kimotco intertrade company limited vs ecobank tanzania limited 2022 tzhccomd 330 25 october 2022

IN THE HIGH COURT OF TANZANIA (COMMERCIAL DIVISION) AT ARUSHA MISC. COMMERCIAL APPLICATION NO.9 OF 2022 KIMOTCO INTERTRADE COMPANY LIMITED…………APPLICANT. VERSUS ECOBANK TANZANIA LIMITED……….…………………RESPONDENT. RULING. Date of last Order: 18th October, 2022. Date of Ruling: 25th October 2022. MARUMA, J. The Applicant, Kimotco Intertrade Company Limited, filed this application under orders XXXVII Rules 1(a) and 3 of the Civil Procedure Code [Cap.33 R.E 2019] and requests the following orders from this honourable Court: 1. That the honorable court orders and grants the applicant an interim injunction restraining the respondent or persons acting under instructions of the respondent from exercising any and all rights under the facility agreement and registered mortgage issued by the respondent to the applicant pending the determination of the main suit. 1 2. That this honorable court be pleased to issue and grant the applicant an interim injunction against the respondent ,her agents and /or servants from disposing by auction or in any manner alienating or dealing with the landed properties of the applicant namely plot No.4 Engorora Village Area, Arumeru District, Arusha region with CT no. 24136 pledged as a security in favour of the defendant and movable assets namely three vehicles with registration numbers T.332 DGC,T.568 DGS and T.569 DGC. 3. Costs of the application be borne by the Respondent. 4. Any other orders that this honourable court deems appropriate and just. Opposing the applicant’s prayers, the respondent filed a counter affidavit sworn by HOPE LIANA refuting all the facts in the applicant’s affidavit. When the matter was set for hearing, Mr. Sheki Mfinanga, advocate, appeared to represent the Applicant, Benedict John Mberesero who was also present. On the other hand, the Respondent had the service of Mr. Allen Godian, Advocate. 2 In his submission in support of the application, Mr. Mfinanga for the applicant prayed to adopt the content of the affidavit of John Mberesero to form part of his submission. He submitted that the Applicant is seeking an injunction against the respondent in the interim. He went on to submit that the principle for the Court to grant an order for interim injunctions was provided by a number of cases, including the case of Atilio vs Mboye, 286 of 1969, whereby the court provided three grounds for temporary injunctions to be issued, including whether there is a triable issue or a prima facie case. Whether there is an irreparable loss, and the last is the balance of inconvenience between the parties. He submitted that all the conditions were met in their application. The counsel went on to clarify the conditions one by one and demonstrate how they are applicable to the application at hand. He further requested the court order to grant an interim injunction restraining the respondent or persons acting under instructions of the respondent from exercising any rights under the facility agreement and registered mortgage issued by the Respondent to the Applicant pending the determination of the main suit. 3 On the other hand, Mr. Allen prayed to adopt the counter affidavit contesting the application filed on July 26th, 2022. He submitted that the application had been filed prematurely as the applicant tried to base his case on paras 8 and 9 of his affidavit in support of the application, which clearly indicated that there were some communications between the parties herein. He submitted the demand notice, which was marked as KICL-& of paragraph 9 of the Applicant’s affidavit was to remind the Applicant to perform his obligation as explained in the mortgage from which he benefited. He also submitted that in paragraph 10, the applicant attached the letter marked as KICL-8 in which the applicant was demanding reconciliation of the loan. He went on to submit that up to date there was no auction to sell the property under the mortgage, no debt collector appointed, but only a letter which was to remind the parties of their contractual obligations. He said that it is so unfair for the parties to not settle on duties and obligations under their contract and run to this court. The respondent herein did not breach any of the terms as per the contract and these prayers are premature and should be dismissed. He made reference to the case of General Tyres East Africa Ltd vs HSBC Bank PLC, Misc. Civil Appl No.35 of 4 2005 TLR 2006 at page 60. Where by the Court stated that ".. The Court jurisdiction to interfere….. breach must be from the act of the Defendant…" He submitted that to write the demand notice is the right of the Respondent. Also, the Applicant cannot claim that the property is a matrimonial home as the said property was the security agreed to be mortgaged and consented. He