CWT Vs

IN THE HIGH COURT OF TANZANIA (DODOMA SUB-REGISTRY) AT DODOMA CIVIL CASE NO. 25 OF 2023 CHAMA CHA WALIMU TANZANIA (CWT)……..……………………………PLAINTIFF Versus NATIONAL MICROFINANCE BANK PLC……….…………………………..DEFENDANT RULING Date of last order: 12th March, 2024. Date of Ruling: 25th April, 2024. E.E. KAKOLAKI, J. This ruling seeks to address the preliminary objection raised by the defendant herein challenging the jurisdiction of this Court in trying the suit filed by the plaintiff in this court. Initially the defendant had raised three grounds of objection on point of law but during hearing which took the form of written submission opted to abandon the 1st and 2nd grounds and retained the third one which is the subject of this ruling. The sole ground is to the effect that, ’’To the extent that the plaintiff claims in the plain are based on alleged breach by the defendant of her banker customer relationship with the 1 plaintiff arising from the reversal of the mandate for operation of the bank accounts allegedly made by the defendant, then this Honourable Court lacks subject-matter jurisdiction to try the matter pursuant to Regulation 35(a),(c), 42 and 51(1)(a),(b) of the Bank of Tanzania (Financial Customer Protection) Regulations, GN 884 of 2019.’’ Briefly the plaintiff a registered Trade Union carrying out trade unionism activities to teachers within Tanzania and the defendant is a licensed commercial bank carrying out banking business with Tanzania whose relationship with the plaintiff is of banker and customer, fell into conflict when the defendant allegedly on 27/09/2023 breached contractual terms between banker and customer for unlawfully and without prior notice refusing to carry out plaintiff’s instructions made to the defendant’s bank, Makore Branch for effecting payment (withdrawals) in respect of plaintiff’s Account No. 20103500343, in settlement of her financial obligations. The reason advanced by the defendant as per the plaint is that, a flag was placed over the said account by the defendant’s head office in Dar es salaam plus other two accounts maintained by the plaintiff in the same bank in execution/enforcement of the order of the High Court in Misc. Labour Application No. 08 of 2023 the decision allegedly is not concerned with 2 plaintiff’s accounts transactions rather about membership and leadership positions. And that, the defendant unlawful and wrongful conspired with the plaintiff’s adversaries to frustrate her activities as the said flagging/blockaging it is claimed, lasted for several days until 09/10/2023 when upon close follow ups the defendant lifted it up after notifying the plaintiff in writing that, she had reserved the changes of accounts signatories made after 18/06/2023 and restored the former ones prior to execution of High Court’s order in the above mentioned case. It is from that alleged defendant’s wrongful, malicious and false acts this suit was preferred by the plaintiff claiming for among other claims, a declaratory order that, the defendant’s act of flagging/blockaging of her accounts No. 20103500343, 20101300312 and 20106600576 is unlawful, wrong and amounts to breach of banker/customer contractual relationship and duty of care to the plaintiff, a declaratory order for reversal of mandate to operate the sais accounts, permanent and perpetual injunction restraining the defendant from flagging/blockaging again her accounts basing on the alleged High Court order, payment of specific damages of Tshs. 2,000,000,000/-, general damages, payment of interest on the prayed sum at commercial rate of 21% per annum from the date of unlawful acts of flagging/blockage of her 3 accounts to the date of judgment, costs of the suit, costs of the suit and any other relief as pleases the court. During hearing the plaintiff was represented by a team of advocates led by Mr. Gabriel Simon Mnyele. Others were Mr. Emmanuel Safari, Mr. Barnabas Nyalusi, Leonard M. Haule and Florence Burudaa, all learned advocates. On the defendant’s side the service was rendered by Mr. Prosper Mwangamila, learned advocate. Submitting is favour of the sole ground of objection Mr. Mwangamila relying on the cases of Salim O. Kabora Vs. Tanesco Ltd and Others, Civil Appeal No. 55 of 2016 and Tanga Cement Public Company Limited Vs. Fair Competition Commission, Civil Application No. 10/20 of 2018 (Both CAT) Tanzlii argued that, jurisdiction being the bedrock on which the Court’s authority and competence to entertain and decide the matter rests, the same cannot be assumed or implied as desired by the plaintiff. And further that, where a certain law provides for a specific forum to deal with a certain dispute, then a resort must be made to it before the recourse is made to the Court as when that procedure is not followed then the decision rendered by the Court becomes a nullity as per Salim O. Kabora (supra). In this case he contended plaintiff’s claim is based on the banker/customer contractual 4 relationship