al karimo investment ltd 5 others vs international commercial bank t ltd another 2023 tzhccomd 191 9 june 2023

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA (COMMERCIAL DIVISION) AT PAR ES SALAAM MISC. COMMERCIAL APPLICATION NO. 183 OF 2021 BETWEEN AL KARIMO INVESTMENT LIMITED........................................1st APPLICANT SAFE HARBOUR LTD................................................................................... 2ndAPPLICANT SALVATORY CELESTINE RWABIZI t/a THESA CONSTRUCTION COMPANY.......................................................... 3rdAPPLICANT HYDERALI FDIAHUSSEIN KHAKI.............................................................. 4thAPPLICANT MEHBUBALI FIDAHUSSEIN KHAKI........................................................ ...5thAPPLICANT SARAH INVESTMENT LIMITED.................................................................. 6thAPPLICANT VERSUS INTERNATIONAL COMMERCIAL BANK (T) LIMITED......... 1st RESPONDENT NATIONAL HOUSING CORPORATION.................................2nd RESPONDENT RULING Date of Last order: 25/05/2023 Date of ruling: 09/06/2023 AGATHO, J.: This ruling is in respect of the applicants' application for temporary injunction. The applicants seek to impress the court that pending determination of the main suit it be pleased to grant temporary injunction restraining the 1st respondent, agents, workmen, assignees, and or any person working under her instructions from disposing off through sale and or anyhow tempering with the following properties: 1 (a) A piece of Land situated on CT NO. 98143, Plot No. 2039/17, Block FLUR II Central Area, Dar es salaam in the name of Safe Harbour Ltd, the suit premises, (b) A landed property under CT NO. 186003/1; 186003/79/3; 186003/79/4; 186003/79/5; 186003/79/6; and 186003/79/7; on Plot No. 1374/208, Central Area, Ilala Dar es salaam, in the name of Hyderali Fidahussein Khaki (the 4th Applicant) the suit premises, (c) A landed property described as CT No. 166900/1/25, Apartment No. 10C, 10th Floor, LO No. 529077, Plot No. 827/22 City Centre FLUR 11 Area, Ilala Municipality, Dar es salaam in the name of Sarah Investment Ltd, the suit premises. (d) A piece of land known as Plot No. 2429/208 Kisutu Area, Dar es salaam in the name of Mehbubali Fidahussein Khaki with CT No. 186003/81/2, pending hearing and determination of the main suit, the suit premises, (e) That pending hearing and determination of the main case, the respondent be restrained from deducting any amount of money from the Overdraft Facility Account AA No. 2019/036 in the name of Salvatory Celestine Rwabizi t/a Thesa Construction Company, contrary to the purpose of which the Secured Overdraft (SDO) was sought and obtained, (f) Costs of this application be provided for. (g) Any other reliefs) this Hon. Court deems fit and equitable to grant. 2 The application was preferred under the provisions of Order XXXVII rule 1(a) and (b) of the Civil Procedure Code [Cap 33 R.E. 2019]. It was by way of chamber summons supported by an affidavit of Salvatory Celestine Rwabizi (principal officer of the 1st Applicant). Respondent and interested party filed their counter affidavits to resist the application. While the counter affidavit of the respondent was deponed by Vitalis Evarist Salimu, the principal officer of the respondent, the counter affidavit of the interested party was sworn by Aloyce Donald Sekule, Principal State Attorney. All sides to the application were under legal representation. Whereas the applicant was represented by advocate Charles Mutakyahwa. The respondent enjoyed the legal services of advocate Richard Madibi. And Mr Aloyce Sekule, Prinicpal State Attorney, represented the interested party. The application was disposed by way of written submission. In determining the application at hand, I will not reproduce what the learned counsel for the parties submitted in support or against the application for temporary injunction. But it suffices to recognize their submissions that have invariably been referred in this ruling. However, to determine the application besides the law, the court is duty bound to examine the evidence (affidavits) presented to support or 3 object the said application. Paragraphs 2, 7, 8, 9, 10, and 14 of the affidavit contain the evidence. Moreover, the applicants claim that the overdraft facility of TZS 690 million extended by the 1st respondent to the 1st applicant was for the purpose of processing the CBA USD 4.5 million loan to the 1st applicant. According to the applicants, if the court does not grant the order for temporary injunction, they will suffer irreparable loss as the respondent will inter alia dispose the mortgaged properties. The respondent through the counter affidavit contested the application. As per paragraph 5 of the counter affidavit, the respondent refuted to anyhow be involved in the 1st applicant's anticipated loan USD 4.5 million from the Commercial Bank of Africa. She also distanced herself from the allegation that she frustrated the efforts to secure the said loan by categorizing the loan of USD 1.7 million that the 1st Applicant took from the respondent as non-performing loan. She categorically stated in paragraph 12 of the respondent's counter affidavit that it was the Bank of Tanzania (BoT) through its agency called Credit Reference Bureau that did so. The respondent went on refuting the averment that she offered TZS 690 