amosi mlasi vs edosama hardware limited 3 others 2023 tzhclandd 76 27 february 2023

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA (LAND DIVISION) AT DAR ES SALAAM LAND CASE NO. 32 OF 2021 AMOSI MLASI (Suing as an Administrator of the Estate of PETER SABATO SANJO) PLAINTIFF VERSUS EDOSAMA HARDWARE LIMITED DEFENDANT EDWARD SAGUDA MADUHU 2'^° DEFENDANT TIB CORPORATE BANK LIMITED DEFENDANT THE ATTORNEY GENERAL 4^" DEFENDANT Date of Last Order: 02.12.2022 Date of Judgment: 27.02.2023 JUDGMENT V.L. MAKANI.3 The plaintiff in this suit is AMOSI MLASI suing as the Administrator of the Estate of the late Peter Sabato Sanjo. He is praying for judgment and decree as follows: (i) A declaration that the act ofthe 1^', 2f"' and J'' defendants of retaining the Certificate of Tide No. 186282/61 ofPiot No. 604 Biock "D"Sinza Area in Kinondoni Municipaiity Dar es Saiaam which belong to the plaintiffafter the underlying contract has been expired is iiiegai and unjust. (H) An order against the J''defendant to eiease the plaintiff's Certificate of Tide No. 186282/61 of Plot No. 604 Block "D"Sinza Area in Kinondoni Municipality Dar es Saiaam unconditionally to the plaintiffand thatifthe said J''defendantso wish to demand another collateral from the 1^ and 2P^ defendants which is different from Certificate of Tide No. 186282/61 of Plot No. 604 Block "D" Sinza Area in Kinondoni Municipality Dar es Balaam which belong to the plaintiff. (Hi) An order to be issued against the and 2"' defendants jointly and severally to pay the plaintiff Tsh. 8,000,000/=to the plaintiff as it was promised by them. (iv) An order against the 1^ and Z"' defendants of paying interest of Tsh. 8,000,000/= (the amount which waspromised)atthe rate of35% per annum from 21^'^ Juiy 2018 when they promised to pay to the date ofjudgment. (v) An order be issued against the 1^^ and 22'' defendants to pay the plaintiff Tsh. 50,000,000/= being general damages the plaintiffhas suffered so far. (vi) An interestfor any decretalsum atcourt rate of 12% from the date ofjudgment to the date of finalsettlement. (vii) The costs of this suit to b bone by the 1^, and J''defendants. veneration Before commencement of the hearing of the case, Issues were framed In terms of Order VIII Rule 40(1) of the Civil Procedure Code CAP 33 RE 2019 (the CPC)as follows: (a) Whether the and 2P'' defendants areJustified to hold the Certificate of Title No. 186282/61 ofPlot No. 604 Block "D" SInza Area In KInondonI Municipality Dar esSalaam, In the name ofthe late Peter Sabato Banjo(represented by the plaintiffas Administrator)on the basis ofthe contract entered between the late Peter Sabato Banjo and the 1^ and 2^^ defendants. (b) Whether the J'' defendant Is justified In law to retain as security the property of the plaintiff(as administrator ofthe estate ofthe late Peter Sabato Banjo). (z) Whether the plaintiffIs entitled to any damages In respect ofthe breach ofcontract(Ifany). (d) To what reliefs are the parties entitled to. The plaintiff was the only witness(PWl) In support of his case. He was led by Mr. IsaackTaslnga, Advocate. In his testimony, PWl said as an Administrator of the estate of the late Peter Sabato Sanjo, he Is In court because he Is claiming the Certificate of Title No. 186282/61 of Plot No. 604 Block "D" SInza Area In KInondonI Municipality Dar es Salaam (the suit property) from the P'and 2"'' defendants and the 3'^'' defendant, TIB Corporate Bank Limited (the Bank). He tendered the Letters of Administration as Exhibit PI. He said he has the copy of the Certificate of Titie (Exhibit P2) while the original is retained by the Bank. He said the 1=' defendant entered into a contract with the late Peter Sabato Sanjo where the latter issued to the 1=' defendant the Certificate of Title of the suit property, to pledge as security in favour of the Bank for a loan taken by the P' defendant. PWl said according to the contract (Exhibit P3) the 1=' defendant was supposed to return the Certificate of Title after one year and further that if there was any default then properties of the 1^' defendants would substitute the Certificate of Titie in the Bank for the purpose of securing the loan. He said the 1=' defendant and the Bank have not adhered to the terms of the contract as the 2^^ defendant who is also the representative/director of the defendant told the late Peter Sabato Sanjo after one year that no money was received from the Bank and therefore, he could not get back his Certificate of Titie. He said there was an understanding that the 1=' defendant would pay the late Peter Sabato Sanjo TZS 