a7 MX M464N 20240716 163906

THE UNITED REPUBLIC OF TANZANIA

JUDICIARY

IN THE HIGH COURT OF TANZANIA MBEYA SUB- REGISTRY

AT MBEYA LAND EXECUTION NO. 28488 OF 2023 (Originating from Bill of Cost No. 11 of2023 of the High Court of Tanzania at Mbeya) NDIMYAKE MPUNJI................................................................ DECREE HOLDER

VERSUS NATIONAL BANK OF COMMERCE LTD.............................. JUDGMENT DEBTOR

RULING Date of hearing: 22/03/2024 Date of ruling:16/07/2024 NDUNGURU, J. This is an application for execution of decree by the decree holder Ndimyake Mpunji against the National Bank of Commerce Ltd, Judgment Debtor. The application is made under Order XXI rule 12 of the Civil Procedure Code, the applicant requests the assistance of this court to order arrest and detention of managing director of the judgment debtor, one Asia Omari Mselemu as civil prisoner for failure to pay the decree holder Tsh. 1,844,000/= arising in Bill of Costs No. 11 of 2023 of the high court of Tanzania at Mbeya. i When the application was served to judgment debtor, Africa Mazoea, counsel for judgment debtor sworn an affidavit to show cause why execution should not proceed. It is narrated that decree holder successfully sued the judgment debtor in the District Land and Housing Tribunal for Mbeya. Aggrieved, the judgment debtor file in this court Land Appeal No. 55 of 2022 which was adjudged time barred and dismissed with cost. Amused by the dismissal of the appeal, the judgment debtor has filed notice of appeal to the Court of Appeal but yet to file the appeal itself as some formalities has not been completed. While awaiting to file the appeal, the decree holder has applied for execution on costs he was awarded. It is averred that execution should not proceed as it will render the intended appeal

nugatory. When the matter came on for hearing, the decree holder was represented by Ms. Joyce Kasebwa, learned counsel and the judgment debtor had service of Ms. Prisca Nchimbi, also learned counsel. Counsel for the judgment debtor was the first to take floor based on filed affidavit to show cause. In her submission, Ms. Nchimbi argued that execution proceeding originate in Bill of Costs No. 11 of 2023 of Land Appeal No. 55 of 2022. They have been granted leave to appeal and it is 2 the law that the high court ceases to have jurisdiction upon notice of appeal being filed in the court of appeal. That so long as the judgment debtor intend to challenge costs awarded it is prudent to wait execution of awarded costs until determination of the appeal at the Court of Appeal. It was further submitted that there is litany of authority to the effect that it is prudent to stay execution in the high court in situation when the judgment debtor is finalizing appeal process. On order to arrest and detain managing director, it was submitted Asia Omari Mselemu was not the managing director of the judgment debtor but a branch manager. Replying to the above, Ms. Kasebwa submitted that it was not true that the court cease to have jurisdiction once the appeal is filed to the Court of Appeal and no authority was cited. Counsel argued that it can only be done when there is stay order of the court.

That there was no law prohibiting the court to continue with execution and cannot be stayed by words of the counsel from the bar. Ms. Kasebwa went on to state that the execution emanates from bill of cost and not main case, making it not possible to stay. 3 On whether branch manage has to be arrested as sought, counsel for the decree holder submitted that there was no averment in the affidavit as who was to be arrested and detained rather statement from the bar. Thus, prayed execution to proceed. I have considered the application form, affidavit to show cause together with oral submission of counsels. The issue for my determination is whether the judgment debtor has shown cause for execution not to proceed. In the submission Ms. Nchimbi has submitted that this court has no jurisdiction as there is notice of appeal filed to the Court of Appeal, adversely Ms. Kasebwa stated there was no law prohibiting execution. Without taking much time on this issue, Mr. Kasebwa is right that the law does not bar execution to continue when there is appeal. This is well stated under order XXXIX rule 5(1) of the Civil Procedure Code [ Cap 33 R: E 2019], it provides; '5(1) An appeal shall not operate as a stay of proceedings under a decree or order appealed from except so far as the Court may order, nor shall execution of a decree be stayed by reason only of an appeal having been preferred from

