavits in support of the application that the applicants claim among other things that the auction of the suit property 12 was undervalued compared to the market value and or forced marked value. That the market value was TZS 404,000,000 and the forced market value was TZS 343,000,000 and the auction was USD 100,000 which is extremely very low price. On the contrary, the 1st respondent was of the view that the averments by the applicants about the value is a mere afterthought after the 1st respondents decided to auction the said property in order to recover his debt. That the suit property was sold as per the market value of USD 100,000. It is my considered position that the disagreement between the applicant and the 1st respondent on the value of the suit property is a triable issue to be determined by this court. Again, the contention by Mr. Madibi that there is no contract between applicants, 1st respondent and CBA bank for loan financing is another issue to be determined by the court in the main case. I am therefore of the settled view that the applicants have met the first condition. On the second condition of irreparable loss, it is a settled position that the court is required to consider whether there is a need to protect either of the parties from irreparable injury before their right have been established. It is obvious that an injunction is granted during the pendency of the suit in order to protect the plaintiff from injuries which are irreparable. The applicants contended that if no injunctive order is 13 granted they will be evicted by the 1st respondent from the suit property and transfer it to the 2nd respondent and that will occasion irreparable loss to the applicants. It is my considered observation that the applicants have failed to explain how they will suffer irreparable loss if they become evicted from the suit property and the suit property is registered in the name of the 2nd respondent. I am of the view that the applicants were supposed to state the particulars of the loss to be encountered for the court to realize how is it irreparable. That a mere statement that one will suffer irreparable loss does not help the court to understand the seriousness of the loss. As it was held in the case of Christopher P. Chale vs. Commercial Bank of Africa (supra), that particulars of irreparable loss have not been given for the court's exercise of its discretion in the applicant's favour, it is therefore my considered view that the applicants have failed to give the particulars of the irreparable loss in case they will be evicted from the suit property. I am afraid that the applicants have failed to establish this condition. On the third condition, the applicants are required to show that on balance of convenient, they are likely to suffer more than the respondents in the event the application is not granted. It has been observed earlier that the applicants have failed to state the particulars of the irreparable loss they are likely to suffer in case they will be evicted 14 from the suit property. It is also on record that the applicants have defaulted to pay the loan they took from the 1st respondent. It is therefore, my observation that on the balance of convenience, the 1st respondent as a landing business, is likely be more inconvenienced than the applicants if temporary injunction is granted. In the upshot, and without prejudice to my observations, I hereby find that the second and third conditions for the grant of a temporary injunction is not met by the applicant. For an order of temporary injunction to be issued, all conditions in Atilio's case (supra) must be met commutatively. In CRDB Bank PLC v. Multimodal Transport Africa Limited, Syed Nazre Abbas Rizvi and Meiya Abbas Rizvi, Misc. Land Application No. 2299 of 2024 which cited with approval the case of Christopher Paul Chale v. Commercial Bank of Africa, Misc. Civil Application No. 635 of 2017 it was held that: "... it is also trite law that conditions set out must all be met and meeting one or two of the condition will not be sufficient for the purpose of the court exercising its discretion to grant an injunction''[Emphasize added] Consequently, the entire application is hereby dismissed with costs. Order accordingly. MANDIA JUDGE 16/12/2024 15