with the defendant for allegedly illegal flaggy/blockage of her accounts by the defendant as asserted in paragraphs 3(a),(d),(e),(f),(g) and (h), 10,11,12,13,15,16,17,18,19 and 21 of the plaint, which is purely based on defendant’s provided services. According to him, the assertion by the plaintiff that she has been enjoying the service of her account No. 40310015342 without interference until 27/09/2023 when her instructions of payment were not carried out by the plaintiff on the reason that, a flag has been placed over the same, which is indicative of her dissatisfaction with the manner in which the defendant as a financial service provider had acted, hence claims for damages and compensation for the loss suffered, is a claim for breach of contract by the defendant which ought to be filed with the Bank of Tanzania in terms of Regulation 42 and 51(1)(a) and (b) of the Bank of Tanzania (Financial Consumer Protection) Regulation, GN. 884 of 2019 (the BOT Regulations) and not before this Court. He said under the said law, the requirement is that any consumer of financial services displeased with services rendered to him/her must lodge his/her complaint first with the said financial service provider and if not satisfied with the decision reached refer the complaint to BOT through the prescribed form in terms of Regulations 51(3) of the Regulations. 5 Mr. Mwangamila went on to convincingly argue that, in this matter the plaintiff ought to have filed her grievances with the BOT on alleged fagging/blockaging of her account as per the Regulations, the law which requires the Financial Service Providers to safeguard the customers’ assets and be liable to pay loss incurred through fraud, unless it is otherwise established that, the consumer incurred loss out of own negligence or fraudulent behavior as per Regulation 35(a) and (c) of BOT Regulations. As to the claim regarding breach of obligation by the Financial Service Provider Regulation 42 read together with Regulation 51(1)(a) and (b) of BOT Regulations he said, has to be filed with the BOT in case of no response or dissatisfaction with the decision of the Financial Service Provider the procedure which the plaintiff herein failed to comply with hence lacking a recourse to bring his grievances to this Court. He referred the Court to its decision in the case of Riziki Mwitu Kiondo and 28 Other Vs. Vodacom PLC and Others, Civil Case No. 153 of 2022 (HC) where the claim of loss were involving breach of contract by Financial Service Provider and the Court found to have no jurisdiction to entertain the same hence a prayer that, in this case the Court be please to follow the stream after being persuaded with the position taken and proceed to struck out this suit with costs. 6 In rebuttal the learned counsel for the plaintiff while relying on article 108(2) of the Constitution of the United Republic of Tanzania, 1977 that confer jurisdiction to this Court to deal with any matter in which the said Constitution or any other law does not expressly state, in which this court shall hear it first, they attacked Defendant’s arguments labelling them as misleading and highly misconceived. They said relying on the above article of the Constitution this Court should determine whether the said GN expressly provide that, plaintiff’s present matter shall be first heard by BOT. It was their interpretation of Regulation 35(a) and (b) of the Regulations that, it provides recourse for consumer’s loss incurred through fraud, misappropriation or misuse of consumer’s assets, the cause of action which basically neither of them constitute the basis of plaintiff’s claims against the defendant. They said, GN No. 884 of 2019 (the Regulation) does not expressly provide that, plaintiff’s claims as pleaded in paragraphs 3,6,7,9,10 and 11 of the plaint upon which the defendant’s preliminary objection is premised shall first be heard by BOT, thus the BOT is not seized with jurisdiction to hear and determine the plaintiff’s suit. They thus submitted that, the preliminary objection is without merits and should be overruled as even the cited case laws are irrelevant to the circumstances of this matter. 7 On the other hand it was their further argument that, in absence of any clear provision of the law from GN No. 884 of 2019 or any other law excluding jurisdiction of this Court over plaintiff’s suit, evidence will be required to establish or ascertain whether the plaintiff’s suit is on loss incurred through fraud, misappropriation or misuse of assets, thus the raised preliminary objection raised cannot be determined without going to full trial as it does not pass the test of the preliminary objection on point of law as enunciated in the case of Mukisa Biscuit Manufacturing Co. Ltd Vs. West End Distributions Ltd (1969) E.A 696 that, it cannot be raised if any fact has to be ascertained or what is sought is in the exercise of judicial discretion. In view of the above arguments the learned counsel prayed