batilda salha burian vs equity bank tanzania limited 2021 tzhc 6262 30 august 2021

IN THE HIGH COURT OF TANZANIA (DAR ES SALAAM DISTRICT REGISTRY) AT DAR ES SALAAM CIVIL CASE NO. 169 OF 2019 DR. BATILDA SALHA BURIAN................................................ PLAINTIFF VERSUS EQUITY BANK TANZANIA LIMITED............... .....................DEFENDANT JUDGMENT Date of Last Order: 9/08/2021 Date of Judgment: 30/08/2021 E. B. LUVANDA, J. Dr. Batilda Salha Burian, plaintiff to the main suit sued Equity Bank Tanzania Limited the defendant to the main suit, faulting the demand notice on the ground that the defendant is in breach of the contract for fraudulently increasing the principal amount of the loan (from Tsh 356,000,000 to 416,672,572) instead of reducing as agreed that quarterly installments could pay half principal sum and half interest, instead the defendant willfully made all repayments on interest alone. By way of counter claim, the plaintiff to the counter claim (defendant to the main suit) claims against the defendant to the counter claim (plaintiff to the main suit) a sum of Tsh 423,677,766.70 as outstanding credit facilities plus interest, for a consolidated credit facility a sum of Tsh 356,000,000/= granted to the defendant (plaintiff in the main suit) in the year 2014. The plaintiff was under the service of Mr. Charles Alex, Esq. learned Counsel and the defendant was represented by Mr. Karoli Valerian Tarimo learned Advocate. Agreed issues are: one, whether the defendant has breached the terms of the loan agreement; two, whether the defendant in the counter claim is indebted to the plaintiff in the counter claim; three, if the second issue is on the affirmative, to what extent; finally, to what reliefs are the parties entitled to. For the first issue, Dr. Batilda Salha Burian (PW1) was suggesting that the defendant is in breach of the loan agreement (which was tendered by the defendant as exhibit D1 being the loan facility for Tsh 250,000,000 dated 22/5/2012; exhibit D3 being offer of credit (consolidation) of Tsh 345,420,000 dated 6/8/2014; exhibit D4 being development loan facility (rescheduling) Tsh 390,000,000 dated 21/6/2018), on explanation that it was agreed that an amount of quarterly instalment payable by the plaintiff could reduce half of the principal loan and half interest, but to the contrary the defendant merely used it to cover interest alone making the loan unpayable. The plaintiff explained that to her computation she has discharged the whole loan as she paid a total of Tsh 625,526,124.35. But the plaintiff did not tender any document to substantiate her allegation, neither tendered a bank statement nor pay in slip to depict that figure. The plaintiff did not single out a clause in the loan facility or offer of credit which provide that the instalment or quarterly instalments will service the principal loan and interest on fifty-fifty basis. However, when she was put to task on cross examination, she said that those were deliberation during the negotiation and she don't know if the agreement she signed provide for half interest and half principal. On cross examination of defence witness number one, the learned Counsel for plaintiff referred him to read clause two of exhibit D4. However, the said clause is silence as to the issue of fifty-fifty on principal and interest. Therefore, that was a theory which was unilaterally contemplated by the plaintiff alone and which was not part of the terms and condition of the offer of credit or loan facility. Be as it may, it was the evidence of Protas Mwalongo (DW1), that the plaintiff paid smoothly for two years after disbursement. In December 2916 the plaintiff requested for extension of time on the explanation that her employment ceased, where payment of a loan of Tsh 363,000,000 was extended up to twenty years and interest reduced up to 17% from initial interest of 23%. She defaulted, where the bank issued demand and default notice. She resurfaced and requested for restructuring and substitution of security which was heeded by the bank via exhibit D4. But still she defaulted, hence the bank issued a demand notice exhibit D7 and notice of default exhibit D8. According to DW1, nowhere the agreement says the customer will pay 50% principal and 50% interest, only that in case the customer default, the system will start to deduct penalty and if she doesn't default the system deduct principal and interest. Now as much, a fact that the plaintiff was on default here and there, only paid smoothly two preceding years, was not contested, it is taken as a correct position that the debt by the plaintiff was ultimately seen to be unpayable because of her default and failure to honour her obligation as per the terms of the credit facility or loan facility. On another development, PW1 explained to had engaged a consultancy of loans and banking Mr. Mrosso from Ms. Afic who prepared an initial report (exhibit PI) and promised to summon him to explain on it, in vain. Indeed, PW1 conceded that exhibit PI was not signed and does not show the author, even Ms. Afic is not reflected therein. As such exhibit PI is ignored and accorded no weight whatsoever. Therefore, the defendant was not on breach of the offer of credit facility or loan facility, rather the breach was orchestrated by the plaintiff who failed to honour her obligation as depicted above. Therefore, the first issue is ruled in the negative. Issue number two, whether the defendant in the counter claim is indebted to the plaintiff in the counter claim. As stated above, DW1 testified that the defendant (plaintiff to the main suit) paid smoothly for two years, in December 2916 she requested for extension of time on the explanation that her employment ceased, where payment of a loan of Tsh 363,000,000 was extended up to twenty years and interest reduced up to 17% from 23%. She defaulted again. After the bank issued demand and default notice, she resurfaced and requested for restructuring and substitution of security which was heeded by the bank via exhibit D4 (rescheduling of loan facility) and exhibit D5 (mortgage of right of occupancy dated 7/8/2018). But still she defaulted once again. According to the notice of default exhibit D8, reveal that the defendant to the counter claim was indebted a sum of Tsh 415,684,722.68 as of 20/6/2019 which continued to accrue interest on daily basis. This can be evidenced by a statement of account exhibit D9, which reveal that up to 5/10/2019 a grand total accrued to Tsh 423,677,766.70. An explanation by the defendant to the counter claim that she discharged the whole loan, cannot be entertained, as she was merely alleging without proof whatsoever. That said, I rule that the defendant to a counter claim is indebted a sum of Tsh. 423,677,766.70. 4 The defendant-counter claim (plaintiff to the main suit) is therefore held liable to pay the plaintiff-counter claim (defendant main suit) a sum of Tsh 423,677,766.70 or in continued default, the defendant-counter claim (plaintiff to the main suit) property mortgaged via exhibit D5 to secure the loan to wit property described under certificate of title No. 46346, plot No. 620, Block "F", Ununio, Kinondoni Municipality land Office No. 166825, to be auctioned for purpose of liquidating the outstanding sum depicted herein. 5 Date: 30/08/2021 Coram Hon. J. E. Fovo - DR For the Plaintiff: Absent For the Defendant: Ms. Victoria Gregory Advocated B/C: Swalehe Court: Judgement delivered at chamber court