eco bank tanzania limited vs benbros motors limited and 3 others 2021 tzhccomd 3318 13 august 2021

IN THE HIGH COURT OF TANZANIA (COMMERCIAL DIVISION) AT DAR ES SALAAM COMMERCIAL CASE NO. 113 OF 2018 ECOBANK TANZANIA LIMITED PLAINTIFF VERSUS BENBROS MOTORS LIMITED DEFENDANT YASSER MOHAMMED ES-HAQ 2*^° DEFENDANT NOUFAL MOHAMMED ES-HAQ 3^^ DEFENDANT YUSRA MOHAMMED ABDULLAH ES-HAQ 4™ DEFENDANT Date of Last Order: 2310612021 Date of Judgement: 13/08/2021 JUDGEMENT MAGOIGA,J. The plaintiff, ECOBANK TANZANIA LIMITED by way of plaint instituted the above suit against the above named defendants praying for judgement and decree in the following orders, namely: i. - Payment of the sum of Tanzanian Shillings-Three Hundred Eight Seven Million Six Hundred Ninety Thousand Thirty Three and Twenty Cents (TZS. 387,690,033.20) and United States Dollars Four Million Eight Hundred Ninety Nine Thousand Seven Hundred Twenty Fourj^ and Forty Two Cents (USD.4,899,724.42) as of 24^^ July, 2018 being the outstanding amount on account of Credit Faciiities; 11. Interest on the outstanding amount specified in (i) at the rate of Two percent (2%) fiat rate per month for foreign currency and Four percent(4%)fiat rate per month for local currency from the date of institution of the suit to the date of judgement; iii. An order appointing Mr. Caspar Nyika as Receiver Manager with powers to sale, lease or collect income of the assets charged under the Debenture; iv. An order appointing Mr. Caspar Nyika as Receiver Manager with powers to sale the mortgaged properties under the Mortgage Deed; V. An order against the mortgagor for eviction from the mortgaged property; vi. Interest on the decretal amount at the rate of 7% from the date of judgement until full and final payment; vii.Cost of the suit; and viii. Any other reliefs which this honourable court may deem fit and just to grant in favour of the plaintiff. Upon being served with the plaint, the defendants filed joint written statement of defence admitting the outstanding amount, on rider that same was not settled because the whole arrangement was frustrated by the dilatoriness of the plaintiff in reacting to the defendant's several requests for rescheduling of the loan and the plaintiff's refusal to release vehicles to waiting customers thus affecting the defendant's liquidity and/or ability to pay back the loan. On mortgage, the defendant alleged that the same was signed under duress and undue influence, demanding additional securities and called the plaintiff into strict proof thereof. Simultaneously, the defendants raised a counter claim against the plaintiff praying for judgement and decree in the following orders, namely: a. That the plaintiff suit be dismissed; b. A declaration that the act of the plaintiff charging the defendant arrangement fees for the year 2016 and 2017 on non-operating facility was illegal and inequitable and thus null and void; c. An order that the plaintiff reschedule the loan repayment period to spread over a period of eight years from the date of judgement after the said loan has been ascertained; d. An order that the defendant should not pay any penalty and/or interest on the principal amount; e. An order that the defendant should not pay arrangement fees on restructured facility; f. A declaration that the plaintiff's actions overall frustrated the defendant's efforts towards repaying the loan; g. The plaintiff pay the defendants' costs of and incidental to the suit and the counter claim; h. Any other relief (s) that the Honourable court will deem fit, just and equitable. The facts pertaining to this suit which are not disputed are that on 26*^"^ June, 2014, the plaintiff made available to the 1^^ defendant, inter alia, Multi Purpose Line of Credit of an amount up to United States Dollars Three Million Five Hundred Thousand (USD.3,500,000.00) for purposes of financing the importation of brand new vehicles, buses, trucks, trailers and tyres from Great Wall Motors, Sinotruck Hubei Co. Limited, Aelos Tyres Limited and Yutong Bus manufacturing Co. Limited on a secure basis. In additional to the above, on 27^^^ May, 2015 the plaintiff further made available to the 1^^ defendant a Revolving Line of Credit of United States Dollars Ten Million (USD.10,000,000.00) for purposes of securing any claims by beneficiary arising from default to borrower for the purchase of brand new Yutong buses Manufacturing Co. Limited against local purchase order. Further facts are that on 2"^ December, 2016, the 1^ defendant made an application to the plaintiff for variation of Facility Agreement 1 and Agreement 2 which was approved by extending the annual renewal to 90 days and decreasing the exposure to United States Dollars Five Million Three Hundred Twelve Thousand (USD.5,312,000.00). In