EXIM BANK T LTD VS BHESANIA GARAGE LTD COMM CASE NO 18 OF 2015 EX PARTE JUDGMENT HON SEHEL J

IN THE HIGH COURT OF TANZANIA (COMMERCIAL DIVISION) AT DAR ES SALAAM COMMERCIAL CASE NO. 18 OF 2015 EXIM BANK (TANZANIA) LIMITED ........ PLAINTIFF VERSUS BHESANIA GARAGE LIMITED ........ 1st DEFENDANT TIMBER TONE (T) LIMITED ........ 2nd DEFENDANT RAMESH RAMJI BHESANIA ......... 3rd DEFENDANT BHARAT RAMJI BHESANIA ......... 4th DEFENDANT KISHORE RAMJI BHESANIA ......... 5th DEFENDANT EX-PARTE JUDGMENT 11/07/2018 & 28/08/2018 SEHEL, J. This judgment arose from the failure of the defendants to pay the plaintiff the outstanding amount in respect of credit and term 1 loan facilities advanced to the 1st and 2nd defendants and guaranteed by the 3rd , 4th , and 5th defendants. It is alleged by the plaintiff that the plaintiff took over a loan facility granted to the 1st defendant by the Bank of Baroda (T) Limited by paying the said Bank of Baroda Tshs. 700 million and USD 800,000 which were due and payable from the 1st defendant. It is further alleged that sometime in March, 2008 the Plaintiff advanced loan to the 1st defendant of USD 745000 and Tshs. 300million. The said loan was personally guaranteed by the 3rd , 4 th and 5th defendants. It is also alleged that sometime in May, 2008 the loan was restructured by cancelling Tshs. 300million and enhancing the overdraft from Tshs. 500 million to Tshs. 700million and enhancing USD loan from 745,000 to USD 800,000. It also alleged that sometime in November, 2008, the outstanding loan was restructured into three loans of USD 240,000 that was payable within one month, USD 200,000 that was payable within 8 months and USD 428,000 that was payable within 16 months. 2 Further the overdraft of Tshs. 700 million was transferred to the 2nd defendant. For the 2nd defendant, it is alleged that sometime in May, 2009 the Plaintiff advanced overdraft facility of USD 200,000 and term loan of USD 450,000. The overdraft facility was for 12 months from the date of offer and the term loan was payable within 3 years from the date of offer. Sometime in October, 2011 the loan facility was restructured as follows: Short loan facility of USD 60,000 payable in one month; Term loan facility of USD 824,000 payable in 60 months equal monthly instalments; and 2nd defendant took over an overdraft facility of Tshs. 700 million from the 1st defendant. The loans and credit facility taken by the 2nd defendant were personally guaranteed by the 3rd, 4th, and 5th defendants. The plaintiff alleged that the 1st and 2nd defendants defaulted in servicing the loan and facilities as such default notices were issued to the defendants but still they failed to honour their obligations. Upon failure to pay, the plaintiff alleged that the guarantors were.an 3 issued with demand notices requiring them to pay the loaned amount pursuant to the terms of their guarantees but they failed, neglected or refused thus the present suit was filed. The plaintiff is claiming against the defendant jointly and severally for: 1. Payment of USD 927,427.86 (United States Dollars Nine Hundred Twenty Seven Thousand Four Hundred Twenty Seven and Eighty Six Cents) and Tshs. 37,982,708.12 (Tanzania Shillings Thirty Seven Million Nine Hundred Eighty Two Thousand Seven Hundred and Eight and Twelve Cent only) being the principal amount advanced to it plus accrued interest as at 31st day of December, 2014 in respect of the loan taken by the 1st defendant; 2. Payment of USD 1,286,648.77 (Say United States Dollars One Million Two Hundred Eighty Six Thousand Six Hundred Forty Eight and Seven Cents only) and Tshs. 1,334,559,011.16 (Tanzanian Shillings One Billion Three Hundred Thirty Four 4 Million Five Hundred Fifty Nine Thousand Eleven and Sixteen Cents Only) being the principal amount plus accrued interest as at 31st day of December, 2014 in respect of the loan taken by the 2nd defendant; 3. Interest of the amounts above at the rate of 14.5% in respect of USD amount and 27% in respect of Tshs. amount from the date of filing of the suit to the date of final determination of the suit and thereafter at the court rate until the final payment of the decretal amount; 