first national bank t ltd vs petrolux service stations ltd 3 others 2022 tzhccomd 114 13 may 2022

IN THE HIGH COURT OF TANZANIA (COMMERCIAL DIVISION) AT PAR ES SALAAM, COMMERCIAL CASE N0.129 OF 2020 FIRST NATIONAL BANK TANZANIA LIMITED............. PLAINTIFF

VERSUS PETROLUX SERVICE STATIONS LIMITED............ 1st DEPENDANT SYLVANUS CHACHA.................... 2nd DEFENDANT CHACHA SYLIVANUS MAGORI................................................... 3rdDEFENDANT MARWA SYLVANUS CHACHA..................................................... 4thDEFENDANT Date of Last Order: 6/05/2022. Date ofJudgement: 13/05/2022.

DEFAULT JUDGEMENT MAGOIGA, J. This is a default judgement as result of breach of contract and failure to enter defence by the 1st defendant despite dully served by publication. The plaintiff, FIRST NATIONAL BANK TANZANIA LIMITED by way of plaint instituted the instant suit against the above-named defendant praying for judgement and decree in the following orders, namely:- a. declaration that the lstdefendant has breached the fundamental terms and conditions of the business loan agreement signed and accepted by the 1st defendant on 6th September,2018; J i b. declaration that the 1st defendant has breached the terms and conditions of the specific debenture as varied and entered into and signed in favour of the plaintiff and cause to be registered by the registrar of the companies; c. declaration that the 1st 2nd and 3rd defendants have breached the terms and conditions of the unlimited personal guarantee they each signed and entered in favour of plaintiff; d. an order directing the defendants jointly and severally liable to pay to the plaintiff the sum of Tanzania Shillings One Hundred Seventy­ Eight Million Nine Hundred Twenty-Seven Thousand Two Hundred and Six and fifty Cents (TZS. 178,927,206.50); e. an order directing the defendant to pay to the plaintiff interest of 6% of the amount stated in item (d) hereinabove per annum and to be calculated on daily outstanding balance

and capitalized monthly in arrears from the 5th day of November, 2020 to the date of payments; f. an order directing the defendant to pay to the plaintiff interest of 7% of the amount balance calculated on daily outstanding balance and capitalized monthly in arrears from the date of judgement to the date of full payments; g. defendants be ordered to pay general damages to the plaintiff the same to be assessed by this honourable court for the loss income to 2 invest in banking business, hardship and disturbance which was caused by the defendants be ordered to pay costs of this matter; h. an order granting the plaintiff permission of sale the motor vehicles make ford, model Ranger with registration Number T 900DJQ and use the proceeds thereof to discharge part of the defendant's liability against it as shall be collectively awarded by this Honourable court. i. Any other relief(s) as Honourable Court will deem fit and just to grant The facts of this suit as gathered from the plaint are that, sometimes in 2015 and 2016 the plaintiff made available to the lstdefendant, a credit facility for vehicle financing agreement and business loan agreement to the tune of TZS. 1,036,500.000/ for purposes of financing acquisition of three Scania R 460 LA 6X42013 Model from Truck store Centurion and to take over a term loan from NBC. Facts go that, as security for such facility, 1st defendant

issued a specific debenture in favours of plaintiff over the 1st defendant's fixed and floating assets, joint and limited personal guarantees of the 2nd, 3rd and, 4th defendants. The said facilities, among others, were to be paid within a period of thirty-six (36) months and interest was to charge on daily basis. 3 It was averred further that the defendant went on servicing the loan well until 2018 when 1st defendant started to default in repayments.Parties' efforts to settle the debt culminated into consolidation and restructure of all unpaid dues into single business loan. In the said agreement, among others, it was agreed that, the debt should be repaid within 12 months with the interest of 16% per annum to be calculated on the daily outstanding. Notwithstanding the said agreement, the defendant failed, neglected and ignored to repay the said outstanding balance. Efforts by the plaintiff through his lawyers to have the money repaid were in vain, hence, this suit claiming for payments of an outstanding of TZS. 178,927,206.50/= as per 5thNovember, 2018. The efforts by plaintiff to serve the defendant by normal means were in vain. This court ordered that the 1st defendant be served by way of substituted service in two local news papers in the country. The plaintiff, therefore, served the defendant on 14/08/2021 through Daily News and on 14/08/2021 through Habari Leo newspaper