8,000,000/= for the delay and the 2""^ defendant wrote a letter to that effect (Exhibit P4). PWl went on saying that the promises by the and Z"** defendants have not been fuifiiied and this is the sixth year. He said the act of the and 2"'' defendants continuing to use the Certificate of Titie of the property is improper as the contract between them and the late Peter Sabato Sanjo has been breached because of the delay in return of the Certificate of Title which was supposed to be after one year or otherwise the security was supposed to be replaced in order to release the said Certificate of Titie belonging to the late Peter Sabato Sanjo. He said the Bank gave them copies of the Mortgage Deed (Exhibit P5), Facility Letter between the Bank and the 1®' defendant (Exhibit P6) and Guarantee and Indemnity Agreement (Exhibit 97). He said the Bank has retained the Certificate of Title and this is improper as the property is now not saleable and so there is a loss on their part. He said another loss is that there is a sick mother who could have been maintained by the proceeds from the sale of the property. He prayed for payment of TZS 8,000,000/= and 50,000,000/= as damages for loss of time of conducting the case he also prayed for the Certificate of Title to be returned to them and also costs. On cross-examination PWl admitted that the 2"^ defendant and the late Peter Sabato Sanjo had a good relationship but there was a slight misunderstanding after failure of the return of the Certificate of Titie. He said he did not know if the late Peter Sabato Sanjo was a beneficiary of the transaction between the Bank and the 1=' and 2"'' defendants and he aio did not know if the late Peter Sabato Sanjo was given a Bajaj costing TZS 7,000,000/=. He said what he is claiming is the Certificate of Title and TZS 8,000,000/= for the delay which was promised by the 2"=" defendant. Further in the cross examination, PWl admitted that the Certificate of Title went to the Bank after the late Peter Sabato Sanjo and the 1^' defendant agreeing that the property registered under the Certificate of Title could be security in favour of the Bank; and the late Peter Sabato Sanjo therefore, knew the terms and conditions by the Bank one of them being that the Bank cannot release the Certificate of Title until the loan is repaid. But he said he did not know that the P'and 2"'^ defendants had defaulted in the repayment of the loan. PWl also admitted that the Bank was not a party to the contract between the late Peter Sabato Sanjo and the 1=' and Z"'' defendants (Exhibit P3). He also admitted that the Mortgage and Guarantee of Indemnity (Exhibits P5 and P7) were signed by the late Peter Sabato Sanjo in that he consented for the property under the Certificate of Title to be security but was not sure about the guarantee or that in the event of default the late Peter Sabato Sanjo was supposed to pay the Bank. He also admitted that the dispute is in respect of the and 2"'' defendants and not the Bank. In re-examlnatlon PWl asserted that he does not know the amount in default by the I®' defendant as he was supposed to get notice but there Is none so far. He reiterated that the contract between the late Peter Sabato Sanjo and the defendant was for one year only. DWl was Edward Saguda Maduhu the 2"'' defendant herein. He said he is one of the directors of the 1®' defendant. He went on saying that he knew the late Peter Sabato Sanjo and he was like a father, friend and neighbour to him. He said since 2007 the late Peter Sabato Sanjo used to give him his Certificate of Title as security for purposes of getting loans and there was an understanding that he would give him some money for that before signing of any bank documents. He said he got a loan of TZS 100,000,000/= from CRDB Bank and that after repayment of the loan in 2010 he returned the Certificate of Title to the iate Peter Sabato Sanjo. The second loan was from ABC Bank and the amount of the loan was TZS 200,000,000/= and the iate Peter Sabato Sanjo was paid his money and the Certificate of Title was returned. He said in 2016 he took another loan from the Bank herein of TZS 500,000,000/= and the understanding was to buy a Bajaj to the late Peter Sabato Sanjo valued at TZS 7,000,000/= and this money was supposed to be paid before he signed any Bank documents. DWl said the late Peter Sabato Sanjo trusted him because he always returned his Certificate of Title in time and during his lifetime, they had no problems save for the last loan which was not paid In time because they were contracted in a desk project by the Municipal