CIVIL APPLICATION NO 886 08 OF 2023 INDUSTRIAL GASES AND CHEMICAL LTD AND OTHERS VS AZANIA BANK LTD AND ANOTHER

IN THE COURT OF APPEAL OF TANZANIA AT MWANZA CIVIL APPLICATION NO. 886/08 OF 2023 INDUSTRIAL GASES AND CHEMICAL LTD.................. 1st APPLICANT NADAKA HOLDINGS LTD.........................................2nd APPLICANT PAMBA INDUSTRIES LTD........................................3rd APPLICANT VERSUS AZANIA BANK LIMITED....................................... 1 st RESPONDENT MAJEMBA COMPANY LIMITED ...........................2nd RESPONDENT (Application for stay of execution of the judgment and decree of the High Court at Mwanza) (Dvansobera. dated the 09th June, 2022 in Civil Case No. 02 of 2020 RULING 16th & 19* July, 2024 ISSA, J.A.: By way of notice of motion under rule 4(1), (2)(b), 11(3), (4), (5)(a),(c), (6), (7)(b),(c),(d) and 48 of the Tanzania Court of Appeal Rules, 2009 (the Rules) the applicant had sought to move this Court to order a stay of execution pending hearing and determination of an appeal before the Court. The application is i supported by an affidavit sworn by Rajesh Kapoor, the Principal Officer of the applicants. The application was resisted by the 1st respondent not only by way of an affidavit in reply, but also by a notice of preliminary objections of which was filed under rule 107(1) of the Rules, and served on the applicants. So when the application came up for hearing I had to start with the preliminary objections followed by main application. Mr. Elias Rachuoyo Hezron, (earned advocate who appeared for the respondents raised two points of objection, which goes thus: (1) Since there is no intended application for execution fried, and that there is no notice o f execution served to the applicants, the application is untenable in law for not complying with rule 11(4) and 7(d) o f the Court o f Appeal Rules, 2009. (2) The application for stay o f execution is untenable in law because the decree sought to be stayed is not capable o f being executed. The Court also raised an issue suo motu regarding the propriety of the instant application and asked the learned counsel to argue it together with the point of objections. The issue is whether the instant application for stay of execution was filed within time prescribed by the law. In order to appreciate the essence of the present application, it is opportune to narrate a brief background facts on the dispute between the parties. The applicants enjoyed banking relationship with Bank M (Tanzania) Limited, which was later acquired by the 1st respondent, that went back to 2010. On 8th December, 2010 Bank M advanced a credit facility of USD 650,000 to the 1st applicant for the purpose of expansion of its business. The facility was secured by the 1st applicant's fixed and floating assets as well as the landed properties belonged to the 2nd and 3rd applicants. The applicants claimed that the facility was discharged after completion of the construction of the factory, but the 1st respondent's claim is that there were still out standings. Hence, in December, 2019 the 1st respondent issued a statutory notice of default which revealed that, the applicants have defaulted payment of TZS. 1,750,018,374.37 and the 1st' respondent intended to recover the said amount by selling the properties kept as collateral. This propelled the filing by the applicants of the Civil Case No. 02 of 2020 at the High Court at Mwanza (the trial court). In the Civil Case No. 02 of 2020 the trial court framed five issues, thus: 1. Whether the defendant (1st respondent) is entitled to lay any claim against the plaintiffs (applicants) in respect o f the credit facility and mortgages by and between the plaintiffs and Bank M. 7Z Ltd. 2. I f the first issue is affirmatively answered, whether the notices o f default that is Form No. 4A issued by the defendant (1st respondent) to the plaintiffs (applicants) are lawful and valid. 3. Whether the defendant (1st respondent) is entitled to dispose o fplots nos. 33 and 47 at Nyakato IndustrialArea, Mwanza. 4. Whether as at December, 2019 the plaintiffs (applicants) were in default o f TZS. 1,750,081,374.37. 