20170119 TZHC Dar es Salaam

IN THE HIGH COURT OF TANZANIA [DAR ES SALAAM DISTRICT REGISTRY]

AT DAR ES SALAAM CIVIL CASE NO. 79 OF 2012 ISSACK B. MWAMASIKA . . . . . . . . . . . . . . . . . . . 1 sT PLAINTIFF REGISTERED TRUSTEES ~OF DAR ES SALAAM INTERNATIONAL SCHOOL TRUST FUND . . . . . . 2N° PLAINTIFF EDBP & GD CONSTRUCTION COMPANY LTD. ... 3RD PLAINTIFF

VERSUS CRDB BANK LIMITED . . . . . . . . . . . . . . . . . . . . . . .DEFENDANT

JUDGMENT Mkasimongwa, J This is a suit by ISSACK BUGALI · MWAMASIKA, THE

REGISTERED TRUSTEES OF DAR ES SALAAM INTERNATIONAL SCHOOL TRUST FUND and the EDBP & GD CONSTRUCTION CO. LTD ( 1 st , 2 nd and 3rd Plaintiffs, respectively, against the CRDB - - , . BANK LIMITED (Defendant). The claim by the First and Second ~ Plaintiffs is on contract for redemption .of mortgages, discharge of hypothecation of goods bond and for the tort of detinue arising from the defendant's . act of detaining their chattels namely Certificate of Title No. 30292, Sinza Commercial Area, in the name of the 1 st Plaintiff; Certificate of Title No.

7483. MBYR Mbeya and Ndaga Village, Rungwe District, in the name of the 1sr plaintiff; Motor vehicle Registration Card No. T 149 AMV, Excavator, in the 1 name of the 2 nd Plaintiff, and Motor Vehicle Registration Card No. T 145 ALY, Wheel Loader in the name of the 2 nd Plaintiff and for speciai- and gene·:ral damages and permanent injunction restraining the defendant from selling the properties mentioned above. The 3 rd Plaintiffs claim against the defendant is for the tort of negligence arising from the defendant's act of detaining the 1st and 2 nd Plaintiffs' chattels stated above resulting in special and general damages. The Plaintiffs allege to have suffered damages in terms of; a) Loss of business opportunity to earn a net profit of USD. 205,603,528 by the 1 st , 2 nd and 3 rd Plaintiffs, apportioned as follows: i) Loss by the 1 st Plaintiff of USD 143,922,469.6 being 70% of the USD 205,603,528, they could have received from the net profit payable by the 3 rd plaintiff. ii) Loss by the 2 nd Plaintiff of USD. 20,560,352 being 10% of USD 205,603,528 it would have received from the net profit payable to him by the 3 rd Plaintiff. iii) Loss by the 3 rd Plaintiff of USD 41,120,705.6 being 20% of USD 205,603,528 it would have received from the business. b) Loss of USD 186,244.6 by the 3 rd plaintiff being the money it paid as fees charges for the preparation of the

Feasibility Study. 2 1 j c) General damages to be assessed by this court, payable separately to the 1 st , 2 nd and 3 rd plaintiffs. d) Exemplary damages for detention of the Certificate of Title and Motor vehicle Registration Cards payable to the 1 st and 2 nd plain tiffs. As the result, from the allegations, the plaintiffs pray for: a) Redemption of the properties, that is to say the rights of occupancy comprised in CT No. 30292 and CT 7483. b) Redemption of the Motor Vehicle Registration Cards No. T. 149 AMV Excavator and T. 145 ALY Wheel Loader. c) Release of the two Certificates of Title to the 1 st Plaintiff. d) Release of the Motor Vehicle Registration Cards to the 2 nd Plaintiff. e) Payment of a total of USD 205,603,528 and interest thereon at the USD rate of 7% from 9 th day of January, 2012 until the date of judgment and a further interest at the court of 7% on the Tanzania shillings equivalent of the sum from the date of judgment until final settlement. -- f) Payment of USD 186,244 being the money the 3 rd plaintiff had paid as charges and fees for the preparation of the Feasibility Study. g) Permanent injunction against the Defendant from selling any of the plain tiffs' properties h) General damages against the defendant to each of the plaintiffs separately. i) Exemplary damages payable to the 1 st and 2 nd plaintiffs. 3 · j) Costs on certificates for their counsels

and any relief as this court will deem to meet the circumstances. The Defendant disputed to the claims and prays the court to dismiss the suit with costs. This necessitated for a full trial of the matter by adduction of evidence. Before commencement of the trial, the following issues were framed for determination by the court namely;- 1. Whether or not the detention or retention of the securities by the Defendant was lawful.

2. To who as between the 1 st and 2 nd plaintiffs were the term loans and overdraft granted and who between the two plaintiffs placed each of the immovable securities for the term loans and overdraft.

3. Whether even after the full payments of the loans and overdraft the release of the securities were still subject to other terms contained on other documents executed by the plaintiffs in respect of other loans extended to other persons including - the 3 rd plaintiff for which the 1st and 2 nd plaintiffs stood as guarantors, and executed personal guarantees and indemnity in favour of the Defendant.

4. Whether or not the guarantees signed for the loan extended by the Defendant to the 3 rd plaintiff are independent of or in addition to securing documents executed by the 1 st plaintiff in favour of the defendant prior to the joint personal guarantees referred to in paragraph 10 (iii) of the plaint 4 5. Whether or not the security given by the 3 rd plaintiff will not cover the facility extended to it by the defendant in event of default.

6. Whether or not new business created by the 1 st and 3 rd plaintiffs to be financed by another Bank was viable and whether 1n view of the 3 rd plaintiffs. contract with the Defendant, it was not in a position to do such other business.

7. Whether or not there was a possibility of the 3 rd Plaintiff obtaining a loan from United Bank for Africa (Tanzania) Limited as claimed by the 3 rd Plain tiff.

8. Whether or not the 3 rd Plaintiff was offered a loan of USD 70,000,000 by Ms. United Bank for Africa (Tanzania) Limited. If the answer is in the Affirmative, then whether or not consequent upon the alleged cancellation of the offer, the 3 rd plaintiff suffered damages as alleged or at all.

9. Whether or not the demand by the defendant upon the 3 rd plaintiff to repay the loan granted to it was spiteful.

10. To what reliefs are each of the parties entitled. - With a view to provide answers to the framed issues, the parties had to call witnesses to give testimony proving what they had pleaded in their respective pleadings. In that regard the plaintiffs called two witnesses namely; ISSACK BUGALI MWAMASIKA (PWl) and BENSON JOEL MWASAGA MAHENYA (PW2) and the Defendant also called two witnesses, ANDERSON MLABWA (DWI) and EXAVERY MAKWI (DW2). 5 In short the plaintiffs' case is as that PWl was a Tanzania Peoples Defence Force Soldier who worked with the force from January, 1977 to 1986 when he retired. He is a trained Pilot, also businessman. As a Businessman, PW 1 dealt with Restaurant, Transportations and Bureau De Change businesses. PWl has also Hotel and Stone Quarry and Military Hardware Businesses. He is also the founder of the DARE SALAAM INTERNATIONAL SCHOOL TRUST FUND (DISTF) (2 nd Plaintiff) and EDBP AND GD ·41t.·· CONSTRUCTION COMPANY LTD (3 Plaintiff) to which he is the rd Chairman of the Board of Trustees and Managing Director respectively. PWl tendered in evidence a certified copy of the Certificate of Incorporation of the 2 nd plaintiff which was admitted and marked as Exhibit Pl. The 3 rd plaintiff deals with Housing Estates and the Earth Moving Equipment such as Loaders, Excavators, Motor graders, Dumpers and Bull dozers, which it lends for road and building

constructions. - It is also the Plaintiffs' case that the 2 nd Plaintiff operates a Bank Account No. 01J1065232800 with the Defendant Bank at its Mbeya Branch. This is evidenced by the Accounts Bank Statement tendered in evidence, admitted and marked as Exhibit P2. Sometime in 2003, the 2 nd Plaintiff wrote to the defendant at its Mbeya Branch requesting for a Bank Loan of Tshs. 350,000,000 /-. A copy of the letter which was attached with a Business Plan, School Registration Certificates, Copy of the Title Deed, Valuation 6 Report, Trust Deed, Audited Accounts for 1999- 2001 and Board of Trustees Resolution and signed by the 1 st Plaintiff as the Chairman was produced in evidence by PWl and the same was admitted marked as Exhibit P3. Of the total sum of Tshs. 350,000,000/- requested, Tshs. 300,000,000 /- was for the Construction of School buildings, purchase of school equipment and furniture and Tshs. 50,000,000 /- was for an overdraft which the applicants intended to shift from the NBC Bank to CRDB so that all their banking businesses are done with one Bank. The request was granted and by the Defendant's letter with Ref. No. 3390 /TL & OD/ 4113 / 1 of 3/4/2003 Mr. Issack Bugali Mwamasika T/A Dar es Salaam International School Trust Fund was informed that the Bank had considered and approved an application and provided for terms and conditions. The Defendant's letter was

produced by PWl in Court to be exhibit and the same was admitted in evidence Marked as Exhibit P4. The loan applicant complied with the terms and conditions and upon being so satisfied, the Defendant released the loan money to the 2 nd Defendant. The facility was secured by; - - 1. First charge legal mortgage over existing and future school buildings in Farm No. 776 with CT. No. 7483 MBYLR Mbeya and Ndaga Village, Uporoto Rungwe District Mbeya in the name of Issack Bugali Mwamasika.

2. First charge legal mortgage over landed property on Plot No. 1 Block "C" with CT. No. 30292, Sinza Commercial Area, Dar es Salaam in the name of Issack Mwamasika. 7 3. Personal Guarantee signed by Mr. Issack Bugali Mwamasika, Harold Issack, Atuganile Issack, Shida Andimile and Mrs. Zebu Koja as Board of Trustees. The loan was fully repaid. Although the loan was fully repaid, the securities were not claimed to be returned. This is because the same were also among the securities offered as security for the loan, the defendant had advanced to Dar es Salaam International School Trust Fund - Boko Quarry as it is evidenced by the overdraft Facility Letter in favour of Issack Bugali Mwamasika T / A DISTF and DISTF BOKO QUARRY of 5/2/2009. The Term Loan Agreement between the Defendant and Issack Bugali Mwamasika T / A DISTF BOKO QUARRY of 15/11/2009, Deed of Variation of Term Loan Agreement between the Defendant and Issack Bugali Mwamasika T / A DISTF. BOKO QUARRY and an Overdraft Facility Letter of the Defendant in favour of Issack Bugali Mwamasika T / A Dar es Salaam International School Trust Fund of 19/3/2010 were produced and admitted in Court as Exhibits and accordingly marked as Exhibit PS collectively. That loan was again fully repaid -- - by 11/11/2011 as it is exhibited by the Bank Statement in respect of the DISTF BOKO QUARRY Bank Account No. 01J1013578800 operated with

the Defendant Bank, which statement was tendered and admitted in evidence marked as Exhibit P6. The case on the part of the Plaintiffs is also to the effect that by a letter dated 2 / 12/2011, a copy of which was tendered and admitted in court as exhibit marked as Exhibit P7, written by the 8 1st Plaintiff to the Managing Director of the Defendant Bank, the 1st Plaintiff requested for Discharge of Mortgage Deed. In the letter he requested for discharge and return to them the fallowing collateral securities.

