gwami investment another vs national bank of commerce 9 others 2020 tzhclandd 4028 5 may 2020

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA (LAND DIVISION) AT DAR ES SALAAM LAND CASE NO. 255 OF 2015 GWAMI INVESTMENT CO. LTD ................................ 1st PLAINTIFF MICHAEL WAGE KAROLI.......................................... 2nd PLAINTIFF VERSUS THE NATIONAL BANK OF COMMERCE LTD........... 1st DEFENDANT COMRADE AUCTION MART...................................... 2nd DEFENDANT TALAL MOHAMED ABOOD........................................ 3rd DEFENDANT RAMADHAN M.A. MUSSA......................................... 4th DEFENDANT M/S WAWA CIVIL AND BUILDING WORKS LTD .... 5th DEFENDANT HUSSEIN KARIM WALJI........................................... 6th DEFENDANT RAHIM RICE & FLOUR MILLS.................................. 7th DEFENDANT ABDUL LATIFF MOHAMED HOOD........................... 8th DEFENDANT FAAISAL MOHAMED HOOD..................................... 9™ DEFENDANT LEONARD DOMINIC MBUYE.................................. 10™ DEFENDANT JUDGMENT S.M. MAGHIMBI, J: This suit was filed by the two plaintiffs who are borrower and mortgagor respectively, of the facility advanced by the 1st defendant to the 1st plaintiff. As per the pleadings, the matter traces its origin from a contractual Legal Mortgage entered between the plaintiffs and the 1st defendant way back in 2006 whereof the first defendant at various dates i advanced loan facilities to the plaintiff's. On 01st June, 2009, the 1st Plaintiff applied for and the 1st Defendant granted her a renewal of an overdraft and a term loan facilities to the tune of TZS 800,000,000 repayable in a period of 60 months, it is this facility is what led to the current dispute. The said TZS 800,000,000 was in additional of the then existing Ioan amounting to TZS 2,600,000,000,. All the facilities above were secured by, amongst other things, various landed properties belonging to the plaintiffs to wit; Plot No. 23 and 24 Block "C" Madaraka Road, with Certificate of Title (CT) No. 183041/11, Plot No. 543 Block "E" Kihonda, Plot No. 105 Block H Kihonda; Plot No. 91 Block "E" Msamvu with CT No. 53353; Plot No. 105 and 104 Block "E"; Plot No. 42 Block "G" market street; Plot No. 44 & 45 Block "G" market street; Plot No. 102 and 104 Block "E" Msamvu. It seems that at some point in time subsequent to the advancement of the facilities, the plaintiff defaulted in servicing the facility and the 1st defendant, vide the 2nd defendant exercised his right u/s 131 of the Land Act, Cap. 113 R.E 2002 ("The Land Act") and sold the mortgaged properties to the various defendants herein, a sale which is the Centre of the dispute. On their part, the plaintiffs allege that the auction and sale of the security properties by the 1st and 2nd defendants was tainted with illegalities. As for the 3rd to 10th defendants, they were joined in this suit as necessary parties for being buyers of the auuctioned properties. In their amended plaint, the plaintiffs move the Court for the following orders and reliefs:- (i) A declaration that the auction and sale of the security/suit properties by the 2nd defendant at the instance and or 2 instruction of the 1st defendant was and remain to be unlawful. (ii) That let the honorable court be pleased to grant general damages as it may asses to the plaintiffs. (iii) The honorable Court be pleased to order the defendant to produce the accounts and record of sale of the suit properties so as to make affair and necessary orders to fair wit whether the plaintiffs still have any liability against the defendants and or vice vesa. (iv) Damages for loss of business with interest at Court rate from date of judgment till satisfaction of the decree. (v) Let the honorable Court be pleased to order vacant procession against the 2nd, 3rd, 4th, 5th, 6th, 7th, 8th, 9th and 10th defendants on the suit properties. (vi) Compensation and mesne profits over the suit properties from date of sale till on the date of vacant possession (vii) Costs of the suit On the other hand, the 1st defendant denied the allegations on the ground that the 1st Plaintiff failed to repay the outstanding loan hence the 1st Defendant exercised the available remedies by selling the mortgaged properties. Further that at the time of sale of the properties in June, 2015 the outstanding loan stood atTZS 12,092,297,846.25. On the allegations of illegalities and fraud, the 1st defendant's reply was that all the properties were sold through public auction to the highest bidders according to the valuation reports conducted in August, 2014. 3 Upon conclusion of pleadings, the following issues were framed for determination: (1) Whether the plaintiff has a cause of action against the 10th defendant in regard to Land Case No. 373 of 2015. (2) Whether the sale and auction of the suit premises by the 2nd defendant at the instance of the 1st defendant was lawful (3) If the answer to the 2nd issue is in the affirmative, whether money realised by the 1st defendant from the sold properties can discharge the plaintiff's from liability over the loan facilities. (4) What is the total agreed interest of the whole transaction, term loan and overdraft facilities between the 1st plaintiff and the 1st defendant. (5) To what reliefs are the parties entitled to. During trial, Mr. Rweyongeza, learned Senior Counsel and Mr. Sengudi learned Counsel represented the plaintiffs. Dr. Onesmo Kyauke, learned Counsel represented the 1st, 2nd, 4th - 9th defendants while Mr. Uforo Mangesho represented the 3rd defendant and Mr. Dickson Mtobesewa represented the 10th defendant. In the battle to prove their case, the plaintiffs' side called two witnesses, PW1 Mr. Michael Wage Karoli 2nd plaintiff who testified as PW1 and Mr. Godfrey Lunyungu, a manager at one of the 1st plaintiff's hotel who testified as PW2. The defendants had five witnesses, DW1, Patrick Mtei an employee of the 1st defendant. Mr. Semi Mkumbo, a court broker and an auctioneer