hekima enterprises company limited vs nic bank tanzania limited another 2013 tzhc 2158 21 june 2013

IN THE HIGH COURT OF TANZANIA (LAND DIVISION) AT PAR ES SALAAM LAND CASE NO. 94 OF 2013 HEKIMA ENTERPRISES COMPANY LIMITED................................................... APPLICANT VERSUS NIC BANK TANZANIA LIMITED................. 1st RESPONDENT BANI INVESTMENT LIMITED.................... 2nd RESPONDENT RULING Mansoor, J: The 1st Respondent in this case, NIC Bank Tanzania Limited raised a preliminary objection that: “The application is bad for non- joinder of the mortgagor contrary to Order XXXII Rule 1 of the Civil Procedure Code, Cap 33 RE 2002.” The Applicant/Plaintiff also filed the notice of preliminary objection containing the following objections on points of law: 1. That the 1st Respondent’s Affidavit is incurably defective for containing legal arguments, conclusions and point of law: 2. The 1st Respondent affidavit is incurably defective for addressing the issues stated in a plaint and not in an affidavit: 3. That the 1st Respondent’s affidavit is incurably defective and bad in law for being signed by a person who is not deponent therein. I ordered hearing of all these preliminaiy objections to be by written submissions, and parties complied. I shall deal first with the preliminary objections raised by the 1st Respondent since that objection affects the existence and competency of the entire suit, and thereafter the Applicant/Plaintiffs objections which attacked the affidavit of the 1st Respondent, shall be considered, if necessary. In submitting for the preliminary objection, D’ Suoza Advocate for the 1st Respondent, had submitted that the Application is bad for non-joinder of the Mortgagor contrary to Order XXXII Rule 1 of the Civil Procedure Act, 1966 (Cap 33 R: E 2002); this reads: Subject to the provisions o f this code, all persons having an interest either in the mortgage, security or in the right o f redemption shall be joined as parties to any suit relating to mortgage. ” The 1st Respondent submits that the mortgaged property subject of this suit being CT NO. 6347-MBYLR, L.O. NO. 155639 PLOT NO. 28 BLOCK H, VWAWA URBAN AREA is registered in the name of JOEL JACKSON PANJA and not the Plaintiff. The 1st Respondent also reminded that since he raised the preliminary objection first, then he should be heard first, and referred to me the provisions of Order XVIII Rule 1 of the Civil Procedure Code, 1966, which has the effect that the plaintiff has the right to begin unless the defendants admits the facts alleged by the plaintiff and contend that either in point of law or on some additional facts alleged by the Defendant the Plaintiff is not entitled to any part of the relief which he seeks, in which case the defendant has the right to begin. On this he referred me to the case of CALICO TEXTILE INDUSTRIES LIMITED VS ZENON INVESTMENTS LIMITED AND 2 OTHER (MISC. CIVIL CAUSE NO. 10 OF 2008, where Judge Mackanja J had said: “The party on whom the onus probandi lies as developed by the record must begin...... At hearing o f a case on a preliminary issue the Defendant by whom the issue is raised has the right to begin. ” The Counsel for the 1st Respondent has missed the point here. I never ordered that the preliminary points raised by the Applicant/Plaintiff be argued or heard first before the preliminary objections raised by the 1st Respondent. What I ordered on 22 May 2013 was that the objections raised by the Plaintiff/Applicant and those raised but the 1st Respondent be heard or argued simultaneously and by way of written submissions, and that I ordered both parties i.e. the Applicant/Plaintiff and 1st Respondent to file their respective submissions in chief in support of their respective preliminary objections on 29 May 2013. I never ordered that the Applicant/Plaintiff submissions be filed first, and this was to serve the precious time of the Court, and to speed up the matter. I could have ordered hearing of the 1st Respondent’s first, and then deliver the Ruling, and then after that order I could have ordered the hearing of the Plaintiff/Applicant’s objections, and then deliver a Ruling. This would have taken ages to finalise the hearing of the objections raised by different parties herein before we start hearing the application, and then the main suit. The Counsel of the 1st Respondent should have appreciated the manner in which we agreed to dispose of the preliminary objections, which indeed by hearing them all at once, has really served the time of the court as well the parties’ time. Regarding the objection he had raised, the Counsel for the 1st Respondent has submitted that the provisions of the law requires that the Mortgagor must be joined in the plaint and in the application whose subject matter is the mortgaged property. He submitted that the Plaintiff alone has no interest in the mortgaged property and the joining of the legal owner of the mortgaged property is inevitable for effective and complete settlement of all questions involved in the application or suit. The Counsel for the 1st Respondent referred to this Court the case of AMANI CENTRE FOR STREET CHILDREN VS VISO CONSTRUCTION CO. LIMITED, MISC. COMM CAUSE NO. 23 OF 2012, in this case, it was said: “The Petitioner failure to observe the mandatory provisions o f the law renders the petition before this Court incompetent, null and void. ” The Counsel for the 1st Respondent further argued that the only interest the Plaintiff has in the property is that the property was placed as a security to its indebtedness but he has no locus or legal recognised interest to sue in the property in the absence of the mortgagor; he said in the case of NAIROBI MAMBA VILLAGE VS NATIONAL BANK OF COMMERCE (1971) EALR 2002, it was said that: “An interlocutory injunction is an equitable remedy which may be issued at the instance o f a party to the suit to protect his legal, rights from violation by lawful acts o f another party.... The party seeking to present alienation, wastage or damage to the property in dispute therein must establish that he has legal rights in such property which he seeks to protect by the