4. An order for immediate sale of the mortgaged chattels EXIM- 14 and proceeds be paid to the plaintiff; 5. General damages; 6. Costs of the suit; and 7. Any other relief (s) that the Court may deem fit to grant. The defendants after being dully served with the plaint and be granted leave to appear and defend, they jointly filed their written, 5 statement of defence. In their defence the defendants denied to have approached the plaintiff on the buy/pay and/or takeover of the loan from Bank of Baroda (T) Limited. The defendants further denied the allegation that the Plaintiff paid the Bank Tshs. 700 million and USD 80,000 so as to take over and to acquire the loan facility. The defendants averred that all the purported transactions if made then they were made fraudulently, deceitfully, and through misrepresentation. The defendants outlined the particulars of fraud as follows: 1. The date in which the plaintiff purports to have been approached for the first time by the 1st defendant to buy and take over the loan facility from the bank is sometime in December, 2008. However, the Memorandum of satisfaction referred to as Annexures EXIM-1, EXIM-2, and EXIM-3 purportedly issued / affixed by the Bank in favour of the plaintiff are dated 16th July, 2008. . 6 2. The Memorandum of satisfaction in Annexure EXIM-1 in the 7th and 8th lines reads: “.... 27th day September 2007 to secure the amount of TZS 1,600,000,000/- (Say Tanzania Shillings Two Billion, Two Hundred and Fifty Million only) as security for the actual credit facilities...." 3. There is no seal of the Bank or of the persons who signed the purported Memorandum of satisfaction. 4. The Annexures EXIM-1, EXIM-2, and EXIM-3 signify that the Bank had a preconceived idea that the 1st defendant would come to approach the plaintiff in future (December 2008) to buy and take over its loan facility thus discharge the mortgage before (16 July 2008). 5. Annexure EXIM-3 purported to be a letter from the 1st defendant is not a letter of offer but rather a Memorandum of satisfaction issued/affixed by the Bank on 16th July, 2008 discharging the mortgage. 6. Annexure EXIM-4 is not dated 19th March, 2008 as alleged by the Plaintiff but rather it is dated 14th March, 2008. It makes reference to a letter dated 31st December, 2008 which it cannot be written at the time Annexure EXIM-4 was written. 7. Annexure EXIM- 5 is dated 28th March, 2008 and not 28th April, 2008 as alleged by the Plaintiff. It is alleged to confirm the Plaintiff’s offer dated 19th March, 2008 which it cannot be possible because it is alleged by the Plaintiff that the first defendant accepted the Plaintiff's offer on 9th April, 2008. 8. EXIM-5 makes an incorrect reference number of EXIM-4. It was further contended by the defendants that Annexure EXIM 26 and 27 were a manifestation of fraud, deception and misrepresentation committed by the Plaintiff against the 1st defendant thus unlawful and void. The suit passed through mediation but parties failed to reach to settlement agreement. Mediation was marked as failed on 2nd day of March, 2016. Pursuant to Rule 49 (2) of the High Courts. (Commercial Division) Procedure Rules GN 250 of 2012 (hereinafter referred to as “the Rules") the plaintiff filed one witness statement of Sandeep Sinha Kumar which on 19th day of June, 2018 was admitted to form part of PW1 's testimony in chief and part of proceedings when the witness appeared for cross examination and re­ examination. The defendants also on 31st August, 2017 filed one witness statement of Bharat Ramji Bhesania after being granted extension of time. On 10th day of May, 2018 when the matter was fixed for hearing, the counsel for the plaintiff, Mr. Gabriel Mnyele prayed for an adjournment as he did not come with his witness. Counsel for the defendants, Mr. Joseph Sungwa who appeared on that day, he had no objection for the adjournment. The hearing was adjourned and the suit was fixed for hearing for two consecutive days, i.e on 18th and 19th June, 2018 at lOOOHrs. On 18th June, 2018 the counsel for plaintiff appeared while counsel for the defendants did not appear.. 