with the 2nd defendant. DW3 was Mr. Talal Mohamed Abood, a purchaser of Plot No. 44 &45 Block "G" Market Street. DW4 was Mr. 4 Andrew Mwambaja, a recovery manager with the 1st defendant and DW5 was Mr. Dominic Rubuye, a purchaser of property on Plot No. 91 Block E Msamvu. Starting with the first issue, is whether the plaintiff has a cause of action against the 10th defendant in regard to Land Case No. 373 of 2015,1 must admit that this is more an issue of law than an issue of fact. At this point, I will just confide myself in determination of the issue as of the day when this case was initially filed in court. In his submissions to support this issue, Mr. Rweyongeza defined a cause of action according to Black's Law Dictionary (10th Ed) at p.266 by Bryan A. Garner which defined it inter alia as:- group of operative facts giving rise to one or more bases for suing; a factual situation that entities one person to obtain a remedy in Court from another person" Further that the authors of Mogha's Law of Pleadings in Indian with precedents at pg. 195 said inter alia that:- "... The Cause of action means every fact which will be necessary for the plaintiff to prove if traversed, in order to support his right to judgment He went on that as to case law, the word cause of action has variously been defined as:- ”... For the purposes of deciding whether or not the plaint discloses a cause of action the plaint and not the reply to the written statement of defence should be looked at. 5 He argued that from the evidence adduced by PW1, PW2 and even the 10th defendant himself, it is common ground that he is the one who bought one of the suit properties to wit Plot No. 91 Block E at MUSAMVU in the Morogoro Municipality. That it is an uncontroverted fact that the said property is plaintiffs' property and as such it is part and parcel of this matter. He hence questioned how one can dispute that such operative facts do not give a right to the plaintiffs to sue the 10th defendant? He argued that pursuant to Order 1, Rule 3 of the Civil Procedure Code, Cap 33 R.E 2002 ("The CPC") the plaintiffs have a right and are entitled to join the 10th defendant as a co-defendant with other defendants in this matter. That he is a necessary party and orders that may be passed by this Court may adversely affect him. Mr. Rweyongeza submitted further that Land Case No. 373 of 2015 was between the 10th defendant and NBC, it was between that 10th defendant and his co-defendant to wit the 1st defendant and as such it cannot exonerate the 10th defendant from liability against the plaintiffs nor can it deprive the plaintiffs right to sue him (10th defendant). He concluded that the plaintiffs have a strong cause of action against the 10th defendant and he is rightly jointly sued. That the 10th defendant is being sued and joined in this matter as a necessary party with an interest over one of the suit properties to wit Plot 91 Block 'E' Msamvu Morogoro Municipality. In his brief reply, Dr. Kyauke submitted that the Plaintiffs have no cause of action against the 10th Defendant following the decision in Land case No 373 of 2015. That the 10th Defendant having being declared the rightful 6 owner of house on Plot No 91, Block 'E' Msavu Morogoro, there is no room to re-open the matter. On his part, Mr. Mtobesewa argued that the plaintiffs have no cause of action against the 10th defendant because the suit property had already been decreed in favour of the 10th defendant and as such, consent decree has not been set aside by way of revision or any other mode to date. He argued that coming to ask this court to declare the sale unlawful or null and void or in any manner setting aside the decree is tantamount to moving this honorable court to set aside a decision of my fellow judge which not be well in the administration of justice as the property disposition has already been decreed and lawful. That there is a judgment in rem over the property vides a decree dated 26/06/2017 hence the issue cannot be lawfully re-litigated upon at this case. I must point out at this point that in the submissions, I have noticed a confusion on the issue of cause of action as framed and "issue estoppel" as it established by the parties submissions. What the 10th defendant is trying to establish is that his ownership has already been determined by this court in another suit which is not the issue of cause of action of the plaintiff against him. I had to point that out because to begin with, let me refresh the minds of all counsels that this suit was filed before the Land Case No. 373/2015 was lodged in this court. And in order to see whether or not the plaintiff has cause of action, we must look at the pleadings and the existing circumstances at the time of filing the suit and not at some events which emerged later on upon pendency of the suit. Therefore as I pointed out earlier, my determination on whether the plaintiff has cause of 7 action against the 10th defendant shall base on the day when this suit was initially filed. That is when we shall determine whether there was the contested cause of action. In Sarkar Code of Civil procedure, 11th Edition by Sudipto Sarkar V R Manohar, Vol. I on page 218, cause of action is defined as: "Compendiously the expression means every fact which it would be necessary for the plaintiff to prove, if transversed, in order to support his right to the judgment of the court. Every fact which is necessary to be proved, as distinguished from every piece of evidence which is necessary to prove each fact, comprises in 'cause of action'" It is pertinent to note at this point that the Land Case No. 373 of 2015 was a suit between the 10th defendant and the 1st defendant and the plaintiff was not a party to that transaction, let alone the fact that it was filed in court after this suit was filed. Hence it is safe to say that since the parties to the Land Case No. 373/2015 were also parties herein, they were aware of the existence of this suit by