the court to overrule the raised objection with costs. The defendant in rejoinder had nothing to counter the plaintiff’s submission instead prayed the court to determine the preliminary objection in their favour. I have dispassionately followed and considered the fighting arguments by the parties regarding the issue as to whether this court is seized with jurisdiction to entertain the suit by the plaintiff or not. I have as well spared enough time and energy to revisit the pleadings (plaint) as well as the 8 provisions of law and the cases relied on by the parties to support and challenge the raised preliminary point of objection. It is trite law as correctly submitted by Mr. Mwangamila that, jurisdiction of the court being the bedrock in which the Court’s power to hear and determine parties’ dispute rests, the same must be established at the earliest possible time. The rationale behind such establishment is to avoid the Court taking a risk of proceeding with hearing of any matter before it on assumption of being clothed with jurisdiction which in fact it does not possess. This position was adumbrated in the case of Fanuel Mantiri Ng’unda Vs. Herman M. Ng’unda, Civil Appeal No. 8 of 1995 (CAT- unreported) when said: ’’The jurisdiction of any court is basic, it goes to the very authority of the court to adjudicate upon cases of different nature… the question of jurisdiction is so fundamental that courts must as a matter of practice on the face of it be certain and assured of their jurisdictional position at the commencement of the trial. I t is risky and unsafe for the court to proceed on assum ption that the court has jurisdiction to adjudicate upon case.’’ (emphasis supplied) 9 Determination of courts’ jurisdiction at the earlier time also serves time, costs and avoid an eventual nullity of the proceedings in the event the objection is sustained later on. See also cases of Tanzania Revenue Authority Vs. Tango Transport Company Ltd, Civil Appeal No. 84 of 2009 (CAT- unreported) Salim O. Kabora Vs. Tanesco Ltd and Others (supra) and Tanag Cement Public Company Limited (supra). It is also settled law that, where a certain law provides for a specific relief or forum to deal with a certain dispute or matter, then a resort must be made to such forum or relief before any recourse is sought from the court. It is also undisputed fact in this case that plaintiff’s claims as deposed in paragraphs 3(a),(d),(e),(f),(g) and (h), 10,11,12,13,15,16,17,18,19 and 21 of the plaint, are purely based on services provided to her by the defendant premised on banker/customer relationship when the defendant allegedly flagged/blocked her bank accounts before reversal of their operation mandate, in which the defendant submits that it ought to be filed with the BOT if dissatisfied with the defendant’s resolution of her grievances in terms of Regulations 42 and 51(1)(a) and (b) of the Regulation. For easy of understanding of the argument, I find it apposite to reproduce the said cited provisions: 10 42. Every consumer shall have the right to file a complaint against a financial service provider upon dissatisfaction or being aggrieved by the conduct of the financial service provider contrary to the manner set out in these Regulations. And Regulation 52(1)(a) and (b) of the Regulation reads: 51.-(1) Subject to regulation 49(1), a complainant may file a complaint with the Bank if- (a) the complainant has not received a response from the financial service provider as required under regulation 46 or his complaint has not been attended to in the manner provided under such regulation: Provided that a complaint shall be entertained in the case of non-receipt of notification under regulation 49(1) or the non- attendance to a complaint, at any time immediately upon the lapse of time of determination as stipulated in the First Schedule, but in any case, not later than fourteen days: (b) the complainant is dissatisfied with the decision of a financial service provider: Provided that a complaint shall be entertained in the case of dissatisfaction with the decision by the complainant, if it is lodged within fourteen days from the date of receipt of notification of the resolution referred under regulation 49(1). From the above exposition of the law any services consumer not satisfied or aggrieved with the services provided by the Financial Service Provider in contravention of any manner set out in the said Regulation has the right and 11 may file a complaint against the service provider under regulation 42. And unpon any delay in response or dissatisfaction with the response or decision by the service provider file the complaint with BOT in terms of Regulation 51(1)(a) and (b) of the Regulation. In this matter what brings the parties into locked horns is the issue as to whether the plaintiff’s claims fall under breach of the manner in which provision of services were to be rendered as specified in the Regulations, in which the defendant