crdb bank plc vs greens construction ltd 3 others 2022 tzhccomd 374 28 november 2022

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA (COMMERCIAL DIVISION)

AT DAR ES SALAAM COMMERCIAL CASE NO. 60 OF 2022 CRDB BANK PLC............................... ........................ PLAINTIFF

VERSUS GREENS CONSTRUCTION LTD............................ lst DEFENDANT HAMIMU HUSSEIN BAKARI................................ 2nd DEFENDANT ERNEST SAMSON LAIZER................................... 3rd DEFENDANT HAMISI JAFARI LUZIGA..................................... 4™ DEFENDANT

DEFAULTJUDGEMENT Date of last order: 24/11/2022 Date of Judgment: 28/11/2022 A.A. MBAGWA, J. The plaintiff, CRDB Bank PLC, by way of a plaint, instituted this suit against the defendants jointly and severally praying for judgment and decree as follows; i) Payment of the sum of Tanzanian shillings one hundred twenty- four million eight hundred eighty-eight thousand four hundred ninety-eight and forty-eight cents (TZS. 124,888,498.48) the same being total arrears as of 23rd May, 2022 on account of the i loan facility (First Deed of Variation) dated 30th September, 2021 advanced by the plaintiff together with interests. ii) Interest on (i) above at the rate of 20% per annum from 23rd May, 2022 to the date of judgment iii) Interest on the decretal amount at the court's rate of 7% from the date of judgment until full and final payment iv) Costs of the suit, and v) Any other reliefs which this honourable court may deem just. Upon filing of the plaint in this court, the same was served to the lst defendant through her secretary on 3rd June, 2022 whilst the 2nd to 4th defendants could not be served through ordinary service. As such, this court, upon a prayer by the plaintiff's counsel, on 25th July, 2022 granted leave to serve the 2nd to 4th defendants by publication. The plaintiff complied with the court order as on the lst day of August, 2022 published the summons via the Guardian

and Nipashe newspapers. Despite all these efforts none of the defendantfiled a written statement of defence. Thus, on the lst day of November, 2022, the plaintiff's counsel one Catherine Tibasana prayed and was allowed to file an application for default judgment under rule 22 (1) of the High Court (Commercial Division) Procedure Rules. Conseguently, the plaintiff filed 2 an affidavit sworn by PASCAL MIHAYO, a principal officer of the plaintiff to prove the claims. The affidavit was accompanied with documents including facility letter dated 19th April, 2021, debenture instrument dated 2nd October, 2019, directors guarantee and indemnity, notice of assignment dated 20th April, 2021 addressed to District Manager of RUWASA, acknowledgment of notice of assignment dated 20th April, 2021, account bank statement No. 0150259115900 maintained at CRDB Kijitonyama, demand notice dated 16th February, 2022 and printout of loan outstanding details. In brief, the plaintiff's case was that on 19th April, 2021, the plaintiff and lst defendant GREENS CONSTRUCTION LTD entered into a loan agreement whereby the plaintiff advanced to the lst defendant a sum of Tanzanian shillings one hundred and two million (TZS 102,000,000/=). According to directors guarantee and indemnity (CRDB 2C) the said facility was guaranteed by the 2nd, 3rd and 4th defendants. The loan was intended to facilitate the lst

defendant to perform the ongoing contract which she was awarded by Bumbuli District Council in respect of construction of water supply infrastructure at Vuga village. According to the facility letter dated 19th April, 2021 (CRDB 1), the loan had interest rate of 20% per annum. It was further 3 7 agreed that Bumbuli District Council (RUWASA) would channel the payments through the lst defendant's account No. 0150259115900 and the same would be used to repay the loan. Having complied with the preliminary conditions of the agreement, on the 21st day of April, 2021 the plaintiff credited the lst defendant's account No. 0150259115900 maintained at CRDB Kijitonyama Branch the loan amount to wit; Tanzanian shillings one hundred and two million (TZS 102,000,000/=). Later on, i.e., on the 2nd day of June, 2021 Bumbuli District Council (RUWASA) made payment to the l^ defendant via her account 0150259115900 to the tune of TZS 138,550,636.96. This transaction is reflected in the account bank statement attached to the affidavit and marked CRDB 3. However, according to the plaintiff, the said money was not used to set off the loan on the ground that the loan facility term had not expired. As such, the lst defendant used the money for other purposes than repayment of loan. Thereafter, the defendant's account did not receive sufficient fund to repay the loan as a result, upon expiry of the term