the time they were prosecuting and settling the Land Case No. 373/2015 and yet they did not make the plaintiffs party therein for reasons known to them. Anyway, who was a party or not a party to that suit is not a matter for this day, today we are dealing with the cause of action of the plaintiff against the 10th defendant. As correctly argued by Mr. Rweyongeza, from the evidence adduced by PW1, PW2 and from what is testified by the 10th defendant himself, it is undisputed fact that Plot No. 91 Block E at Msamvu in the Morogoro Municipality was part and parcel of the security deposited by the plaintiffs 8 to secure the facilities in EXD1, EXD2 and EXD3. It is also alleged by the 10th defendant that he is the purchaser of the said property, although that fact is disputed by the plaintiffs. Owing to that, and from the definition of the cause of action above, in this suit the plaintiffs are mainly objecting the sale of their various properties including the one purchased by the 10th defendant and are seeking for orders of this court to declare the auction and sale of the suit properties unlawful. Therefore the plaintiffs have adduced facts which, if proved, will affect the interest of the 10th defendant on the property situated on Plot 91 Block "E" Msamvu. This does not mean at this point that the said sale is unlawful or not, but as of the date of filing of this case, the plaint established sufficient facts to show that they have a cause of action against the 10th defendant as a purchaser of the property previously owned by the plaintiffs, a sale which is a subject of contention in this suit. The determination of this suit cannot in any way go in isolation of the 10th defendant and if the 10th defendant subsequently sought his own means of having the property to his ownership, that will be his evidence to prove that he is so the rightful owner of the property and not to dispute the facts adduced by the plaint challenging his acquisition of the property. That said, the first issue is answered in favor of the plaintiff, that the plaint has established sufficient facts that the plaintiff has a cause of action against the 10th defendant. Having determined the first issue, I find it just that for the expedient and more convenient disposal of this suit, I first determine the 4th issue which is on the interest charged. This is because if the issue is determined in favor 9 of the plaintiff, then it shall have the effect on the 3rd issue on whether the money realised by the 1st defendant from the sold properties can discharge the plaintiff's from liability over the loan facilities. The plaintiff's contention on para 18 of their amended plaint is that contrary to the agreement between the plaintiffs and the 1st defendant on an interest to be charged, the 1st defendant charged a total interest of 22% per annum instead of 19%, a fact which wrongfully and considerably increased the above outstanding debt. In his evidence, PW1 testified that according to EXP1, the interest rate of the facility was 16% plus 3%. That interest was wrongly totaled at 22% instead of 19% which would have been the total if we were to add the 16% and the 3%. This, according to PW1, was the interest to be charged on monthly basis on the outstanding amount. He also pointed out that there was also a condition that the bank had a right to change the interest but it was to be done only upon notice being served to the borrower which he had never received. PW1 also argued that according to Collective EXD3, the interest rate started from 24% to 28% lamenting that he didn't have any information on the change of interest from 19% to 28% before receiving the WSD to the amended plaint. He agreed that the last para of EXP1 says that the bank can charge 5% per annum in any amount that is above the loan facility expected, he however counted that even if the 1st defendant was to charge 5% above 19% the interest would still be 24%. He testified further that he was not prepared to bear that burden because he was not served with notice. io About the excess amount that was charged, PW1 denied that he had an outstanding more than what he was allowed to take arguing that the interest increased the outstanding amount because it was overcharged. On his part, DW2 testified that as per clause 7 of EXD2, the "Loan and Overdraft facilities in name of Gwami Investment Co Ltd, the interest for both credit facility was agreed to be 23%, that is overdraft at 23% and term loan 23%. That it was however agreed that the bank would charge additional 5% if the 1st plaintiff was on default. DW1 further testified that when they entered into new facility agreement (EXD2), the other facility agreements were reversed and the new facility covered the previous ones rendering them non-existent. On clause lf he added that the interest is categorically mentioned as 23% for each facility and there was an addition of 5% penal interest. DW1 argued that the computation of the amount paid as shown in the plaint and evidence PW1 are not correct in that the computation on facility agreement was erroneous as it was made on non-existing agreement as it was reversed in May 2011 and June 2012. That if anything was paid, the expectation is it should have been based on the last facility letter dated 01/06/2012 (EXD2) where he had a term loan of 5.9 billion and an overdraft of Tshs 368. That the computation and amount demanded from Gwami was a debt not paid and is according to (EXD2) so any action taken by the bank was for execution of the terms and conditions contained in EXD2. In his final submissions on the fourth issue, Mr. Rweyongeza argued that the loan agreement established by the plaintiffs is one governed by exhibit ii Pl. That the conditions contained therein including interest are the conditions to govern interest rate agreed by the parties. Further that in the amended plaint, the plaintiffs aver that the interest rate agreed upon is as in paragraph 9 of the EXP1 which reads:- "The loan