addition, on 31^ March, 2017, on the 1^^ defendant's request the plaintiff renewed the existing facilities to the tune of United States Dollars Five Million (USD.5,000,000.00) only. The above three facilities were guaranteed by a debenture over the 1^*^ defendant's fixed and floating assets, joint and several personal guarantees of the 2"^, 3''^, and 4^*^ defendants and 1^ ranking legal mortgage over landed property located on Plot No.72, Mikocheni Industrial Area with CT NO.38353 and L.O. No. 91343. Interests were to be charged as agreed in the facility letters. Furthermore, the defendant defaulted in repayment of the principal sum plus interest, which act constituted an event of default under clause 24(a) (1) of the Credit facility letters and clause 10(1) of the debenture. Even efforts by the plaintiff through his lawyers to have the money repaid were in vain, hence, this suit claiming the prayers as contained in the plaint. On the other hand, the facts as to the counter claim were that in the course of business the terms of the facility letters were frustrated by the dilatoriness of the plaintiff in reacting to the 1^ defendant's several requests for rescheduling of the loan and the plaintiff's refusal to release vehicles to waiting customers thus affecting the 1^ defendant's liquidity and/or ability to pay back the loan. Also was that, the plaintiff's refusal to give an up to date statement on the loan and deliberate stall of the discussions on rescheduling. Another reason was charging of arrangement fees for renewal of loan facilities in 2016 and 2017 for facilities which did not operate for want of signature'causing unjustified charges which caused escalation of the loan amount. Further facts were that even when the plaintiff in the counter claim made efforts to get new financiers who were ready to buy out the loan and pay the plaintiff on condition that the plaintiff cause the name of the 1^ defendant be removed from the BOT list of non performing debtors in order for new financiers to take the matter they were unreasonably refused by not responding even after six months causing the interested financiers to drop the idea. These, according to the plaintiff in the counter claim, caused her to suffer serious trading losses, hence, this counter claim claiming the prayers as contained in the written statement of defence. The plaintiff at all material time has been enjoying the legal services of Samah Salah, learned advocate from IMMMA Advocates, while the defendants have been enjoying the legal services of Messrs. Pascal Kamara and Roma Lamwai, learned advocates. Before hearing started the following issues were framed and agreed between parties for the determination of this suit, namely: 1. Whether the terms of payment of the three facility agreements were frustrated by the plaintiff and in what way; 2. Whether the plaintiff created in the mind of the defendant that it was willing to reschedule the payments of the debt; and if yes, whether the plaintiff is stopped from denying that. 3. Whether there was an agreement to reschedule the loan; and if yes, did the defendant meet the agreed terms; 4. Whether the defendant executed the mortgage on Plot No.72 Mikocheni Industrial area with CT No. 38353 LO. 91343 under duress and undue influence by the plaintiff; 5. Whether the request to issue a mortgage as security was unjustifiable in law and equity; 6. Whether the plaintiff illegally charged penalties and/or arrangement fees on the loan 7. To what reliefs parties are entitled to? In proof of the suit, the plaintiff called one witness Mr. EMMANUEL JAMES SHAYO (to be referred herein in these proceedings as 'PWl'). PWl under oath and through his witness statement adopted in these proceedings as his testimony in chief told the court that, he is the Local Accountant of the plaintiff and is aware that the 1^ defendant was a customer of the plaintiff and the 2"^, 3""^, and 4^^ defendants were the guarantors of the 1^*^ defendant in credit facility letters granted to the 1^^ defendant. According to PWl, on 26'^'^ June, 2014, the 1^ defendant was granted by the plaintiff a Multipurpose Line of Credit of an amount up to United States Dollars Three Million Five Hundred Thousand (USD.3,500,000.00) for purposes of financing the importation of brand new vehicles, buses, trucks, trailers and tyres from Great Wall Motors, Sinotruck Hubei Co. Limited, Aelos Tyres Co. Limited and Yutong Manufacturing Co. Limited on secured basis. Further testimony of PWl was that on 27^"^ May, 2015 the plaintiff made available to the 1^*^ defendant a Revolving Line of Credit of United States Dollars Ten Million (USD.10,000,000.00) for the purposes of securing any claims by the beneficiary arising from default by the borrower for purchase