1. The Title Deed No. 30292 in respect of Plot No. 1 Block "C" Sinza Commercial Area.

2. Title Deed in respect of Farm No. 776 Uporoto and Ndaga Village - Mbeya 3. Motor Vehicle Registration Card No. T. 145 AMV for Excavator, and 4. Motor Vehicle Registration Card No. T.145 ALY for Wheel loader. The Defendant responded to the letter by his letter dated 9/1/2012. The defendant's letter with Ref. No. 3390/652328/4113/005 which was addressed, to the 1 st Plaintiff as the Chairman of the Board of Trustees, DISTF and DISTF BOKO QUARRY, responding to the 1st Plaintiffs letter (Exhibit P7) was produced in evidence by PWl and the same was admitted marked as Exhibit PS. The Defendant, vide Exhibit PS, informed the 1st Plaintiff that they could not discharge the securities due to non-performing loans for the 3 rd Plaintiff · (EDBP & GD CONSTRUCTION CO. LTD). With a view to showing that PW 1 never held the title of Issack B. Mwamasika t/ a Dar es Salaam International School Trust Fund, contrary to how he was addressed vide Exhibit PS, he tendered in court as exhibit an offer of overdraft money, currently addressed to him as Issack Bugali Mwamasika, Chairman of the Board of Trustees, Dar es Salaam 9 International School Trust Fund, Boko Quarry Project. The same was admitted in evidence marked as Exhibit P9. PW 1 told the court 1n evidence that in Exhibit PS the Defendant mentions the EDBP & GD Construction Company Limited (3 rd Plaintiff). He is the Managing Director of the

Company. The 3 rd Plain tiff had obtained a loan from the Defendant Bank which was for the purposes of purchasing Apartments on Plot No. 100 Uganda Avenue, in Msasani Oysterbay. The Defendant granted tti,.· the loan vide his letter with Ref. No. 3390/3314 001 of 23/6/2006 which was addressed to Mr. Issack Bugali Mwamasika, Director of the EDBP & GD Construction Co. Limited. The letter was tendered in court by PWl as Exhibit and it was admitted marked as Exhibit PlO. On 30/6/2006, there was executed the Term Loan Agreement between the Defendant and the 3 rd Plaintiff. A copy of the Agreement was produced in court as exhibit and it was admitted marked as Exhibit P .11. Securities provided for the loan as indicated by both Exhibit PlO and Pl 1 are; 1. First charge legal mortgage over property a Plot No. 100 with CT.7553, LO No. 12192 located in Msasani area, Kinondoni District, Dar es Salaam in the name of the Embassy of the People's Republic of Korea to be transferred in the name of EDBP & GD Construction Company Ltd.

2. Floating and Fixed charge debenture over all the present and future company's assets. 10 3. Joint and several personal guarantee signed by Mr. Issack Bugali Mwamasika Harold Issack and John Mwambigija. PW 1 testified to the court stating that the securities provided to secure the loan by the 2 nd Plaintiff as shown in Exhibit PS are different from those provided in respect of the loan advanced to the 3 rd plaintiff. Each loan therefore had its own different securities. No any single security was held to secure both loans and that the value of the securities for the loan given to the 3 rd Plaintiff were ~· satisfactory thus the Defendant had no reason to deny the request for return of the securities listed above. In the Letter of Offer and Loan Agreement (Exhibits PlO and Pl 1) the 3 rd Plaintiff was required to file security including that related to CT. No. 7553 which they did. PWl tendered in evidence a copy of the Title Deed with CT. No. 7553 which was admitted and marked as Exhibit P12. The witness (PWl) stated further in evidence that at the instance of the Defendant the property in respect of Exhibit P12 was evaluated twice. TRESS ASSOCIATED LTD did the first evaluation of the property in May, 2006 in respect of the loan to the tune of USD 8,500,000. The second valuation was done in December, 2011. Both Evaluation Reports were approved by the Government Chief Valuer on

23/5/2006 and 3/1/2012 respectively. PWl tendered in evidence Evaluation Reports dated May, 2006 and December, 2011 as Exhibits. These were admitted in evidence marked as Exhibit Pl3 and P14, respectively. Exhibits P13 and P14 show the 11 property valued at Tshs. 19,300,000,000 /- and Tshs. 27,172,000,000/-, respectively. The Plaintiff's case is also to the effect that after having paid the debts· to the Defendant, at the Dar es Salaam International School Trust Fund, DISTF Boko Quarry and EDBP and GD · Construction Co. Ltd there arose an idea to do another business by the 3 rd . Plaintiff. The business related to construction equipment to · be used in roads construction and for hire to other persons. They . . therefore engaged the Invest-Konsult Inc. (IKI) to prepare them a Business Plan or Feasibility Study Report in that respect. The Company studied the idea and came up with a Feasibility Study Report which PWl tendered in court as Exhibit and the Court admitted and marked it as Exhibit PlS. PWl paid for the services rendered by the IKI as it is clearly shown by the Tax Invoice from the IKI to the 3 rd Plaintiff which was tendered and admitted in Court as exhibit marked as Exhibit P16. As the report was a technical one, BENSON MAHENYA (PW2) WAS consulted for him to provide advice if the same was properly made. PW 2 testified that he is a practicing External Auditor

and Business Consultant. He has a Company named BM Associates for Auditing and S. E. Consultants for Business Planning. He was approached by PWl so that he reviews Exhibit PlS which he did. PW2 ·passed through the Key Sections of the record (Exhibit PlS) which are the Background Information which focused on the 12 General Economic Review of the Country, the Construction Industry Overview, Construction Industry Policy and the Contribution of the Industry to the National Economic Growth. PW 2 also told the Court that the record (Exhibit P15) discusses the Role of Road Transportation in National Economic Growth etc. It was his conclusion that the one who prepared the report did a good job. As to the project, PW 2 reviewed, the Key assumptions and the prices for buying and leasing the equipment. He also read the other parts of the document along with its Annextures. He found the project as . ., being viable and therefore advised Issack Bugali Mwamasika (PWl) to submit it to the Bank. He did that upon finding also that the cash flows were positive ten years come and the equipment to be purchased qualified for being collateral for the loan from the Bank. Although the tax rate shown on the report was 20% while in fact in Tanzania we use the 30% tax rate. PW2 however found that to be irrelevant in case loss happens. PW 2 also advised that the project qualifies to be registered under

the Tanzania Investment Centre (TIC) for tax incentive. On ·- being Cross examined by Mr. . . Rweyongeza, learned Advocate -for the defendant, PW2 told the Court that at pages 12 and 13 of Exhibit PlS the author states that "The situation has since worsened". PW 2 does not know if the report gave the current position at the time it was made. He made the recommendation to the report because there was viability in the hire of equipment and that there were projects going on at that time in which they used 13 equipment similar to those Issack Bugali Mwamasika could deal with as mentioned in Exhibit Pl5. PW2 also testified, on being cross examined, that Exhibit Pl5 did not show the source of the equipment which was used by the ongoing projects in the country at the time the report was made. Although, he had prepared this like a report several times, he had never come across with the per hour charges rate as shown on Exhibit Pl5. It is aga.In the Plaintiff's case that; upon getting the Report PWl wrote on behalf of the 3 rd Plaintiff to the United Bank for Africa (UBA) applying for the USD 76,417,000 loan. The letter dated 22/4/2011 signed by PW 1 as the Managing Director of the 3rd Plaintiff was produced in court by PWl as Exhibit and the same was so admitted marked as Exhibit Pl 7. In response to the letter (Exhibit Pl 7) the UBA wrote to the 3 rd Plaintiff extending an invitation

to PW 1 to discuss the request with them. The invitation letter was tendered in court by PWl to be exhibit and it was admitted as such marked as Exhibit Pl8. Before meeting with the ~-:- , B~nk of Africa Officials; the Company (3 rd Plaintiff) held a meeting and passed a Special Resolution and a Resolution. The Company also entered into Separate Agreements with the 1 st and 2 nd Plaintiffs. The Special Resolution dated 15/5/2011, the Resolution, dated 16/5/2011, the Agreement entered on 17/5/2011 between the 1st and 3 rd Plaintiffs and the Agreement entered between the 2nd and 3 rd Plaintiffs dated 20/5/2011 were tendered in evidence by PWl arid accordingly admitted marked as Exhibit P19, Exhibit 14 P20, Exhibit P21 and Exhibit P22, respectively. The Dar es Salaam International Trust Fund were also involved in this transaction. They also held a meeting and came up with a Resolution dated 19/5/2001 which was produced to the court for identification only. According to the Resolutions passed by the 2 nd Plaintiff, he was supporting to the Loan Application by the 3 rd Defendant as PW 1 was doing. The 1st and 2 nd Plaintiffs pledged their School and Farm Certificates as securities to the loan from which the 1st , 2 nd and 3 rd plaintiffs could have, respectively, benefited 70%, 10% and 20% of the profit of the intended Construction Equipment Business. Following presentation of the

Feasibility Study to and discussion held with the United Bank for Africa Officials, the Bank issued an offer dated 21/11/2011 to the PWl (as the Managing Director of the 3 rd Plaintiff). The offer was tendered in court by PWl as exhibit and the same was so admitted and marked as Exhibit P23. Under the Exhibit the Bank offered USD 70,000,000 loan. According to Exhibit P23 the securities required were listed to be: 1. Legal mortgage on Plot No. 1 Block C, Sinza Commercial Area, Dar es Salaam 2. Legal Mortgage on Farm No. 776 Uporoto Mbeya, Tanzania 3. Chattel Mortgage over Excavator with Registration No. T. 149 AMV.

