LAND APP 12842 SCANNED

IN THE HIGH COURT OF TANZANIA (LAND DIVISION) AT DAR ES SALAAM LAND APPEAL NO. 12842 OF 2024 ANNA PHILEMON CHACHA (Administrator of The Estate of the late Thobias Mnoko Mniko)........................... APPELLANT VERSUS EFC MICROFINANCE BANK LTD....................................... 1st RESPONDENT GENESIS AUCTION MART AND DEBT COLLECTORS LTD...2nd RESPONDENT DR.WILFRED NYERERE SARUNDAY................................. 3rd RESPONDENT (Originating from Land Application No. 163 of 2018 of the District Land and Housing Tribunal for liaia at Kivukoni) JUDGMENT 16/9/2024 & 15/10/2024 A. MSAFIRI, J. The appellant, having been aggrieved by the decision of the District Land and Housing Tribunal of Ilala in Land Application No. 163/2018 has lodged the instant appeal advancing five (5) grounds of appeal as follows: 1. That the Honourable Chairperson grossly erred in both law and fact by holding that the sale of the mortgaged property did not contravene the Tribunal's order. 2. That the Honourable Chairperson grossly erred in both law and fact by holding that the mortgaged property was sold as per the market i 3. That the Honourable Chairperson grossly erred in both law and fact in holding that the sale of the mortgaged property was done in accordance with the required procedures. 4. That the Honourable Chairperson grossly erred in both law and fact by failing to make proper analysis of evidence and issues before him so as to make a just decision. 5. That the Honourable Chairperson grossly erred in both law and fact by failing to note that the selling of the house in question amounts to unfair enrichment. The appeal was heard by way of written submissions and the submission in chief by the appellant was drawn and filed by Mr Frank Mchomvu, learned advocate while the reply submissions by the respondents was drawn and filed by Mr Cleophace James, learned advocate. Among the issues which the appellant is complaining of, is the fact that the trial Chairperson failed to make proper analysis of evidence and issues before her. This court being the first appellate court, has mandate to go through the evidence, make analysis and come with a conclusion. According to the proceedings of the trial Tribunal, at first, it was Thobias Monko Mniko who instituted a suit against the now respondents. He said that he is the lawful owner of the suit property located at Kipunguni 'B' Area, Kitunda Ward, Ilala Municipality within the city of Dar es Salaam. That, in August 2014, he took a first loan from the 1st respondent of TZS- 2 16,000,000/=, that he managed to pay and then topped up the loan to TZS 24,000,000/=. He said that after deduction of outstanding due of the first loan on 27/4/2015, the applicant continue to service his loan agreement. That on 17/01/2018, the applicant was served with a notice of eviction by the 2nd respondent and that is when he realized that the suit property has been sold to the 3rd respondent without notice to the applicant, and it was contrary to the order of Tribunal dated 16/8/2017 in Misc. Civil Application No. 489 /2017. That the suit plot has been sold to the 3rd respondent for TZS 20,000,000/= which is far below the forced value of TZS 61,000,000/= declared in the valuation done in March 2015. The applicant/appellant prayed for declaratory order that the sale of the suit property to the 3rd respondent is contrary to the law and it should be nullified. During the trial, the applicant/ appellant testified as PW1 and produced the mortgage deed and the Offer Letter as exhibit Pl collectively. He also produced another mortgage deed of 2015 which was admitted as exhibit P2. PW1 said that he agreed to pay back the loan for 36 instalments which is equal to TZS 29,999,000/= and he started repayments in 2015. He^^/_ 3 produced a Bank statement which was admitted as exhibit P3. He said that the problem began when he was late to deposit one instalment whereby he deposited on the next date. That the Bank served him a notice asking him to pay the full required instalments or pay the unpaid balance plus the interest which is TZS 25,553,000. PW1 said further that he started to pay on the same date he was served with the notice. That he was served with the two notices at the same time, i.e. 14 days' notice and 60 days' notice. He produced the two notices which were admitted as exhibit P4 collectively. He told the Tribunal that on 28/7/2017 he received a notice from Waungwana Auction Mart that they are about to sell the suit plot on 31/7/2017. He said that he immediately filed a case in the Tribunal which was Application No. 198/2017 and Misc. Application No. 489/2017 where he got an order to restrain the sale. That he got the restrain order on 16/8/2017 and sent the order to the Bank on 17/8/2017 and sent the copy to Waungwana. The copy of restrain order was admitted as exhibit P5. PW1 said that he continued to make payments up to when he received a notice from the 2nd respondent on 17/01/2018 informing him that they have sold the suit house. He said that he was surprised that the house was sold while there was a stop order,J\fl ' 4 PW1 said that there was an order from Case No. 44/18 between EFC, Waungwana, Genesis and Nyerere. He