of brand new Yutong buses from Yutong Bus Manufacturing Co. Limited against local purchase order. PWl went on to tell the court that, on 2"^ December, 2016 following the 1^^ defendant's application the two facilities were varied to extend the annual renewal period of 90 days and decreasing the exposure to United State Dollars Five Million Three Hundred Twelve thousand (USD.5,312,000.00). PWl told the court that, upon the defendant's request again the plaintiff renewed the existing facilities to the tune of United State Dollars Five Million only (USD.5,000,000.00). PWl further told the court that the terms of the facility agreements were that: a. The facilities were to be secured by a debenture over defendant's fixed and floating assets, joint and several personal guarantees of the 2"^, and 4^^ defendants and ranking legal mortgage over land property located on Plot No 72 Mikocheni Industrial Area with CT NO. 38353 and L.O. no. 91343 which was made by 1^ defendant on its own free will and consent as security to secure the 1^ defendant indebtedness; b. The interest on Facility Agreement 1 and 2 will be charged at both prevailing currencies; c. Foreign currency Base Line Lending Rate which was 10% minus 2.5 meaning at 7.5 per annum and local currency Base Line Lending Rate which was 22% minus 3% meaning at 19% per annum and that Facility Agreement 3 will be charged at the Bank of Tanzania prevailing currencies that is foreign currency Base Line Lending Rate which was USD10% per annum and local currency Base Line Lending Rate which was 22% minus 2% meaning at 20% per annum; d. The interest payable under the Facility Agreement will be calculated on the basis of 365 days and will be subjected to review from time to time in line with prevailing market conditions; 10 e. All payments to the plaintiff will be made free and clear of all present and future taxes and deductions. PWl went on with his testimony by telling the court that, in addition to the terms, the defendant agreed to pay arrangement fee up front upon presentation of the plaintiff's offer, fee per quarter which was non- refundable and payable upon executing the credit facility. PWl told the court that on 28^^ May, 2018 the mortgage was varied in order to extend further facilities issued to the 1^*^ defendant on the old terms which were binding on parties. Further testimony of PWl was that on 30^^ September, 2014 and 30^*^ April 2017, the 2"^ , 3^^^, and 4^"^ defendants executed personal guarantees to guarantee the obligations and liabilities of 1^ defendant and agreeing to pay on demand all money, obligations and liabilities of the 1^ defendant among others. According to PWl, the 1^ defendant failed to meet its obligations under the facilities and the plaintiff in good faith in various meetings which the 1^ defendant raised concerns on the operations of the facilities and discussed repayment plans but which were not feasible and the plaintiff had no option 11 but to reject request for restructuring due to insufficient cash flow to support the restructuring and insufficient security proposal. PWl went on to tell the court that, following defendant's default the plaintiff issued various demand letters informing of the default and sought payment of the outstanding loans which kept on accruing penalties and interest on daily basis. Not only that, but PWl further told the court that, the plaintiff issued statutory notices in relation to mortgage requiring the mortgagor to remedy the situation otherwise the plaintiff will exercise the remedies provided for under the Land Act, 1999. According to PWl, despite all notices issued the defendant failed and/or neglected to pay the outstanding amount due which as of 24^^ July, 2018 stood at TZS.4,899,727.42 in account number 0021015401509201 and TZS.387,690,033.20 on account number 002001540150920 as indicated in the bank statement. On the basis of the above testimony, PWl prayed that this court be pleased to enter judgement and decree against all defendants as prayed in the plaint. 12 In proof of the above facts, PWl tendered in evidence the foiiowing exhibits, nameiy: 1. Gertificate of authenticity of printer out of Bank Statements as exhibit PI; 2. Credit Faciiity Letter dated 27/6/2014 and a board resolution dated 25/8/2014 collectiveiy as exhibit P2a-b; 3. Credit facility Letter dated 27/05/2015 and a board resolution dated 28/05/2015 collectively as exhibit P3a-b; 4. Variation of Credit Faciiity Letter dated 06/06/2016, variation of credit resolution dated 2/12/2016 and Board Resolution dated 02/12/2016 collectively as exhibit P4a-d; 5. Banking Credit facility Letter dated 31/03/2017 as exhibit P5; 6. Fixed and Floating Debenture dated 29/10/2014 and certificate of Registration of Charge dated 26/11/2014 