4. Chattel mortgage over Wheel loader with Registration No. T. 145 ALY 5. Legal charge over equipment's to be purchased to cover the full costs of the equipment. 15 6. Comprehensive Insurance Cover for the security pledged as collateral with UBA Tanzania stated as First loss payee Beneficiary. . PW 1 accepted the offer after he had agreed to the terms of the loan agreement and since the securities were still in possession of the Defendant and since they had paid all loans advanced to them by the Defendant Bank PWl wrote a letter (Exhibit P7) to the Defendant Bank requesting for discharge and return of the 1 •·J ..... .• . 1 ), . se.Cllrities and. In response to the letter the defendant wrote a letter (Exhibit PS) addressing it to Mr. Issack Mwamasika, the Chairman of Board of Trustee, Dar es Salaam International Trust Fund and DISTF Boko Quarry. According to the Business Plan (Exhibit P15) PWl told the court that the intended project/business showed that in ten years · period they could have earned USD 205,000,000, that is an average of USD 20,000,000 per year. As the 3 rd Plaintiff did not timely fulfill the conditions of the Agreement, the United Bank for Africa did on 3 / 1 / 2002 write to the Managing Director of the 3 rd Plaintiff reminding him to produce the requested documents. The letter was produced in evidence by PWl and the same was admitted and marked as Exhibit

P24. The letter (Exhibit P24) warned that the Bank will cancel the In Principle Offer issued to the 3 rd Plaintiff if the documents could not be submitted as they required. As the Defendant Bank did not release the documents the 3 rd Plaintiff 16 could not submit the documents as required and the United Bank for Africa therefore cancelled the offer. The Managing Director of the 3 rd Plaintiff was so notified vide the United Bank for Africa's letter dated 6 / 1/2012 which was tendered in evidence by PW 1 and admitted as exhibit marked as Exhibit 25. PW 1 also testified to the court that the equipment that were to be purchased by the loan from the United Bank for Africa were available from MANTRAC Company at Pugu Road, Dar as Salaam. Upon being served with the In Principle Officer by the United Bank for Africa, on 21 / 12/2011 PW 1 proceeded to the Company where he was provided with a Proforma Invoice a copy of which he produced to the court to be exhibit and the same was admitted in evidence marked as Exhibit P26. According to Exhibit P26 the price for purchasing the Earth Moving Equipment was USD 64,050,000 and the price for purchasing 21 generators was USD 838,208.28. PWl also submitted the Proforma Invoice to the United Bank for Africa. - 111111111' - The Plaintiffs' case is further to the effect that the Plaintiff did not agree with the Defendant Bank, that the later returns

the documents/property after the loan applied had been fully paid. The Defendant did that arrogantly and caused loss to the Plaintiffs. The 3 rd Plaintiff has the right to sue because, he was the one offered the loan by the United Bank for Africa whereas the other plaintiffs 17 provided for security to the loan. The fact that, the 3 rd Plaintiff could not get the loan under the shown facts, entitles him to sue. As to the prayers, PW 1 told the court that he is not maintaining seeking for reliefs sought under paragraphs (a) - (d), and (g). He however, maintains the rest of the prayers. The plaintiffs' case was tested by the defence upon cross examination by Mr. Rweyongeza, the learned advocate for the . . . . .defendant. On being cross examined PW 1 told the court that the 2 nd Plaintiff has Issack Bugali Mwamasika, Ms. Shida Andulile and Mr. Zebu Kaja as Trustees and that the 3 rd Plaintiff is owned by Issack Bugali Mwamasika, Harold Issack Mwamasika, ~ John Mwambigija. The 2 nd Plaintiff had a loan with the NBC ·,and the . Defendant Bank bought it to make the same their client. There was · no loan advanced to Mr. Issack Bugali Mwamasika trading as Dar es Salaam International School Trust Fund (DI STF). He signed on Exhibit PS and in the exhibit there is a Loan Agreement Executed · between the CRDB Bank and Issack Mwamasika t/ a DISTF Boko Quarry. Exhibit PS also comprises an

Overdraft Facility Letter dated 26/2/2010 between Issack Bugali Mwamasika t/a DISTF and the CRDB which PW 1 had signed. Boko Quarry was only a Department of the DISTF (2 nd Plaintiff). As such it has no legal personality. The money related to the Overdraft Facility mentioned in Exhibit PS was obtained by the DISTF. The money was transferred to the Bank Account in the names of Dar es Salaam 18 International School Trust Fund and Ms. Dar es Salaam --internationa-:i--school Trust Fuho & DSTF, Boko Qiiarry~-Exhi6it P6 is a Bank statement related to that Account in which, again, the loan money was deposited. According to Exhibit P6, the money was so deposited on 1/12/2005. The loan according to Exhibit PS had a personal guarantee. Going by Exhibit P2, the Bank Statement for the DISTF Bank Account with the Defendant Bank, the loan was fully paid. -However, the exhibit does not clearly show as to when · the loan was paid in full. As regards to Exhibit P6, the Bank . ., Statemerit for the DISTF Boko Quarry Account, the loan was fully paid for on 30/7/2011. PW 1 did not claim back for the securities as from the date the loan was fully repaid, only because he had nothing to do with them before and that it is not true that they were left with the Bank that long because they were still collaterals for a loan. It is true however:, that at the time he requested for . return of the securities

the 3 rd Plaintiff had a loan to be serviced. The securities were requested to be returned as PWl wanted to use · them as securities in the -loan offered to the 3 rd Plaintiff by the . . . . l United Bank for Africa. The defendant did not release the properties/documents giving reason that since PWl was the Director of the 3 rd Plaintiff who had not fully paid the loan with the defendant, the securities could not be returned. Again _on being cross examined by Mr. Rweyongeza, counsel for the_defendant, PWl told the Court that he requested for a loan from United Bank for Africa (UBA Bank) vide his letter, Exhibit 19 Pl 7. The Exhibit which he (PWl) delivered by hand however does not show if it was received by the Bank. According to Exhibit Pl5 there are mentioned companies which used to hire construction equipment rather than using their own. Those were their potential customers if the 3 rd Plaintiff had obtained the loan from the UBA Bank. Among the companies was the Tanzania Road Workshop which has its branch at Mbeya. Exhibit P 1 7 was responded by UBA Bank by their letter dated 15/5/2011 (Exhibit P.18). The response letter does not indicate if it was received by its addressee. PWl admitted that at the time the resolutions and agreements were made as per Exhibits Pl 9 - P22, the loans were not already fully paid for. On receipt of Exhibits Pl9-22 which PWl had delivered to UBA

Bank by hand and without a covering later, the Bank did not endorse to them acknowledging receipt of the same. Exhibit Pl8 is the UBA Bank's letter inviting the Applicant for the loan for discussion. The loan was granted and the Bank wrote a letter . (Exhibit P20) to the loan applicant reminding him to submit the required documents for the loan. Information on the grant of the loan was passed to PW 1 vide a letter (Exhibit P23). It was an In Principal Offer of the term loan for USD 70,000,000. This was an offer subject to the terms indicated. Exhibits P23 to P25 were not cooked documents made for the purposes of facilitating this case. PW 1 went on testifying in court upon being cross examined by Mr. Rweyongeza that, according to the Business Plan (Exhibit Pl5), there have been listed on page 3 the 3rd Plaintiffs three 20 shareholders whereas at page 15 they have been shown to be four shareholders. This was a typographical error as the 3 rd Plaintiff Company has · only three shareholders. The Exhibit contains technical issues save for the names of the Directors and Company which were provided to the consultant by PWl. PWl admits that Exhibit PIS was not signed by the person who prepared it. PWl also contended in evidence that the 3 rd Plaintiff did not -~ ..... have any security which was withheld by the Defendant. The latter's \ r'.J• . · ) act of withholding the claimed back

securities was deliberate. As such, the 3 rd Plaintiff claims for loss of opportunity of getting the loan from the UBA Bank. The 1 st Plaintiff claims for loss he suffered following his agreement with the 3 rd Plaintiff for the planned business that did not take off. Upon being re-examined by Mr. Marando, learned Advocate for the Plaintiffs, PWl told the Court that, he did not explain the qualification of his colleagues in the companies to the defendant for the later knew him well and did not need to get the qualifications of the colleagues. He was the NBC Bank customer, to which he had an outstanding loan and on hearing that he was building another school at Uporoto Mbeya the Defendant Bank approached him so that he turns to be their client and upon being satisfied on their interest PWl agreed with them. The Defendant asked him to submit an Application for loan attaching with it, a Business Plan which he did and signed the Application letter (Exhibit Pl) as the Chairman 21 - - - - - - - _of the_ Board _o( Trllstees. T~e NBC Bank granted the loan after he had provided the 1st Plaintiffs School's Title Deed as security. PWf - - - - - - - - - did not personally request for the loan however in response to the request the defendant granted the loan to lssack Mwamasika Trading as ... He was not having an Account with the defendant Bank in the name Issack Mwamasika Trading As . . .

Securities provided for the loan facilities granted to the 2 nd Plaintiff and DISTF- Boko Quarry were different from those provided for in the loan extended to the 3 rd Plaintiff. The defendant knew why the securities were claimed back for PWl had indicated that he intended to use them as securities in respect of another Bank's Loan facility. He so indicated to the Defendant's Officials namely Mr. Bohai and Mr. Richard Mwakalukwa. Mr. Bruce, Mr. Philip Alfred, Mr. Mlabwa Anderson and Dr. Kimei were also aware of that fact. On the other hand as it has been said above, the defendant's case is built of the testimonies of Mr. ANDERSON MLABWA (DWl), ___,.,, i r --the Defendant Bank's Loans Director since 20/1/2000 and MR. EXAVERY MAKUI (DW2), the Senior Credit Manager working with the Defendant Bank from 22 / 2 / 1999, when he was first employed · as the Credit Officer. According to DWl sometime in 2006, the 3 rd Plaintiff came to the Defendant Bank with the USD 8,500,000 loan request. He (DW 1) made recommendations to the Application/ request after he had been availed with the Credit Appraisal Report from the responsible Department. He then submitted the Loan 22 Request to the- Board .of the Defendant Bank for Approval. The Loan was approved and the 3 rd Plaintiff was granted it on conditions that,- the borrower will pay the sum by installments from the proceeds of his Apartment

Business and that all Bank Transactions should be through the Defendant Bank. Again the Directors of the 3 rd Plaintiff were to sign personal guarantees and provided for Mortgage Deeds. At first, the 3 rd Plaintiff was paying well for the loan. Sometime later he could not do so and that brought both the Bank and 3 rd Plaintiff to a discussion which resulted into variations of the terms of the loan which was reduced into a Loan Letter of Variation which was executed on 1/3/2012. DW 2 tendered in evidence, the letter which was admitted as such and marked as Exhibit D5. The variation came following the client's application for restructuring the loan to accommodate the arrears on payment of the loan. After the variation the client paid for the debt for some time. He however stopped later. The loan has not been fully paid. DWI tendered also in evidence the Personal Guarantees and Indemnity issued by ISSACK BUGALI MWAMASIKA, JOHN MWAMBIGIJA and HAROLD ,,_ 'i-• ISACK MWAMASIKA on 1/3/2012. This was admitted and marked ✓ Exhibit D6. In evidence DW 1 also told the Court that he knows the first - plaintiff one Mr. ISSACK BUGALI MWAMASIKA. In 2003 the Defendant Bank granted loan to Issack Bugali Mwamasika