9 Therefore, the counsel for the plaintiff notified the Court that they have come with their witness for hearing but since the defendants are absent then he prayed for the suit to proceed ex-parte tomorrow if the defendants will default appearance as they were well aware of the hearing dates. In order to give the defendants last chance for their appearances as they were fully aware of the hearing dates, the hearing was adjourned to 19th June, 2018. On 19th June, 2018 neither the defendants nor their counsel entered appearance despite being aware of the hearing date. Therefore in terms of Order 43 (1) of the High Court Commercial Division) Procedure Rules GN 250 of 2012 (hereinafter referred to as “the Rules") read together with Order IX of the Civil Procedure Act, Cap. 33 (hereinafter referred to as "the CPC”) the Plaintiff was allowed to proceed ex-parte against the defendants. At the trial, four issues were framed, which are:- io 1. Whether the borrowing or loan facilities procured by defendants was tainted by fraud, undue influence and/or misrepresentation; 2. Whether the plaintiff offered to the defendant advice that led to the defendants’ default to pay the loan; 3. Whether the defendants are indebted to the plaintiff and if so to what extent; and 4. To what reliefs are parties entitled. Whether the borrowing or loan facilities procured by defendants was tainted by fraud, undue influence and/or misrepresentation The issue of fraud, undue influence and/or misrepresentation was raised by the defendants in their joint amended written statement of defence. It is trite law that “He who alleges a particular fact has a duty to prove that fact." The standard of proof in allegation of fraud is as stated in the case of Othman Kawila Matata vs. Grace Titus Matata, [1981] LRT P.23 at p. 26/27 where the late Mr Justice ii Lugakingira, J, (as he then was) quoting the case of Batter [1951] P.35 at p. 37 by Lord Denning held:- “It is settled law that fraud must be strictly proved. In Batter [1951] p.35, p.37 Lord Denning said:- “A civil court when considering a charge of fraud will naturally require a higher degree of probability than that which it would require if considering whether negligence were established” And even more pertinently the Court of Appeal for East Africa said in R.G. Patel vs. Lalji Makanyi [ 11957] EA 314 at p. 316:~ “Allegations of fraud must be strictly proved, although the standard of proof may not be as heavy as to require proof beyond reasonable doubt something more than were balance of probabilities is required". It is upon that standard that the plaintiff allegations are to be considered. I will require something more than a balance of probabilities”. 12 I have shown herein that neither the defendants nor their counsels entered appearance on the date the suit was fixed for hearing. Therefore the suit proceeded ex-parte against the defendants and consequently failed to bring any witness for cross examination. As I said, the defendants filed one witness statement of Bharat Ramji Bhesania but they failed to cause him to attend for cross examination as required by Rule 56 (1) of the Rules. Rule 56 (2) of the Rules provides that where the witness fails to appear for cross examination, the Court is required to strike out his statement from the record, unless the Court is satisfied that there are exceptional reasons for his failure to appear. Since Bharat Ramji Bhesania failed to appear for cross examination and no exceptional reasons had been advanced therefore his witness statement is hereby strike out under Rule 56 (2) of the Rules. Having striking out the sole witness statement of the defendant then we have no other evidence brought before the Court to 13 the allegations. In that regard, the first issue is answered in the negative. Whether the plaintiff offered to the defendant advice that led to the defendants’ default to pay the loan The second issue which was raised by the defendants in their amended written statement of defence also face similar peril. Apart from allegations contained under Paragraph 2 of the amended written statement of defence, no further evidence was brought to prove it. Therefore, issue number two suffers same result that it is answered in the negative. Whether the defendants are indebted to the plaintiff and if so to what extent It is the testimony of Sandeep Sinha Kumar (PW1) which has not been invalidated or shaken by cross examination that he is the head of Credit Department of the Plaintiff thus he knows the defendants. 