produced the said order and it was received for judicial notice. PW2 was Samwel Mwera Chegere. He said that he was a Street Chairman of Kipunguni B from 2015 - 2017. That the applicant/ appellant was a resident in the said street and in 2015, he came to the Street Government Office and requested for an approval to get a loan. That PW2 approved for the applicant to get the said loan from EFC Bank. That, after that in 2017, the EFC Bank came into his office complaining that the applicant does not pay the loan as agreed. That the applicant was served with the default notes through the Street Government Office. That the applicant informed him that he has filed an application for restraint order and the applicant showed him the restraint order. PW1 identified exhibit P5 which is an order of the Tribunal. The respondents also adduced their evidence whereby SU1 Fadhili Obasi Katule was a witness from EFC Bank. He said that he is a loan officer from EFC Bank. He said that EFC Bank released a loan TZS 24,000,000/= to the applicant/appellant. He produced the loan agreement as Exhibit Kill. That the payment was for 36 instalments from 08/4/2015 and the security. 5 for the loan was the suit house. He produced a copy of payment schedule as Exhibit KU2. SU1 said further that according to exhibit KU2, the applicant was to pay first instalment by 08/6/2015 and deposit TZS 1,111/031-06. and the last payment instalment was to be by 08/5/2018. That the applicant began to default on payment where he was delaying to make payments contrary to the agreed schedule. He produced a copy of Bank statement as exhibit KU3. That the appellant/applicant delayed whereby he did not deposit the money timely and in other time, did not deposit at all. That, the appellant failed to deposit any instalments for January 2017, May 2017, June 2017 and July 2017. SU1 said that after default, the Bank served the applicant with 60 days demand notice. It was admitted as KU4 which was issued on 04/8/2016. That after that still the applicant failed to make any payments hence the 2nd respondent started the procedures for disposing the suit property by auction. He produced a piece of newspaper with an advertisement of an auction. It was admitted as exhibit KU5. That the auction was conducted successfully where the suit house was sold to Wilfred Nyerere Sarundai. The Certificate of Sale was admitted as exhibit KU6. That the auction was conducted on 27/9/2017. .Af I L 6 About the restrain order, SU1 said that it was the one side order and it was about the Application No. 489/2017 and it was never been heard. He insisted that the Bank followed all procedures for auction. He said that the value of the suit house was TZS 60,000,000/= and it was not to be sold below 25%. He prayed for the dismissal of the suit. SU2 was the Executive Manager of the 2nd respondent Genesis Auction Mart. He said his company as an Auctioneer was engaged by the 1st respondent in 2017 to collect the debt from the applicant/appellant. That they followed up on the applicant. That on default, they conducted an auction to sell the suit property after making all necessary adverts. That the 3rd respondent emerged the winner in the auction and purchased the suit property. Wilfred Nyerere Sarundai testified as SU3. He said that on 27/9/2017 he attended a public auction which was conducted by Genesis Auction Mart. That he emerged the highest bidder and managed to purchase the suit house. That he got the news about the auction on 29/8/2017 through Mwananchi Newspaper. That he paid the whole purchase price which was TZS 20,000,000/= and was issued with a Certificate of Sale. That he could not possess the house as the applicant instituted a suit. Lf I 7 I Having gone through the evidence, I will now determine the grounds of appeal. The first ground is that the trial Chairperson erred by holding that the sale of the mortgaged property did not contravene the Tribunal's order. In the submissions, Mr Mchomvu for the appellant submitted that in the judgment, the Tribunal admits clearly that there were orders issued by the Tribunal against the sale of the disputed house. That even the respondents did not dispute that fact. That surprisingly, the Tribunal came up with the strange finding that, since the order made was exparte , the appellant ought to have shown whether or not the application was finally determined inter partes. Mr Mchomvu was of the opinion that the applicant have proved the existence of the Tribunal's orders, and it was upon the respondents to fault the same by showing that they were not valid. He cited the case of M&M Food Process Company Ltd vs. CRDB Bank Ltd & others, Civil Appeal No. 273 of 2020 (TANZLII), where the Court of Appeal noted that, proof on balance of probability in civil cases implies that the court will sustain such evidence which is more credible than that of the other on a particular fact to be proved 8 Mr Mchomvu added that the Tribunal also erred in its finding that the parties to the Misc. Application in which the restraint order was issued were different. He said that it is true that the parties in the application were EFC and Waungwana Auction Mart, this does not affect the validity of the orders given