shall bear the rate of Interest of NBC Base rate of 16% plus 3% i.e 22% pa" That in paragraph 18 of the amended plaint the plaintiffs avers that the 1st defendant was charging 22% instead of 19% and that that amount led to the increase in the outstanding amount. He pointed out that the the 1st defendant does not deny to have charged 22% and she goes to accept the proposition that 16% plus 3% equally 22%. He invited the Court to look at the answer to paragraph 18 of the amended plaint, in the 1st defendant's written statement of defence as averred in paragraph 7 of the joint written statement of defence which reads: "7. The contents of paragraph 18 of the Amended Plaint are denied. The 1st Defendant states that Interest was charged In accordance with the contract. In terms of clause 9 of the Loan Agreement It was clearly stipulated that the loan shall bear the rate of Interest of NBC TZSBase rate of 16% plus3% i.e 22% pa" He hence argued that by implication, the 1st defendant admits to have charged an interest of 22% contrary to the agreed rate of interest and that save for the allegation that in case of default as per agreement, there is nowhere in the joint written statement of defence where it is alleged that there was another rate of interest. He went on to submit that it is a cardinal principle of pleadings that a party is bound by his own pleading 12 and is not allowed to depart unless he obtains permission from the Court to do so. He supported his argument by citing the case of James Funko Ngwagilo V Attorney General (2004) TLR pg 163 where His Lordship the late Justice Lugakingira JA (as he then was), after visiting a number decision of rules of pleadings had this to say at pg 166:- "If a party wishes to plead inconsistent facts, the practice is to allege them in the alternative and he is entitled to amend his pleadings for that purpose. The need to do so may arise at any stage in the trial and if the amendment is one the Court can lawfully and conveniently accommodate, it would be obliged to consider the same even though not initially pleaded" Mr. Rweyongeza argued that from the holding in that decision, the 1st defendant who had not pleaded an interest rates other than the one pleaded by the plaintiffs, was at liberty to apply for an amendment and she is now barred from introducing it. On the EXD2 introduced by DW1, claiming that in interest rate of 23% applied both for the Term Loan and for the overdraft facility, Mr. Rweyongeza submitted that that particular pleading is not contained in the plaint and that the letter does not say when the bank stopped charging the unlawful interest of 22% and switch to 23%. He submitted further that the letter and the evidence by DW1 do not tell when the default occurred and the Bank started the 5% interest. He also submitted that this loan which contains 23% does not tell if at all it was executed by the bank hence remains an executing agreement. Further that the loan under exhibit D2 remained exclusory because according to the said exhibit, the 1st defendant 13 had to prepare a schedule of repayment but for more than 6 months, the schedule was not prepared. He submitted that when one reads the contents of clause 3 on repayment, the parties had to agree on terms of repayment and that there was no such agreement because EXD2 never came into force. That according to clause 7 of exhibit D2, interest rate was the same for the two categories of loans and that the interest on loan and overdraft is 23 and a default interest of 5% which he argued not to be true. He pointed out that the Bank Statements that were produced as exhibit D3, particularly at the column on interest reflect that. That the Court was informed that Account No. 026103004734 is for overdraft and truly it is marked OD the interest rate is 28% while the Statement of Account No. 026122000209 is for Term Loan and it is marked TL but interest is 24%. He submitted further that if exhibit D2 is anything to go buy, then DW3 does not support the contents of clause 7 of the EXD2. It is clear that different rates of interests were charged and the 1st defendant never offered any explanation, supporting his contention that the loan the subject of exhibit D2 was never released to the plaintiff. He concluded that he rate of interest from any angle one takes has been increased in contravention of very clear terms of the loan (exhibit Pl) arguing that whatever the amount the bank claims can only be ascertained once the rate of interest is put at the agreed rate. That the 1st defendant does not suggest that at any given time she notified the plaintiffs of any change of interest which in the agreement it used the word "shall" which is mandatory. That since the 1st defendant failed to do so, any amount 14 claimed by the 1st defendant is not true and urged the court to go by the calculations as presented by the plaintiff. In reply, Mr. Kyauke submitted that the Plaintiffs are disputing interest of a contract that was no longer binding the parties. That the renewal of overdraft facility letter dated 1st June, 2009 was varied by the parties on 12th May 2012 (EXD1) and further varied by EXD2. He argued that once a contract is varied, it automatically ceases to exist unless it is agreed by the parties otherwise hence if there was an issue of interest, it should have been raised well before the variation. Having considered the evidence and submission on the issue, I find that what the plaintiffs are attempting to do and hence to be determined by this court, is to disown the terms of the varied facilities reflected in EXD1 and EXD2. According to Mr. Rweyongeza,. paragraph 18 of the amended plaint, was denied by the first defendant who admitted that in terms of clause 9 of the Loan Agreement it was clearly stipulated that the loan shall bear the rate of interest of NBC TZS Base rate of 16% plus 3% i.e 22% pa. He also argued that that there was no such agreement to vary the terms of the facilities because EXD2 never came into