kikundi cha tupendane vs rozi manema 2023 tzhc 15869 28 february 2023

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA

MUSOMA SUB REGISTRY

AT MUSOMA PC CIVIL APPEAL NO 35 OF 2022 (Originating from Appeal No 46 of 2021 at Tarime District Court) KIKUNDI CHA TUPENDANE.................................................... APPELLANT

VERSUS ROZI MANEMA......................................................................... RESPONDENT

JUDGMENT 14lh & 28th Feb, 2023 F. H. Mahimbali, J:. The appellant in this case successfully sued the respondent at the trial court for a claim of 4,890,700/= which she owed the said group for various dates: on 6th January 2021, 10th March 2021, 4th April 2021, 13th April 2021 and 11th August 2021. Dissatisfied with the said award, the respondent successfully challenged the said award before the first appellate court. Now the appellant is dissatisfied with the said decision and by way of appeal has knocked the doors of this court armed up with the following five grounds of appeal, namely: 1. The first appellate court erred in law and facts for failure to consider the admission of the respondent on the claim of Tshs 3,537,200/= which was reflected on her evidence at the trial court. 1 2. The teamed Magistrate at the first appellate court erred in fact by relying on the facts of payment of Tshs 3,537,2000/= on 29/08/2021 without any proof 3. The first appellate court erred in law and facts by failure to use its appellate jurisdiction to allow the tendering of the Constitution of the group, debts books and other documents which will enhance justice on the aspects of agreements on loans of the group.

4. The first appellate court reached into the wrong decision by relying on the ground of appeal which was not raised on the grounds of appeal and not addressed to the parties.

5. The learned Magistrate in appellate court give failure to provides reasons for its decision. During the hearing of appeal, the appellant was represented by Ms Maula Tweve whereas the respondent enjoyed the legal services of Mr. Onyango Otieno. In arguing the appeal, Ms Maula Tweve first prayed to adopt all grounds of appeal and briefly argued them as follows. That the first appellate court (District Court), erred in not considering the fact that the respondent had admitted being indebted. Since the evidence at the trial court is clear that the respondent had fully admitted the claims, it was wrong for the learned magistrate (at the appellate court) not accord it necessary weight. Since the respondent made an admission to the claims, it was the good basis for the court's 2 decision relying his position in the case of Joshua Wilson @ Obondo vs Okech Odiyo, PC Civil Appeal No 37 of 2020 (High Court - Musoma) which emphasized that the admission of a party forms good basis for court's decision. The District Court unreasonably in the appellate level overturned the said the trial court's decision while its decree was fully executed. She further argued that, the District Court failed to consider the evidence of the appellant at the trial court. On that, she faulted the first appellate court for failure from fetching further evidence from the respondent on the issue of records in her

possession as the evidence of SU2 remains hanging if she fully refunded the said loaned fund. She added that, in a further consideration of the appeal, it is clear that the District Court had raised issues that were not part of the issues deliberated (see page 6 of the first appellate court's judgment). This was on the issue of dividend and whether the respondent had a loan. All these new issues were raised by the court Suo-motto and without affording the parties with the opportunity of being heard. Lastly, she argued that the first appellate court did not consider the gist of the case by both parties' evidence at the trial court thus faulting 3 the first appellate court for misapprehending the facts of the case. With this, she humbly prayed that this appeal be allowed with costs. On his part, Mr. Onyango Otieno contested all the grounds of appeal as follows. Firstly, he submitted that since the cardinal principle in civil cases is proof of the case on balance of probabilities, with the appellant's case, he challenged it as not being clear what really they were claiming. Was it 3,500,000/= or 4,800,000/=. Since there was no any evidence at the trial Court to substantiate their claims, the decision of the first appellate court was justified. The relied letter is not a valid document for the basis of the said award. He challenged exhibit Pl as not being the proper basis for the