14 It was the testimony of PW1 that sometimes in December, 2008 the 1st defendant approached the plaintiff to take over the loan facility granted to it by the Bank of Baroda (T) Limited by paying the said Bank of Baroda the sums that was due and payable from the 1st defendant. The plaintiff paid the said sum of Tshs. 700,000,000/= and USD 800,000.0. The Bank of Baroda then issued a memorandum of satisfaction to enable the plaintiff to register the loan securities in their favour. A memorandum of satisfaction was tendered and admitted as Exhibit P l. It also on records through the testimony of PW1 that on 14th March, 2008 the plaintiff offered the 1st defendant USD 745,000.00 and Tshs. 300,000,000/= as term loan and Tshs. 500,000,000/= as an overdraft which were accepted by the 1st defendant on 9th April, 2008 when the last director signed the letter of offer signifying acceptance. Therefore, on 1st April, 2008 a loan agreement was executed. PW1 also said the 1st defendant obtained money from the plaintiff to purchase three Scania lorries and their trailers whereby 15 the 1st defendant wrote a letter to the plaintiff dated 28th April, 2008 to confirm the offer. The said facilities were secured by: various legal mortgages; various chattels mortgages; debenture over the entire assets of the 1st defendant; personal guarantees of directors and shareholders. PW1 said that in May, 2008 the 1st defendant applied for restructuring of the loan, that is, by cancelling the term loan facility of Tshs. 300,000,000/= and enhanced it to an overdraft from Tshs. 500,000,000/= to Tshs. 700,000,000/= and USD 745,000.00 be enhanced to USD 800,000.00. PW1 said that the bank accepted and restructured the loan facilities as per letter dated 15th May, 2008 which was tendered and admitted as Exhibit P10. PW1 further testified that the enhanced facilities were further secured by additional two legal mortgages. In November, 2009 the 1st defendant applied for another restructuring of the loan and overdraft facility advanced to it, and the Bank again restructured it. The overdraft facility was extendec^ 16 up to 28th April, 2011 and a term loan was extended for further sixty months or five years. The term loan was restructured into three loans of USD 240,000 that was payable within one month, USD 200,000 that was payable within 8 months and USD 428,000 that is payable within 16 months and the term loan had to be paid by 5th May2012. Further the overdraft of Tshs. 700,000,000/= was transferred to the 2nd defendant. In addition to the securities provided in the original offer dated 14th March, 2008, additional securities were placed; namely legal mortgages, debenture deed and personal guarantee. In respect of 2nd defendant’s debt, PW1 testified that on 29th May, 2009 the 2 nd defendant applied for an overdraft facility of USD 200,000 of 12 months and a term loan of USD 145,000 payable within three years, of which the 2nd defendant was granted. The facilities were secured by: various legal mortgages; various chattels mortgages; debenture over the entire assets of the 1st defendant; personal guarantees of directors and shareholders and debenture instrument created by the 2nd defendant, 17 He said sometimes in October, 2011 the 2nd defendant applied for restructuring of its credit facilities as such the loan was restructured as follows; short term loan facility of USD 60,000 payable in one month; term loan facility of USD 824,140 payable in 60 months equal month instalments; and the 2 nd defendant took another overdraft of Tshs. 700,000,000/= from the 1st defendant for a period of 12 months. PW1 tendered: 1. Letter of offer for enhancement facility sent dated 14th March, 2008 with its annexures Demand Promissory note of USD 745,000 and of Tshs. 500,000,000 and Tshs. 300,000,000 together with Board of Directors Resolution of 15th May, 2008 admitted collectively as Exhibit P2; 