force. The question to be determined here is whether or not the plaintiff was aware of the varied facility EXD1 and EXD2. Starting with EXD1, letter from the 1st defendant addressed to the 1st plaintiff, the letter is a response to the 1st plaintiff's application for renewal and additional finance to finalize Gwami Hotel in Morogoro (introductory para of the exhibit). In the said letter, the 1st defendant was informing the plaintiffs that the bank has approved facilities which had an additional term 15 loan of Tshs. 1.5 and capitalization of the arrears amounting to Tshs. 678.5 million. The facility was covered by legal mortgages which are a subject to this suit and the plaintiff never contested the existence of the said mortgage facility. Clause 6 of the said facility reads: "Facility Conditional on perfection of collaterals: The facility will be available for utilization after the client has accepted the letter of offer and all collaterals have been preferred" To show that the plaintiff accepted the facility, clause 29 of the same EXD1 reads: "Expiry of the Offer: The Borrower shall accept in writing the terms and conditions contained herein as soon as possible. If such acceptance is not done within fourteen (14) days after receipt of the offer, te Bank shall be entitled to cancel the facility' On the same last page, the plaintiffs accepted the offer on the end of the page where it is written: "Acknowiedgement/Acceptance of Offer We hereby accept the offer." The acceptance was signed by Michael Wage Karoli, Managing Director and Rosemary Almas Wage, Director. Even when he was cross examined by Mr. Rwazo, PW1 admitted that the signatures on EXD1 were his and his wife's. Therefore at this point, it is undisputed that the credit facility of 2009 (EXP1) was first varied vide EXD1 in the year 2011. The terms changed and the plaintiffs accepted them. 16 Going to the second variation of the facility, the highly contested EXD2, according to Mr. Rweyongeza, the EXD2 never came into force and the determination of this suit should only be based on EXP1, the original facility letter dated 2009. A dissection of the EXD2 have exposed me to the following clauses which are relevant in the determination of this issue: The intoroductory para of the EXD2 reads: "We wish to inform you that the National Bank of Commerce Limited ("The Bank") has approved the overdraft and amendment to the loan subject to the terms and conditions listed below/' (Emphasis is mine) The word has approved the overdraft amendment is a clear implication that there was a request from the borrower to have the loan amended and an application for an overdraft. Whether or not this was actually the case will be observed at the end of the exhibit when we see whether or not the plaintiff did accept the terms of the new varied facility. Clause 2 of the exhibit further reads: "Once the Offer is accepted it shall constitute the terms and conditions of the overdraft and loan agreement ("the agreement') the latter to be signed by both parties." As per clause 5 of the EXD2, the facility was secured by "the existing facilities" most of which are a subject matter to the current suit. According to clause 7 of the facility on the interest rate, as correctly pointed out by Mr. Rweyongeza, interest rate was the same for the two categories which was at 23%. Although he contested that this is not true, but these are the very clear terms of EXD2 under clause 7. In case the plaintiffs missed the 17 contents of clause 8 of the EXD2, there was a default interest of 5% to be charged on overdue amounts under the facilities which was to accrue on day to day basis but to be debited on a monthly basis . It was further provided and agreed that on an event of it not being paid on the due date, then the interest was to be compounded. A compounded interest is usually calculated on the initial principal, which also includes all of the accumulated interest from previous periods on a deposit or loan. This was the gist of clause 8 of the EXD2, that in case the monthly interest was not paid, then the 1st defendant was to charge a compounding interest of an addition 5%. Therefore if the agreed interest on EXD2 was 23% then on every default on due date, the 1st defendant was allowed to charge another interest (compound) of 5% making it a total of 28% as reflected in one of the collective EXD3, hence the plaintiffs' argument is without merits. As for the 24% interest charged on part of EXD3, the EXD2 is clear on clause 4 that that there will be an early redemption fee of 1% which will be payable on any amounts of the facilities which are pre-paid. This interest; added to the 23% interest; amounts to 24% as reflected in the collective EXD3. Therefore at this point, it has been well established by the evidence that all the interests charged were as agreed by the parties as explained. As for the argument rose by Mr. Rweyongeza, that the agreement never came to force, clause 28 of the contract is on the "Acceptance of the Offer" it reads: "The borrower should signify acceptance to the terms and conditions of the facilities by counter-signing the copy of the letter of offer and returning this to the bank. It is important to 18 note that the countersigned letter constitutes an agreement between the borrower and the bank. If such acceptance is not done within fourteen (14) days after receipt of the offer, the Bank shall be entitled to cancel the offer" The clause is clear that signing of the letter (EXD2) by the borrower constitutes an agreement between the borrower and the bank. Under the same clause there is acceptance clause which reads: "Acknowledgement/Acceptance of offer For and on behalf of Gwami Investment Co. Ltd, we hereby accept all the terms and conditions of the offer as detailed above" The acceptance was signed by Michael Wage Karoli, Managing Director and Rosemary Almas Wage, Director. In terms of Section 4(2)(b) of the contract Act, Cap. 345 R.E 2002, a communication of acceptance is complete as against the acceptor when it comes to the knowledge of the proposer. Since the proposer was the bank who tendered EXD2, proving that he had knowledge of the acceptance, then there was a valid agreement between the parties which is exhibited by EXD2 and the performance of it is evidenced conclusively by collective EXD3. I have hence failed to understand the argument raised by the plaintiff that the contract never came into existence while the same is clear that signing of the letter constitute an agreement between the borrower (1st plaintiff) and the bank (1st defendant). The performance of the contract is exhibited by the collective EXD3 which are the statements of accounts of the 1st plaintiff showing the trend of the facility. Furthermore, the interests charged were as correctly explained by DW1 as also analysed above. 