TRADING AS DAR ES SALAAM INTERNATIONAL SCHOOL TRUST FUND (DISTF). He was, again, sometime in 2005 granted with 23 another loan. The same was given to ISSACK BUGALI MWAMASIKA TRADING AS DISTF BOKO QUARRY. Sometime in 2006 ISSACK BUGALI MWAMASIKA came to the defendant Bank with the EDBP AND GD CONSTRUCTION CO. LTD to which he was the main shareholder and Managing Director seeking for the Bank Loan so that he could purchase a property sold by the KOREAN Embassy. Mr. Issack Bugali Mwamasika did well in respect of the first two loans. He did not do well in respect of the third loan which was large involving purchase of the Korean Embassy property. The customer was defaulting payment in that loan. As far as the DISTF, the Defendant Bank knew no one other than Issack Mwamasika and that is why he was being referred to ISSACK BUGALI MWAMASIKA TRADING AS DISTF. In his evidence also DW 1 identified Exhibit PS in court. The Exhibit comprises four documents which are: an Overdraft Facility Letter to Issack Bugali Mwamasika Trading as DISTF and DISTF BOKO QUARRY. It was so addressed as all institutions had their ..... ......... 1 . trade names but owned by Issack Bugali Mwamasika. The letter clearly shows that the 1st Plaintiff signed it as the borrower. According to the letter the securities provided for were a house with Title Deed No. 30292, Plot No. 1 Block "C", Sinza Dar es Salaam

in the name of Issack Bugali Mwamasika; A Farm with No. 776, Tittle Deed No. 7483 MBYLR, Ndaga Village, Uporoto Mbeya, Chattel Mortgage of the Building and Excavator Caterpillar. According to Exhibit PS all these properties belong to Issack Bugali Mwamasika 24 who again signed a perso:qal gua:,;antee. In respect of this loan there is no any other contract executed by any other person. DW 1 also said that Exhibit PS also comprises a Loan Agreement. This was executed by the CRDB on the one hand and Issack Bugali Mwamasika trading as DISTF Boko Quarry on the other hand. On the 9 th page of the Agreement there is an attestation clause. The clause shows the CRDB Managing Director and the Company Secretary signed it on behalf of the CRDB and Issack Bugali Mwamasika did the same as the borrower. The Borrower's part of the attestation was signed by Issack Bugali Mwamasika witnessed by Mr. Julius Ndanzi, an Advocate. It reads as follows:- "signed and delivered by the said Issack Bugali Mwamasika". DW 1 also testified in Court that Exhibit PS also has the Deed of Variations of the Term Loan Agreement between the CRDB and Issack Bugali Mwamasika t/a DISTF Boko Quarry. The Deed of ....,., Variation varied particular items of the Loan Agreement. It ,,.,, capitalized on the interest. It was done on 27/3/2007 for the Loan Agreement entered in November, 2005. Both the Loan Agreement and the

Deed of Variation show the Borrower as being Issack Bugali Mwamasika t/ a DISTF Boko Quarry. Lastly, Exhibit PS comprises also the Overdraft Facility Letter dated 26/2/2010 to Issack Bugali Mwamasika t/a DISTF. It was 25 signed by Issack Bugali Mwamasika, the 1 st Plaintiff who was mentioned as the Borrower. DWI told the court that there was no any time the 1 st Plaintiff questioned as to why he had been mentioned as Issack Bugali Mwamasika t/a DISTF. According to Exhibit P6, the Bank Account is in the name of DSTF Boko Quarry and that DISTF Boko Quarry is Trade name the 1 st Plaintiff is using. He added that going by the exhibit the Plaintiff has no any outstanding debt and that it is the 1 st Plaintiff one Issack Bugali Mwamasika who paid for the debt in respect of that Account. DWI also identified Exhibit P7 in court. It is a letter written by the 1st Plaintiff addressed to the Managing Director of the CRDB and titled "D_ISCHARGE OF MORTGAGE DEED". The letter was seeking for return of the securities after he had discharged all his debts with the Bank. The 1st Plaintiff wrote it as a Borrower and that there was no anytime the 2 nd Plaintiff had written to the Bank seeking for return of the loan securities. -.....,, ,,. As regards to the suit, DW 1 told the court in evidence that the plaintiffs have instituted this suit claiming for a sum of USD 205,000,000 for loss of income

and the Defendant Bank is blamed for not returning the properties listed in Exhibit P7. DW 1 testified that by the time this matter was being instituted the defendant had not discharged the properties. According to Exhibit P22, the agreement entered between the 2 nd Plaintiff and the 3 rd Plaintiff, the later was showing intention to seek for a loan from the United Bank 26 for Africa Limited to the tune USD 70,000,000 so that the Company purchases Construction Equipment and that the 2 nd Plaintiff had agreed to guarantee the mortgage by executing a chattel Mortgage of an Excavator with Reg. No. T. 149 AMV and a Wheel Loader with Reg. No. T 145 ALY as collateral for the said credit. As consideration the owner will be paid 10% of the net profit realized from the business. Parties to the contract were all having loans with the Defendant Bank and the Equipment mentioned in the contract was the securities of the loans. DWl added that before going for the loan with the United Bank for Africa Limited, the 3 rd Plaintiff did not consult and have the consent of the Defendant Bank and that the 2 nd Plaintiff was not justified when he indicated the securities of the CRDB Bank Loan to be securities he guaranteed the 3 rd Plaintiff in the loan with the United Bank for Africa Ltd. The witness stated in evidence further that as the 3 rd Plaintiff had defaulted, the CRDB Bank in response to

the 1 st Plaintiff's letter requesting for discharge of mortgage (Exhibit P7), wrote a ..... letter (Exhibit PS) refusing returning the properties. As regards to the UBA Bank loan, DWl testified that on 3/1/2012 Exhibit P23 was written. It is the letter from the United Bank for Africa Limited titled "IN PRINCIPLE OFFER OF USD 70,000,000 LOAN FACILITY". "In Principle Offer" or "Indicative Offer" as it is in Exhibit P23 is an offer with conditions that the loan applicant is required to bring his documents for processing the loan. It invites the applicant of the loan for the loan. Once the conditions set the In Principle Offer are 27 met the Bank makes an appraisal and approval before the offer is given. -The in Principle-offer-(Exhibit- P23r also-warried--the Plaintiff that if he could not produce the documents required the offer will be cancelled. Although by the letter dated 6/1/2012 (Exhibit P25) the 3 rd Plaintiff was notified by the United Bank for Africa Limited of cancellation of the offer, this was done in three (3) days only of the In Principle Offer. DW 1 testified again in court by stating that, the terms of the offer according to Exhibit P23 were that: 1. Type of Facility Term Loan 2. Purpose Purchase of Construction Equipment 3. Amount USD 70,000,000 4. Terms Five years inclusive of six months grace period. This meant that within five years the loan must be paid and during the six months grace period interest is suspended. The terms were ...... also in respect of installment, interest, commitment fee and security. Security provided included; 1. Legal mortgage on Plot No. I, Block "C" Sinza Commercial Area Dar es Salaam.

2. Legal Mortgage on Farm No. 776, Uporoto Mbeya, Tanzania 3. Chattel Mortgage over Excavator with Registration No. T.149 AMV. 28 4. Chattel Mortgage over Wheel Loader with registration No. T145 ALY.

5. Legal charge over the Equipment to be purchased to cover full costs of the equipment.

6. Comprehensive Insurance Cover for the Security pledged as collateral with UBA Tanzania as First Loss Payee Beneficiary. By that time those securities were with the CRDB as securities for the loan taken therefrom and the Defendant was not informed of the arrangement between the 3 rd Plaintiff who had a loan with the CRDB which was secured by among others, Debenture charges of both present and future. In evidence DWl identified Exhibit P15 in court as being the Feasibility Study Report which was prepared by .the 3 rd Plaintiff. This is a proposal for loan the Applicant submitted to the Bank showing the business he is going to do and asks for finance to enable the business. At page 3 of Exhibit P15 the borrower says that he will guarantee the owner's equity of USD 4,500,000 which - . would come from four sources, namely, the luxury Apartment along Uganda Avenue Oysterbay. DWl said that the Apartments were purchased after the Defendant Bank had financed the 3 rd Plaintiff and that the income generated from the Apartments is supposed to service their loan. The income in this regard was not enough and it could not be possible for it to raise equity with the UBA (T) Ltd. DW 1 mentioned other sources for the owner's equity to be the Boko Quarry, DISTF and Uporoto Diary Project. He said by that time both 29 the Boko Quarry and DISTF had outstanding loans with the --Defendant Bank. In

Exhibit PlS, the 3 rd Plaintiff proposes to pay_ the loan in 10 years period with 6 months grace period. This suggested period differs from 5 years and 6 months which is shown in Exhibit 17. At page 4 of Exhibit PlS there is financial viability. The 3 rd Plaintiff expected for profit as follows: - 1. Earnings Before Interest, Tax, Depreciation Amortization (EBITDA) to the tune of USD 16,847,750 for the year 2012, USD 17,129,901 for the year 2013, USD 17,475,263 for the year 2014, USD 17,833, 295 for the year 2015 and USD 19,953,582 for the year 2016.