award of the said claims. He was of the firm view that, it was rightly ruled by the first appellate court that there was no real and valid evidence in substantiating the appellant's claims. In addition, he argued as there were no any valid exhibits tendered at the trial court, it was astonishing then in that absence of proof, how could the appellant be declared a winner. On that basis, the first appellate court was legally justified to reach that finding, clarified Mr. Otieno. 4 In addition, Mr. Onyango invited this Court to consider one legal issue on the propriety of these proceedings at the trial court contending that the appellant being a financial group (kikundi) are operating under the Cooperative Societies Act, 2013. Under Reg. 83 (2) of GN. 272 of 2015 directs that any dispute of such cooperative society shall first be settled through amicable settlement. On this, he referred this court to the case of Daudi Gerald Kilinda vs Chama cha Msingi Kalemela, Civil Appeal No 5/2019, CAT at Tabora, (page 5 and 6). Another case is Posta na Simu Saccos vs Christopher Ernest Kowi, PC Civil No. 17 of 2022 (High Court at Morogoro) at page 6 and 7 which insists on the need of resolving such disputes via amicable settlement. On these arguments, Mr. Otieno was of the view that the appeal be dismissed with costs. In her rejoinder submission, Ms. Maura Tweve maintained her

earlier submission in chief that the respondent is still indebted and that she settled none. There is no such proof of any sum payment. On the competency of the matter before the trial court, Ms Tweve was of the view that a group is different from a financial institution or saccos. Therefore, a kikundi (group) is not registered under cooperative societies Act but are mere social group contracts. On this, she differed 5 with Mr. Onyango from the position he is proposing. She relied her support in the case of Sabina James vs Mwenyekiti wa Kikundi cha Tamtam, PC Civil Appeal No 58 of 2021 where at page 12 it was insisted that these groups are mere social contracts. Therefore, it is not an organization under the cooperative societies Act. She prayed that the appeal be allowed with costs. Upon hearing the parties' arguments on the competency of the appellant being just a group, I tasked the parties' counsel to address me on this issue whether the appellant being a kikundi is capable of suing. Mr. Onyango on his part submitted that a person who can sue in court is either a natural person or a juridical person. Short of that, none can sue in a court of law. He relied this position under section 4 of the Interpretation of Laws Act, Cap 1 R.E 2019. Furthermore, he cited section 2 and 35 (1) of the Cooperative Societies Act and the case of St. Maurice Vicoba Group A Vs. Francis Mwamlima

Ndaga (Civil Appeal No. 256 of 2020) HC - Dar es Salaam. Ms. Maula Tweve on her part submitted that since the appellant is just a mere Kikundi (group), does not fall under the definition of a cooperative society thus covered under the Cooperative Societies Act. Relying on the definition of locus standi as defined in the case of 6 Lujuna Shubi Ballonzi V. Registered Trustees of Chama Cha Mapinduzi (1996) TLR 203, that a locus standi is governed by common law according to which a person bringing a matter to court should be able to show that his right or interest has been breached or interested with. The High Court has the power to modify the applied common law so as to make it suit local conditions. That since the relationship between the parties was based on a purely social contractual relationship where parties agreed on the terms of performance of the contract as agreed. Since their relationship was based on a social contract, then it is based on a principle of the sanctity of a contract as per the law of contract as stated in the case of Sabina James V. Mwenyekiti Kikundi cha Tamtam page 12 and 13, PC Civil Appeal No. 58 of 2021 making reference of the case of Simon Kichele Chacha Vs. Avelina M. Kilawe, Civil Appeal No. 160 of 2018 which insisted on the principle of sanctity of contract and its reluctance of entertaining excuses for non­ performance. Once contracted, parties

are bound by the terms of the contracts unless prohibited so by law, public policy, fraud, misrepresentation etc. 7 On merit of the case, it is a cardinal principle in a cases that only a party with weightier evidence than the other is the winner of the case (see Helmina Nyoni Vs Yeremia Magoti, civil appeal No 61 of 2020 and Barelia Karangirangi vs Asteria Nyalwambwa, Civil Appeal NO 237 of 2017). In the current case, Ms. Maula faults the trial magistrate for failure to fetch additional evidence from the respondent to suit her case. I wonder if a court of law is duty bound to be a party's agent for fetching additional evidence. Failure to bring material evidence in your case, suggests a failure to prosecute your case. In any case, a court of law being not any party's agent, cannot be faulted as wished by Ms. Maula learned advocate. Be reminded that this being a court of law is not any party's mom. The court decides basing on material evidence presented by parties to the case. Therefore, as the appellant had not discharged their necessary duty of establishing their case as per law, deserved the legal verdict rightly accorded by the trial court. On legality of the case before the trial court, in essence I agree with Mr. Onyango that where a party to the case involves a Cooperative Society or a financial group dully registered, it must follow the law as per section 35 of the

