NDAHAT FARM

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA [ARUSHA SUB- REGISTRY] AT ARUSHA BUSINESS REGISTRATION AND LICENCING AGENCY WINDING UP PETITION NO. 06 OF 2022 IN THE MATTER OF THE COMPANIES CAP 212 AND IN THE MATTER OF A PETITION FOR WINDING UP OF NDAHAT FARM (T) LIMITED.................................................. PETITIONER AND BALTON TANZANIA LIMITED............................................ RESPONDENT RULING 7th August, & 10th October, 2024. I.C. MUGETA, J. This ruling addresses the winding up petition brought under section 279 (1) (a) (d) and section 281 of the Companies Act, Cap. 212 R.E 2019. The petitioner is a limited liability company (the company) incorporated in Tanzania on 26/07/2007 through a certificate of Incorporation No. 6136 to deal in farm produces. Her registered office is Namalulu Village, Simanjiro District, Manyara region. The affidavit verifying the Petition is sworn by Mr. Hassan Ibrahim, Director and one of the shareholders of the petitioner. Page 1 o f 5 The petitio advances one ground for winding up, that the company is trading under loss and has failed to pay creditors. That production has sharply declined due to rapid climate change jeopardising farming business. Having filed the petition, the petitioner served the notice to the Respondent as per rule 105 of the Companies (Insolvency) Rules 2005 and pursuant to court order dated 02nd April, 2024. The petition was also advertised in the Citizen and Mwananchi Newspapers both dated 11th February, 2023 pursuant to Rule 99 (1) and (2) (b) of the Company (Insolvency) Rules G.N No. 43 of 2014. Having been served and pursuant to the advertisements, the respondent, as a creditor, did enter appearance via a notice of appearance dated 27/09/2023 opposing the petition. On 17/4/2024 she filed an affidavit in opposition. The respondent opposes the petition on several grounds. They include that the respondent is executing a decree against the petitioner in another case and this petition is designed to avoid liability while her directors intentionally concealing the assets. The Petitioner is represented by Mr. Shadrack B. Mofulu, advocate while the respondent enjoys the legal services of learned mind of Meinrad Menino D'souza, advocate. Page 2 of 5 The matter was argued by way of written submissions, and both counsels complied with the scheduling orders. I have carefully considered the contents of the petition, the affidavit, counter affidavit and the submissions presented by the parties' advocates in support and against the petition. As results, I agree with Mr. Meinrad D'souza that this voluntary winding up petition has been filed without a special resolution passed by the shareholders authorising the winding up of the company. This is contrary to section 279 (1) (a) of the Companies Act (supra). That is the holding of the Court of Appeal, in the case of SIMBA PAPERS CONVERTES LIMITED vs PACKAGING AND STATIONERY MANUFACURES LIMITED AND ANOTHER, Civil Appeal No. 280 of 2017, CAT, at Dar es salaam, (unreported) at page 20. The Court held: "In the premises, since the claimant was a company, it was not proper to institute a suit on behalf o f the company without its formal authority. This required the express authority by way o f resolution o f the Board o f Directors to institute the case in the absence o f which, the suit in the Page 3 of 5 name o f the company was defective and it ought to have been struck out". Further, as argued by Mr. Meinrad, it is also a condition under section 334 (1) of Cap. 212, that as soon as the resolution for voluntary winding up is made, notice of resolution must be published in the gazette within 14 days. However, there is no proof that the resolution was so published. On record, is the notices published in the Citizen and Mwananchi Newspapers dated 11th February, 2023. Gazzette and newspapers are not one and the same thing. Therefore, the law was partly not complied with. Further, even the members' resolution for voluntary winding up was not tendered in court despite the reference made about it by counsel for the petitioner in his submission that it was passed on 5/5/2022. Again, as correctly submitted by the counsel for the respondent, the law under section 340 (1) of Cap. 212 makes it mandatory for the company in a general meeting to appoint one or more liquidators for the purpose of winding up the affairs and distributing assets of the company. There is no evidence that such a liquidator has been appointed. Another hiccup in this petition is that the petitioner did not comply with the requirement of Rule 102 of the Company (Insolvency) Rules 2004. Page 4 of 5 This rule requires that the petitioner or his advocate, least five (5) days before the hearing, to file in a court a certificate of compliance with the Rules relating to service and advertisement. There is no proof that the petitioner lodged a certificate of compliance as correctly submitted by the respondent's advocate. In view of the foregoing, I find the petition incompetent for none- compliance with the statutory requirements. I accordingly dismiss it. Costs to follow the event. DATED at ARUSHA this 10th day of October, 2024. 4" '' . I.C. MITCETA /=- : ^ I / JUDGE \ — \ / "■----- ^ 10/ 10/2024 eourt: Ruling delivered in chambers in the presence of Mr. Shedrack Mofulu, Advocate for the Applicant and Mariam Mrutu, Advocate holding brief for Meinrad D'Souza, Advocate for the Respondent. Sgd: I.C. MUGETA JUDGE 10/ 10/2024 Page 5 of 5