azania bank limited vs salma mohamed mwassa 2023 tzhccomd 258 4 august 2023

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA (COMMERCIAL DIVISION) AT DAR ES SALAAM COMMERCIAL CASE NO. 36 OF 2023 AZANIA BANK LIMITED………………………………………PLAINTIFF VERSUS SALMA MOHAMED MWASSA………………………… DEFENDANT Last Order: 04/07/2023 Judgment: 04/08/2023 DEFAULT JUDGMENT NANGELA, J. This “Default Judgment” arises from a claim for payment of monies advanced to the Defendant as consumer loan by the Plaintiff. The outstanding amount claimed by the Plaintiff is a sum of TZS 128,572,671.52 being amount outstanding in respect of the consumer loan granted by the Plaintiff to the Defendant as per the terms of the consumer loan Agreement as of 09th March 2023. Page 1 of 13 In this suit, the Plaintiff instituted it against the above- named Defendant praying for Judgment and Decree as follows: - 1. For Payment of a total sum of TZS 128,572,671.52 being the amount outstanding and remaining unpaid in respect of the consumer loan granted by the Plaintiff to the Defendant as per the terms of the consumer loan Agreement as of 09th March 2023, and 2. For Payments of interest computed at an agreed rate of 14% per annum on outstanding amount referred in (a) above, computed from date of filing this suit to the date of judgment; and 3. For payment of interest on the decretal sum at Court’s rate from the date of judgment till full satisfaction of the entire decretal sum; and Page 2 of 13 4. For payment of general damages suffered by the plaintiff for loss of business and other resultant losses and damages suffered by the Plaintiff as a result of the Defendant’s failure to heed to the terms and conditions of the loan agreement. 5. For Cost for this suit; and 6. For any other relief(s) the Court may deem fit to grant. When this suit was called on for orders, the Plaintiff enjoyed the legal services of Mr. Mbagati Nyarigo, learned Advocate. The Defendant being absent was also unrepresented and never filed a written statement of defense. I will briefly narrate the facts of this suit as gathered from the Plaint. It all started sometime in May 2017 when the Defendant, being at that time a Member of the Parliament of the United Republic of Tanzania, applied and was granted by the Plaintiff a Consumer Loan in the tune of TZS Page 3 of 13 100,000,000/=. Besides, in June 2017, she was further granted an additional TZS 85,000,000/= as consumer loan and the two facilities advanced to her were granted subject to the terms and conditions contained in a Term Sheet for Consumer Facilities for Members of Parliament. (See: Exh.ABL-1 to the affidavit) supporting the Form No.1 filed in this court). Having received the loan amount and after a lapse of some time, the Defendant defaulted repayment hence breaching the terms and conditions of the consumer loan agreement. Despite several reminders, the Defendant refused, failed, and/or neglected to heed to the Plaintiff’s repayment demands. As such, the loan amount, which remained outstanding as of 09th March 2023 stood at TZS 128, 572,671.52, hence, this suit and the reliefs claimed under it. On 16th May 2023, Mr. Nyarigo, the Learned Counsel for the Plaintiff, told the court that the Plaintiff was unable to Page 4 of 13 trace the whereabout of the Defendant for purposes of service of the Plaint. In view of that, he prayed for that, the Defendant be served by way of substituted service. This court granted the application and service by way of publication was effected through the Mwananchi newspaper dated 26th of May 2023 (at page 18) as well as the Citizen newspaper (dated 26th May 2023 (at page 4)). See Annex.ABL-5. The two newspapers were also availed to the court as proof of service. However, up to the 15th of May 2023, no defense was ever filed, and, at the same time, the Defendant did not appear in court. On the material date, the Plaintiff’s counsel moved the court for an order that would, pursuant to Rule 22 (1) of the High Court (Commercial Division) Procedure Rules, 2012, GN. NO. 250 of 2012 as amended by GN. No. 107 of 2019 (the Rules) allow her to apply for Default Judgment. Page 5 of 13 This court granted the prayer, and, having ascertained that the Plaintiff complied with its earlier order of filing Form No.1 with its requisite supporting affidavit and annexures to it, this court proceeded to fix a date for this Judgment. The Form No.1 filed in this court was accompanied by an affidavit of Mr. Charles Mugila, the Principal Officer of the Plaintiff. I have looked at the affidavit regarding proof of claim and the annexures ABL1 to ABL5, attached to it. I have also looked at the originals which were availed to this Court. The issue which I am suppose to determine in this case is whether the Plaintiff is entitled to the prayers and reliefs sought in form No.1 filed in this court. In essence, the filing of Form No. 1 seeking for a Default Judgment in favour of Plaintiff in a case comes when the Defendant has failed to appear to defend the claims levelled against him or her. It is therefore a right which the Plaintiff enjoys under Rule 22 (1) of the High Court Page 6 of 13 (Commercial Division) procedure Rules, 2012 (as amended, 2019). The said Rule 22 (1) provides as follows: “Where any party required to file written statement of defence fails to do so within the specified