of loan facility i.e., 21st July, 2021 the loan was still outstanding. Consequently, on the 30th September, 2021, upon request by the lst defendant, the plaintiff restructured the loan facility of 19th April, 2021 via a First Deed of Variation dated 30th September, 2021. The intention of the variation was to extend the payment term for another three months hence upon restructuring the defendant's loan stood at Tanzanian shillings one hundred eleven million seven hundred and one thousand nine hundred ninety and forty two cents (TZS 111, 701, 990.42). Nonetheless, the lst defendant continued to default payment in that as of 21st April, 2022, the lst defendant had only paid TZS 2, 502, 242.88. Owing to the lst defendant's default, on 16th February, 2022 the plaintiff served the defendants with a demand notice (CRDB 4d) to no avail. Following the continued failure by the defendants to repay loan, by of 23rd May, 2022, the loan amount had accrued to Tanzanian shillings one hundred twenty-four million eight hundred eighty-eight thousand, four hundred ninety-eight and forty-eight cents (TZS 124,888,498.48) comprising the principal sum of TZS 109, 177, 540.42, accrued interest of TZS 14, 278, 093.48 and total penalty interestTZS 1,432,864.58. I have keenly gone through the pleadings, affidavit and the accompanying documents. Through the evidence tendered via affidavit, it is clearly

established that on 19th April, 2021, the plaintiff and lst defendant entered into loan agreement whereby by the plaintiff 5 agreed to lend the lst defendant a sum of Tanzanian shillings one hundred and two million (TZS 102,000,000/=). The said money was disbursed to the lst defendant via her bank account No. 0150259115900 on the 21st day of April, 2021 as exhibited through the lst defendant account bank statement. Further, it is established that the lst defendant did not pay the loan as per the agreement, a fact which triggered a restructuring of the loan via a loan facility letter (deed of variation) dated 30th September, 2021. Despite restructuring of the loan, the lst defendant did not service the loan until the outstanding amount reached the sum of TZS 124,888,498.58 as evidenced by the loan outstanding details (annexure CRDB 5). In view of the evidence adduced as hinted above, I am satisfied that the plaintiff has managed, on the balance of probabilities, to prove her claims. In consequence, I enter judgment and decree in favour of the plaintiff. The defendants are jointly and severally ordered to pay the plaintiff as follows: i) The sum of Tanzanian shillings one hundred twenty-four million eight hundred eighty-eight thousand four hundred ninety-eight and forty-eight cents (TZS. 124,888,498.48) the same being total arrears and interest as of 23rd May, 2022 on account of

the loan 6 facility (First Deed of Variation) dated 3O01 September, 2021 advanced by the plaintiff to the lst defendant. ii) Interest on (i) above at the rate of 20% per annum from 23rd May, 2022 to the date of judgment iii) Interest on the decretal amount at the court's rate of 7% from the date of judgment until full and final payment iv) Costs of the suit, and In addition, the plaintiff is, in terms of rule 22(2) of the High Court (Commercial Division) Procedure Rules, 2012 ordered to publish a copy of decree in at least two newspapers of wide circulation in the country within ten days from the date of this judgment. It is so ordered The right of appeal is explained Dated at Dar es Salaam this 28th day of November, 2022. A.A. Mbagwa

JUDGE 28/11/2022 7 Court: The judgment has been delivered in the presence of Catherine Tibasana, advocate for the plaintiff and in absence of the defendants on this 28th day of November, 2022. A.A. Mbagwa~

JUDGE 28/11/2022 8