guuled whole salers ltd vs cmg investment ltd 2003 tzhccomd 20 31 january 2003

IN THE HIGH COURT OF TANZANIA (COMMERCIAL DIVISION) AT DAR ES SALAAM COMMERCIAL CASE NO. 143 OF 2002 GUULED WHOLE SALERS LTD...... PLAINTIFF VERSUS CMG INVESTMENT LTD.................... DEFENDANT Counsel: Mr. Galati for Plaintiff Mr. Rugaimukamu for Defendant JUDGMENT BWANA, J. Both the plaintiff and defendant are limited liability companies registered under the Companies Ordinance and carrying on their business in Mwanza. The cause of action arose in Mwanza and it concerns claims by the plaintiff for shs.63, 254,500/- being the value of goods delivered by the said plaintiff to the defendant. The sum stated above in said to be the outstanding, the defendant having paid some, out of shs.108, 254,900/- that is said to have been the value of the commodities supplied. The plaintiffs case, as supported by the evidence of Sanjay Gandhi - PW1 - is that at divers dates between 12/2/2001 and 8/3/2001, the defendant - through its Shop Manager named Turab Shariff- made orders for different types of goods from the plaintiff valued at shs.108, 254,900/-. Out of that sum, the said shs.64, 254,500/- have since been paid. The usual procedure of raising invoices was followed. Payment is said to have been effected by Turab (DW 2) in his capacity as shop manager for the defendant company. It is said that the said DW 2 is the one who ordered for those goods on behalf of the defendant. He has since terminated his services with the defendant - although he testified on its behalf as DW 2. 1 It is the plaintiff's averment that by its letter dated 21 March 2001 - Exh Pl - the defendant admitted liability. That letter is signed by the said Mr. Turab and bears the official stamp of the defendant company. The amount still outstanding is also given as being shs.63, 254,900/-. It is now the plaintiff's claim that despite repeated demands, the defendant has refused to pay the outstanding sum hence this case. Exh P2 collectively shows the quantities and values of goods sold to the defendant. According to Mohamed Hassani - PW 2 one of the directors of the plaintiff company, the goods claimed were bought by Mr. Turab on behalf of the defendant and not as an individual. PW2 avers that he was told by Mr. Turab that the part payment received was from the defendant. The two companies had their shops close to each other. The defendant denies any liability. According to its financial controller, one Surmidex Ganid, Dw 1 - all their business transactions such as the ordering of goods was by way of L.P.O. and payments were by way of crossed cheques, not by cash. According to this witness, whatever goods Turab may have ordered or bought from the plaintiff that was done on an individual basis and not binding the defendant. Mr. Turab - Dw2 - seems to agree with this version. He states: " I bought goods from them. I was buying the goods for my own but using CMG's address., the business I did with the plaintiff was my own and not on behalf of CMG...I paid for the goods from my own sources..the debt claimed by the plaintiff, I admit it and I am ready to pay it back..." The parties framed the following issues for the determination of this court:- 1. Whether the plaintiff supplied to the defendant goods worth shs. 63254 900/- between 12/2/2001 and 8/3/2001. 2. Whether the defendant is liable to pay for the goods supplied. 2 3. Whether the defendant or someone e/se wrote a letter dated 21/3/2001 admitting liability. 4. To what reliefs the parties are entitled. For purposes of convenience, I start with issue No.3. The letter in question is Exh P4. It reads in part " From: CMG Investment To: Gulled Wholesales Ltd... I Mr. Turab is conforming that I have purchased goods from Gulled whosalers on behalf of CMG investment on credit basis. The account here under is correct and I am conforming the balance. We will pay the remaining balance by"..(emphasis mine) The statement then gives a "Credit Account Statement" with a "balance to be collected at shs.63254900/-. It is signed by Mr Turab "For CMG Investment." I believe the word "conforming" as used in the quoted part above should read "confirming". Both Counsel have laboured on either relying on the contents of that Exh P4 (as per Mr. Galatti) or denying its correctness (on the part of Mr. Rugarabamu). PW2 does not admit that Exh P4 was prepared by them - the plaintiff likewise. DW 1 says he never prepared the document neither was it paid for by them. However Mr. Turab (Dw 2) states that Exh P4 was prepared by PW1 and that he signed it. This fact seems to tally with PWl's statement thus: "Iprepared it in my computer...it was prepared by me in confirmation of Turab to prove that the balance stated therein was true.." 3 Whoever wrote that letter, that issue should not detain us further. It was PW1 in his computer. However the reason why he wrote it is the important element. As he states in evidence - it was prepared so that Mr. Turab could confirm the outstanding balance. That he did by signing :"for CMG Investment." Therefore to answer issue No.3, it is my view that the letter was prepared by PW1 but for Mr. Turab who signed it on behalf of CMG investment. He admitted liability. The issue for consideration is whether the plaintiff supplied the goods to the defendant, goods worth the sum of money now being claimed. The fact that the goods were supplied, by the plaintiff is not in dispute. The type of goods and their value are clearly shown on the "tax invoices" collectively tendered as Exh P2 and supported by the delivery notes Exh P3. It is also admitted that. Dw 2 received those goods. The contested point here is whether DW 2 did so for and on behalf of the defendant or on his own behalf for his side business. The defendants seem to suggest that the latter position is the case. The plaintiff however argues in favour of the former. After careful consideration, I am of the view that Mr. Turab received the goods for and on behalf of the defendant. My view is cemented by the following points. First, those goods were handed to DW 2 while he was still an employee of the defendant. Second, he signed for and on behalf of the defendant, using its address and rubber stamp. Third, as per plaintiff's case, during the relevant transaction the plaintiff was made to believe that Turab was doing so in his capacity as a shop manager belonging to the defendant. Even the part payment is seen as originating from the defendant. Whether the defendant had a different procedure for ordering goods (using LPO) or effecting payment (by Crossed cheque) is immaterial. That was its own internal arrangement. What is apparent here is that the plaintiff delivered goods to somebody acting as representing the defendant. That same person made part payment on behalf of the defendant. Given their close business contacts, there was no reason for the plaintiff to doubt what Mr. Turab did on behalf of the defendant. Mr. Turab's signing of the relevant documents on behalf of the defendant cannot be interpreted otherwise than that he did so on behalf of the 4 defendant; hence binding the said defendant. Therefore to answer issue No 1, it is my view that the plaintiff supplied the said goods to the defendant (represented by Mr-Turab, its employee) between 12 February and 8 March 2001. As such and to answer issue No.2, the defendant is liable to pay for the goods supplied. If any thing, the defendant can proceed against Mr Turab for the recovery of the same as he seems to admit having taken those goods. The last issue is the extent of the parties' reliefs. The plaintiff prays for payment by the defendant of shs.63, 254,900/- being the outstanding principal sum. As discussed herein that sum is still outstanding. Therefore the plaintiff is entitled to be paid the same. The plaintiff prays for interest on the principal at the commercial rate of 30% per annum from 21 March 2001 todate. No plausible explanation has been given in support of such a claim. In the absence of the same, the court can but only award a nominal 5% per annum as interest to the principal sum from 21 March 2001, todate. However, interest on the decretal sum at the court's rate of 7% per annum is awarded from the date hereof up to the date of payment in full. Costs of the suit are also awarded to the plaintiff. It is accordingly ordered. /x Sgd; Dr. sArBvtena JUDGE 31/1/2003. Words 1,453 5