5. To what reliefs are parties entitled. After a full trial, the trial court answered the 1st, 3rd, 4th and 5th issues in the affirmative while the 2nd issue was negatively answered. The notices of default were found to be invalid and of no legal effect. A decree was issued to that affect. The 1st respondent in pursuance of the terms in the mortgage deed engaged 2nd respondent to sell the properties of the applicants iri order to recover the outstanding debt. The 1st respondent advertised on the Newspaper of 4th November, 2023 that the said properties would be sold by public auction. The advertisement triggered the filing of the instant application by the applicants. Reverting to the first preliminary objection raised, Mr. Hezron argued that, according to rule ll(7)(d) of the rules the application for stay of execution must be accompanied by a notice of intended execution, but in the instant application there is no notice of intended execution which was annexed to the application. He bolstered his argument by citing the Court's decision in Joseph Chacha Magabe v. Board of Trustees of CCM (Civil Application No. 462/8 of 2023) [2024] TZCA 322 (7 May 2024, TANZLII) where the application for execution was struck out for failure to annex a notice of the intended execution. Mr. Hezron added that, when a party is exercising his right on the mortgage the exercise cannot.be stayed. To support his proposition he cited the case of ‘ ..........................» .( 1 4 1.3 Maryam Nassor v. ABLA Estate Developers and Agency Limited and Others-(Civil Application No. 153/17 of 2022) [2024] TZCA 168 (7 March 2024, TANZLII). Arguing the second objection, Mr. Hezron submitted that according to rule 11(4) of the Rules a stay of execution cannot be granted unless there is a threat of execution. There must be a decree capable of being executed. In the instant application, the decree annexed is a dismissal decree. It did not give a right to any party which is capable of execution. He fortified his stance by citing the Court's decision in Patel Trading Co. (1961) Ltd and Another v. Bakari Omary Wema t/a Sisi kwa Sisi Panel Beating Enterprises Ltd, Civil Application No. 19 of 2014 (unreported) and Catherine Honorati v. CRDB Bank Pic [2020] T.L.R. 185. With respect to the issue raised by the Court, Mr. Hezron submitted that according to paragraph 9 of the affidavit of the applicants, they were aware of the intended sale of the properties on 4th November, 2023. Hence, they were supposed to file the application for stay of execution within 14 days from that date. On ^ 1 ' r -■ • •&, i the contrary, the application at hand was filed on 27th November, 2023 which is out of time. He added that, the applicants could have applied for extension of time if they wanted to pursue the matter. He prayed for the dismissal of the application with costs. In response, Mr. Leonard Slyvanus Joseph, learned advocate for the applicants submitting on the first objection stated that, the decree granted by the trial court on 9th June, 2022 is a decree capable of being executed as it has explained about the rights of the parties. The applicants were entitled to those claims which were granted by the decree. He insisted that although it was the applicants' case before the trial court, but the respondents could still execute the decree. Further, he contended that, the applicants cannot exercise the rights arising from the mortgage as the said mortgage has been put under litigation. The respondents, on the other hand, can claim what was granted by the court and it was illegal for the respondents to find other ways of execution outside the decision of the trial court. He emphasised that the situation in the case of Joseph Chacha (supra) is distinguishable to the present case. In Joseph Chacha the applicant went to court for fear of execution while in the instant case there is advertisement - ■ 'r t ,f ,y_ ^ published by the 1st respondent in spite of an appeal being already lodged in Court. The fact that the respondents intended to dispose the property is a. sufficient notice to warrant intervention as the respondents were exercising the right of sale under the mortgage. He urged the Court to intervene by invoking section 4(2) of the Appellate Jurisdiction Act, Cap. 141 (the ADA) in order to preserve the ends of justice. With respect to the first objection, Mr. Joseph gave a short response in which he argued that, the applicants cannot sit and watch their properties being sold while waiting for compliance of the rule 11(4) and (7)(d) of the Rules. Lastly, arguing the issue raised by the Court, Mr. Joseph submitted that, the instant application was filed electronically on 17th November, 2023, but the system was not active and filing could not be done. On their follow up at the Court's registry they received a notification dated 20th November, 2023 informing them that the system was inactive. He submitted that the confusion was caused by the Court registry. He implore the Court not to punish the applicants. In rejoinder, Mr. Hezron submitted that the applicants' suit was partly granted by the trial