and on 12th April ,2022, the process server served the summons to appear to 1st defendant and 4th defendant 21st April,2022 and summons were received by the 1st and the 4th defendant. 1 4 When this suit was called on for orders on 06/05/2022, no defence has been filed and the learned advocate for the plaintiff prayed that he be allowed to proceed under the provisions of Rule 22(1) of this Court's Rules. In the circumstances, his prayer was granted. It is against this background, this Court on strength of such proof of service, granted the plaintiffs prayer to prove her case by filing Form number 1 accompanied with affidavit in proof of the claim as provided for under Rule 22 (1) as amended by G.N. 107 of 2019, therefore, paved way for this default judgement. In proving the claim, the plaintiff filed in this Court, Form 1 accompanied by the affidavit of, one, Antony Bwahama who is the principal officer of the plaintiff. Having carefully gone through the affidavit and the exhibits annexed in proof of the claim, I am satisfied that this suit revolves around breach of contract on the part of the 1st defendant for unjustifiably failure to repay business loan granted and utilized by him. The issue which I am supposed to determine in this suit is whether the plaintiff is entitled to the prayers and reliefs sought in form No.l filed in this court against the lstdefendant? The plaintiff

entered into business loan for consideration of TZS.213,000,000/= paid in monthly by the defendant and the outstanding balance remained unpaid as per 5th November,2018. Having carefully gone through the affidavit in proof of the claim and exhibits 1-6 in this suit, I 5 find this suit proved to the standard required in civil cases against the 1st defendant. This Court faced with similar situation in the cases of NITRO EXPLOSIVE (T) LIMITED v. TANZANITE ONE MINING LIMITED, COMMERCIAL CASE NO.118 OF 2018 (HC) DSM (Unreported) AND A-ONE PRODUCTS AND BOTTLERS LIMITED v. TECHLONG PACKAGING MACHINERY LIMITED AND ANOTHER, COMMERCIAL CASE NO 105 OF 2017 (HC) DSM (Unreported) in the interpretation of Rule 22 (1) as amended, held that, for the plaintiff to enjoy fruits of justice under Rule 22, the following cumulative ingredients must be proved, namely; a. Proof of the service to the defendant but who has failed to file written statement of defence. b. The plaintiff must make an application in the prescribed Form No. 1- to the First Schedule to the Rules. c. That the said application in Form No. I must be accompanied by an affidavit in proof of the claim In the instant suit, there is no dispute that the 1st defendant was served in accordance with the law. However, no written statement of defence has been so far filed nor any application for extension to file one. Equally it is not in

dispute that the plaintiff has made an application in prescribed Form No. 1 and same was accompanied with the affidavit in proof of the claim. 6 In the totality of the above, and equally having carefully gone through the affidavit and exhibits 1-6 thereto and in terms of Rule 22(1) of the High Court (Commercial Division) Procedure Rules, 2012 as amended by G.N.107 of 2019, this court do hereby enter judgement in default against the 1st defendant in four of the plaintiff and order as fol lows:- a. It is hereby declared that, the 1st defendant has breached the fundamental terms and conditions of the business loan agreement signed and accepted by the 1st defendant on 6th September, 2018; b. It is hereby declared that the 1st defendant has breached the terms and conditions of the specific debenture as varied he have entered into and signed in favour of the plaintiff; c. The defendant is ordered to pay the plaintiff TZS. 178,927,206.50/= being outstanding amount arising from unpaid instalment arrears, and the remaining principal amount arising from business loan agreement; d. The 1st defendant shall pay interest of 6% of the amount stated in item (c) and to be calculated on daily outstanding balance and capitalized monthly in arrears from the 5th day of November, 2020 to the date of payments; e. The lstdefendant to pay to the plaintiff interest of 7% of the amount balance calculated

on daily outstanding balance and capitalized monthly in arrears from the date of judgement to the date of full payments; x 7 f. The 1st defendant shall pay the plaintiff TZS.5,000,000 as general damages; g. The 1st defendant shall pay interest at the court rate of 7% of the decretal amount from the date of judgement, to the date when the decree is fully satisfied; h. 1st defendant shall pay costs of this suit. In terms of Rule 22 (2) (a) of the Rules as amended by G.N. 107 of 2019,1 further order that the decree in this suit shall not be executed unless the decree holder has, within a period of ten(10) days from the date of the judgement, serve by publication in Daily News paper and Mwananchi newspaper one issue each of the decree to the 1st defendant and a period of twenty one days (21) from the date of expiry of the said ten (10) days has elapsed. It is so ordered. 8