2. Acceptance Letter dated 28th March, 2008 from 1st defendant admitted as Exhibit P3; 3. Credit Facility Agreement between the plaintiff and the 1st defendant signed by Directors of the 1st defendant on 9th April, 2008;and a legal mortgage over Plot No. 41 Block A Service 18 Industrial Area, Ipogoro Iringa admitted collectively as Exhibit P4; 4. Three legal mortgages over Plot No. 58, Block Industrial Area, Ipogoro, Iringa Municipality; Plot No. 220, Block IB, Lugalo, Iringa Township; and Plot No. 1405, Block A, Buguruni Area, Dar es Salaam City admitted collectively as Exhibit P5; 5. Certificate of Titles Over Plot No. 41 Block A Service Industrial Area, Ipogoro, Iringa Township admitted as Exhibit P6; 6. Two Chattel’s mortgages dated 19th June, 2010; and dated 8th November, 2008 admitted collectively as Exhibit P7; 7. Debenture Instrument dated 9th April, 2008 issued by the 1st defendant in favour of the plaintiff admitted as Exhibit P8; 8. Guarantee Instrument dully signed by Kishore Ramji Bhesania on 8th April, 2008; Bharat Ramji Bhesania on 9th April, 2008; and Ramesh Ramji Bhesania on 9th April, 2008 admitted collectively as Exhibit P9; 19 9. Letter of offer dated 15th May, 2008 in respect of enhancement of overdraft facility from Tshs. 500 million to Tshs. 700 million and demand loan from USD 745,000 to USD 800,000 admitted as Exhibit P10; 10. Second legal mortgage over Plot No. 41 Block A Ipogoro, Iringa and Legal mortgage over Plot No. 21 & 22 Block E Kitanzini, Iringa Municipality admitted collectively as Exhibit Pl 1; 11. A letter of offer dated 16th November, 2009 in respect of renewal of credit facilities extended to the 1st defendant admitted as Exhibit P12; 12. A debenture instrument dated 19th June, 2010 issued by the 1st defendant to the plaintiff admitted as Exhibit Pl 3; 13. Personal Guarantee by Ramesh Ramji Bhesania; Bharat Ramji Bhesania; and Kishore Ramji Bhesania admitted as Exhibit 14. Letter of offer dated 22nd October, 2010 in respect of renewal of overdraft facility and re-schedulement of outstanding dues and a letter dated 5th January, 2011 in respect of restructuring of accounts of Bhesania Garage Ltd admitted collectively as Exhibit P l5; 15. A demand notice dated 14th January, 2013 sent to the 1st defendant with its annexure admitted as Exhibit Pl 6; 16. Four Demand notices each dated 5th November, 2014 sent to the 2nd ; 3rd ; 4th ; and 5th defendants admitted collectively as Exhibit Pl 7; 17. Bank statements of account number 0301723334 running from 1st May, 2008 to 31st December, 2014; account number 0301778132 and account number 0301778121 running from 1st May, 2008 to 31st December, 2014 and account number 0016037174 running from 31st December, 2011 to 30th December, 2014 together with the affidavit in proof of authenticity collectively admitted as Exhibit P18; m 21 18. A letter of offer dated 22nd August, 2008 extended to the 2 nd defendant for loan facility USD 450,000 and overdraft facility of USD 200,000 admitted as Exhibit Pl 9; 19. Six legal mortgages over Plot No. 58, Block Industrial Area, Ipogoro, Iringa Municipality; Plot No. 220, Block IB, Lugalo, Iringa Township; and Plot No. 21 & 22 Block E Kitanzini, Iringa Municipality; Plot No. 190, Vingunguti Industrial Area, Dar es Salaam; over Plot No. 58, Ipogoro, Iringa Municipality; and Plot No. 1, Block A, M ang’ula Urban Area, Morogoro collectively admitted as Exhibit P20; 20. A debenture instrument dated 19th June, 2010 issued by the 2 nd defendant in favour of the plaintiff admitted as Exhibit P21; 21. Guarantee signed by the directors of the 2nd defendant namely Ramesh Ramji Bhesania; and Kishore Ramji Bhesania and another guarantee signed by the directors of the 2nd defendant namely Ram esh. Ramji Bhesania; Bharat Ramji, 22 Bhesania; and Kishore Ramji Bhesania collectively admitted as Exhibit P22; 22. A letter dated 5th January, 2011 in respect of restructuring of accounts of the 2nd defendant admitted as Exhibit P23; 23. A demand notice issued to the 2nd defendant dated 14th January, 2013 admitted as Exhibit P24; 24. Second and final demand letter issued to the 2nd defendant dated 5th August, 2013 admitted as Exhibit P25; 