Councils but a large sum of money has not been paid. He said this has also caused the default to pay the loan and this fact was discussed with the late Peter Sabato Sanjo. DWl said In 2018 they requested the Bank to reschedule the repayment of the loan and the Bank agreed. So, they paid the late Peter Sabato Sanjo TZS 8,000,000/= because he had to sign Bank documents for the rescheduling of payment schedule. He said even after the rescheduling, still the 1^^ defendant went into default, and this was explained to the late Peter Sabato Sanjo. He told the court that they want to repay the loan so that the Certificate of Title can be returned to the plaintiff, and it is expected that by March, 2023 the loan would be repaid because they have a new project in Dubai. He said they have a genuine intention to pay back the loan. On cross-examination DWl admitted that the contract (Exhibit P3) between the 1=' defendant and the late Peter Sabato Sanjo was for one year. He also admitted that the family of the late Peter Sabato Sanjo cannot do anything with the property because of the loan. He said the late Peter Sabato Sanjo knew that he was taking a loan, that his property was security and that the Certificate of Title would remain with the Bank until the loan is cleared. He further admitted that the Bank knew nothing about their contract and the late Peter Sabato Sanjo. In re-examination DWl insisted that the late Peter Sabato Sanjo was a guarantor of the loans taken by the defendant in CRDB Bank, ABC Bank and the Bank herein. DW2 was Ayubu Mkwawa Chief Manager of Loan Recovery of the Bank. He said he knows the defendant and that she is their customer. He said in 2016 the P'defendant took a loan, but she failed to pay. He said the security offered was a legal mortgage in respect of premises in Segerea and Sinza. The guarantor to the loan was Peter Sabato Sanjo and the security given by him was a house in Sinza valued at TZS 135,000,000/=. The other security was property at Segerea owned by the 2"'^ defendant valued at TZS 225,000,000/=. He said the loan has not been repaid fully and there were talks engaged with the 2"^ defendant who requested for adjustment of penalties so that the loan could be bought by another bank. He said the talks resulted to the reduction of the loan from TZS 404,000,000/= to TZS 375,000,000/= which has not been cleared. He said the plaintiff's claim that the Certificate of Title is being held contrary to the law is not correct because the loan has not been repaid. He said the contract between the defendant and the late Peter Sabato Sanjo (Exhibit P3) is not known to the Bank. He said the Bank has the Certificate of Title because the loan has not been paid for a long time despite the negotiations. On cross-examination DW2 said that he was not aware what attracted the late Peter Sabato Sanjo who was the guarantor to sign the Bank documents. He said where there is a good customer the Bank would engage in talks before doing any recovery measures and that is what they did in respect of the loan taken by the defendant. In re-examination DW2 said their loan has not been paid but they want to engage the defendant in talks and negotiations as they believe she can pay. 10 After the presentation of evidence by the parties, final submissions were filed by Counsel for the parties as was ordered by the court. The relevant part of the submissions will be pointed out in the course of analysing the evidence of the parties. The first issue for consideration is whether the and 2"^ defendants are justified to hold and retain the Certificate of Title of the late Peter Sabato Sanjo. Mr. Shitindi, Advocate for the and 2'^^ defendants submitted in his finai submissions that since the iate Peter Sabato Sanjo was a guarantor to the loan then the and 2"^ defendants were justified to retain the Certificate of Titie. Mr. Nyakiha, State Attorney did not submit on this issue and the third issue. He said, and correctly in my view, that these issues did not touch on the Bank and the 4^ defendant. It is without dispute that the iate Peter Sabato Sanjo and the 2"^ defendant were guarantors to the ioan taken by the defendant from the Bank. Further, there is no dispute that the ioan taken by the Bank has not been paid to this date as confirmed by DWl and DW2 in their testimonies. There is also no dispute that among the terms of 11 the contract between the late Peter Sabato Sanjo contract and the defendant was that the offer of the suit property as security was only for one year and that the Certificate of Title would be returned thereafter. PWl