20070604 TZCA Dar es Salaam

IN THE COURT OF APPEAL OF TANZANIA AT DAR ES SALAAM CIVIL APPEAL No 23 OF 2003 (CORAM: MSOFFE, J. A., KAJI, J. A. AND RUTAKANGWA, J. A.) ',, / i~ / I/ ;r-HE:~·1ANAGING DIRECTOR , \tF NATIONAL INSURANCE ,. "---~ '. ' CORPORATION ... ■ • I. I ••••••••••••••••••••••••••••••••••• •••••••• ./J..PPELL.ANT VERSUS JOSEPH MASWE ............................................... RESPONDENT (Appeal from the Judgment and decree of the High Court of Tanzania at Dar es Salaam) (Ihema, J.) Dated the 20 th day of November, 2002 In Civil Case No. 152 of 1999 RULING OF THE COURT RUTAKANGWA, J. A. The appellant was adjudged by the High _Court of Tanzania (Ihema, J.) sitting at Dar es Salaam, to pay the respondent compensation of Tshs 30,000/= per day from 1st March, 1998 to the date of judgement plus interest less Tshs. 7,668,000/=. The appellant was also condemned to pay the respondent's costs in the ...... _suit. Being aggrieved by the decision, he duly instituted this appeal, through Msemwa and Co. Advocates. When the appeal was called on for hearing, Mr. Marando, . . learned advocate holding the brief of Mr.Maira, learned advocate for the respondent with instructions to defend the appeal, rose to argue a point· of preliminary objection, notice of wl1ich had been earlier filed under rule 100 of the Court of Appeal Rules, 1979 (henceforth the Rules). The notice of preliminary objection very vaguely reads thus:- "the Appeal is _jncurably defective for non compliance with the ;mandatory provisions. and established principles df law". In substantiating the preliminary objection, Mr. Marando began by asserting that the respondent was declared in 1998 a Specified Public Corporation, vide G. N. No.330A of 1998. Being such a Corporation, in terms of Section 9 of the Bankruptcy Act, Cap. 25, read together with Section 43 (1) of the Public Corporations Act, 1992 as amended by Act No. 16 of 1993 (henceforth the Act), the appellant ought to have joined the P.S.R.C., the statutory official ~eceiver of the respondent company, as a necessary party in this \ __..: -:ippeal, he submitted. As the P. S. R. C. was not thus joined by the appellant, the appeal becomes incompetent and should be struck out with costs, he argued. In support of his submission he referred the Court to two earlier decisions of the Court, namely :- (a) The Registered Trustees of Mama Clementina Foundation and Others Vs National Insurance 2 Corporation of Tanzania, Civil Appeal No. 40 of 2001 (unreported) and (b) National Insurance Corporation Vs. J. Mbuna, Civil Appeal No. 67 of 1999 (unreported). In response, Mr. Koga, learned advocate for the appellant, conceded to the said, point of preliminary objection. However; he pointed out that the first transgressor of the mandatory provisions of section . 9 of the Bankruptcy Act, was the· respondent ; himself. In elaboration, he submitted that the appellaf]_t corporation was declared a specified Public Corporation in June, 1998 while the suit against it --- by the respondent was instituted on 10th May, 1999. That being the case, the respondent was mandatorily required to obtain leave from the High Court, under section 9 of the Bankruptcy Act, to commence legal proceedings against the appellant, which he did not, he argued. There was no such leave sought and granted, he went on to submit, the proceedings in the High Court were a nullity. He accordingly invited us to invoke our revisional jurisdiction under section 4 (2) of the Appellate Jurisdiction Act, 1979 (No. 15) to nullify those proceedings, and set them aside as this Court did in the case of The ----'Registered Trustees of Mama Clementina (supra), relied on by the respondent. The invitation to invoke the Court's revisional jurisdiction to nullify the proceedings in the High Court was countered by Mr. Marando. Mr. Marando adeptly urged us not to follow that course because section 9 of the Bankruptcy Act does not say that in every 3 · · case whete a receiver is appointed, then leave should be sought to implead the receiver. To him such leave should be obtained if the debt involved is one provable in bankruptcy. According to Mr. Marando there is no evidence to show that the alleged debt in this case is a deb;. provable in bankruptcy. He accordingly reiterated his . prayer that the appeal be struck out for. being incompetent on the basis of the reason he had advanced earlier. It is now established law that once a public corporation is I declared under section 43 (1) of the Act, to be a specified Public Corporation then the provisions of section 9 (1) of the Bankruptcy Act _.. apply to it without further assurances. The said provision reads tas follows:- "On the making of a receiving order the official receiver shall be thereby constituted receiver of the prnperty of the debtor, and thereafter, except as directed by this Act, no creditor to whom the debtor is indebted in respect of any debt provable in bankruptcy shall have any remedy against the property or person of the debtor in respect of the debt or shall commence any action or other legal proceedings,, unless with leave of the Court and on such terms as the Court may impose" {Emphasis is ours}. It is clear in our minds that the language of section 9 (1) is very plain and needs no interpolations. What becomes immediately 4 ' r_) 7-<?: {, '60 ~ 70 I l.Ll~-U obvious is that once a receiving order is made no action or other legal proceeding may be commenced and/or even proceeded with, against