Cooperative Societies Act, Cap 211 R.E 2002. If not registered, then it squarely falls legal sword of lacking legal personality, and thus as rightly ruled in the case of St. Maurice Vicoba Group A 8 Vs. Francis Mwamlima Ndaga (Civil Appeal No. 256 of 2020) HC - Dar es Salaam that "/I society which is unregistered is devoid of these rights and cannot purport to exercise any of such rights in its own name. Since in this case the appellant in this case miserably failed to prove its registration/incorporation, the trial court, having found, as it correctly did in page of its judgment, that the legal status of the appellant was uncertain, it ought to have stopped thereby striking out the suit as it had been rendered incompetent for being instituted by a non existent being". In my considered view, the position taken by Hon. Dr. Massabo, J in the above case, strictly applies for situations covering Saccos Societies and vicoba groups. The question to ask now is whether this Tupendane Group is one amongst them?. Going by record, especially the testimony of SMI at the trial court at page 2, reads: ....Tuiianza kikundi tarehe 2/9/2020. Ni kikundi cha kuweka na kukopa kwa riba ya asiiimia 5. Tuiikua wanachama 55.......... " I am also aware of the position taken by my sister Mnyukwa, J in the case of Sabina James (Supra), where she relied her position basing on the social contract principle

and thus invoked the doctrine of sanctity of the contract, that parties are bound by it. However, to my understanding, the doctrine of the sanctity of contract as envisaged in 9 the case of Simon Kichele Chacha Vs. Aveline M. kilawe, involved individual parties unlike the current case which involved a group member and the organization which in essence is an organization involving itself on financial transaction which is purely a cooperative function under the Cooperative Society. It being an organization involved into financial matters, it must have been registered under the Cooperative Societies Act with its constitution. The situation would have been different had it been an organization in non-financial dealings such as "kufa na kuzikana" The appellant being an organization formed purely for financial issues with interests, that was an organization squarely fitting under the Cooperative Societies Act. The Cooperative Societies Act, defines a co-operative society as an association of persons who have voluntarily joined together for the purpose of achieving a common need through the formation of a democratically controlled organisation and who make equitable contributions to the capital required for the formation of such an organisation, and who accept the risks and the benefits of the undertaking in which they actively participate (See section 2 of the Societies Act). As

rightly pointed out by my Sister Judge in St. Maurice Vicoba Group A Vs. Francis Mwamlima Ndaga (Supra) that a right to sue is not an automatic right. Such right only is available to natural and 10 legal/juridical persons such as corporations and or their recognised agents as per Order III rulel of the Civil Procedure Code [Cap 33 R.E 2019]. I node head with her. In our jurisdiction, the legal personality which the appellant purports to have vests in such entities as companies duly incorporated under the Companies Act [Cap211R.E2002] and other entities conferred with legal personality by statutes under which they are established. An example of such entities are cooperative societies registered under the Cooperative Societies Act, Cap.211 (R.E.2002). Section 2 of this Act defines a cooperative to mean a society registered under the Act and includes a primary society, secondary society, apex and the federation. A primary society, is understood as a registered society whose members are individual persons or an association of such individual persons or an association and any cooperative body other than a body registered under the Companies Act. As per section 35 of this Act, once a society is registered it becomes a body corporate by the name under which it is registered and it naturally acquires perpetual succession, a common seal power to own property, to enter into contracts. It

also acquires powers to institute and defend suits and other legal proceedings. A society which is unregistered is devoid of these right and cannot purport to exercise any of such rights in its own name. As the members opted not li to register it, they assumed undertaking the possible risks as this. The dead teach the living, it is high time that similar groups consider their legal status well, in the event of such defaults. There might be scrupulous persons joining these groups just because they know the legal deficiencies in their operations. Again, let the innocent members of these numerous scattered groups be reminded that, you join these called social groups with high risk of unscrupulous members' ill motive. In view of this, I invoke the revisional powers vested in this court by section 44(1) of the Magistrate Courts Act [Capll RE 2019], revise the proceedings of the two lower courts and I accordingly quash and set them aside for being premised on an incompetent suit. For similar reasons, I strike out this appeal. As for the costs, considering the circumstances of the suit, I find it to be in the interest of justice that parties should bear their own costs. It is so ordered. 12 Court: Ruling delivered this 28th day of February, 2023 in the presence of Mr. Mligo, advocate for the Appellant, Mr. Onyango, advocate for the respondent and Mr. Kelvin Rutalemwa, RMA. F. H. Mahimbali

JUDGE 13