said up to this date the Certificate of Title has not been returned to him as an administrator of the estate of the late Peter Sabato Sanjo and DWl and DW2 confirmed that indeed the Certificate of Title has not been returned because it is still retained by the Bank as the loan to the P' defendant has not been paid. As correctly submitted by Mr. Tasinga in his final submissions, the said contract(Exhibit P3)was very clear In Clause 4 that the suit property would be used as security for one year from 15/08/2016 to 14/08/2017. And in Clause C of the said contract if the 1=' defendant failed to pay the loan within a year, then the security by the late Peter Sabato Sanjo would be released and substituted with properties of the 1^ defendant and the Certificate of Title would be returned to him. It is the law that once a contract has been concluded between parties not even the court is allowed to interfere or correct the terms as stated in the cases of Haroid Sekiete Levira & Another vs. African Banking Cooperation Limited (Bank ABC)& Another, 12 Civil Appeal No.46 of 2022(CAT-DSM)(unreported) cited by Mr. Tasinga and Austack Alphonce Mushi vs. Bank of Africa Tanzania Limited & Another, Civil Appeal No. 373 of 2020 (CAT-Mbeya) (unreported) cited by Mr. Nyakiha, iearned State Attorney for the Bank and 4"^ defendant. The iatter case cieariy highlighted the principle of privity of contract in that strangers in a contract do not have a right over the said contract. Since Exhibit P3 was a contract between the late Peter Sabato Sanjo and the 1=' defendant then parties were supposed to adhere to the terms therein, and corisidering that DWl and DW2 admitted that the Certificate of Title has not been returned it means there is breach of contract, and thus the 1=' and 2"'' defendants are not justified to hold and retain the Certificate of Title. They were supposed to return it to the late Peter Sabato Sanjo and now the plaintiff as administrator. The reason that the Certificate of Title is with the Bank vis a vis the contract is inconsequential because firstly the Bank, as said above, is not privy to the contract between the P' defendant and the late Peter Sabato Sanjo. Secondly, the 1=^ and 2"'^ defendants knew that they had an obligation, according to the contract, of returning the Certificate of Title after one year and substituting their properties as security to cover the loan taken. There was no term in the contract of grace 13 period in the event there is any default of repayment of the loan. In view thereof, the parties were supposed to adhere to the terms of the contract and the and 2"*^ defendants were obliged to inform the Bank in order to substitute the security as agreed. In that regard, the holding and retaining of the Certificate of Title in the name of the iate Peter Sabato Sanjo by the and 2"^ defendants is not justifiable. The first issue is therefore answered in the negative. As for the second issue, the evidence on record is clear that the late Peter Sabato Sanjo was a guarantor to the loan taken by the defendant, and this has not been disputed. The loan has not been repaid and as rightly stated Mr. Nyakiha in his final submissions, in terms of the Guarantee of Indemnity (Exhibit P7) the late Peter Sabato Sanjo assumed the obligation to repay the loan in case of any default. In that regard, the Bank has a right as a Mortgagee to retain the security until the loan is fully recovered.(See the case of Austack Alphonce Mushi (supra). The Bank has no obligation whatsoever in the contract between the late Peter Sabato and the defendant because she is not privy to the said contract. Mr. Tasinga in his submissions pointed out that the Bank did not even bother to issue a default notice to the guarantor. But as intimated by DW2 and 14 asserted by DWl, the recovery process has not started as they are engaged in talks with the 2"^ defendant as director of the defendant who is their good customer on how best to recover the loan. In such a situation the Bank cannot release the security unless the loan is repaid fully or the borrower, who in this case is the defendant, substitutes the said security with another. It is evident therefore that the Bank is justified to hold the Certificate of Title because one, there is a default by the defendant in the repayment of the loan; and two, it is the late Peter Sabato Sanjo who signed and was willing to be guarantor to the loan according to the Guarantee and Indemnity Agreement (Exhibit P7). In essence therefore, the Bank is justified In law to retain the Certificate of Title as such the second