collectively as exhibit P6a- b; 7. Two demand letters dated 05/07/2018 marked collectively as exhibit P7a-b; 8. Demand notices dated 05/07/2018 to Yasser Mohammed Es-Haq as exhibit PS; 13 9. Personal Guarantee and indemnity of Noufai Mohammed Es-Haq dated 30/09/2014, Personal Guarantee of Yasser Mohammed Es-Haq dated 30/09/2014 and that of Yusra Mohammed Es-Haq dated 14/04/2017 are collectively admitted in evidence as exhibit P9a-c; 10. Legal mortgage Deed and its certificate dated 29/10/2016 as exhibit PlOa-b; 11. First Deed of mortgage variation dated 28/05/2015 as exhibit Pll; 12. Notice to pay from the plaintiff to the borrower dated 20/12/2017 as exhibit P12; 13. Letter dated 11/06/2018 for analysis of outstanding loan to the 1^ defendant as exhibit P13; 14. Letters dated 05/01/2018, 08/01/2018 and 23/04/2018 between plaintiff and defendants were collectively admitted as exhibit P14a-c; 15. Bank statement in the name of the 1^*^- defendant No.0021015401509201 in USD currency and NO. 0021015401509201 in TZS were collectively admitted as exhibit P15a-b. Under cross examination by Mr. Kamara, PWl told the court that, the unpaid balance was USD. 4,791,125.57 and TZS.375,828,275.04. According to PWl, 14 the dollar account default started in June, 2017 and on TZS started in August 2017. Pressed with questions, PWl told the court that the loans are in written off status which is done after one year. PWl insisted that a written off account is charged of interest and the process is internal control of the bank and not client. PWl went on to tell the court that, whenever a client raises an issue, the bank is entitled to give him a right to be heard. PWl admitted when they were asked to release the motor vehicles they refused because no payments were done. Under cross examination by Mr. Lamwai, PWl told the court that, the agreements were for the bank to offer letter of credit for payment of new buses from Ghina-Yutong make. PWl insisted the bank gave the money as agreed. Pressed with questions, PWl was able to tell the court that, the plaintiff disbursed the money in USD.3,500,000.00 on different dates as indicated in Bank Statement. PWl told the court that, later the loan became a non performing loan. Pressed with more questions, PWl told the court that, in the mortgage no amount is shown and that the security was on Plot No.72 Mikocheni Industrial Area owned by 1^ defendant which was in 2014 valued at TZS.4,632,000,000.00 and its force value was TZS.3,472,000,000.00. PWl went on to tell the court that there were other 15 securities as well. Exhibit Pll was for variation and the money advanced was USD. 13,000,000.00. and personal guarantee was another security which was also guaranteed to the whole amount. According to PWl, no guarantor was discharged and all guarantors accepted the variation and signed a deed of variation. PWl told the court that, exhibit P14c was written after the 1^*^ defendant removed the buses without the bank's consent. The meetings were orally discussed and not minutes were written down. According to PWl, non- performing loan started in 10/07/2017 after 90 days without any payment. Pressed with question on guarantorship of Yusra, PWl admitted that, in exhibit P2 she was not mentioned but was quick to point out that, in other documents she was a guarantor and she has never been discharged unless all money is paid in full. PWl insisted that, all guarantors were served with notices on 21/12/2017. Under re-examination by Ms. Salah, PWl told the court that, personal guarantee regulates the relationship between the borrower and the guarantor. Non-performing loans do not exonerate the borrower from paying the loan, interest and penalties. 16 This marked the end of hearing of plaintiff case and same was marked closed. In defence, the defendants were defended by Mr. MOHAMMED ABDULLAH AHMED ES-HAQ ( to be referred in these proceedings as 'DWl'). DWl under affirmation and through his witness statement adopted in these proceedings as his testimony in chief told the court that, he is the chairman of the defendant and has been authorized to testify for all defendants. DWl went on to tell the court that, it is true they entered into credit facility agreements with the plaintiff and that the 2"^, and 4^"^ defendants were guarantors for the said facilities. DWl admitted that, he does not dispute that the payments were overdue but the non-payment was attributed by the plaintiff who frustrated the performance of the contracts for failure to allow restructuring of the loan due as to adverse business conditions that existed. According to DWl, in the course of discussion, the officers of the plaintiff indicated that, restructuring was possible because the defendant explained of the business environments that existed. The situation forced the 1^^ defendant to ask for another loan of USD.800,000,000.000 to enable it to carry on business but same was not approved. 