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THE UNITED REPUBLIC OF TANZANIA JUDICIARY IN THE HIGH COURT OF TANZANIA MBEYA SUB – REGISTRY AT MBEYA LAND APPEAL NO. 49 OF 2023 (Originating from Land Application No 111 of 2015 of the District Land and Housing Tribunal of Mbeya, before Hon A. MAPUNDA - Chairman). GEORGE GIDION MWASUNGA…………………….………………..….1ST APPELLANT PARTSON G. MWAKILEMBE…………………………..…………….….2ND APPELLANT VERSUS CRDB BANK PLC……………………………..….……………………..1ST RESPONDENT KIMBEMBE AUCTION MART LTD………………..……………..….2ND RESPONDENT TEDDY JASSON SANGA…………………………….………………...3RD RESPONDENT JUDGMENT Date: 29 February 2024 & 16 April 2024 SINDA, J.: This is an appeal from the judgment of the District Land and Housing Tribunal of Mbeya at Mbeya (the DLHT) in Land Application No. 111 of 2015, delivered on 9 May 2023, in favour of the respondent (the Judgment). 1 The brief facts of the case are that the first appellant secured a loan of TZS 25,000,000/= from the first respondent. The second appellant guaranteed the loan by mortgaging his house at Plot No. 353, Block “S”, Airport Area – Mbeya City, with a Certificate of Title No. 444-MBYLR (the Disputed Property). The appellants alleged they paid the whole loan plus interest of TZS 27,000,000/=. However, the first respondent sold the Disputed Property through a public auction to the third respondent. Thereafter, the appellants filed Land Application No. 111 of 2015 to the DLHT to challenge the sale of the Disputed Property. The appellants prayed for judgment and decree against the respondents as follows: the declaration that the purported sale was illegal for failure to follow legal procedures, the declaration that the second appellant was the rightful owner of the Disputed Property, payment of general damages of TZS 50,000,000/= and costs of the suit. The matter at the DLHT was initially before Hon. Munzerere, Chairman, who decided in favour of the respondents. Dissatisfied, the appellants brought an appeal at the High Court Mbeya Registry before Hon. Ndunguru, who, due to incurable irregularity, ordered an expedited retrial at the DLHT before 2 another chairman and a new set of assessors. The DLHT again decided in favour of the respondents. Hence, this appeal. The appellants, being aggrieved with the decision of the DLHT, made this appeal on the following grounds that: 1. The trial chairman erred in law and fact to declare that the Disputed Property was legally sold by the first and second respondents while, on the purported auction date, there existed a court order or interim order restraining the respondents and their agents from conducting anything on the Disputed Property. 2. The trial chairman erred in law and fact by declaring that the first appellant defaulted on the terms of the loan facility agreement when the evidence on record clearly shows that the first appellant repaid the whole amount in dispute to the first respondent. 3. The trial chairman erred in law and fact by declaring that the respondents complied with the procedures for selling the Disputed Property by way of public auction, even though there was no evidence to prove the same. 4. The trial chairman erred in law and fact by finding that the procedures for selling the Disputed Property by public auction had been complied 3 with, while the second respondent never appeared to adduce evidence to that effect. 5. The trial chairman erred in law and fact by declaring that the third respondent had purchased the Disputed Property at a public auction when the said public auction never existed. 6. The trial tribunal chairman erred in law and fact by holding that the first appellant deposited and withdrew money from his loan account, which was in the direct and total control of the first respondent, without any evidence to prove that the first appellant actually withdrew the said money. 7. The trial chairman grossly failed to evaluate the evidence adduced by the appellants and their witnesses, which resulted in an erroneous decision. 8. The trial chairman erred in law and fact for failing to determine the third respondent's counterclaim, which was annexed to his written statement of defence and filed on 27 February 2020. As a result, the counterclaim is not reflected anywhere in the DLHT's judgment. 4 9. The trial chairman grossly erred in law and fact by relying on contradictory and ambiguous documentary evidence (Exhibit D2) and, hence, reached an erroneous decision. 10. The trial chairman erred in law and fact by finding that the procedures for selling the Disputed Property were complied with while the second appellant was never served with notice of default as required by law. At the hearing of the appeal, the appellants were represented by Ms. Jalia Hussein and Mr. Ibrahim Athumani, learned counsel. The respondents were represented by Mr. Ntegwa Mpinyagwa, learned counsel. On the first ground of appeal, Ms. Hussein submitted that the DLHT erred in saying that the Disputed Property was legally sold to the third respondent while a restraining order was issued against the respondents from doing anything in the Disputed Property. Arguing on the second ground of appeal, Ms. Hussein submitted that the first appellant took a loan of TZS 25,000,000/= on 27 August 2014 to be serviced in 12 months. The appellant paid the loan in instalments as follows: On 27 September 2014 – TZS 2,400,000/=; On 27 October 2014 – TZS 2,400,000/=; On 15 June 2015 – TZS 12,000,000/=; and 5 On 16 June 2015 – TZS 11,000,000/= She further submitted that the first appellant completed full repayment of the loan on 16 June 2015 and the mortgaged on the Disputed Property was to be discharged. Grounds three, four, five, and ten were consolidated by the counsel, who argued that the first and second respondents did not follow proper procedures in conducting the auction. She argued that the appellants were not given default notice. She also added that the property valuation was not done when the auction took place to determine the property’s value. Also, the street chairman was not involved in the auction. On the sixth ground of appeal, Mr. Athumani submitted that there was not enough evidence to show that the first appellant deposited and withdrew money from his account. He referred to the case of Hemed Said vs. Mohamed Mbiru (1994) TLR to support his argument. Concerning the seventh ground of appeal, Mr. Athumani contended that the trial chairman failed to evaluate the evidence on record adduced by the appellants and their witnesses on matters concerning the default notices and the auction, hence reaching an erroneous decision. 6 In relation to the eighth ground of appeal, the counsel submitted that the trial chairman disregarded the third respondent's counterclaim, which was annexed to the Written Statement of Defense (WSD), and that the counterclaim was not mentioned in the Judgment. In conclusion, the appellant’s counsel submitted that the DLHT chairperson misdirected himself by admitting contradictory and ambiguous documentary evidence (Exhibit D2) that it was tendered without following proper procedure, and it was not read before the court. In reply to the submission, Mr. Mpinyagwa did not object to the restraining order being issued on 12 June 2015, the date the auction took place. However, he explained that nowhere in the records does it show when the restraining order was obtained. He emphasized that the restraining order was overtaken by the event since the auction took place at 09:30 a.m. Hence, there was no restraining order. He added that the appellants breached the loan agreement. Therefore, the respondents had the rights over the mortgaged property. He cited the cases of Simon Kichele Chacha vs Aveline Kilawe Civil Appeal 160 of 2018, Abualy Alibhai Azizi vs Bhatia Brothers Ltd (2000) T.L.R and M & MM 7 Food Processors Company Limited vs CRDB Bank Limited & 2 Others Civil Appeal No. 273 of 2020 to support his argument. In opposition to the second ground, the counsel stated that he is in agreement with the findings of the DLHT’s chairman because the first appellant defaulted on the terms of the loan agreement. The appellant took a loan of TZS 25,000,000/= to be paid in 12 months. Every month, the first appellant had to pay TZS 2,400,000/=. However, there was an eight-month default from the typed proceedings of the DLHT (the Proceedings). The appellant also admitted that he paid the first and second instalments but could not pay the third and fourth due to business difficulties. Mr. Mpinyagwa replied jointly to the third, fourth, fifth, and tenth grounds of appeal that the procedures for executing a public auction were followed. He argued that both 14-day and 60-day notices were given to the appellants as per Exhibits D1 and D2. He added that the appellants did not object to the said exhibits when admitted. He cited the case of Makubi Dogani vs. Ngodongo Maganga Civil Appeal No. 78 of 2019 to support his argument. On the sixth ground of appeal, Mr. Mpinyagwa submitted that there is enough evidence to show that the first appellant deposited and withdrew 8 money from his account, as seen in Exhibits D3 and D4, which were presented, and there was no objection. Submitting on the seventh ground of appeal, he argued that the DLHT considered evidence from both parties and followed procedure before the auction to reach its decision. Arguing on the eighth ground of appeal, Mr. Mpinyagwa agreed that a counterclaim was not reflected in the Judgment or the Proceedings. He added that the act did not deprive the appellants of their rights. He further stated that since the third respondent submitted the counterclaim, the right to be heard was denied to the third respondent and not the appellants. He cited the case of Jafari Mohamed vs. the Republic Criminal Appeal No. 112 of 2006 to support his argument. Regarding the ninth ground of appeal, the counsel contended that it is true that Exhibit D2 was not read. He argued that the issue is trivial because the said Exhibit was admitted without objection. He added that the contradiction explained by the appellants’ counsel does not go to the root of the matter. He cited the case of Swaibu Amani Shabani vs. the Republic Criminal Appeal No. 87 of 2021 to support his argument. 9 In rejoinder, the counsels for the appellants submitted that the respondents’ advocates admitted that there was a restraining order against the auction. She added that the restraining order was issued at 8:30 a.m. on 12 June 2015. Also, the counsels insisted that the auction was invalid since it did not follow procedures. Regarding the sixth ground of appeal, Mr. Athumani submitted that there is no conclusive proof that the first appellant withdrew money from the loan account. Mr. Athumani submitted a rejoinder that Exhibit D4 does not show the first appellant's withdrawn money from the loan account, as PW3 testified that there were two accounts, the personal account and the loan account. Mr. Athumani relied on their submission chief that the DLHT chairperson misdirected himself. In relation to the eighth ground, Mr. Athumani rejoined that the failure of the DLHT to address the issue of the counterclaim raised by the third respondent is contrary to the law, regardless of which party will be prejudiced by the said action. 