injunction sought Also he said the case of DEPARTED ASIANS PROPERTY CUSTODIAL BOARD VS JAFFER BROTHER (1999) 1 EA 55, which provided that “in order fo r a person to be joined to a suit on the ground his presence was necessary fo r the effective and complete settlement o f all questions involved in the suit, it was necessary to show that the order sought would legally affect the interest o f that person, and it was desirable to have that person joined to avoid multiplicity o f suits, or that the defendant could not effectively set up a desired defence unless that person was joined or an order made that would bind that other person. ” In response to this the submissions by the Counsel for the 1st Respondent’s objection, the Advocate for the Applicant/Plaintiff, Counsel Benjamin Mwakagamba has submitted that the suit is instituted in the name of the company, and that the individual who is the mortgagor is the director of the company, and that the directors have resolved that the action be instituted in the name of the company. He cited the books of Mullah, the Code of Civil Procedure, 16th Ed, Vol. 3, and the book by Solid Paul and Anupam Srivastava. He also cited the case of Radhe Lai vs. East India Railway (1926) 5 Pat 128, 90 IC 680, AIR 1926 Pat 40. He says although Joel Jackson Panja is not joined in the application but he is the director of the company, and he has signed on the affidavit and verified the pleadings. He says the reliefs sought in the chamber application and in the plaint are for the benefit of the company and not an individual director. In the alternative, the Counsel for the Applicant submitted that the preliminary objection raised by the 1st Respondent cannot be treated as a pure point of law, on this he referred us to the case of Shahida Abdul Hassanali Kassam vs. Maledi Mohamed Gulamali Kanji, Civil Application No. 42 of 1999. The Counsel for the Plaintiff /Applicant did not submit anything regarding the status of the Plaintiff being the borrower, and that of Joel Jackson Panja being the mortgagor. The distinction between necessary parties and proper parties is made in the Civil Procedure Code where necessary parties are parties "who ought to have been joined" and who are indispensable as without them no decree at all can be made and proper parties are those whose presence enables the Court to adjudicate more effectually and completely. Order XXXII Rule 1, is a rule of procedure that all persons interested in the mortgage security or the right of redemption shall be made parties to the suit. The object of this rule is clearly to avoid multiplication of suits, but does a breach of this rule involve the consequence that the suit should be dismissed? According to that section non-joinder of parties, though a breach of the procedure enjoined by the Code is not a fatal defect unless it affects the merits of the case or the jurisdiction of the Court. In the present case, the Plaintiff being a compny and a borrower instituted a suit, in its own name, as the borrower but it did not join the individual name whose property was mortgaged to secure the loan for the company. The right to enforce the mortgage charge against by the bank on the part of the security will be against the mortgagor. The non-joinder of the mortgagor in this suit will affect the merits of the case for it is only the right, title and interest of the mortgagor that can be sold. The Mortgagee is entitled to enforce the charge against the mortgagor who is not made a party to this suit. The reliefs sought in the plaint as well as in the application will definitely be for the benefit and for protection of the interests and rights of the mortgagor, and since he is not made a party to this suit, the reliefs sought cannot be made, and the mortgagee if he wins, shall not be able to execute any decree against him, and even if the order sought in the plaint and in the application are granted, the orders affects the property, which property is registered in the name of the mortgagor who is not a party to this suit. Evidently Order XXXII Rule 1 of the Civil Procedure Code, 1966 requires that a suit on the mortgage would be competent if all parties subject of the mortgage are made parties. Suit on mortgage cannot be constituted unless the lender (mortgagee), the borrower and the mortgagee are made parties to it. Now what would be the consequences of non-joinder of the necessary party, does it necessitate the dismissal of the suit? A mortgagee's claim in these proceedings is primarily a claim against property of the mortgagor for the recovery of the loan extended to the Plaintiff. Possibly the correct procedure here would have been to direct the plaintiff to add JOEL JACKSON PANDA as the co-plaintiff. It is not so provided by Order XXXII, Rule 1, either expressly or as I think impliedly. The disadvantage of failing to join persons who ought to be joined as plaintiffs or defendants is not to dismiss a suit. There is certainly no other provision in the Procedure Code which supports the view that in such circumstances as these a suit should be wholly dismissed. The objection raised by the 1st Respondent is on noncompliance of Order XXXII R 1 of the Civil Procedure Code, it is a pure matter of law and meets the tests set in the famous case of Mukisa Biscuits, and could be treated a preliminary point of objection. Consequently, I order that the plaint as well as the application be amended so as to include the necessary party. Since the Application and the Plaint will be amended, there is no need to determine the preliminary objections raised by the Plain tiff/Applicant on an defective affidavit of the 1st Respondent since 1st Respondent shall have a chance to file a fresh affidavit and an amended written statement of defense. The amended application and amended plaint to be filed within 14 days from the date of this order, and the Defendants shall file their respective counter affidavit, and amended written statement of defense within the prescribed time. The preliminary objection raised by the 1st Respondent is upheld. DATED at DAR ES SALAAM this 2 I st day of June, 2013 L. MANSOOR JUDGE 21st JUNE 2013