implored the Court to find it is under the provisions of Regulation 35(a) and (b). The said provision provides: 35. Every financial service provider shall- (a) be liable for the consumers’ loss incurred through fraud, misappropriation or misuse involving consumers assets held, administered or controlled by the financial service provider; (b) N/A. (c) promptly refund a consumer for the actual amount lost due to fraud, misappropriation and misuse of consumers’ assets, unless proved that the loss occurred due to consumer’s negligence or fraudulent behavior; My interpretation of the above cited provision of the law is that, for any consumer to be successful refunded by the service provider upon filing a complaint either with the service provider or BOT regarding the financial 12 services rendered to her/him, must have first suffered loss out of fraud or misappropriation or misuse of her/his assets held, administered or controlled by the financial service provider. My reading of paragraphs 3(a),(d),(e),(f),(g) and (h), 10,11,12,13,15,16,17,18,19 and 21 of the plaint, with due respect to Mr. Mwangamila could not unveil any plaintiff’s claim falling under the three above named categories of loss arising from the services provided to her rather dissatisfaction with the manner in which the defendant as a financial service provider conducted herself for refusing to carry out payment instructions on the unfounded assertion that her accounts have been flagged/blocked under instruction from the head offices in execution of the order of the case in a matter with no connection to her accounts hence paralysed her daily activities or operation in which compensation and declaratory orders are sought for. I therefore embrace the proposition by counsel for the plaintiff and proceed to hold that, under the circumstances plaintiff’s claims cannot be treated to fall under the requirements of the provisions of Regulations 35(a) and (b), 42 and 51(1)(a) and (b) of the Regulations for filing first her complaints to either the defendant or BOT, as it would require evidence to prove whether the claimed violation of contractual obligation by the defendant and loss suffered if any 13 by the plaintiff resulted from fraud or misappropriation or misuse of her assets (money) held, administered or controlled by the defendant, the course which defeats competency and the purpose of the raised preliminary objection. It was held in the case of Mukisa Biscuits (supra) that: ’’ A preliminary objection is in the nature of what used to be a demurrer. It raises a pure point of law which is argued on the assumption that all the facts pleaded by the other side are correct. I t cannot be raised if any fact has to be ascertained or what is the exercise of judicial discretion.’’ (Emphasis supplied) It is settled law that, a preliminary objection must either be pleaded or arise from clear implication out of the pleadings which if argued may dispose of the matter. See Mukisa Biscuits (supra). In this matter as alluded to, the pleadings does not imply that the plaintiff’s claims are premised on the loss arising from defendant’s fraudulent acts when rendering services to her or misappropriation or misuse of her assets by the defendant hence not subject of Regulation 35(1)(a) and (b) of the Regulation. It is to my understanding that Mr. Mwangamila was inviting this Court to be persuaded with its own decision in Riziki Mwitu Kiondo (supra) when deliberating on the applicability of GN. 884 of 2019 (the Regulation) to find this Court does not 14 possess the requisite jurisdiction to try the matter at hand for plaintiff’s failure to file first her claims with either the service provider or BOT. With due respect to the learned counsel, I am not prepared to accept such invitation as in that case applicability of Regulation 35(1)(a) and (b) of the Regulation was never considered nor formed basis of the said decision hence distinguishable from the fact of this matter. As there is no any material advanced by the defendant establishing to this Court’s satisfaction that, there is non-compliance by the plaintiff with the provisions of Regulations 35(1)(a) and (b), 42, 51(a) and (c) of the Regulation so as to cloth this Court with the requisite jurisdiction to entertain her suit for want of factual evidence, I find the raised preliminary objection does not qualify to be a point of law in terms of the test cherished in Mukisa Biscuit (supra) and proceed to overrule it. It is therefore ordered that, hearing of suit should proceed on merit. Costs in cause. Order accordingly. Dated at Dodoma this 25th April, 2024. 15 E. E. KAKOLAKI JUGDE 25/04/2024. The ruling has been delivered at Dodoma today on 25th day of April, 2024, in the presence of Mr. Leonard Haule, advocate for the Plaintiff, Mr. Simon Mwigulu Adv holding brief for Mr. Prosper Mwangamila, Adv for the Defendants and Ms. Veradina Matikila, Court clerk. Right of appeal explained. E. E. KAKOLAKI JUGDE 25/04/2024. 16