court as the notice was ^declared illegal, but the decree did not grant any right to the respondents that can be executed. Regarding, notice of execution published in the Newspaper, he explained that was not an enforcement of trial court's decree as there was no notice of execution attached. With 8 respect to the prayer of the applicants' counsel beseeching the Court to invoke section 4(2) of the AJA, he submitted that the said provision is not applicable in this case as there is no lacunae in the law. He relied on the case of Patel Trading case (supra) to support his proposition. Lastly, he reiterated that the instant application was filed out of time and the explanation given by applicant's counsel was submission from the bar and not evidence. He concluded that, at the most the applicants should have sought leave to file supplementary affidavit. The Court will start its determination on the issue it raised suo motu which is whether the application for stay of execution was filed within time prescribed by the law. The governing provision on this issue is rule 11(4) of the Rules which states: ”11. (4) An application for stay o f execution shall be made within fourteen days o f service o f the notice o f execution on the applicant by the executing officer or from the date he . is otherwise made aware of the existence of an appiication for execution (emphasis supplied) The provision is very clear that the application should be filed within 14 days of the service of the notice of execution on the applicant or when is otherwise made aware of the existence of the application for execution. In the instant application, there was no application for execution which was made. Hence, there could be no notice of execution which could be served on the applicants. The respondents intended to sale the properties of the applicants wielding the power vested on them by the mortgage deed. Therefore, the advertisement in the Newspaper of 4th November, 2023 is the one which gave the information to the applicants of the intended sale. Consequently, if the applicants had the interition to stay the execution, they were required to comply with the rule 11(4) of the RUles by filing the application for stay of execution within 14 days from the date they became aware of the intended sale which was 4th November, 2023. therefore, the applicants were required to file the application for stay of execution by 18th November 2023. The instant application was signed by Rajesh Kapoor, the principal officer of the applicants on 17th November, 2023 and filed in Dar-es-Salaam registry on 27th November, 2023 out of time prescribed by rule 11(4) of the Rules. The date of receiving the application is evident as the Deputy Registrar of the Court signed and dated the document and stamped it on the front part of the document in accordance with rule 18 of the Rules which provides: "18. Whenever any document is lodged in the Registry, sub-registry o f the Court, or in the registiy o f the High Court, or tribunal under or in accordance with these Ruies, the Registrar, or Deputy Registrar, or the Registrar o f the High Court or any other officer o f the court appointed for that purpose, as the case may be, shaii forthwith cause it to be endorsed, showing the date and time when it was lodged." Therefore, there is no doubt that 27th November, 2023 is the date in which the instant application was filed in Court registry. The argument advanced by Mr. Joseph that it was filed electronically on 17th November, 2023, but the system was out of order was not supported by any evidence from the applicants or from the Registry. The form which was produced during submission which stipulates, that, the system was not in order does not persuade me as that form was not signed by the Registrar and it was dated 20th November, 2023. By this date, the applicants were already 2 days late. ii Therefore, the Court is of the view that the application for stay of the execution was filed out of time prescribed by rule 11(4) of the Rules. This issue is sufficient to dispose this application and the determination of the two points of objection raised by the respondent's counsel will be superfluous. In the result, I strike out the application with costs. It is so ordered. DATED at MWANZA this 19th day of July, 2024. A. A. ISSA JUSTICE OF APPEAL The Ruling delivered this 19th day of July, 2024 in the presence of Mr. Elias R. Hezron, learned counsel for the respondent also holding brief for Mr. Leonard Sylvanus Joseph, learned counsel for the applicant, is hereby certified as a true copy of the original. D. R. LYIMO DEPUTY REGISTRAR COURT OF APPEAL 12