2. Depreciation to the tune of USD 7,543,104 for the year 2012, USD 7,543,101 for the year 2013, USD 7,543,101 for the year 2014, USD 7,543,101 for the year 2015 and USD 7,543, 101 for the year 2016. The 3 rd Plaintiff has not included INTEREST and TAX. He however shows the Net Profit before Interest and Tax to the tune of USD ,...,. f ,, 9,300,000 for the year 2012, USD 9,600,000 for the year 2013, r USD 9,900,000 for the year 2014USD 10, 300,000 for the year 2015 and USD 12, 400,000 for the year 2016. Although it is provided by Exhibit PlS that the loan is payable, going by it (Exhibit P15) the loan could not be paid in the period of five (5) years. In their plaint the plaintiffs claim for a total sum of USD 205,000,000. From the above analysis the profit shows only USD 15,000,000 which will only pay for the interest without principal. 30 At page 19 of the Feasibility study Report (Exhibit P. 15) fixed - Investment, cost and Financing- plari is provided. DW( said in evidence that in the plan the 3 rd plaintiff shows that they will have the equity contribution of USD 83,300,000 raised from the securities to tlie tune of USD 2,500,000. DWl said that it would take 40 years to pay the Equity. In the plan the 3 rd Plaintiff also shows a term Loan of USD.76,917,000, overdraft Facility of USD2,500,000 and another working Capital of USD4,200,000 which bring to a total of

USD.83,300,000. According to Exhibit P.17 the 3 rd plaintiff applied for an overdraft and a Term Loan of USD. 76, 417,000. They did not request for the working Capital and that he (DW 1) did never see a letter showing an Application for the overdraft of USD 2,500,000. At page 32 of Exhibit P15, DW 1 told the court that there have been shown the projects completed by the 3 rd Plaintiff and their years of completion. The latest project was that completed in 2009. One expected to see the future projects on this page. The shown ...,., projects could not be of any assistance except that one could learn that there were projects done in Tanzania. In the 3 rd Schedule to the Exhibit P15 the 3 rd Plaintiff shows the "PROJECT FINANCING PARTERN" under which the owner's contribution and loans are shown. According to the schedule the 3 rd plaintiff has USD 150, 000 and that he will have additional investments, Loan and Working Capital in the sum of USD 4,200,000, USD 76,407,000 and USD 2,500,000 respectively. The schedule does not match with what is 31 stated in the body. In Banking practice Equity cannot be below 20% of the asset financing. The Business Plan (Exhibit P 15) was unacceptable and DW 1 thinks that is why the UBA (T) Ltd did not pay the loan. He added that the tendered Feasibility Study is for 10 years and the Banker gave 5 years inclusive 6 months grace period. Secondly the

Business Plan projections depended on 5% interest while the Bank Offered LIBOR plus 5% which brought about over 7% interest. Thirdly the 3 rd Plaintiff applied for USD 76,471,000 Term loan and overdraft of USD 2,500,000 of which the Bank offered USD 70,000,000 Term Loan only the effect of which the owners had to pay USD 9,400,000 plus their shown equity. Fourthly, to any Banker, could not accept the plan which shows the 3 rd plaintiff has the USD 83,000,000 Equity. Page 4 of Exhibit P15 provides for the "NET ASSETS VALUE" which is the Total Assets value minus liability. The shown Net Assets value is unrealistic and it does not reflect to the business. Although the 3 rd plaintiff has a loan with the Defendant that fact has not been shown in business plan. Going by the Business plan, the In Principle Offer (Exhibit P23) was not met because One: The 3 rd Plaintiff has been offered USD 70,000,000 instead of USD 76,147,000 applied. There had not been offered in the In Principal Offer a sum of USD 2,500,000 overdraft which is also used as strengths in the Business plan. Two: The period of analysis in the Business Plan is 10 years and 6 months and the business talks of its viability in respect of that period while the In Principle Offer speaks of only 5 years. Three: As regards to the interest rate, whereas the Feasibility Study speaks of 32 the Fixed 5% interest rate the in Principle

offer speaks of a Floating interest rate of 6 months LIBOR plus 5% Margin. Four: The Equity contribution used in the Business plan is USD 4,200,000 while the offer given shows the Equity of USD 9,200,000. DWl went on telling the court in evidence that the CRDB refused to release the documents requested vide the letter (Exhibit P7) because the owner of properties/documents one ISACK BUGALI MWANASIKA was the Guarantor of the 3 rd plaintiff who was in default. DWl added that the 3 rd plaintiff had a Debenture with the CRDB. As such his properties were with the Bank. He tendered the Debenture in court as Exhibit and the same was admitted marked was Exhibit Dl. The Debenture was taken to the Registrar of Companies for registration. The same was registered a certificate of which DWl tendered in evidence. The Certificate was admitted as Exhibit and marked as Exhibit D2. Exhibit D1 that is the Single Debenture Instrument is dated 30/6/2006 and was signed by Issack B. Mwamasika the Managing Director of the 3 rd Plaintiff. The Debenture was for the current and future assets. According to Exhibit D1 all properties bought from the loan which were requested to be returned, were to be covered by the Debenture. As such there was no possibility for any Bank to grant a loan to purchase items that would secure a fellow Bank's loan. As to the properties listed in Exhibit PS as security that is:

a house with CT No. 7483 MBYLR owned by Issack Bugali 33 Mwamasika; CT. No. 30292 owned by Issack Bugali Mwamasika; --tl1e First Charge Credit-Mortgage over- Earth MOvirig Equipment and Caterpillar Excavator owned by Issack Bugali Mwamasika do not have any bearing with the 3 rd plaintiff. As such the 3 rd plaintiff cannot be heard claiming that by delaying in returning the properties he could not get the loan sought from the UBA (T) Ltd. Secondly, even if the 3 rd plaintiff had any agreement with the owners of the properties, the Defendant was not a party to that agreement. On Exhibit Pl 1, DWI told the court that it is a Term Loan Agreement between the Defendant Bank and EDBP & GD Construction Limited. The Agreement provides for the following items as security: 1. Legal mortgage on CT. No. 7533 located at Msasani Oysterbay.

2. Floating and fixed charge Debenture of all present and future company.

3. Personal Guarantee signed by Issack Bugali Mwamasika, John Mwambigija and Harold Issack Mwamasika. These properties do not belong to the 3 rd Plaintiff. As such, he cannot allege negligence against the Defendant when the later denied release them when requested for. As to the claim by the 2 nd Plaintiff, DW 1 told the court that, the 2 nd Plaintiff contends that the CRDB has withheld its properties. 34 In fact the 2 nd plaintiff had no any property. DISTF is a trade name ---- used by-Issack Bugali Mwamasika.-DWl but-admits tliat the allegea- withheld machines that is a Wheel Loader with Reg. No. T. 145 ALY and an Excavator with Reg. No. T. 149 AMV were all registered in the name of the 2 nd plaintiff. By now the registration cards in respect of these machines have been restored to Issack Bugali Mwamasika who has dealt with the Registration of the items. DWl went on testifying that according to Annexture 1 in -:.~ Exhibit PS that is an overdraft Facility Letter, sometime in 2009, Issack Bugali Mwamasika signed it showing that he trades as DISTF and DISTF Boko Quarry. Regarding to this loan there were two mortgages that is: 1. First Charge Legal Mortgage over School Buildings, CT. No. 7483 MBYLR and Farm No. 776 located at Mbeya and Ndaga Village Uporoto in Mbeya Region. 2 ..First Charge legal Mortgage over School Buildings, CT No. 30292, Plot No. 1 Block "C" Sinza Dar es

Salaam. Issack Bugali Mwamasika also signed a Chattel Mortgage of the Bull Dozer and Wheel Loader and Wheel Loader and also signed a personal guarantee. From the above explanation DWl told the court that the 2 nd Plaintiff was not among the Bank's Barrowers and that he had not given any of his property as security to the loan. As stated in the written statement of Defence the Defendant has 35 already returned to Issack Bugali Mwamasika all documents 1n ···respect of the equipment. As to the 3 rd Plaintiff. DWl told the court in evidence that, the 3 rd plaintiff does not have locus standi in this matter as all properties do not belong to him. The properties belong to the 1st plaintiff who had guaranteed the 3 rd Plaintiff in the loan extended to him by the Defendant. The 3 rd plaintiff has defaulted and the 1st plaintiff being a guarantor he could not claim for the properties he has provided as security to the loan. The contract entered between the 1st and 3 rd plaintiff does not have any legal effect to the Defendant for the later was not a privy to it. DW 1 prayed the court to find no merit in the suit and the same should therefore be dismissed with costs. On being cross examined by Mr. Matunda the learned advocate for the plaintiffs, DWl contended that the 3 rd plaintiff was given the loan by the Defendant in 2006 so that he purchases, 9' apartment. He (DWl) too is the Real

Estate Businessman owning an apartment at Msasani. At the time of giving the loan, the Defendant was satisfied by the 3 rd plaintiffs Management Capability. The 3 rd plaintiff had a Business Lincence and Business Plan. The Defendant conducted an appraisal and the responsible authority approved the loan. Normally a Letter of Offer is issued after approval is conducted and approval is made. The CRDB does not conduct appraisal on behalf of the United Bank for Africa as each 36 Bank has its own procedures in conducting appraisal. He added ----------·that the 3 rd plaintiff who was given the USD 8,000,000 loan was to pay for the loan through the Apartment's proceeds. According to the Loan Agreement entered by the 3 rd plaintiff and the CRDB, the former was not allowed to conduct Banking Transactions other than those with the CRDB. He is not sure if at the time the 3 rd plaintiff was applying for the loan from the United Bank for Africa there was a subsisting default. However, by the time the United Bank for Africa issued the In-principle offer the 3 rd Plaintiff, there was in • existence an enforceable notice of default. Again upon being cross examined by Mr. Matunda, DWI told the court that in order for the customer to open a Bank Account with the CRDB he must submit to the Bank a Business License, TIN Number and Certificate of Registration of Business name or Company. Whereas the

2 nd plaintiff (DISTF) was the Defendant's customer operating a Bank Account, the 1 st Plaintiff was not. The later had no Bank Account with the CRDB. So that one is granted with the Bank loan, he must have a Bank Account with the Defendant/Bank. There is no Account with the CRDB in the name "ISACK MWAMASIKA TRADING AS ... " Exhibit Pl is a Certificate of Incorporation of the DISTF. It is the Trustee Corporation. Exhibit P3 is an Application for a Loan by the DISTF (2 nd plaintiff). According to the Exhibit (Exhibit P3) ISACK BUGALI MWAMASIKA T / A DISTF was not the Applicant of the loan. Exhibit P2 is the Bank Statement of the 2 nd Plaintiffs Bank Account. There are no 37 names of I SACK BU GALI MWAMASIKA T / A in it. Exhibit P4 is an offer issued in response to Exhibit P3. The offer was directed to !SACK BUGALI MWAMASIKA T/ A DISTF. !SACK BUGALI MWAMASIKA owns the DISTF in his name. According to Exhibit Pl the DISTF was registered under the Trustee Incorporation Ordinance, Cap.