therein. In response, Mr James for the respondents submitted in contention that the appellant failed to prove that there was existence of order of status quo/temporary injunction at the time of auction. That the misc. application usually originates from the main case hence it is without doubt that the parties in both cases should be the same. He said further that as per exhibit P5, the parties were different with the matter at hand, hence even if the said order was in existence, it could not bind the parties who were not present in the said proceedings. To bolster his point, the counsel cited the case of Jacqueline Jonathan Mkonyi & Another vs. Gausal Properties Ltd, Civil Appeal No. 311 of 2020, CAT, where it was held thus; "Z/7 land cases, judgment in favour of the party is not alwaysjudgment against the whole word so it does not bind those who were not parties" Jlj / / 9 The pertinent question before me is whether there was Tribunal's restraint order when the disputed house was sold in an auction? The Certificate of Sale which was admitted as exhibit P5 shows that the auction on which the disputed house was sold, was conducted on 27/9/2017. According to the evidence, there were two restraint orders issued at different times. As per exhibit P5 (admitted collectively), there was a restraint order issued in Misc. Application No. 489/2017 whereby the appellant, then Thobias Monko Mniko sought for restraint orders against EFC Tanzania and Waungwana Auction Mart. The order of maintenance of status quo on the suit house was issued by the Tribunal on 16/8/2017. In the order, both parties were ordered to maintain the status quo on the suit house pending inter parties hearing and determination of the chamber application. It is not clear in the evidence on whether the application was heard interpartes or not and the outcome of the hearing of the application is also not clear. There is also another restraint order issued in Misc. Application No. 44 of 2018, parties were Thobias Monko Mniko vs. EFC Tanzania, Waungwana Auction Mart and Genesis Auction Mart and Debt Collectors. The Tribunal ordered the parties to maintain the status quo of the suit house pending the determination of the chamber application interparties. The order was^/ io issued in 29/01/2018. This order was received during the trial for judicial notice. Looking at this order, it is clear that it was issued after the auction. The auction was conducted on 27/9/2017 hence the order of the Tribunal of 2018 was already overtaken by events. The first order was issued on 16/8/2017 a month before an auction. However, the order was issued pending interpartes hearing and determination of the chamber application. The status of Misc. Application No. 489 of 2017 at the time of the auction was not made clear by the applicant. What was the outcome of the said Misc. Application? True, there was the Tribunal order of maintenance of status quo but it could not have stayed forever. The order had time limit which was clear i.e. " pending interparties hearing and determination of the chamber application!'. Since it was the appellant who claimed that the auction was conducted while there was still a court restraint order, it was the duty of the applicant/appellant to prove to the Tribunal that indeed the court order still existed at the time of the auction. The appellant's counsel Mr Mchomvu argued that the appellant has proved that the Tribunal order existed during the auction and it was the respondents' duty to prove that the order did not exist. It is my view that the appellant is trying to shift the balance of proof to the respondents ii while he has failed to show to the Tribunal that the order of maintenance of status quo still existed. The existence of the restraint order was limited to the hearing and determination of Misc. Application No. 489/2017 which the appellant did not show its status at the time of auction. Was the misc. application still pending in court or was already determined? That was the duty of the appellant to prove or inform the Tribunal. It was not the duty of the Tribunal or the respondents. In the circumstances, I agree with the findings of the trial Chairperson in her decision that the appellant has failed to show the status of the misc. application as the temporary order was limited to the hearing and determination of the said application. I find the first ground to have no merit. The second ground is that the trial Chairperson erred by holding that the mortgaged property was sold as per the market value. Mr Mchomvu submitted that the valuation conducted in 2015 indicates clearly that the market value of the disputed property was TZS 102,000,000/= and the forced sale value was estimated at 60% which was TZS 61,000,000/=. He said that selling the house at a price of TZS 20,000,000/= was far below i i i the real value of the property.