19 Having made the above findings, the fourth issue is answered in favor of the 1st defendant, the interest charged on the facilities is as agreed under the EXD2 and evidenced under collective EXD3. I will now turn to the second issue, whether the sale and auction of the suit premises by the 2nd defendant at the instance of the 1st defendant was lawful. In his evidence, PW1 testified that in taking the facility from NBC, he mortgaged 8 houses which were all in Morogoro urban, and were valued at the time the facility was taken. Therefore the fact that the properties were mortgaged to the 1st defendant is not in dispute, the issue is on the realisation of the security by the 1st defendant vide the 2nd defendant. The auction/sale of mortgaged property is governed by Sub-Part 3 of Part X of the Land Act, Cap. 113 R.E 2002 (as amended) ("the Land Act") which provides for rights and obligations of lender (mortgagee) in the process of realising the security and the Auctioneers Act, Cap 227 R.E 2002 where the auction of the disputed property is concerned. Analysis of the second issue will therefore analyse the provisions of the law with regard to the available evidence to see whether the prescribed law and procedures were followed. I will start with Sub-Part 4 of Part X of the Land Act. Section 126(4) provides that one of the lender's rights in case of default is to sell the mortgaged land. However, Section 127 of the same Act, requires the mortgagor to be notified of the default before the mortgagee exercises his right of sale under Section 126(4) as per the provisions of Section 132 of the Land Act. On the record, the issue of 60 days statutory demand notice 20 in compliance with the provisions of section 127(1) and (2) of the Land Act was not pleaded hence not in dispute therefore the initial procedure was complied with. Mr. Rweyongeza's argument is that according to testimonies of PW1 and PW2, it became glaring clear that the auction and sale of the security properties took place on the 23rd and 24th July, 2015, this was after various advertisements in local News Papers among them the citizen issue ISSN 0856 9754 No. 3585 dated 19th July 2015 (Exh P2). He argued that the auction and sale was conducted five days after the advertisement of the same which according to him was contrary to the law relating to auction of Right of Occupancy. That Section 52 of the Land Act which empowers the Minister to make Regulations governing the holding and conduct of an auction and the process of tendering for land. On his part, Dr. Kyauke submitted that as DW2 rightly stated, the major aim of advertising an auction is to attract the public to attend and also to give the borrowed an opportunity to redeem the properties. According to Exhibit D5, auction to sell the impugned properties was advertised in several newspapers on 30th April, 2015, however, as also admitted by PW1, the auction could not take place because the Plaintiffs sought court injunctions. Taking Mr. Rweyongeza's argument, as per the evidence adduced, PW1 testified that he knew about the auction after seeing an advert from the Citizen Newspaper for Sunday 19/07/2015 (EXD2). That the advertisement in the newspaper came only once on 19/07/2015 and the auction took 21 place on 23/07/2015. However, the same PW1 admitted that sometimes in May, 2015 there was to be another auction and it didn't take place because his wife filed a case before the District Land and Housing Tribunal for Morogoro vide Misc Application No. 66C/2015 against the 1st defendant and the two plaintiffs. She was seeking and secured injunctive order and that is the reason why the first auction did not take place. At this point, I am in total agreement with Dr. Kyauke that according to the evidence of DW1 and DW3, after the Court injunction was set aside, there was no need to re-advertised the auction for a long period as the public was already aware and the re-advertisement was a mere reminder. Therefore since there is evidence (EXD5) that there was a previous advertisement of the auction in 2015 which was rendered futile by Misc Application No. 66C/2015 filed by the plaintiff's wife, it is safe to conclude and make a finding that the plaintiffs had ample and sufficient knowledge of the default and the intended auction. There is no law which compels the mortgagee to re-advertise the auction for the same period of time provided for under the law for initial advertisement. Section 133(2) of the Land Act provides: "Where a sale is to proceed by public auction, it shall be the duty of the lender to ensure that the sale is publicly advertised in such a manner and form as to bring it to the attention of persons likely to be interested in bidding for the mortgaged land and that the provisions of section 52 (relating to auctions and tenders for right of occupancy) are, as near as may be, followed in respect of that sale." 22 This is further emphasized under Section 12(2) of the Auctioneers Act, Cap 227 R.E 2002 which provides: "No sale by Auction of any land shall take place until after at least 14 days public notice thereof has been given at principle town of