fabiano m samo vs air tanzania corporation another 2005 tzhc 170 6 october 2005

IN THE HIGH COURT OF TANZANIA

AT MWANZA MISC. CRIMINAL APPL. NO. 120 OF 2002 (Arising from Civ. Case No. 62/1999) FABIANO M. SAMO..................................................... APPLXCAPl; Versus 1. AIR TANZANIA CORPORATION 2. PRESIDENTIAL PARASTATAL SECTOR REFORM COMMISSION (RESPONDENTS) 20th Sept. 2005 & 6th Oct. 2005

RULING R. M. RWEYEMAMU, JUDG E: This is an. application made under the section 43 (1) (b) of the Public Corporation Act, 1992 as amended by the Public Corporation (amendment) Act 16 of 1993 and Section 9(1) of the Bankruptcy Ordinance Cap.

25. The applicant vide his counsel Messrs Magongo Advocate is seeking leave of this court to commence proceedings against the respon3ent57TFTe latter, through their representatives; Messrs Juristic Law Chambers and Ms. Matata and Co. Advocates for 1st and 2nd respondents respectively, are resisting the application. In summary, the main arguments raised by the respondents against the application are that; the application is res judicata as it arises form civil case 62/99 which was struck from the court record; the claim is time barred; the first respondent is non existent; there is no cause of action against the 1st respondent because the applicant was paid all his dues and in the alternative that; there is no cause of action against the 2nd respondent as it is not liable for debts of the 1st respondent; and the claim is not provable in Bankruptcy. In their written summations, all parties cited a number of authorities in support of their positions. I found some of the authorities useful and instructive on issues in contention. I wish on the outset to dispose of two issues. First is the issue regarding the date when this application was filed. The Chamber Application on record 120/2002 was filed and signed by the DR on 23/7/2002. That record bears Mr. Magongo out; that the application was not filed in 2005 as submitted by counsel for the respondent. The second relates to issues

argued by both respondents that the claim is not maintainable because; it is res judicata; it is time barred; and that it has no basis because the applicant was paid all his dues. I have gone through parties' submissions and it seems to me that the three issues are substantive ones, which ought to be raised in the main suit - if leave to file the same is granted. To deal with them at this stage would amount to "placing the cart in front of the horse", as submitted by counsel for the applicant. That concluded I proceed to deal with the remaining three issues. The answer I think is obvious, from the following facts submitted by counsel for the applicant but which are in my opinion, uncontestable facts: 1. The Public Corporation (specified corporations Declaration) Order, GN 543/1997 made under the Public Corporation Act 2/92 as amended, declared the 1st respondent a specified public corporation on 22nd .8. 1997.

2. Under Section 43(1) (b) of the Public Corporation (Amendment) Act 16/1993, the 2nd respondent (PSRC) becomes automatic Official Receiver of specified public Corporation, and the provisions of the Bankruptcy Act Cap. 25 became applicable to both the 1st and 2nd respondent.

3. This application was filed on 23/7/2002, when the 1st respondent was in existence but was already a specified corporation and the 2nd respondent its receiver.

4. The 1st respondent was reorganized by the Air Tanzania Corporation ('Reorganization and Vesting of assets and Liabilities) Act, - GN 516/2002 of 1st November 2002; (after the suit was filed), creating ATC Holding Corporation and ATC Company Limited.

5. When the 1st respondent was reorganized, ATC Holding Corporation stepped in its shoes by operation of Law, consequently the liability of the 2nd respondent remained. This position is supported by the CA decision in Burhani Abdul Karim i/c EAK Enterprise, is NBC Jantim Branch in CA Misc. Appl. 7/96 (Mwanza Registry) unreported — cited by counsel when the late Nyalali G , held that: "By virtue o f the operation o f section 10 o f the National Bank o f Commerce (Reorganization and Vesting o f Assets and Liabilities Act 1997 (Act No. 23 o f 1997)f the Respondent shall hence forth in these proceedings be read and understood to be the NBC Holding Corporation established under section 4, wherever the title and name o f N.B.C. Jamhuri Branch Bukoba appears and I order accordingly. " 6. Under Section 9 of Cap 25, no proceedings can be commenced against a specified corporation, of which the 2nd respondent is the receiver, without leave of the court. On the above facts, it is clear the 1st respondent is an existing entity in law and the bankruptcy law is applicable- but whether the claim in question is provable in bankruptcy is an issue to be determined in the main suit. Regarding the liability of the 2nd respondent however, there is something-to be said. The 2nd respondent (PSRC)'s liability arises as a receiver of the 1st respondent, and that should have been indicated in

the applicant's pleadings by using a proper title for the 2nd respondent to read PSRC (Receiver Manager of 1st respondent). Otherwise PSRC as such, is a body corporate which can sue and be sued without leave of the court, as rightly submitted by its counsel. Now, what is the consequence of that omission? In my opinion, the omission is only a technical error which; judging from submissions of the 2nd respondent; was not prejudicial in a manner which made it difficult for the respondent to understand the nature of the claim against them. I accordingly rule that the omission is not sufficient reason to deny the application. In brief, I grant the applicant's prayer for leave to sue both respondents. R. M. RWEYEMAMU

JUDGE 6/10/2005 Coram: Ruling delivered in the open court at Mwanza on 6th October 2005 in the absence of Mr. Magongo Advocate for the applicant. Mr. Ezron Adv. present for the 1st respondent, and in the absence of Mr. Matata Adv. for the 2nd respondent. S ’*

JUDGE 6/10/2005