million ODF to the 1st applicant to process the USD 4.5 million loan from CBA to the 1st applicant. Instead, she said the TZS 690 million 4 was extended as addition to the money loaned for the building construction project. Besides that, the respondent argued that she was not a party to prospective USD 4.5 million loan deal with the CBA. The respondent further stated that the properties which the applicants are seeking the court order to restrain the responded from disposing or dealing with them are the securities given to secure USD 1.7 million loan from the respondent. The applicants have not disputed that they have defaulted to repay that the loan that is USD 1.7 million. Paragraph 15 of the respondent's counter affidavit avers that they issued default notice to the applicants. Having heard the submissions of learned counsels, the issue for determination is whether conditions for temporary injunction exist in this matter. It should be noted that a temporary injunction is an equitable relief. It is granted before or during trial for the sole purpose of preventing an irreparable loss or injury from occurring before the court has chance to decide the case. And it is granted upon satisfaction by the court that the applicant has right capable of being addressed through the injunctive order. It was held in Christopher P Chale v Commercial Bank of Africa, Misc. Application No 635 of 2017, HCT Dar es salaam District Registry at Dar es salaam (unreported) that the court must be satisfied that all the conditions for granting temporary injunction are met. 5 The said conditions were stated in the celebrated case of Atilio v Mbowe (1969) HCD 284. The learned counsel for the parties including the interested party are in agreement that the conditions enunciated in Atilio v Mbowe (supra) guide the court to grant the temporary injunction. That the applicants have to prove three principles for grant of injunctions namely: one, there must be triable issues or prima facie case; two, irreparable loss; and three, balance of conveniences. It should further be noted that, these three key principles or conditions must all be present and proved to warrant the grant of temporary injunction. In the case at hand, starting with the first principle that is there must be triable issue as one of the key considerations for grant of the temporary injunction. Looking at the parties' submissions and affidavits it is not disputed that Commercial Case No. 136 of 2021 is pending before this court also I have perused the applicants' affidavit specifically, the applicant is alleging that the respondent frustrated the efforts to secure the USD 4.5 million loan from CBA by categorizing the loan of USD 1.7 million extended by the respondent to the 1st applicant as the non­ performing loan. That made the CBA to decline extending USD 4.5 million loan to the 1st applicant. That inhibited the 1st applicant's ability to service 6 the loan. The 1st applicant alleges that the respondent was aware of the arrangements that the said USD 4.5 million loan if secured will be used to repay the USD 1.7 million loan to the respondent. That the respondent understood that the 1st applicant was servicing the loan by paying the interest first. That the respondent unilaterally and without consent of the 1st applicant deducted TZS 204,949, 213.40 from the overdraft bank account. The 1st applicant alleges that all these show the negligence of the respondent, and they are against banking practices. They in turn make the repayment of the loan to the respondent difficult. In the applicants' side these constitute the prima facie case with a chance of success. The interested party in objecting the application for injunction submitted that she owns the plots offered as security. Therefore, she ought to be the one complaining. In her view the applicant's affidavit does not disclose facts suggesting that there is a serious question of law or facts to be tried by this court. Rather they show that the 1st applicant took a loan from the respondent and has defaulted. I am inclined to agree with the observations of the counsel for the interested party. And, in my view, although there is pending suit before the court, what have been averred in the affidavit in support of the application as above depicted and without examining the merit of the main 7 suit fails to convince me that such evidence establishes prima facie case with a probability of success in the main suit in relation to the alleged frustration of the USD 4.5 million due to disclosure that the loan of USD 1./million was a non-performing loan, deduction of TZS 204,949, 213.40 from the overdraft bank account from ODF account (actually as per paragraph 13 of the respondent counter-affidavit the same was done as directed by the 3rd applicant) and even the allegation that the 1st respondent was aware of the USD 4.5 million loan and that she assured the CBA her maximum cooperation and hence the latter could issue the USD 4.5 million loan in favour of the 1st applicant. There is no evidence to substantiate this. Again, the testimony of therespondent is that the alleged amount of TZS 690 million extended as ODF was not for processing the USD 4.5million loan with CBA. Rather it was for the construction project. And the respondent has averred in the counter affidavit that she is not privy to the alleged arrangement. Therefore, the applicants have failed to