17 Further testimony of DWl was that, at times, the defendant got customers who were ready to pay for the buses which were under control of the plaintiff, but the plaintiff flatly refused. Also was the testimony of DWl that, there were other banks that, were willing to purchase the loan from the plaintiff but the plaintiff refused, frustrating the efforts by the 1^^ defendant to have the money paid back. DWl went to testify that in oral discussions, the officer of the plaintiff by the name Mwanahiba Mohamed Mzee promised orally that, if the defendant deposited into their account an amount of USD214,000,000.00 then she will allow restructuring and the same amount was deposited on 22"^ January 2018 and 31^ January 2018 but still no restructuring was allowed. DWl told the court that, while negotiations were on, the plaintiff went on charging high rates of interests at the rate of 46% and 34% on USD and TZS respectively which rates were unjustifiable both in law and equity. Not only that, but DWl told the court that, at ail material time the plaintiff never informed the 2"^^, 3''^, and 4^"^ defendants of the 1^ defendant's failure to pay the loan and there is no way they could have taken any measure to remedy the situation. DWl went on to tell the court that even securities demanded were inequitably in excess of the loans given and that the landed properties 18 that were mortgaged had higher value than the loan taken making the loan over secured. On the foregoing, DWl urged this court to find that, the plaintiff Is stopped from denying that the arrangement fees was In respect of rescheduling of the loans and the Impression the defendant had Is correct Impression In the circumstances. Further testimony of DWl was that, even the efforts by the 1^ defendant to secure other financiers ready to buy the loans such as Azania Bank, Equity Bank and CRDB Bank were frustrated by the plaintiff. Not only that but also that the plaintiff as well failed to give In time the exact Indebtedness of the 1^ defendant leading to the 1^*^ defendant falling to know exactly the extent of Indebtedness. According to DWl, dilatory actions by the plaintiff caused serious damages to the 1^ defendant's business by jeopardizing the 1^ defendant business with Its customers for failure to deliver the vehicles that were supposed to be delivered to the customers causing them to deal with suppliers directly. DWl told the court that, the 2"^ defendant (Yasser Mohammed Es-Haq ceased to be the shareholder and director of the 1^ defendant upon advice 19 of the plaintiff that he could not have acted as guarantor nor director or shareholder in two sister companies which are the defendant and Unifreight Tanzania Limited which all had facility with the plaintiff. On the foregoing reasons, DWl prayed and urged this court to dismiss the instant suit and grant judgement and decree in favour of the plaintiff in the counter claim. In proof of their case, DWl tendered the following exhibits, namely: 1. An affidavit to authenticate emails admitted collectively as exhibit Dla-d; 2. Bank statement with account No. 0021015401509201 as exhibit D2. Under cross examination by Ms. Salah, Dwl told the court that, they admit they are indebted to the bank. DWl pressed with question admitted that, at first Yasser and NOufal Mohammed Es-Haq were guarantors but were later removed and email communication was sent to the plaintiff. The email is exhibit Did. DWl when asked if he has document from BRELA to prove their removal admitted to have no such a document and no document to prove restructuring. 20 DWl when shown exhibit 14c and asked to read paragraph 3 admitted that no restructuring was allowed because they did not meet their expectations/conditions. DWl told the court that, CRDB had an intention to take up the plot but he had no document to prove that in court. DWl pressed with more questions admitted that they were aware of the unpaid balance. Under re-examination by Mr. Kamara DWl admitted the debt of USD.2,800,000.00. There was a promise to restructure which triggered payment of USD.214,000.00 but they refused to release motor vehicles. DWl admitted that the last payment was that of USD.214,000.00 because they disputed the interest and asked same to be removed. Asked by the court for clarification on the balance unpaid according to exhibit D2, Dwl said the balance is USD.4,276,628.57 and was quick to say the amount raised because of unjustified interest. This marked the end of hearing of defence case and same was marked closed. The learned advocates for parties prayed to exercise their rights under Rule 66(1) of this