the district in which land is situated and also at the place of the intended sale." Since there is evidence (EXD5) that the advertisements were made and ~ attempts hindered by the plaintiffs wife, as far as the requirement of the law is concerned, the advertisement was sufficient. For instance in his evidence, DW2, they did not re-advertise for 14 days because the advertisement had come out and there were already interested people who were asking for the properties and they had to put them on hold. When the court order was no longer in force, it is the client (1st defendant) who instructed him to advertise and the number of days until the auction was set by her. Therefore according to the provisions of the law on the purpose of advertisement which is to attract as much people who will be interested as possible, the first notice was issued and the public had knowledge of the auction, hence the mere fact that the second advertisement was not for 14 days is not a sufficient cause to nullify the sale. The auction was attended by many people as also testified by PW1 himself, we have DW3 and DW5 who also attended the auctions. Therefore so far as the records are concerned, the 1st defendant complied with the requirements of Section 127 and 132 of the Land Act with regard to th procedure for sale of the mortgaged properties. 23 There is also a dispute on the price that the properties were sold at. To begin with, Section 3 of the Valuation and Valuers Registration Act, No. 7 of 2016 defines a market value as: "market value" means the estimated amount for which an asset should exchange on the date of valuation between a willing buyer and a willing seller after proper marketing wherein the parties had each acted knowledgeably, prudently, and without compulsion;" Owing to the fact that a sale under mortgage is a means of recovery of a facility, it is usually not under favorable or willingness environment. This is why in valuation of properties for purposes of mortgage, there has to be provided the forced market value which is a credit slang term for what price mortgage lenders expect a property to reach at auction if sold after repossession. This forced market value is usually around 70% of the market value, which is the price the property would fetch if sold normally. Furthermore, under Section 133(1) of the Land Act, a mortgagee owes a duty of care to the mortgagor to obtain the best price reasonably obtainable at the time of sale. PW1 complained that the house on Plot No. 42 Block "G" was sold at Tshs. 230,000,000/-, while the valuation was Tshs 272,000,000/=, however, looking at EXP3, the forced market value of the said plot was Tshs. 231,000,000/- .Therefore since the price obtained was a million Tshs below the forced market value, the mortgagor cannot be said to have breached his duty under Section 133(2) of the Land Act. The same goes for the other properties which when compared to the EXP3 on their forced market value, the obtained price at the auction were not so 24 low as to make the rebuttable presumption under Section 133(2) of the Land Act. However, this conclusion shall not apply to the highly contested sale of Plot No. 91 Block E Msamvu, purchased by the 10th plaintiff (DW5) at an alleged price of Tshs. 200 million which analysis is provided hereunder. As for the Plot No. 91, according to PWl's testimony, the auctioneers and the purchasers locked themselves in and sold as they wanted. They sold the properties after the auction had passed and that as per the WSD to the amended plaint, it was sold on the 07/08/2015. He claimed that the house was sold at an undervalue, the valuation is Tshs 294 and he bought it at Tshs 200 which is 60% of the market value. On his part DW2, testified that at the auction of the godown on Plot No. 91 Block E Msamvu Morogoro, there were few people and the minimum price was not reached hence it was not sold. That the first offer was Tshs. 50 million a price which was low hence the property not sold. He however testified further that the interested party continued negotiation with bank and the bank required him to add more money and he later on heard that that bank sold the property to him for around Tshs. 110 or 200 million but he was not involved. From the testimony of those witnesses and that of DW5 himself, on the day of the auction the property on Plot No. 91 was not sold. The plaintiff wants this court to nullify the alleged sale. In his submissions, Mr. Rweyongeza submitted and in fact even the 10th defendant admitted to have not bought the property on plot 91 Block 'E' Msamvu at and on the date of public auction (to wit 23rd or 24th July 2015). He argued that this again was an irregularity which denied other bidders to 25 bid for that property. Further that the 10th defendant confessed to have been approached first by the 2nd defendant and was informed about the auction and sale of the plaintiffs' properties arguing that one and fails to understand the motive between the 2nd defendant and the 10th defendant of inviting one another to the auction, he left the issue to the wisdom of the court. He submitted further that it is only the 10th defendant who produced 3 receipts, one issued on 07/08/2015 (14 days after the purported sale and hence contrary to regulation 10(1) as the amount was paid out of the requisite period. That not only so, but was far short of 25% of the alleged purchase price of 200,000,000/= contrary to the advert appearing in EXP1 which required a deposit of 30% of the Purchase Price. In his closing submissions, Mr. Mtobesewa argued that the property has already been decreed in favor of the 10th defendant in Land Case No. 373/2015, a decree which has not been challenged to date. That nullifying the sale in this suit is setting aside a decision of a fellow judge. That in so far as there exists a decree of the 10th defendant and upon his payment of Tshs. 200,000,000/- to the 1st defendant, this court is functus officio in deliberating and making orders against the suit property. On his part, while making his defence, DW5 tendered EXD6, a memorandum of settlement and compromise of suit pursuant to Order XXIII Rule 3 of the Civil procedure Code, Cap. 33 R.E 2002 (The CPC) the memorandum emanates from Land Case No. 373 of 2015. It is at this point that I will elaborate the issue of estoppel which I had introduced when determining the 1st issue, whether the plaintiffs have a cause of action against the 10th defendant. 