period or where such period has been extended accordance with sub rule (2) of rule 20, within the period of that extension, the court may, upon proof of service and on application by the plaintiff in form No. 1 set out in the schedule to these Rules accompanied by an affidavit in proof of claim, enter judgment in favour of the Plaintiff.” In this suit, the Plaintiff has complied with the above provision by filing Form No. 1 and an affidavit as required. It is also clear that, the Defendant failed to appear to defend her case despite all efforts made to make her appear in court, which efforts include service by way of publication as evidence by the newspapers availed to the court as Exh.ABL-5. Page 7 of 13 I have also looked at the affidavit of Charles Mugila filed in this court in proof of the claims, and I am satisfied that, the same is self-explanatory proving the claims as laid out in the plaint and supported by the attached exhibits. This does satisfy the cardinal principle that the one who alleges must prove. See section 110, 111 and 112 of the Evidence Act, Cap 6 R.E 2022. From the foregoing, it is my finding that after executing the two consumer loan agreements and after receiving the loan amounts so advanced to her, the Defendant had a duty to repay the loans in full. It is also worth noting, essentially, that, if the Plaintiff is to be able to continue thriving in her core business of banking, I find it pertinent to reiterate what this court reiterated in the case of Prashant Motibhai Patel and Darshana Prashant Patel vs. Azania Bank Ltd and Another, Commercial Case No.37 of 2020 (unreported). Page 8 of 13 In that cited case, this court stated, citing the case of Agency Cargo International vs. Eurafrican Bank (T) Ltd, Civil Case No.44 of 1998 (unreported), that for: “…If a bank does not recover its loans, it will seriously be an obvious candidate of bankruptcy …It is only fair that banks and their customers should enforce their respective obligations under the banking system.” It is also clear, even under the normal contract law, according to section 37 (1) of the Law of Contract Act, Cap.345 R.E 2019, that, as a matter of principle: “the parties to a contract must perform their respective promises, unless such performance is dispensed with or excused under the provision of this Act or of any other laws.” The above stated principle was aptly stated albeit differently, by the Court of Appeal of Tanzania in the cases of Page 9 of 13 Simon Kichele Chacha vs. Aveline M. Kilawe, Cvil Appeal No.160 of 2018 (unreported) and Abualy Alibhai Azizi v Bhatia Brothers [2000] T.L.R. 288. In those cited cases, the Court was of the view that: "the principle of sanctity of contract is consistently reluctant to admit excuses for non- performance where there is no fraud (actual or constructive) or misrepresentation and no principle of public policy prohibiting enforcement." In this suit, the Defendant was in contract with the Plaintiff whereby the latter advanced consumer loans to the Defendant on terms and conditions which included a full and timely repayment of the loans. The Defendant, therefore, ought to have discharged her obligation to repay the loans, failure of which amount to a serious breach of her duties under the Facility Agreements she executed. Page 10 of 13 Besides, it is also clear that, the Defendant’s failure, neglect, refusal, or inability to appear in court and defend her case despite all efforts made, does entitle the Plaintiff to proceed in terms of Rule 22 (I) of the High Court (Commercial Division) Procedure Rules, 2012 R.E 2019, and this court is justified to grant the Plaintiff what she has prayed for. In the upshot of the above, this court does hereby proceed to enter a default Judgment and Decree in favour of the Plaintiff and states as follows: 1. That the defendant is hereby ordered to pay to the plaintiff a sum TZS 128,572,671.52 being the amount outstanding and remaining unpaid. 2. That the defendant is hereby ordered to pay interest on the above sum at the Commercial rate of 14% from the date of filing this suit to the date of judgment. Page 11 of 13 3. That the Defendant is hereby ordered to pay interest on the decretal amount at the court rate of 7% from the date of judgment till the date of full satisfaction. 4. That the Defendant is condemned to pay costs of this suit. The court does issue a further Order that: 5. in terms of Rule 22 (2) (a) and (b) of the High Court (Commercial Division) Procedure Rules, 2012 as amended, 2019 the courts makes further orders that the decree emanating from this suit shall not be executed unless the decree holder has, within a period of ten (10) days from the date of this default judgment, publish a copy of it (decree) in at least two widely circulated newspapers in the country and after a period of twenty one (21) Page 12 of 13 days from the date of expiry of the said ten (10) days has elapsed. Order accordingly. DATED AT DAR-ES-SALAAM ON THIS 04TH DAY OF AUGUST 2023 ……………………………………………………………………. DEO JOHN NANGELA JUDGE Date: 04/08/2023 Coram: Hon. Nangela, J. For the Applicant: Mr. Mbagati Nyarigo, Advocate For the Respondent: Absent C/Clerk: Fortunata Court: Ruling delivered today, this 04th of August 2023 in the absence of both parties. ……………………………………………………………………. DEO JOHN NANGELA JUDGE. Page 13 of 13