Court's Rules to file final closing submissions. I granted the 21 prayer, r express my sincere gratitude to them for their industrious input on the matter. I will, in the course of answering issues, consider them but will not be able to produce them verbatim but it suffices to say the same were well taken in determining this suit. However, before going into issues from the pleadings and testimonies of the respective witnesses for parties' and exhibits tendered in this suit, there are some of the facts which are not in dispute. I find it imperative to state them because will help this court in answering issues in respect of this legal dispute. These are; one, there is no dispute that, the defendant was availed with a Multipurpose Line of credit of USD.3,500,000.00, Revolving Line of Credit of USD.10,000,000.00 which same were varied in 2016 and exposure was USD.13,000,000.00. Two, there is no dispute that, the said credit facilities were secured by debenture on fixed floating charge by the 1^ defendant, personal guarantee by the 2"^ to 4^^ defendants and legal mortgage over Plot Nd.72 Mikocheni, Industrial Area, with C.T.No.38353. Three, there is no dispute as well that the 1^ defendant defaulted in its obligations under the facilities. However, in the circumstances, what is in serious dispute between parties is what caused the 1^ defendant to fail to meet her obligations under the 22 facilities and to what tune because DWl admitted only the amount of USD.2,900,000.00. That being in mind, is high time to answer the issues now. The first issue was couched that "whether the terms of payment of the three facilities agreements were frustrated by the plaintiff and in what way?" While the defendant's counsel is of the strong submissions that, the plaintiff caused and frustrated the defendant's efforts to restructure the loan facilities due economic hardships, on the other hand the piaintiff's counsel has disputed those allegations and to her since there was consensus arrived out of those communications, no way it can be said so and no proof was put forward to prove how the plaintiff caused any frustrations as alleged. Having dispassionateiy considered this issue right from the pleadings, testimonies of the parties, exhibits tendered and finai closing rivaiing submissions, I am inciined to answer this issue in the negative. The reasons why I am taking this stance are not far-fetched. One, the defendant's allegations of frustration were based on email communications (exhibit Dlb) and letter dated 16^*^ April, 2018 (exhibit Die). But carefui perusal of exhibits P14a, exhibit P14b and exhibit P14c answers and negate ail the efforts of 23 the defendant which did not meet the terms as set by the plaintiff, which terms the bank thought were necessary for a defaulter who was requesting more funding. In exhibit P14c the plaintiff gave the reasons why they declined the restructuring proposal as insufficient cash flow to support restructuring, insufficient proposed additional security for term lending, un authorized release of nine buses without the bank's consent, inability to demonstrate authenticity of TZS.5 billion and non-response to several emails. Exhibit P14c was not replied to by the defendant and there is no proof that he rectified the short comings noted. In the circumstances, it cannot justifiably be said that, the plaintiff frustrated the exercise. Two, one of the reasons given by the defendant was that the plaintiff frustrated the exercise of other financiers to take over the loan due but apart from mentioning of CRDB Bank and Equity Bank nothing was tendered to substantiate the allegations of those financiers willingness to take up the matter nor was any witness from those banks produced to support his allegations. In the absence of such evidence, there is no way it can be conclusively be concluded that, the plaintiff in any way frustrated any efforts of payment. 24 In the totality of the above reasons, the first issue must be and is hereby answered in the negative that, in on way the plaintiff frustrated the terms of payment in the facilities availed to the defendant. This takes this court to the 2"^ issues which was couched that ^whether the plaintiff created in the minds of the defendants that they were willing to restructure the payment of the debt and if yes whether the plaintiff is stopped from denying that?' The learned counsel for the plaintiff had it that no agreement was concluded between parties on restructuring, to bind the parties and as such no way the defendants can invoke the estoppels principle against the plaintiff to deny to have reached a consensus. According to Ms. Salah, the issue ended at proposal and counter proposal level as evidenced in exhibit P14. On the other part of the defendants, it