the decree but the Court 4 may, for sufficient cause, order the stay of execution of such decree/ The above provision is clear that an appeal and if I may add mere presence of notice of appeal is not bar to execution. The court can only stop to grant execution order on two grounds, namely, by satisfaction of the decree or order staying the execution by the court of competent jurisdiction. Even assuming counsel for the judgment debtor is right though not, the prayer to stay in circumstance of this case has to be made to the Court of Appeal and not this court. Furthermore, although it is not clear in the affidavit but what is discerned the applicant has filed notice od appeal in respect of Land Appeal No. 55 of 2022 and not Bill of Cost No. 11 of 2023 subject of this application. I therefore reject the invitation. As to whether the court should grant execution in the mode sought, it has to be noted that execution by arrest and detention as civil prisoner is provided under sections 42 to 47 and rules 28, 35 to 39 of Order XXI of the CPC. Order XXI Rule 28 provides that; "Every decree for payment of money including a decree for payment of money as alternative to some other reliefs, may be executed by detention as civil prisoner of the judgment debtor or by the attachment and sale of his property, or by both.' 5 Committing judgment debtor as a civil prisoner is subject to

conditions and limitation set under rule 39(2) of Order XXI, it provides; '39(2) Before making an order under sub-rule (1), the court may take into consideration any allegation of the decree holder touching any of the following matters, nameiy- (a) the decree being for a sum for which the judgment debtor was bound in any fiduciary capacity to account; (b) the transfer, concealment or removal by the judgment debtor of any part of his property after the date of the institution of the suit in which the decree was passed, or the commission by him after that date of any other act of bad faith in relation to his property, with the object or effect of obstructing or delaying the decreeholder in the execution of the decree; (c) any undue preference given by the judgment debtor to any of his other creditors; (d) refusal or neglect on the part of the judgment debtor to pay the amount of the decree or some part thereof when he has, or since the date of the decree has had, the means of paying it; (e) the likelihood of the judgment debtor absconding or leaving the jurisdiction of the court with the object or effect of obstructing or delaying the decree-holder in the execution of the decree.' 6 [See also; Grand Alliance Limited vs Mr. Wilfred Lucas Tarimo & Others, Civil Application No. 229 of 2020 [2022] TZCA 541 (7 September 2022; TanzLII)]. The law requires that invoking arrest and

detention as a mode of executing a court decree should be done as last resort upon concrete proof of failure of other modes and that can only be done when there is evidence that other mode has proved futile and judgment debtor is dishonest. Mulla: The Code of Civil Procedure, 18th Edition at page 726 explains that; '...Therefore, mere non-payment of the amount of the decree is not enough to send the judgment-debtor to prison. But if the conduct of the judgment-debtor is dishonest or countumacious he is liable to be arrested and detained. The judgment-debtor is not protected if there is element of bad faith in his conduct. If he has the means to pay and still he refuses or neglects to honour his obligation under the decree, he becomes liable to imprisonment under s 51, Code of Civil Procedure. In short, honest judgment­ debtors must be protected and dishonest ones should be punished...' The present case presents a different scenario, the person sought to be arrested and detained as civil prisoner is not the judgment debtor but a director, if not employee of the judgment debtor. My perusal of the 7 application did not come across with evidence that the judgment debtor applied to pierce veil of the judgment debtor. The law is that director or shareholder or employee of a company should not be arrested in execution of a decree passed against the company unless he is one of the

judgment debtors or the decree holder has first sought and successfully obtained an order piercing the corporate veil. In this application there is no evidence as to how those behind the company or body corporate are involved in concealing assets of the corporate body or hindering payment of the decreed money necessitating veil of incorporation to be lifted in order to hold them personally liable. In the case of Jackson Sifael Mtares & Others vs The Director of Public Prosecutions, Criminal Appeal No. 180 of 2019 [2021] TZCA 612 (28 October 2021; TanzLII) the court stated; '... lifting the incorporation veil entails looking behind the person in control of the company not to take shelter behind legal personality where fraudulent and dishonest use is made of the legal entity. The underlying reasons are to ensure that the legal entity should not be used to defeat public convenience, justify wrong or defend crime. Thus, the law will consider the company as an association of persons whereby the courts can draw aside the veil to see what lies behind.' 8 At hand there is no any evidence that Asia Omari Mselemu is a director of the judgment debtor and is involved in any manner to conceal and hinder effort of the decree holder not to realize the decreed amount. Further there is no order of the court lifting the veil of incorporation of the judgment debtor and make those behind the

company management liable. Flowing from the above, I find and hold that the decree holder has not met conditions for executing the decree by arrest and detention of Osia Omari Mselemu who is not judgment debtor. Thus, do hereby strike out the application. The decree holder is at liberty to file another application after complying with the law. In the circumstance of this case no order to costs. It is so ordered. D.B. NDUNGURU

JUDGE 16/07/2024 9