10 As for the ninth ground, Mr. Athumani rejoined that the contradictions were clear in Exhibit D2, which was tendered in court. He added that the contradictions are so material that they prejudice the rights of the appellants. The issue in dispute is whether the said notice was served to the first and second appellants. The fact that Exhibit D2 was never read out was an irregularity. I have considered the grounds of appeal, the parties submissions, and the evidence on record, which I shall reiterate and consider in determining this appeal. The pertinent issue is whether the appeal has merit. Starting with the first ground of appeal, I agree with the trial chairman that there is no proof of whether the restraining order reached the first and second respondents before or after the auction. The duty of proving the same was bestowed upon the appellants, but they failed to do so. In their rejoinder submission during this appeal, they stated that the order was issued at 08:30 am without availing any proof. Since they alleged the matter, they had the duty of proving the same as provided in the case of The Attorney General vs. 21 Eligi Edward Massawe, Civil Appeal No. 86 of 2002 (unreported) and Ikizu Secondary School vs. Sarawe Village Council, Civil Appeal No. 163 of 2016 (unreported). 11 On the second ground of appeal, the appellants’ counsels submitted that the trial chairman erred in declaring that the first appellant defaulted on the terms of the loan facility agreement while the evidence showed that the debt was paid in full. In deciding this matter, it’s important to revisit the terms of the contract between the first appellant and the first respondent. Clause 7.1 of the agreement reads: “7.1 The loan, inclusive of interest thereon, shall be repaid in monthly instalments as per the following loan repayment schedule." The text above is followed by a repayment schedule. Therefore, the issue here is not whether the loan was paid in full but the manner of payment of the said instalments. Based on the quotation above, the first appellant was supposed to pay the instalments on a monthly basis. Instead, he paid two instalments of TZS 2,400,000/= on 27 September 2014 and TZS 2,400,000/= on 27 October 2014. He then defaulted on payment and breached the contract. Eight months later, he paid two instalments again of TZS 12,000,000/= on 15 June 2015 and TZS 11,000,000/= on 16 June 2015. This was contrary to the loan agreement, and thus, I agree with the findings of the trial chairman on this ground as well. 12 I will respond jointly to the third, fourth, fifth and tenth grounds since they all deal with the auction. The counsel for the appellants submitted that the procedure for the auction was not followed because the sixty and fourteen days’ notice was not issued and served to the guarantor and guarantee. She supported her argument by referring to section 127 (2) (d) of the Land Act Cap 130 R.E 2019, which states that: “Section 127 (2) the notice required by subsection (1) shall adequately inform the recipient of the following matters: (a) the nature and extent of the default; (b) that the mortgagee may proceed to exercise his remedies against the mortgaged land; and (c) actions that must be taken by the debtor to cure the default; and (d) that, after the expiry of sixty days following receipt of the notice by the mortgagor, the entire amount of the claim will become due and payable and the mortgagee may exercise the right to sell the mortgaged land” She stated that the guarantor was not given notice that the first appellant defaulted on the loan payment. The appellant's counsel further submitted 13 that the property valuation was not done to determine the property’s value and that the street chairman was not involved in the auction. Also, the second respondent did not testify at the DLHT that the auction occurred. I agree with the respondent’s counsel that the auction followed all the necessary procedures. After going through the Proceedings, it is evident that the second respondent did put a public notice for the auction of the Disputed Property in the Daily News and Nipashe Newaspapers, both dated 29 May 2015. The auction was conducted on the 12 June 2015. This meets the requirements of section 12 of the Auctioneers Act, Cap 227, which provides: "12(2); No sale by auction of any land shall take place until after at least fourteen days public notice thereof has been given at the principal town of the District in which the land is situated and also at the place of the intended sale". The method of communicating the notice is stated under sub-section (3) of the same Act that; "12 (3); The Notice shall be given not only by printed on written document but also by such other method 14 intelligible to an educated persons as may be prescribed and it shall be expressed in Kiswahili as well as English and shall state the name and place of residence of the owners" Also see the case of Godebertha Rukanga vs. CRDB Bank Limited & 3 others, Civil