was the strong submissions of the learned counsel for defendants that, since in the course of negotiations, the plaintiff charged arrangement tees for restructuring on 23/05/2017 " to the tune of USD.16,000.00 and USD.65,000.00 on 29/05/2017 and further on 22/01/2018 the defendant deposited the sum of USD.216,000.00 as upfront payment to pave way for restructuring and as such the plaintiff is to stopped from denying because he made the 1"^ defendant to be believe so and acted 25 on that believe. In support of his stance, the learned advocate for the defendants cited section 123 of the Tanzania Evidence Act,[Cap 6 R.E.2019] and cited several cases on the point. Having dispassionately considered the rivaling arguments of the learned advocates for the parties, the pleadings and exhibits tendered in support of this issue, in particular, the money alleged to be arrangement fees as exhibited in exhibit P15a and exhibit D2, and I have noted that, the deposit that was done on 22"^ January, 2018 was payment for oil supply supplied by Global Oil Limited and the cash deposit done on 31^*^ January, 2018 cannot be said to constituted a promise to apply the principal of estoppel because it was not the only condition that was to be performed by the 1^ defendant and in any way the obligations to pay was there. In my considered opinion, the payment, if any, was to go with other terms to make the principle of estoppels to come into force. The circumstances of this suit, is not one to apply the principle. While I appreciate the arguments by the "learned advocate for the defendants and the relevant law as cited and case law but the circumstances of this case do not convince to hold otherwise and are distinguishable. 26 As to the fees that was paid on 23/05/2017 to the tune of USD.16,000.00 as arrangement fee, the defendant in the counter claim, in her written statement of defence to the counter claim at paragraph 3 stated that the same was fees for variations of the loans that was done in 2016 and that in the facility letter dated 31^ March, 2017, the 1^*^ defendant agreed to pay an arrangement fee up front non-refundable payment on execution of the credit facility letter. These facts in paragraph 3 were not disputed nor replied by the defendants because after being served with the written statement of defence to the counter claim and when the suit was called on 26/11/2018 the learned advocate for the plaintiff in the counter claim told the court as follows: " Mr. Pongole- the defendants do not wish to file any reply to plaintiff's WDS to the counter claim. I pray for PTC." Failure to reply to the above paragraph 3 by the plaintiff in the counter claim was clear admission that what the defendant in the counter claim stated is true and was not an issue. So, if any, it is the defendants (plaintiff in the counter claim) who are stopped from denying that the money was not what they are alleging and the plaintiff (defendant in the counter claim) failure to cross examine was attributed to the fact that, it was admitted facts. (0\ 27 In the totality of the above reasons, I hereby answer issue number two the negative. Next is issue number 3 which was couched thus "whether there was an agreement to reschedule the loan, and if yes, whether the defendant met the agreed terms/' This issue will not detain this court much based on reasons I gave when dealing with the issue in this suit. The plaintiff's learned counsel had it that, there is nothing on record to establish any contract because exhibit P14b dated 8^*^ January, 2018 the defendants were requesting for rescheduling and exhibit P14c reply thereto was rejecting the prayer for restructuring for reasons as contained therein. On the part of the defendants, the learned counsel argued that by contents of exhibit Dlb then there is evidence that there was agreement by her complying with the terms. Having gone through testimony of the parties' and having read the exhibits tendered, I with respect to the learned advocate defendant, pray to associate myself with the plaintiff's counsel that there is nothing on record to establish any contract as alleged. On that note issue number three is answered in the negative. 