meet the first condition for grant of temporary injunction. Regarding the second condition the applicants are claiming that if the application is not granted, she will suffer irreparable loss. The applicants claim that in the event the application is not granted the 8 respondent will dispose the mortgaged properties as such applicants will suffer irreparable loss. The 1st applicant lamented that the respondent's act of deducting money from the overdraft facility account is likely to injure the applicants. The interested party has pointed she is the lawful owner of the two plots in which there is a 17-storey building. This was joint venture project. Thus, it is the interested party that should be complaining and not the applicants who have mortgaged government property. It should be noted that in the second condition, it is not enough to show that a party will or is likely to suffer loss or hardship, rather there must be evidence that the hardship is of such nature that it cannot be met by monetary compensation. See Christopher Chale's case (supra) pages 5-7. It ought to be the irreparable injury that could not adequately be compensated by an award of damages. See American Cynamid Co. v Ethicon Ltd [1975] All ER 504 at p. 509. In the present application there is no dispute on the existence of mortgage. That the properties were mortgaged. However, there is no evidence given that if the respondent disposes the mortgaged properties the applicants will suffer irreparable loss. It should be noted that the object of a temporary injunction is to protect the Applicant against injury by violation of his right for which he could not adequately in damages recoverable in the action if the suit ends in favour of the applicant on the trial. I ask myself can't the foreseen loss 9 be compensated by damages or in monetary terms? In the present case the injury may be remedied by damages. Hence, it is not irreparable loss. In my respectful view the injunction order cannot be granted. I have noted that the applicants have not demonstrated that they will suffer irreparable loss. Having disposed the second condition, I turn to the third condition for grant of temporary injunction, that of balance of convenience. It is the role of the court to determine who between the applicants and the respondents will suffer greater hardship if the order for temporary injunction is withheld. Reading the affidavit, counter-affidavits, and the submission made by learned counsel and authorities cited, the applicants base their allegation on the respondent's act of frustrating the prospective loan to the tune of USD 4.5 million from the CBA by classifying that the loan given in favour of the 1st applicant by the respondent amount to USD 1.7 million as the non-performing loan. There are allegations of negligence on the side of the respondent. But the applicants neither disputes that there was default in repayment of the loan nor objects there are properties mortgaged. Moreover, the applicants have failed to meet the two conditions for granting temporary injunction. The affidavits from both sides confirm that there is an outstanding loan that the 1st applicant has not fully repaid. These are bank customers' money. I am persuaded by Agency io Cargo International v Euafrican Bank (T) Ltd, Civil Case No. 44 of 1998, HCT at Dar es salaam (unreported) at pages 5 and 6, where his Lordship Nsekela, J. (as he then was) that: " ...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 tend and which has 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." The above holding was reiterated in Christopher P Chale's case (supra) at pages 8-9.1 fully subscribe to view that the bank being in the banking business must have funds to lend and which have to be repaid by its debtors. Therefore, on the balance of convenience it can hardly be said that the applicants will suffer more hardship than the respondent who advanced the loan to the 1st applicant and has not recovered the same. Therefore, the third condition has also not been met. In this application, no prima facie case has been established. There is no foreseeable danger which has been pleaded by the applicants to convince the court to grant temporary injunction. Even if is that danger ii could have been there (which is not) monetary compensation may be sufficient as rightly held in the case of General Tyre East Africa LTD V HSBC Bank PLC [2006] TLR 60, where the court held that, the facts do not show any irreparable injury which applicant will suffer for which damages are not sufficient as a remedy. Again, on the balance of convenience the respondent is likely to suffer more hardship than the applicants. The applicants have failed to meet all the conditions set and therefore the application cannot be granted. Briefly, I find the application lacking pre-requisite merit. It is dismissed with costs. Order accordingly. DATED at DAR ES SALAAM this 9th day of June, 2023. Date: 09/06/2023 Coram: Hon. U. J. Agatho, J. For Applicants: Charles Mutakyahwa, Advocate 12 For Respondent: Genoveva Kalolo, Advocate holding brief of Richard Madibi, Advocate For Interested Party: Absent C/Clerk: Beatrice Court: Ruling delivered today, this 9th June, 2023 in the presence of Charles Mutakyahwa learned counsel for the Applicants, and Genoveva Kalolo, Advocate holding brief of Richard Madibi, Advocate for the Respondents. U.J.AGATHO JUDGE 09/06/2023 13