-Ml L- 12 In the reply, Mr James submitted that the appellant has failed to prove that the suit property is worth more than TZS 20,000,000/=. That the appellant ought to furnish the court with the valuation report showing the increase in value. He cited the case of JM Hauliers Limited vs Access Microfinance Bank Ltd, Land Appeal No. 274/2021 CAT (Unreported). In his evidence, the appellant as PW1 claimed that the suit house was sold way below the forced value of TZS 61,000,000/= which was declared in the valuation dated March 2015. However the said valuation report of 2015 was not produced in court. The appellant simply relied on verbal words to prove to the court that there was valuation which was done in 2015. In absence of the report to cement the appellant's words, the Tribunal could not have relied on mere words where there was a question of value of the suit house. In addition, the Tribunal could not have taken judicial notice of the value of the suit house in absence of the valuation report. Besides, the issue of valuation/values of the properties are not among the facts which the courts are to take judicial notices as provided under the law. I find the second ground of appeal to have no merit. I will consolidate the third and fourth grounds as they both relate on the procedure for selling the suit house. The counsel for the appellant claims 13 that the trial Chairperson erred by holding that the sale of the mortgaged property was done in accordance with the procedures. That the trial Chairperson also erred by failing to note that the selling of the disputed house amounts to unfair richness. That this was for the reason that the sale of the suit house resulted in a financial gain for the mortgagee that is disproportionate to the debt owed. In response, the counsel for the respondents submitted that the procedures of auction was proper as decided by the trial Tribunal. On the issue of enrichment, the counsel argued that the claim is unfounded since the appellant defaulted to repay the loan and was duly served with the default notice. He said further that the appellant has failed to justify his claims of unfair enrichment. In the evidence, the appellant as PW1 admitted to have been served with the default notice. He admitted that he was late to deposit one instalment and he was issued with a notice on 11/8/2025, one was 60 days' notice and another was 14 days' notice. Exhibit P4 collectively shows that the appellant was served with 60 days' notice on 04/8/2016 and he acknowledge receipt on 11/8/2016. Further, the Bank advertised its intention of selling the disputed property by auction through Mwananchi Newspaper as per exhibit KU5. 14 PW2 who said that he was a Street Chairman from 2015 to 2017 stated that in 2017 the dispute between the applicant and EFC Bank emerged whereby the Bank came to his office and complain about the applicant's default. The witness said that Waungwana Brokers sent the applicant the notice of default and notice of auction through a Street Chairman. PW3 also testified that he was elected a Street Chairman of Machimbo in 2017. He said he knew the applicant has some issues with the Bank. That he was informed that the applicant was given a notice to vacate the suit house by the Bank. He said he knew nothing about the notice of eviction. He was shown exhibit P6 which is the said notice and shown the signature which he denied to be his. The witness PW3 also denied the official stamp on the notice saying that it is not their offices' stamp. In the appellant's submission in court in instant appeal, the counsel for the appellant argued that the sale of the mortgage property was not done in accordance with the procedure. The ground he relied upon was that PW3 stated that he never received any notice of auction from the 2nd respondent. I find this position to be misconceived as the counsel for the appellant is twisting the facts. I say so because according to the evidence of PW3 as analysed above, he said that he was not served with the notice of eviction of the applicant. 15 PW3 never said anything about being served or being not served with the notice of auction. Furthermore, the allegations of PW3 that the signature and the official stamp on the eviction note was not his and not from his office, insinuated that the document was forged. However, neither the appellant nor his witness PW3 managed to prove the forgery claims. The witness did not tell or show the Tribunal how he arrived to his conclusion that the official stamp of the office seen at exhibit P6 was forged. Since the claims of forgery requires proof, and none was produced beside mere words from PW3, then I find the claims to be baseless. On the issue of enrichment by the sale of suit house. I have already found that the appellant failed to establish the value of the suit property so as to base his claim that the property was sold below its value. Since the appellant entered into a loan agreement while knowing the consequences of default, he cannot complain now as he has defaulted and is bound by the terms of the loan agreement. On the last ground on analysis of evidence, I have gone through the whole evidence and I have come with conclusion that the appellant failed to establish his case as per the required standard in civil cases i.e. on balance of probabilities. I find that the trial Chairperson correctly analysed the 16 evidence and come out with the right decision which I have no reason to fault. Having observed that, I find the entire appeal to have no merit and I dismiss it with costs. It is so ordered. 17