25. Three final demand notices each dated 5th November, 2014 issued to the 3rd; 4th; and 5th defendants collectively admitted as Exhibit P26; 26. Bank statements of account number 030172334; 0301723301; 0301778132; 0301778121 running from 1st May, 2008 to 31st December, 2014 and account number 0016037174 running from 31st December, 2011 to 30th December, 2014 23 together with an affidavit of proof of authenticity collectively admitted as Exhibit P27; PW1 also tendered jointly various documents which were admitted collectively as Exhibit P28. These documents are:- copy of certificate of Title in the name of the 4th defendant; deed of legal mortgage over Plot No. 196 Industrial Area, Kibwabwa, Iringa; a demand promisiory note issued by the 2 nd defendant to the plaintiff dated 8th October, 2010; a demand promissory note dated 8th October, 2010 issued by the 1st defendant to the plaintiff; a letter dated 23 rd April, 2008 form Bank of Baroda (T)Ltd about indebtedness of the 1st defendant; Board of resolution of the 1st defendant dated 12th September, 2008; an extract from the meeting of the Board of Directors of the 1st defendant dated 22 nd October, 2010; a letter dated 16th March, 2011 by the 2nd defendant proposing settlement of the loan; a letter dated 29th January, 2009 by the Bank to the Registrar of Vehicles, Tanzania Revenue Authority to register its interests; a letter dated 23rd October, 2012 from the 1st defendant, 24 detailing crash program to pay the outstanding loan; a letter dated 28th November, 2012 from the 2nd defendant acknowledging indebtedness; a letter dated 5th August, 2013 from Bulwark Associates Advocates acknowledging that the 1st and 2nd defendants had borrowed from the plaintiff and are yet to pay; spouse consent affidavit of Mrs. Ramish Ramesh Bhesania for creation of mortgage over plot No. 190, Vingunguti Industrial Area, Dar es Salaam; Consent for creation of mortgage over Plot No. 1 Block A Mang’ula Urban Area, Morogoro Municipal given by Timber One Tanzania Limited dated 10th October, 2010; Consent by Bharat Bhesania for creation of mortgage over Plot No. 196 Industrial Area, Kibwabwa Iringa dated 9th November, 2010; consent letter by Ramesh Ramji Bhesania for creation of mortgage over plot no. 220 Block 1B Lugalo Iringa; consent affidavit by Bharat Ramesh Bhesania for creation of mortgage over Plot No. 58 Ipogoro Iringa Municipality; consent for creation of second mortgage over Plot No. 21 and 22 Block E Kitanzini Area Iringa Municipality by Bhesania Garage Limited; spouse consent affidavit by Mrs. Bharat Bharat Bhesania fo r 25 repeated creation of mortgage over Plot No. 190 Vingunguti Industrial Area, Dar es Salaam; consent by Bharat Bhesania for creation of second mortgage over Plot No. 196 Iringa Municipality; consent for creation of second mortgage over Plot No. 190 Vingunguti byBharat Ramji Bhesania, Kishor Ramji Bhesania, and Ramesh Ramji Bhesania; consent. by Ramesh, Ramji Bhesaia for creation of legal mortgage over Plot No. 220 Block 113 Lugalo Iringa Municipality; spouse consent by Mrs. Bharat Bhesania for creation of mortgage over Plot No. 196 Iringa; spouse consent affidavit of Raxita Kishor Bhesania for creation of second mortgage over Plot No. 190 Vingunguti Area, Dar es Salaam; consent for creation of second mortgage by Bharat Bhesania over Plot No. 58 Ipogoro Iringa Municipality; consent for creation of second legal mortgage over Plot No. 41 Ipogoro Iringa by Bhesania Garage Limited. From the above testimony of PWland from the exhibits tendered before the Court, it is established on the preponderance of probability that the 1st and 2nd defendants took the loan facilities. 