Appeal No. 25/17 of 2017. In addition to the newspaper notice, adverts were published near the Disputed Property, and public announcements were made using a public address system. There is also an issue of the guarantor not being informed of the default payments. The guarantor was supposed to make sure the borrower paid the loan and did not need to wait for the bank to inform him. He admitted to being informed by the first appellants when he made the first two instalments. He should have followed up with the first appellant and the bank when such feedback was no longer given. Concerning the facts that the street chairman was not informed of the auction and that the said Disputed Property was not valued, I find that these arguments do not hold water since there is no known law that makes these 15 mandatory requirements for conducting an auction, or without them, the auction becomes a nullity. Further, the issue of why the second respondent, being an agent of the first respondent, did not testify becomes trivial. Since what the second respondent states is in the first respondent's knowledge, his testimony would merely repeat what the first respondent already stated. After considering section 127 (2) (d) of the Land Act Cap 130 R.E 2019 and section 12 of the Auctioneers Act Cap 227, I find this ground has no merit. The sixth ground of appeal is solely based on evidence on record. Exhibits P3, D3, and D4 show the transactions in the first appellant's accounts: Exhibit P3 is the loans account, Exhibit D3 is the personal account, and Exhibit D4 is the cash withdrawal receipt. The testimonies and evidence surrounding this ground are strong. Based on the exhibits, it is obvious that money was deposited into the appellant's accounts and later withdrawn. I will discuss the seventh and ninth grounds together as they deal with evidence. I am of the view that the DLHT made its decision based solely on the available evidence. The first appellant admitted to defaulting on loan payments. Exhibit D2 was not read. However, the contents of Exhibit D2 16 were discussed during the examination in chief, thus making reading it no longer necessary. On page 67 of the DLHT’s proceeding, DW2 stated, “Hatua niliyochukua ni kwamba nilimwita mkopaji. Baadae nilimwita mkopaji na mdhamini na kuwakumbusha umuhimu wa kulipa mkopo na kwamba mkopo usingelipwa tungetekeleza notisi hiyo ya siku 60 nyumba iliyowekwa dhamana ingeuzwa.” Since the contents of the exhibits were already discussed during the examination in chief, it was procedurally important but no longer mandatory for it to be read, as stated in the case of Chrizant John v. Republic, Criminal Appeal No. 313 of 2015. The Court of Appeal (CAT) stated that if the witness's evidence capitalizes on the exhibit, then the accused is not prejudiced. Specifically, the CAT held: “In the circumstances of the instant case however, we rush to agree with Mr. Ngole that since the Republic called PW4 Florence Kayungi, the doctor who conducted deceased’s autopsy, and because the evidence of that witness capitalized on exhibit P1 and 17 he explained in detail the deceased's cause of death, also as his advocate was given chance to cross- examine her, it cannot be accepted that the appellant was denied opportunity to know the contents of Exhibit P1.” Also, the fact that there was no objection when both exhibits were being tendered, show that there was acceptance and the contents were proved, as discussed in the case of Makubi Dogani vs. Ngodongo Maganga (Supra). As for the ninth ground, I agree with the counsel for the respondents that the appellants’ counsels are not in the position to raise this ground. The counterclaim was raised by the third respondent and she was not at all aggrieved when the same was not reflected in the Judgement. Addressing this right now would be in favor of the appellants and not the third respondent who most likely disregarded the matter altogether. I also feel the urge to protect the third respondent as a bonafide purchaser. It is noteworthy that a bona fide purchaser does not lose his title to the property merely because there was fraud, misrepresentation, irregularities, or subsequent reversal or modification of the decree. Instead, his right over 18 the suit property is protected. The rationale behind the protection of a bona fide purchaser for value was aptly stated by the Court in the case of Peter Adam Mboweto vs. Abdallah Kulala and Mohamed Mweke [1981] T.L.R 335, it held that: “If a reversal of decree would invalidate the sale, there would be less inducement in any intending purchaser to buy at an auction sale thus depreciating sale prices and there will also be no degree of certainty as a purchaser cannot be expected to a behind a judgment to inquire into irregularities in the suit.” Equally, in the case of John Bosco Mahongoli vs. Imelda Zakaria Nkwira and 2 Others, Land Appeal No. 101 of 2016 this court held that: Under the law the rights of bonafide purchaser have to be protected.” For the foregoing reasons, I find the appeal has no merit and the same is hereby dismissed in ts entirety with costs. 19 The right of appeal was explained. Dated at Mbeya on this 16 day of April 2024. A. A. SINDA JUDGE The Judgment is delivered on this 16 day of April 2024 in the presence of Ms. Leah Kasanga, learned advocate for the appellants and Mr. Ntegwa Mpinyagwa, learned advocate for the respondents. A. A. SINDA JUDGE 20