375. It is an entity. Exhibit P6 is the Bank Statement of a Bank Account in the name of DISTF BOKO QUARRY. Exhibit PS 1s a letter to ISACK MWAMASIKA, the Chairman of the Board of Trustees of the DISTF and BOKO " QUARRY PROJECT. Exhibit PS (collective) was signed by two Bank Officials whereas the borrower, ISACK BUGALI MWAMASIKA singed alone. As regards to the 3 rd Plaintiffs loan, two persons signed on the part of the borrower for it was the company. DWI added that it is the Bank that prepares the Loan Agreement. DWI went on telling the court on being cross examined that sometime in 2011 the 1 st and 2 nd Plaintiffs wrote to the Bank requesting for return/ release of their securities. The Bank did not return them as there was still an obligation in respect of the 3 rd Plaintiffs loan. The properties claimed back under Exhibit P7 were not directly the securities of the 3 rd Plaintiffs loan which so far he has not paid for. The 1st Plain tiff is the guarantor and as of now the Bank has returned the Titles to the owners. Exhibit Pl 7 is the 3 rd Plaintiffs letter to the UBA Bank requesting for a loan. According to the letter, Reference No. CRDB/FKDA/0513/001 of 23/5/2013, written by the UBA Bank to the Defendant Bank the UBA Bank was 38 capable of giving the loan. Exhibit P23 is an In Principle Offer issued by the UBA Bank to the 3 rd Plaintiff. It does not direct for

the amendment of the Business Plan by the 3 rd plaintiff nor does it refer to the plan. The In Principle Offer was cancelled by the UBA Bank vide the Bank's letter of 6/1/2012 (Exhibit P25) because the borrower could to not provide the securities although the Borrower was reminded to submit them as it is clearly shown by the Bank's Letter to the Managing Director of the 3 rd Plaintiff (Exhibit P24) dated 3/1/2012. The securities were in possession of the CRDB. Exhibit Pl 1 is the Loan Agreement entered between the CRDB and the 3 rd plaintiff. According to the Agreement the securities agreed were not among those belonged to the plaintiffs which ISACK BUGALI MWAMASIKA had claimed back from the Defendant, that is Earth Moving Equipment with Reg. No. T 145 ALY and T. 149 AMV. DWI tendered in evidence Reg. Card. No. 608873 for the Motor Vehicle T. 145 ALY owned by DISTF, Title held by CRDB and Registration Card No. 5752379 for a motor vehicle with Reg. No. 145 ALY owned by DISTF and a Registration Card No. 5752372 for Motor Vehicle with Reg. No. T. 149 AMV owned by DISTF. These were admitted as Exhibit marked as Exhibit D4. In respect of the Feasibility Study (Exhibit P15), DWI told the court that it is not true that UBA Bank issued an offer without requiring equity. It is not provided by the In-Principal offer (Exhibit P23) that the borrower should provide for equity nor is there

any letter that shows that equity is required. The equity arises from the 39 Business Plan and the same shows the equity. Equity does not constitute a condition for a loan in any Bank. According to Annexture 2 to the Business Plan the period provided for payment · for the loan was eight and half years. Exhibit Pl 7 does not state the period. Essentially the period was not ten years. Again according to the Annexture (the projected cash flow statement), the profit after Tax has not been shown. The Annexture does not even show residual funds. The cash flow does not include Debt service. It is therefore a Cash Flow before debt service. Here the debt ratio 'I shows positive. The Cash Flow was therefore not correct. DW 1 also told the court that the 3 rd Schedule to the Business plan is the Project Financing Pattern. The 3 rd Plaintiffs Equity in hand is shown to be USD 150.000. The Additional Equity he was seeking was USD 4,242,148 and that brings to a total of USD 4391, 148 Equity. It shows also that the Bank loan of USD 76,417,208, working capital of USD 2,500,000. A total financing was USD 83,308,356. It is a common practice that in Banking .,. Equity should not be less than 20%. According to the In Principle Offer, the 3 rd Plaintiff was given an amount less than that he requested for. DW 1 added that, the Cash Flows were to come from the project (Equipment) which according to

the 1 st Schedule to the Business Plan was to cost USD 64,760,346. He does not know if construction equipment is tax exempted. The 3 rd Plaintiff's business 40 would be affected from the fact that the amount lent was lesser than that requested and that the amount of Tax has been slightly raised. The 1 st and 2 nd Plaintiffs had severally entered into Guarantee Agreement with it 3 rd Plaintiff. From the Agreements then 3 rd Plaintiff was a beneficiary. The witness was also cross examined by Mr. Kamala, the leaned advocate also acting for the plaintiff and stated that the letter written by UBA Bank dated 23/5/2013 (Exhibit D3) was responding to that of the CRDB dated 17/3/2013 which he has not produced to the Court as Exhibit. The Bank had to use court process against the guarantor who has not provided tangible assets as security and that he does not remember if in the Guarantee there is a specific article in which the guarantor states that he is guaranteeing his personal properties. According to Exhibit P3 it is the DISTF who applied for the loan. There is no letter of ISACK BU GALI MWAMASIKA TRADING AS DISTF requesting for the loan. Both the TIN Certificate and the Account in which the loan money "11 was created are in the name of the DISTF. On being re-examined by Mr. Rweyogeza, the Defendant's learned advocate, DW 1 testified to the court that Exhibit P3 is the letter from

the DISTF requesting for the credit. The Bank did not give the loan to the DISTF .. Instead they advanced the loan to Issack Bugali Mwamasika. Exhibit PS collectively is the Overdraft Facility Letter in favour of Issack Bugali Mwamasika Trading as 41 DISTF and DISTF Boko Quarry. The loan was requested by. the ······· - DISTF for development of the school and building a school. The documents submitted showed the business owner as Issack B. Mwamasika and that is why the loan was advanced to him. By now the credit which was signed by Issack B. Mwamasika as the borrower has been fully paid. Exhibit P2 is the Bank Statement of the DISTFS Bank Account which was opened sometime in 1999. The statement shows that the credit was extended by the Bank through that Account. When the DISTF submitted the School Registration Certificate and the Title Deed of the school premises upon request by the Bank, they all showed Issack B. Mwamasika as the owner of the School and the School Buildings. The Bank therefore found that it is Issack B. Mwamasika who is capable of being given the loan and the money was credited into the DISTF Bank Account. According to Article 9 (4) of the Loan Agreement (Exhibit Pl 1) the Borrower was to operate a Bank Account with the Defendant Bank only. The 3 rd Plaintiff could not obtain a term loan for the UBA Bank without prior consultation with the Defendant ~

Bank. That is the whole evidence with matter. The respective learned advocates representing the parties in this matter sought and were granted leave to file their final submissions. They filed the submission as required. I will consider those valuable submissions when determining this matter. Going by the evidence adduced, I find there is evidence showing that the 1 st plaintiff is a natural 42 I, person and is a businessman. The 2 nd and 3 rd plain tiffs are corporate persons. The 2 nd plaintiff is incorporated under the provisions of the Trustee Incorporation Ordnance as it is evidenced by the Certificate of Incorporation tendered in court and admitted in evidence marked as Exhibit Pl. It is not disputed that the 2 nd Plain tiff has been taking overdraft and term loans from the Defendant Bank to facilitate its businesses and , the 1st Plaintiff agreed to mortgage some of his properties and so act as guarantor on behalf of the 2 nd Plaintiff to the Bank. As an incorporated body the 2 nd Plaintiff also mortgaged its land and chattels to the bank to secure both overdraft and term loans advanced to it. As per Exhibit PS (collectively), it is also not disputed that on 9/5/2009 the defendant issued an Overdraft Facility Letter in favour of ISSACK BU GALI MWAMASIKA TRADING AS DAR ES SALAAM INTERNATIONAL SCHOOL TRUST FUND AND D.I.S.T.F. BOKO QUARRY. According to the letter the overdraft was secured by the following securities: 1. First Charge Legal Mortgage over School Buildings; CT No. 7483 MBYLR owned by Issack Bugali Mwamasika located at Farm 776 Mbeya and Ndaga Village, Uporoto Rungwe District, Mbeya Regions.

2. First Charge Legal Mortgage over school buildings; CT. No. 30292 owned by Issack Bugali Mwamasika, at Plot No. 1 Block "C" Sinza Commercial Area Dar es Salaam. 43 ..

3. First charge chattel mortgage over earth moving equipment namely Caterpillar Wheel Loader and Caterpillar Excavator owned by Issack Bugali Mwamasika . .4. Personal Guarantees signed by Issack Bugali Mwamasika Horold Issack, Atuganile Issack, Shida Andimile and Mrs. Zebu Abas Koja as the Board of Trustees. Again going by Exhibit PS (collectively), there is ample evidence that these same properties and personal guarantees 1 served the same purpose (securities) sometime in November, 2005 when the Defendant Bank entered into a Term Loan Agreement with Issack Bugali Mwamasika T / A D.I.S.T.F. Boko Quarry, in which agreement a sum of Tshs. 350,000,000/- loan was extended to the borrower . This followed the Request for Bank Loan by the DISTF signed by the 1st plaintiff as its Chairman (Exhibit P3). The evidence also clearly shows that sometime in 2010, the Defendant Bank issued an Overdraft Facing Letter for a sum of Tshs. 70,000,000 /- in favour of Issack Bugali Mwamasika T / A DAR ES SALAAM INTERNATIONAL SCHOOL TRUST FUND. According to the letter (Exhibit PS collectively) the same securities were provided. It is not disputed that the three loans were fully paid for by the borrowers. It is also not in dispute that the 3 rd Plaintiff in its separate and corporate self also negotiated with and was granted by the Defendant Bank a separate loan of USD. 8,500,000. According to 44 the

letter with Ref. No. 3390/3314/001 dated 23/6/2006 (Exhibit - - -PIO) written by the Defendant Bank to Mr. Issack Mwamasika, the - Managing Director of the EDBP & GD Construction Company Ltd, (the 3 rd Plaintiff) the Bank was pleased to inform the Chairman that the Bank had considered and approved a ten year loan facility to the tune of USD 8,500,000. The facility was secured by the following properties: (a) First charge legal mortgage over property on Plot No. 100 with CT. 7553, LO No. 12192 located in Msasani Area Kinondoni District Dar es Salaam in the name of Embassy of the People's Republic of Korea to be transferred in the name of EDBP & GD Construction Co. Ltd. (b) Floating and fixed first charge debenture over all the present and future company's assets. (c) Joint and several personal guarantee signed by Mr. Issack Bugali Mwamasika, Horold Issack and John Mwambigija. Upon being satisfied that he has cleared all debts and or liabilities of the 2 nd Plaintiff and DISTF Boko Quarry a 2/12/2011, the 1st Plaintiff wrote to the Managing Director of the Defendant Bank requesting for discharge and restoration of the following collateral securities. (1) Title Deed No. 30292 in respect of Plot No. 1 Block "C" Sinza Commercial Area. (2) Title Deed in respect of Farm No. 776 Uporoto and Ndaga Village Mbeya. 45 ., (3) Motor vehicle Registration Card No. T. 149 AMV for the Excavator,

and . (4) Motor vehicle Registration Card No. T. 145 ALY for the Wheel loader. In response to the request, the Defendant Bank wrote to Mr. Issack Mwamasika, The Chairman, Board of Trustees, DISTF a letter (Exhibit PS) stating that: "We regret to inform you that the bank cannot discharge the securities requested due to non- 1 performance of EDBP & GD Construction Company Limited loan facility with the Bank. You are the main guarantor of the loan in favour of EDBP & GD Construction Company Limited and Main shareholder and thus in case of non- recovery of the non-performing loan, security in your personal names will also be used to repay the loan." As to the payment of the loan, by the 3 rd plaintiff, both DW 1 and DW2, told the court that initially the 3 rd Plaintiff was doing well in paying for the loan. He later became a defaulter and according to DWI this came after change of management of the Apartments, the main source of the income used in repaying the debt. Again both DWI and DW2 told the court and in fact it is not disputed that so far the debt has not been fully paid. Despite that fact the Bank has 46 returned the Titles/cards to their owners. This is also confirmed by the plaintiff who through their learned advocates submitted that: "It must be pointed out that the certificates of title and motor vehicle registration cards were released on 7th June, 2013 after mediation