26 and failed to repay the said loan facilities. The loan taken by 1st defendant is shown in Exhibit P l 8 that as at 31st December, 2014 there is outstanding balance of Tshs. 37,982,708/= and USD 926,872.86 which still remained unpaid. For the loan taken by the 2nd defendant, exhibit P27 shows that as at 31st December, 2014 there is outstanding balance of Tshs. 1,334,559,011/= and USD 1,286,648.77 which still remained unpaid. I therefore find that the 1st and 2nd defendants are indebted to the Plaintiff. Regarding the indebtedness of the 3rd , 4th , and 5 th defendants, it is on records through Exhibit P l4 that each of these defendants signed and committed themselves to irrevocably and unconditionally undertake the obligations and liabilities assumed by the 1st defendant (principal debtor) over an overdraft facility of Tshs. 700,000,000/=; and Term Loan of USD 626,070.00 together with interests charged thereon and other charges thereof. The 3rd , 4th , and 5th defendants further guaranteed to pay the plaintiff on 27 demand in the currency in which the facility and the loan fall due for payment. Further through Exhibit P22, the 3rd, 4th, and 5th defendants guaranteed the plaintiff the payment of and undertake to pay all sums of money which become due or owing to the Plaintiff from the 2nd defendant’s liability. Sections 78, 79 and 80 of the Law of Contract Ordinance, Cap. 433 provide as follows - “78. A ‘contract of guarantee’ is a contract to perform the promise, or discharge the liability, of a third person in case of his default. The person who gives the guarantee is called the ‘surety’; the person in respect of whose default the guarantee is given is called the ‘principal debtor, ’ and the person to whom the guarantee is given is called the ‘creditor’. A guarantee may either be oral or written. 28 79. Anything done, o r any promise made, for the benefit of the principal debtor may be a sufficient consideration to the surety for giving the guarantee. 80. The liability of the surety is co-extensive with that of the principal debtor, unless it is otherwise provided by the contract. In the matter at hand I have found that the 1st and 2 nd defendants failed to honor their obligations as such they have defaulted payment. It follows then that the 3rd , 4th , and 5th defendants having guaranteed to the plaintiff that they undertake to repay all the sums when due and not recoverable from the 1st and 2 nd defendants then their liability is co-extensive with that of the principal debtors as per the terms of their deed of guarantee. (See the case of Grayson & Company Ltd Vs A.H Wardle (Uganda) Ltd and Others [1963] E.A 582) Lastly is the issue of the reliefs. I have held herein that the defendants are jointly and severally indebted to the plaintiff therefore judgment is hereby entered against the defendants jointly and severally in favour of the plaintiff and it is hereby decreed that:- 1. The defendants shall jointly and severally pay the Plaintiff USD 926,872.86 (United States Dollars Nine Hundred Twenty Six Thousand Eight Hundred Seventy Two and Eighty Six Cents) and Tshs. 37,982,708.12 (Tanzania Shillings Thirty Seven Million Nine Hundred Eighty Two Thousand Seven Hundred and Eight and Twelve Cents only) being the principal amount advanced plus accrued interest as at 31st day of December, 2014 in respect of the loan taken by the 1st defendant; 2. The defendants shall jointly and severally pay the Plaintiff USD 1,286,648.77 (Say United States Dollars One Million Two Hundred Eighty Six Thousand Six Hundred Forty Eight and Seven Cents only) and Tshs. 1,334,559,011.16 (Tanzanian Shillings One Billion Three Hundred Thirty Four Million Five Hundred Fifty Nine Thousand Eleven and Sixteen Cents Only) 30 being the principal amount plus accrued interest as at 31st day of December, 2014 in respect of the loan taken by the 2nd defendant; 3. The defendants shall Jointly and severally pay the Plaintiff interest of the amounts mentioned above at the contractual rate of 14.5% in respect of USD amount and 27% in respect of Tshs. amount from the date of filing of the suit to the date of final determination of the suit; 4. The defendants shall jointly and severally pay the plaintiff interest at court's rate of 7% per annum on the decretal amount from the date of judgment to the date of full payment; and 5. The defendants shall jointly and severally pay the plaintiff costs of the suit which shall be taxed. For avoidance of doubt the prayer for general damages is declined since interest awarded suffice to cover the loss suffered by the plaintiff. It is so ordered. 31 Dated a t Dar es Salaam this 28th day of A ugust 2018. 28th day of August, 2018. 32