issue is answered in the affirmative. Is the plaintiff entitled to any damages? As said hereinabove that the defendant has breached the contract, the remedy thereof is payment of damages. It is apparent that the Certificate of Title was supposed to be returned in 2017 but this was not done until the filing of this case in 2021. The plaintiff is therefore entitled to damages for the disturbances he went through in following up the Certificate of Title resulting to this case. I will thus order a token amount of TZS 15 10,000,000/= as general damages payable by the and 2"^ defendants who shall as well pay the costs of the case. What are the parties entitled to? According to the contract (Exhibit P3)the 1^^ and 2"^ defendants are in breach of the contract between them and the late Peter Sabato Sanjo. On the other hand, though there is a Loan Facility Agreement between the Bank and the 1^^ defendant, it is a known fact that the 2"^ defendant and the late Peter Sabato Sanjo were guarantors, but there is still no recovery process which has been initiated by the Bank. Now, the only remedy available is for the 1^^ and 2"^ defendants to adhere to the contract (Exhibit P3) by substituting the security in the Bank as per Clause C, so as to release the late Peter Sabato Sanjo from guarantorship of to the loan, and immediately thereafter, the Certificate of Title be returned to the plaintiff to enable him to continue with the administration of the estate of the iate Peter Sabato Sanjo. The plaintiff also prayed for payment of TZS 8,000,000/= for the delay in return of the Certificate of Title of the suit property as promised by the 1^^ defendant by virtue of its letter (Exhibit P4). DWl as the director of the 1^ defendant did not controvert the said letter, he merely 16 stated that the said amount was paid to the late Peter Sabato Sanjo. Since there is no proof of payment tendered to show that indeed, the said amount was received by the late Peter Sabato Sanjo then this court cannot rely on mere words. In that regard, I hold that the said amount of TZS 8,000,000/= is payable to the plaintiff by the* and 2"*^ defendants. The plaintiff also asked for interest on the amount of TZS 8,000,000/= at 35% per annum from 21/07/2018 to the date of judgment. However, in his evidence the plaintiff did not state, and he was not led to show the basis and how he arrived at this rate. In the circumstance, this prayer is not granted. The court shall only grant interest at 7% court's rate from the date of judgment to payment in full. In the end result it is hereby decreed as follows: (a) That the act of the 1^^ and 2""^ defendants retaining the Certificate of Title No. 186282/61 of Plot No. 604 Block "D" Sinza Area in Kinondoni Municipality Dar es Salaam is in breach of the Contract between the late Peter Sabato Sanjo and the 1^*^ defendant and hence unlawful. 17 (b) That the and 2"*^ defendants are ordered to substitute and replace the security offered to the Bank by the late Peter Sabato Sanjo, namely, the suit property under Certificate of Title No. 186282/61 of Plot No. 604 Block "D" Sinza Area in Kinondoni Municipality Dar es Salaam in the name of Peter Sabato Sanjo, with their own properties as per the Contract. (c) That after the substitution and replacement of the security as ordered in (b) above, the 1^ and 2"*^ defendants in collaboration with the Bank are ordered to immediately return the Certificate of Title No. 186282/61 of Plot No. 604 Block Sinza Area in Kinondoni Municipality Dar es Salaam to the plaintiff as Administrator of the late Peter Sabato Sanjo. (d) That the exercise of substitution and replacement of the security by the and 2"*^ defendants, and the return of the Certificate of Title No. 186282/61 of Plot No. 604 Block "D" Sinza Area in Kinondoni Municipality Dar es Salaam to the plaintiff as in (b) and (c) above, shall be completed within three months from the date of this judgment. 18 (e) That the and 2"^ defendants shall pay the plaintiff TZS 8/000^000/= being payment for the delay of the return of the Certificate of Title Certificate of Title No. 186282/61 of Plot No. 604 Block "D"Sinza Area in Kinondoni Municipality Dar es Salaam as promised. (f) That the 1^^ and 2'^'^ defendants shall pay interest on the decretal amount at 7% court's rate from the date of judgment until payment in full. (g) That the 1^ and 2"^ defendants shall pay damages to the plaintiff to the tune of TZS 10,000,000/=. (h) The 1^^ and 2"^ defendants are condemned to costs of this suit. It is so ordered. \J 6Cmt \3RT 7! V.L. MAKANI C5 JUDGE 27/02/2023 ★ IAtd 19