... " Going by the adduced evidence I find again, it is not disputed that save for the joint and several personal guarantees signed by Mr. Issack Bugali Mwamasika, Harold Issack and John Mwambigija, all other securities agreed by the parties to the loan agreement between the Defendant and the 3 rd plaintiff (Exhibit PlO) are different from those agreed in respect of the Agreement entered between the Defendant Bank and the DISTF and DISTF Boko Quarry. (Exhibit PS). Although it has been submitted in favour of the Defendant that the 5 th issue for determination has no relevance, with due respect, I beg to differ with the learned counsel in this regard. It is important therefore for the court to determine whether or not the security given by the 3 rd plaintiff will not cover ~ the facility extended to it by the defendant in the event of default. In my view in Banking practice before the Bank approves a Bank facility/ Loan the · Banker proposes to protect him where the customer defaults. Such protection may be by provision of securities or by means of a guarantee. Sheldon's Practice and Law of Banking, 10 th Ed by C. B. Draver and R. W. B. Bossley Law friced Editor at Pg. 332 defines the term "Guarantee" as follows: 47 "A guarantee is a written document made by · one person to be collaterally answerable for the debt, default or miscarriage of another person." ·A guarantee is one of

the means the Banker may propose to protect him where a customer to whom the Bank facility has extended fails to pay. As to guarantee, the authors of the Book above state as follows at page 334: "When therefore a banker proposes to protect himself by means of a guarantee, be must first of all, by careful inquiries, satisfy himself as far as possible, that the guarantor will be able conveniently and without embarrassment to redeem his promise to pay if the customer accommodate fails to do so." Here in my view, the inquiry conducted by the Bank aims at among others, establishing the capability of the Guarantor to redeem his promise. The capability goes with "adequacy". Where the Banker forms an opinion that the Guarantor has nothing adequate to cover the loan, it remains unwise for him to grant the loan since he is not sure of his protection. As it is for the "Guarantor" where the Banker proposes to protect himself by means of securities he must again first of all by careful inquiries satisfy himself that the securities provided will serve the purpose of protecting him in case of default by the customer. According to Exhibit PlO the Banker 48 was satisfied that the securities and the guarantees proposed as the - means-of protecting himself are sufficient: The Exhibit is silent as to- the end result where the securities provided by the 3 rd Plaintiff will not cover the facility

extended by the defendant in event of default. I hold therefore that the security given by the 3 rd plaintiff will cover the facility extended to it by the defendant in case of default. Going by the evidence given it is evident that this litigation was triggered by the defendant's decision contained in Exhibit PS, 'I a letter which was responding to that of the 1 st and 2 nd Plaintiffs (Exhibit P7) requesting for discharge and restoration of the Title Deeds in respect of Plot No. 1 Block "C" Sinza Commercial Area, Farm No. 776 of Uporoto and Ndaga Village Rungwe District, Motor Vehicle Registration Card No. 149 AMV and under vehicle Registration Card No. T 145 ALY. In the letter (Exhibit PS) the defendant refused to release the documents as shown above because of: "Nonperformance of the EDBP & GD. Constructions Company Limited loan facility with the Bank. You are the main guarantor of the loan in favour of the EDBP and GD Construction Company Limited and the main shareholder and thus in case of non-recovery of the non-performing loan, securities in your personal names will be used to repay." 49 I am in fully agreement with the defendant that in case of non- recovery securities in the personal name of Issack Bugali Mwamasika would be used to repay the loan. The driving words here are "securities in the personal name". This does not mean that all properties in the name of Issack

Bugali Mwamasika would be automatically used to repay the loan. "Security" here meant all properties proposed by the Banker and agreed by the Borrower/ Guarantor to secure the loan facility. For the purposes of the loan in question, going by the Loan Agreement (Exhibit PlO) there was no any property in the personal name of the 1st Plaintiff was proposed and agreed a security to secure the loan. I understand that the 1 st Plaintiff had signed a personal guarantee. As it has been shown in evidence, with a view to enforcing a personal guarantee, one has to go through court process. In this matter the claimed, back securities were not securities in respect of the Bank Loan Facility issued by the Defendant. Secondly, the Defendant did not invoke powers of the court to enforce the personal guarantee the 1 st Plaintiff had signed in favour of the Defendant in respect of the loan extended to the 3 rd Plaintiff. These facts lead the court to find the Defendant had no any justification to withhold the securities for whose loan facility was fully recovered. As such, I will respond to the first issue by stating that the detention and retention of the securities (claimed back by the 1 st and 2 nd Plaintiffs) was not lawful. On the above analysis I also answer the 3 rd issue for determination that after the full payment of the loans and overdraft the release of the securities was not

subject so to other terms contained in other documents executed by the · · plaintiffs in respect of other loans extended to other persons including the 3 rd Plaintiff for which the 1 st and 2 nd plaintiffs stood guarantors and executed personal guarantees and indemnity in favour of the Defendant. This is confirmed by DW 1 who in evidence is recorded to have said that: "Personal guarantee one guarantees himself to pay for the borrower who defaults payment of the loan. The guarantor is discharged when the loan has been fully paid for. " This was also in the minds of the Court of Appeal for Eastern Africa, when determining the case of REID Vs. NATIONAL BANK OF COMMERCE ( 1971) EA 522 where the court said that the guarantor was discharged when the debt was repaid. The defendant's counsel's submission however is to the effect that the 1st guarantee given will always remain in force as long as the guarantor has commitment with the Bank. This stand got its support from what is stated on page 328 of the Sheldon's Law of Banking that: "A lien is the right to retain property belonging to the debtor until it has discharged a debt due to the retainer of the property. A lien may be either (a) particular, or (b) general. A particular lien arises from the particular transaction connected with the property subject to lien; a 51 general lien arises not only out of the particular - transaction

but also out of the general dealing between the parties in respect of other transactions of a similar character." The learned counsel submitted that the Banker's loan covers all documents deposited with the Bank by customer. It is not confined to a particular transaction as in the present case it goes to cover all transactions. As such the 1 st plaintiffs properties were to act as security under the law of banking in respect of the loan they had original secured have been liquidated. This submission in my view is defeated by the testimony given in court by DW 1 that, the guarantor is discharged when the loan has been fully paid for. It is also even defeated by the defendant's on later act of releasing the properties to the 1 st plaintiff while there is an outstanding debt with the 3 rd plaintiff. Secondly; as it is submitted by the plaintiffs' advocate the Defendant did not plead the Banker's lien in this matter. That being the case the defendant cannot raise that issue now. They referred the court to the decision in the case of F ATMA IDHA SA~UM VS. KHALIFA HAMED SAID, Civ. App. No. 28 of 2002, CAT at Zanzibar where the court held that: "It is now settled that the only way to raise issues before the court for consideration and determination is through pleadings and as far as we are aware of, this is the only way." 52 ,, On the basis .of the above analysis, it is my view that

as regards to the 4 th issue, the guarantee executed by the 1 st Plaintiff for the loan extended to the 3 rd Plaintiff by the Defendant is different and independent of the joint personal guarantee given by the 1st Plaintiff to the 2 nd Plaintiffs loan. As to whether or not the new business created by the 1 st and 3 rd Plaintiffs to be financed by another bank was viable and whether in view of the 3 rd plaintiff's contact with the defendant it was not in position to do such other business; it is submitted by the defendant's counsel that the question that echoes is: did the 3 rd plaintiff create any business. The learned counsel also analyzed the feasibility study, (Exhibit Pl5). He stated that the same is not supported by the oral evidence of its maker and that the same is outdated. Although the Exhibit shows projects completed between 2007 and 2009 there are no facts relating to the projects and the equipment used which render the document lack any evidential value. The report shows that there are ongoing projects. It is not disputed that the projects are going on without the equipment of the 3 rd plaintiff and that there is no suggestion in the report that there is shortage of equipment and contractors wanted to hire them. It is submitted also that in the first place there is no evidence to support the assertion that there was a business created by the 1st and 2 nd plaintiffs

and secondly the so called business could not in any way be viable to be financed by another bank. Assuming there was such business it is submitted that the 3 rd plaintiff could 53 not carry out such other business due to the existing contract . between the 3 rd plaintiff and the defendant. Exhibits D1 and D2 restrict the 3 rd Plaintiff from conducting any business without the express consent of the Defendant. On the other hand the plaintiff's counsel submitted that PW2 is an expert who explained Exhibit P15 and concluded that the business was viable. He was cross examined on two aspects only; that is whether PEHCOL was still functioning and on the typo in respect of the leasing rate of USD 100 which PW2 ably and credibly answered. The report shows that the profit after Tax would rise from USD 16,800,000 in 2012 to USD 23,800,000 in the tenth year of operation. With this huge amount of profit the 3 rd Plaintiff and UBA Bank Ltd negotiated and the repayment period was shortened to five years from 10 years. DWl was not justified to discredit the report (Exhibit P15). Pages 36, 37, 38 and 39 of the Report have a long list of 76 ongoing projects. Page 35 shows projects under procurement. It is the projects under procurement and those ongoing which made the project viable. As to the interest, the incremental interest role (LIBOR) would not affect the 3 rd Plaintiff's profit because,

he would obtain the profit by registering the project under the Tanzania Investment Centre thereby pay corporation tax at an average of rate of 15% for ten years. DWl admitted that the cost of equipment was USD 64,760,346 as it is reflected on the Proforma Invoice (Exhibit P 26). He conceded also that with the sum of USD 70,000,000 the 3 rd Plaintiff could still buy the same number of equipment as would have been purchased if the 3 rd Plaintiff was 54 ,,, .. granted with a loan of USD 76,000,000. The said goods have a zero tariff. It was proper therefore to return the amount of taxes from the amount applied for. Generally the DWI did not have genuine reason to discredit the Report (Exhibit P15). As to the debenture, DWI conceded that the debenture did not operate to restrain the plaintiff from trading or dealing in its assets. Viability of the 3 rd plaintiff was very positive as it was confirmed by PW 1, PW2 and the letter by UBA Bank to the Defendant (Exhibit D3). On the above analysis, the plaintiffs submit that issues No. 6 and 7 should be answered with Affinitive. Again it is my considered opinion that there is ample evidence to show that after the DISTF, DISTF BOKO Quarry had paid for their respective loans with the Defendant there cropped an idea that they do a business through the EDBP and Construction Co. Ltd related to construction equipment for road construction and