28 This trickles to issue number 4 which was couched thus ^'whether the defendant executed mortgage deed on plot number 72 Mikocheni Industrial Area with CT.No.38353 under any duress?" The defendants' learned counsel had nothing to submit on this issue because no evidence was led to amplify it. While the learned counsel for plaintiff had it that, these serious allegations were not proved and are baseless. Having followed this issue from the pleadings of the parties, testimonies of their respective witnesses and final closing submissions, I am inclined to answer this issue in the negative. My reasons for taking such stance are not far-fetched. One, the defendant is the one who alleged duress and according to sections 110 and 112 of the Tanzania Evidence Act, [Cap 11 R.E.2019] as rightly argued by the learned counsel for plaintiff and rightly so in my own opinion, the burden to prove duress lied on them. This was not done. Two, the admission by the learned advocate for the defendants that, they have nothing to submit on this issue, is no more thanThat nothing was put forward to prove this issue. On the foregoing, the fourth issue is answered in the negative that, 1^ defendant executed mortgage on Plot No.72 Mikocheni Industrial Area without duress. 29 Next is issue number five couched thus "whether request to issue a mortgage as security was unjustifiable both in law and equity?" The defendant's counsel argued that in the restructure negotiations, the plaintiff, among other things, refused to restructure the loan because, the legal mortgage security had more value than the loan in dispute by more than 125% as required by BOT but unjustifiably the plaintiff demanded additional security. According to the learned counsel for the defendants, this was an unjustifiable request and was intended to frustrate the process because the same security covered USD.10,000,000.00 and queried why it was not possible to secure a loan of USD.2,800,000. On the other hand, the learned advocate for the plaintiff strongly submitted that, the defendant had burden of proof to prove his allegations but has miserably failed and urged the court find this allegations unproved. Having gone through the pleadings, testimony of the parties' respective witness, exhibits tendered and final written submissions, on the "same reasons given in issue number 4 above, this issue without much ado must be and is hereby found wanting of evidence from the defendants as such has to fail and be answered in the negative. 30 This takes me to issue number six which was couched thus "whether the plaintiff illegally charged penalties and or arrangement fees on the loans?" The plaintiff counsel again attacked the defendants' argument as unsubstantiated and concluded that the said allegation were not proved as required by law and penalties, if any, were charged as per the facility letters. On the other hand, the defendants counsel repeated the arguments in respect of issue number three. Having heard and carefully considered ail that was pleaded testified and submitted, on the reasons as to that I gave in issue number three, I unreservedly find this issue unproved and same is hereby answered in the negative. The last and usual issue was "to what reliefs parties are entitled." The defendants claimed several reliefs as contained in the counter claim against the plaintiff in the main suit. However, based on my findings in issues above the counter claim must be and is hereby dismissed. On the other hand, the plaintiff claimed several reliefs as contained in the plaint and upon finding that there is no dispute on the loan advanced, I find the plaintiff has proved her case to the standard required in civil cases entitling her a judgement and decree in her favour as follows: 31 i. The defendants are ordered pay of the sum of Tanzanian Shillings Three Hundred Eight Seven Million Six Hundred Ninety Thousand Thirty Three and Twenty Cents (TZS. 387,690,033.20) and United States Dollars Four Million Eight Hundred Ninety Nine Thousand Seven Hundred Twenty Four and Forty Two Cents (USD.4,899,724.42) as of 24^*^ July, 2018 being the outstanding amount on account of Credit Facilities within three months from the date of this judgement; ii. Defendants are ordered to pay interest on the outstanding amount specified in (i) at the rate of Two percent(2%) flat rate per month for foreign currency and Four percent(4%) fiat rate per month for local currency from the date of institution of the suit to the date of judgement; iii. The court further grant interest on the decretal amount at the rate of . 7% from the date of judgement until full and final payment; iv. Failure to pay the amount as adjudged in item (i), (ii) and (iii) above, this court hereby appoints Mr. Caspar Nyika as Receiver Manager with powers to sale, lease or collect income of the assets charged under the Debenture; 32 V. Further this courts appoints Mr. Caspar Nyika as Receiver Manager with powers to sale the mortgaged properties under the Mortgage Deed; vi. In exercise of the powers by Mr. Nylka, this court equally order eviction against the mortgagor from the mortgaged property; That said and done, the suit must be and is hereby allowed as prayed in the plaint with costs. It is so ordered. Date at Dar es Salaam this 13^^ day of August, 2021. o Ui X z > ★ ★ S.M.MAGOIGA JUDGE ISC/AL^ 13.08.2021 33