26 The existence of the EXD6, the existence of the Land Case No. 373/2015 and the subsequent memorandum of settlement and compromise of suit under Order XXIII Rule 3 of the CPC raises the subject of issue estoppel to this court on the ownership of the Plot No. 91. Section 42 of the Evidence Act, Cap. 6 R.E 2002 provides: "The existence of any Judgment, order or decree which by iaw prevents any court from taking cognizance of a suit or holding a trial, is a relevant fact when the question is whether such court ought to take cognizance of such suit or to hold such trial." From the above provisions of law, issue estoppel claims roots from well- known doctrine which control the re-litigation of issues which are settled on a prior suit. It pertinent to note that issue estoppel is not concerned with the correctness or incorrectness of the finding which amounts to an estoppel, it is just on the existence of the fact that the same issue has already been settled in another suit. Therefore Mr. Rweyongeza's argument that the plaintiff was not a party to that suit is not sufficient to have this court re-open that issue, afterall, the 1st defendant claims title from the plaintiff as a mortgagee. The plaintiff also had a chance to challenge the suit in many ways including revision, objection proceedings and the like which he did not so do, therefore unless the same was disputed under Section 46 of the Evidence Act, the existence of Land Case No. 373/2015 and the outcome thereto cannot be reversed or decided otherwise by this court. Hence the sale of Plot No. 91 Block "E" Msamvu cannot be challenged at this point as it has already been finally determined by Land Case No. 373/2015. 27 Going to the third issue, this issue was dependent on the 2nd issue in which if the answer to the 2nd issue was in the affirmative, whether money realised by the 1st defendant from the sold properties can discharge the plaintiff's from liability over the loan facilities. Since the 2nd issued is answered in the affirmative, that the sales were lawful, the issue is then whether money realised by the 1st defendant from the sold properties can discharge the plaintiff's from liability over the loan facilities. In his testimony PW1 disowned to have taken any facility apart from the one reflected on EXP1. In his submissions Mr. Rweyongeza also submitted that the defendant through DW1 attempted to show that the amount claimed was very high, a total of 12,092,297,846.25 on the term loan and a total of Ths. 905,934,354.94 on the overdraft. He argued that there was no explanation offered as to why the statements start with January 2014, when the facilities date back to 2009 concluding that the EXD3, when dealing with the issue of interest, is not worth of belief and that the computations should base on what the plaintiffs testified during the examination in chief of PW1. On his part Dr. Kyauke submitted that according to the record, the properties were sold at TZS 2,450,500,000 in total. However, the amount recovered was not sufficient to offset the outstanding amount as per the EXD3 which shows that the outstanding amount was TZS12.9 Billion, therefore, the Plaintiffs are still indebted to the 1st Defendant to the tune of TZS 10,450,000,000. 28 It should be recalled that when determining the issues in this case, I opted to determine the 4th issue before going to the 2nd and 3rd issue for reason that if the issue is determined in favor of the plaintiff, then it shall have the effect on the 3rd issue on whether the money realised by the 1st defendant from the sold properties can discharge the plaintiff's from liability over the loan facilities. As the issue has been determined in favor of the 1st defendant, that the interest rates and statement binding was as per the collective EXD3, then this issue is also answered in favor of the 1st defendant. The determination on whether the loan is settled shall be based on EXD2 and the collective EXD3 and not in EXP1 as the plaintiff will desire because in his cross examination, he admitted to know the facility, the (EXD2) which he said was advancing amendment to the loan and approval of an overdraft facility, he also admitted that the overdraft was for an undisclosed amount and the loan was extended to Tshs. 5,911,301,096.27/- and the loan was to expire on 31/05/2016. PW1 also admitted to have signed the document, along with his wife as a director of Gwami. On those findings therefore, the determining factor of the outstanding amount shall be based on collective EXD3 as agreed by the parties as envisaged in EXD2.1 however leave the nits and grits of the decimal points and the numbers to the 1st defendant and the plaintiffs as the court is not exactly an expert in accounts, I just had to determine and have so conclusively determined that the facilities were varied by the EXD1 and EXD2 and should not be based on EXP1 as the plaintiff would have desired. 29 The last issue is on the reliefs that the parties are entitled to. On the balance of probabilities as per the evidence above, the defendants' evidence outweighs that of the plaintiff hence all the preceding issues were answered in favour of the defendants in their severalty and jointly. In their Written Statements of Defence, the defendants only prayed for the dismissal of the suit with costs. Therefore having made the above analysis and findings this suit is hereby dismissed with costs. Dated at Dar es Salaam this 05th day of May, 2020 b / O / X \* A ............... .mmaghimbi JUDGE \o M \\ 30