for hire to other persons. The idea was studied and a feasibility study was conducted and a Report (Exhibit P15) developed. The report was - -\ reviewed with a view to satisfy the viability of the business. Whether the business was viable, in my view, depended on the interpretation one accords to the report (Exhibit P15) especially the consumer of that report. The consumer of the report who is not satisfied by the viability of the business proposed, in my view cannot entertain it to the extent of proposing a contract. In evidence DWI told the court that: 55 ., . 4 "If conditions for the loan are completed the Bank starts assessing documents with a view to satisfying of their co~ectness and viability ... we took in viability of the business in which we look into the financial capability to have the business run, who runs the project, whether he has Management capacity, the market the project targets, Risks available to the business and Risks mitigating factor." DW 1 admits that each Bank has its own procedures of conducting assessments. In my view, however in the Bank community, Banks must satisfy themselves of the viability of the project that they are asked to finance by granting the loan facility. In this matter, the Feasibility study was submitted is the United Bank for Africa Ltd. The Bank, on receipt of the Feasibility Study along with the Application for loan by the 3 rd

plaintiff (Exhibit Pl 7), invited the 3 rd · Plaintiff for discussion of the proposal in detail (Exhibit D18). Following the discussion, the UBA Bank issued to the 3 rd Plaintiff "IN PRINCIPLE OFFER" (Exhibit 23). Exhibit P23 was valid for 6 weeks from the Date of Agreement (22/11/2011). Exhibit P23 also warned that failure to submit items under security within 6 weeks the offer will lapse. The UBA Ltd reminded by letter (Exhibit P24) the 3 rd Plaintiff to submit to the Bank the documents requested. The In-Principle offer was then cancelled as the 3 rd Plaintiff could not submit the documents and the 3 rd plaintiff 56 . • was so notified by a letter (Exhibit P25). As to the genuineness of the correspondences, the same was confirmed by the letter from UBA Bank to the Defendant Bank (Exhibit D3). This scenario leads me to hold that in the eye of the consumers of the Feasibility Study Report that is UBA Bank, the business created/planned by the 1 st and 3 rd Plaintiffs to be financed by another Bank was viable. As to whether in view of the 3 rd Plaintiffs contract with the defendant it was not in a position to do such other business, it is not disputed that the contractual relationship between the 3 rd plaintiff and the defendant is exhibited by the Term Loan Agreement (Exhibit Pl 1). According to Exhibit Pl 1 the loan was secured by properties other than those at issue and that

the Defendant did not order the plaintiffs submit them as securities. DWI told the court that the UBA Bank loan to the 3 rd Plaintiff was a Term Loan. The same under the prevailing circumstances could not be obtained without a prior consultation with the CRDB. It has been clearly shown by evidence, the 3 rd plain tiff did execute the single Debenture Instruction (Exhibit Dl) which was registered under the Companies Ordinance and a Certificate of Registration (Exhibit D2) was duly issued. I agree with the Defendant's counsel that the effect of the Defendant's counsel that the effect of the two exhibits is to restrict the 3 rd plaintiff to conduct any business without express consent of the Defendant. The restriction however is not general. It is connected only with the properties and assets charged. Where the company intends to part with or dispose of any part of the property 57 charged he cannot do so without the consent of the Bank. I have studied Exhibit P23, the properties demanded by UBA Bank from the 3 rd plaintiff as securities do not belong to the Company (3rd Plaintiff). Basically the 3 rd Plaintiff has no powers to part with or dispose of them. As such the Single Debenture in this matter could not be properly invoked in alleging that the 3 rd Plaintiff could not obtain the loan without the prior consent of the defendant Bank. The 3 rd Plaintiff was therefore in a

position to do such other ... aft business. Again, going by the evidence adduced, I find it is not disputed that the 3 rd Plaintiff requested for Term Loan and Bank Overdraft to the tune of USD 76.41 7M (Exhibit Pl 7) from UBA Bank. After holding a discussion, the Bank issued In Principle Offer of USD 70M Term Loan Facility (Exhibit P23). The offer was cancelled after six weeks because the 3 rd plaintiff could not submit the documents required by the Bank (Exhibit P24 and P25). This evidence clearly shows that there was a possibility of the 3 rd Plaintiff obtaining loan from the United Bank of Africa (T) Ltd and that the 3 rd Plaintiff was offered a loan of USD 70,000,000 by Ms. United Bank of Africa (T) Ltd. Based on the foregoing, issues for determination No. 7 and the 1st limb of issue No. 8 are answered in the affirmative. The question that follows is whether or not consequent to the alleged cancellation of the offer, the 3 rd Plaintiff suffered damages as alleged. As found here above, the defendant did unlawfully refuse to release the properties of the 1 st and 2 nd Plaintiffs which properties were 58 -- -- ~--- - - -- ... J, •• proposed by_ UBA Bank _as securities of the loan which the Bank had showed interest to grant to the 3 rd Plaintiff financing the project which would have earned profit to the Plaintiffs. The Defendant's act in this regard, in actual fact had caused

the 3 rd Plaintiff suffer damages. Whether or not the demand by the defendant upon the third Plaintiff to repay the loan granted to it was spit fool, I fully join hands with the defence in their submission that the issue need not to be there. Before coming to the reliefs the parties are entitled to let me consider issue No. 2; that is to who between the 1 st and 2nd Plaintiffs were the terms loans and overdraft granted and who between the two Plaintiffs placed each of the immovable securities for the term loans and overdraft. With due respect in my opinion the pleadings as they are; determination of this issue in my view serves other purpose than determining the rights and duties of the parties in this matter. I am made to understand from the pleadings and the evidence that the term loans facilities and/ or overdraft _.. _ facilities were granted by the Defendant to Issack Bugali Mwamasika Trading as DISTF and/ or DISTF Boko Quarry. Whether that was correct or not in my view is not at issue. Those facilities were settled and there is peace among the parties to that regard. The issue suggests to the court to consider why the Bank offered the facilities to the person who did not request for. The court also is moved to consider why the person who did not request for the facilities accepted them. Again the Court should consider why the 59 , l ---- --moneys- were- credited __ by_

th~__ 9:efencl~nt in to the Accounts not - operated by the person who was granted with the facilities. As said these considerations will not bring the matter at peace. Courts of law are there to resolve disputes. Where there is peace among the people and that peace is reached un-procedurally, courts should restrain themselves from questioning the procedure a result of which may cause chaos. Here the wise words that the end justifies the means clearly seem to be relevant. I agree with the Plaintiffs advocates submission that these litigations are triggered by the Defendant's decision not to release the requested document listed in Exhibit P7 due to the alleged nonperformance of the 3 rd Plaintiffs Loan Facility with the Defendant. On the basis of the above, I refrain myself from discussing and determining the 2 nd framed issue for determination. Now, are the reliefs to which the parties are entitled. As found herein above the plaintiffs, did suffer damages resulted from the Defendant's unlawful act of refusing to restore to the 1 st and 2 nd Plaintiffs properties which were subsequently to be offered as security in the Bank loan from the Bank which had issued the In Principle Offer in that regard which offer was cancelled from failure to submit documents/properties. The plaintiffs show that in the proposed Construction Equipment Project, UBA Bank essentially agreed to finance, a

sum of USD 70,000,000 which, going by Exhibit P15, would have generated USD 205,603,528 net profit in ten years. According to Exhibits P21 and P22, the 1 st and 2 nd 60 Plaintiffs, who agreed to guarantee the credit facility, were entitled to 70% and 10%, respectively, of the net profit realized from the business of the company. The 3 rd Plaintiff was entitled to the remaining 20% of the profit. Under Paragraph 22 of the Plaint this sum (USD 205,603,528) is claimed as loss of business opportunity. Loss of a business opportunity is not loss of business. An injury suffered for loss of business does no entitle one to what can be granted in a proved specific damage. I have considered the sum claimed and I do agree with the defence that it is to the high side. Secondly the Defendant was not informed by the Plaintiffs at the time of requesting for the documents that the documents were to be used as securities in the loan facility to be extended by UBA Bank. The 3 rd Plaintiff also claims for USD186, 244 being the money it paid as fees/ charges for the preparation of the Feasibility Study (Exhibit P15). This is evidenced by the Invest. Konsult Inc. Tax Invoice (ExhibitP16). The Plaintiffs again pray for interest and costs. Upon considering the matter I find the suit for the Plaintiffs who are awarded with the following: 1. USD 30,000,000 being loss of business opportunity apportioned as follows: i) Loss by the 1 st Plaintiff of USD 21,000,000 being 70% of USD 30,000,000 ii) Loss by the 2 nd Plaintiff of USD 3,000,000 being 10% of USD 30,000,000 61 -i-ii) - Loss· by the 3 rd Plaintiff of USD 6,000,QO~ being 20% of USD 30,000,000.

2. Interest at 7% rate per annum of each portion from when this matter was instituted in court to the date of judgment.

3. Interest at ~he Court rate of 7% per annum on Tanzania shillings equivalent of each portion from the date of judgment to the date of final settlement.

4. Payment of USD 186,244 to the 3 rd Plaintiff being the fees/ charges paid for preparation of the Feasibility Study (Exhibit. PlS).

5. Payment of USD. 500,000 to each of the Plaintiffs separately being general damages.

6. Costs. Dated at Dar es Salaam; this 19 th of January, 2017.

JUDGE 19/01/2017 62 . I __ --- ----.... -- ---- - -Date-:------ ---- --- --- - -19/0ll2QlJ Coram: Hon. Mkasimongwa, J For the Plaintiffs: Mr. Mwakisu and Mr. Majura and Mr. Hussein, Learned Advocates. For the Defendant: Mr. Mwakipesile and Mr. Theodory Primus, Learned Advocates. CC: Mrangi Court: Judgment delivered in Chambers this 19 th of January, 2017 in the presence of Mr. Mwakisu accompanied by Mr. Majura, and Mr. Hussein learned Advocates representing the Plaintiff and of Mr. Mwakipesile, accompanied by, Mr. Theodory Primus, learned advocates representation the Defendant. Right of Appeal is fully explained to the parties.

JUDGE 19/01/2017 \ y 63