the debtor unless with leave of the court (exercising bankruptcy jurisdiction: see section 2 of the Act). Mutatis Mutandis once a public corporation, like the appellant, is declared a specified public corporation the provisions of section 9 (1) of the Bankruptcy Act automatically apply to it. To that extent no action or other legal proceeding can be commenced against it --- without leave of the Court in respect of any debt provable in bankruptcy owed by it That is the position of the law as we --· Gnderstand it to be to date. That is indeJd what this Court held in the two cases cited by Mr. Marando and relied on by Mr. Koga to bolster up their respective legal propositions. We wish to observe in passing, however, that the law does not proscribe a specified public corporation from commencing any action or proceeding with any action against its debtors in respect of any debt, even one provable in bankruptcy on its own. Furthermore, a creditor of a debtor against whom a receiving order has been made is not barred from commencing or proceeding with an action or other '---· legal proceeding in respect of any other debt, i.e a debt not provable in bankruptcy. In short not every liability carries with it an obligation to seek leave. In view of this, a creditor of a specified public coporation, can commence and/or proceed with an action or other legal proceeding against it without leave in respect of a debt not provable in bankruptcy .. This is all because the corporation does not 5 : ... • · lose its corporate or legal personality on becoming a specified public corporation. For this reason, we agree with Mr. Marando only to the extent that the legal obligation to seek leave to commence an action, only arises when the -debt which constitutes the cause of action is one provable in bankruptcy. Going by Mr. Marando's s·ubmission, it becomes evident that in this appeal there is no unanimity between the parties on whether the claim of the respondent against the appellant is a .debt provable in bankruptcy__or not, a situation not obtaining in .the- case of The Registered Trustees of Mama Clementina (supra). That was why he vigorously resisted the prayer to the Court to invoke lts revisional powers to nullify the proceedings in the High Court as the appellant had not obtained leave before instituting the suit. To him that issue ought to have been resolved first by the trial High Court and cannot be resolved by this Court. Whether he is correct or not on this is not of the moment. But given this situation of uncertainty it would, in our firm view, be risk. taking if not a remiss in our duty, to boldly sustain Mr. Marando on his submission or to accede to Mr. Koga.'s prayer. Either way we would be holding without any basis, that the respondent's claim is a debt provable in bankruptcy. This then is an arguable issue which cannot be conclusively determined at this stage. Curiously, if the respondent's claim is not a debt provable in bankruptcy then strictly speaking there was no need for him to implead the P. S. R.C. G .' In view of these peculiar circumstances, we reject the respondent's point of preliminary objection as it is a mixed point of fact and law. This will be canvassed at length at the appropriate stage, that is, when the appeal will be heard on the merits. Likewise, vve reject the appellant's request to have the proceedings in thP High Court nullified. Having rejected the preliminary objection and the appellant's prayer·, we would have ordered the appeal to· proceed to hearing _ forthyvith. Unfortunately, we are constrained from doing so for one ........... obvious reason. The appeal is patently incompetent .as the record of appeal does not contain a valid decree contrary to- the mandatory requirements of rule 89 (1) (h) of the Court of Appeal Rules, 1979. As shown earlier on in this ruling, this was supposed to be an appeal against the judgement and decree of the High Court in the exercise of its original jurisdiction. The said judgement was pronounced on 20 th November 2002. In terms of rules 7 and 8 of order XX of the Civil Procedure Code 1966 (the C. P. C. henceforth) the extracted decree ought to have been signed by the trial judge or ~- his successor in office. Furthermore, the said decree ought to bear the d ~ f the day on which the judgement was pronounced. The extracted decree contained in the record of appeal was signed by an acting District Registrar who is not authorised to sign such decrees. In addition, the said extacted decree, bears a date which is totally different from the one of the day on which the judgement was delivered. Both Mr. Koga and Mr. Marando have conceded to these 7 " defects. Mr. Koga had the audacity, all the same, to assert that this is a curable irregularity. Notwithstanding Mr. Koga's contention, we are satisfied that the two defects render the said decree incurably defective. This is now common knowledge and there is a plethora of authorities to that effect. These authorities have gone further and formally established that such a defective decree renders the purported appeal ·incompetent. For the foregoing reasons we 11·.o_ld this appeal to be /"•rompetent. It is accordingly struck out. As 'this issue was raised ' i suo 'motu by the Court we make no order for costs. DATED at DAR ES SALAAM this 4 th day of June, 2007 J. H. MSOFFE JUSTICE OF APPEL S. N~ KAJI JUSTICE OF APPEAL E. M. K. RUTAKANGWA · JUSTICE OF APPEAL I certify that this is a true copy of the original. 8