further submitted that the issue of different amounts is an afterthought as the applicant has already filed his application in Court and this does not exclude him from exercising his duty and obligation under the loan. He added that if the applicant has any issue regarding to the amount or figures. He was supposed to use internal means as stated in the letter to resolve the issue, but not to run to this Court while there was no notice of sale. He prayed for this application to be dismissed with cost. In his rejoinder, with respect to the long submission, Mr. Sheki submitted that from the entire submission, he did not state why there were two figures. He argued that the issue of the application being premature was submitted from the bar, not in the counter affidavit. He submitted that it is clear from the demand notice that the applicant was given 7 days to clear the 5 debt or recover measures with no further notice. He said the demand notice is among the statutory measures of the initial stages and cannot be termed as a reminder. He further submitted that the case of General Tyer (Supra) is in support of their application as all conditions were met. He went further to submit that the breach must be on the part of the Defendant as is in the present application. The Applicant requested for reconciliation of the amount, but the Respondent insisted on the figure of TZS. 362, 919,685.11/= and believed that the applicant was supposed to pay the demand letter but contained a figure different from what was actual. Also, in the counterclaim, they came with another figure of the amount claimed, which is TZS 291,963,215.78/= being the outstanding amount as at 2nd August 2022. Having heard the submissions from both sides, I had an opportunity to go through the pleadings in support of the application and come up with the findings. The demand notice was issued on 8th June, 2022 and among the matters captioned therein is for the Applicant to pay the outstanding amount of TZS. 362,919,685.11/= as 3rd June,2022 within 7 days, otherwise recovery measure should take its course as reflected in 6 paragraph 9 and annexture KICL-7. Moreover, on 5th July 2022 the Applicant responded to the demand notice by informing the bank that the outcome of the virtual meeting held on 15th March, 2022 and the outstanding should be TZS 64,476,909/= and requested the reconciliation of an account to ascertain the actual loan as stated in paragraph 10 of the affidavit and annexture KICL-8. Also, on the same date, the bank wrote another demand note to commence recovery proceedings against the company, including enforcement of the security, with no further notice for full recovery of the debt. Guided by Order XXXVII Rule 1(a) and 3 of the Civil Procedure Code [Cap.33 R.E 2019], this Court has the power to grant an order for temporary injunction to restrain or stay and prevent the wasting, damaging, alienation, sale, loss in value, removal, or disposition of the property in case the said property in dispute in a suit is in danger of being wasted, damaged, or alienated by any party to the suit of or suffering loss of value or wrongly sold in execution of a decree. Taking the above legal position and applying it to the circumstances in the present application in relation to the conditions therein The facts set forth in the applicant’s affidavit 7 in paragraphs 9 and 11 established the conditions laid down under Order XXXVII (1) (a) of the CPC following the two demand notices issued on 8th June 2022 and 5th July 2022 which set in motion the execution proceedings to sell the mortgaged property provided under paragraph 12 (i) and (ii) of the affidavit to recover the claimed an outstanding amount resulting from the default of loan agreement terms entered between the Respondent and the Applicant in annexture KICL-1. The said circumstances are also supported by the principle laid down in the case of Atilio (Supra). That is, there is a "prima facie case" between the parties on the disputed amount, which needs to be determined by the court. Also, since there is variance in the disputed, there is a likelihood of irreparable losses on the plaintiff’s side which needs court interference to protect the plaintiff’s rights. From the aforesaid findings, I am of the settled mind that, on the balance of probabilities, the applicant has established sufficient reasons for the granting of the prayer sought as it was held in the Kenyan’ case of Kisimani Holdings Ltd & Anor vs 8 Fidelity Bank HCCC No. 744 OF 2012 [2013] EKLR. Court of Appeal of Kenya stated that; "…The balance of probability is in favour of the applicant as the sale of one's property is a serious matter that deprives one's right in law and, as such, should not be allowed to proceed in doubtful circumstances…" Under Order XXXVII Rule 1(a) and 3 of the Civil Procedure Code [Cap.33 R.E 2019] ,I therefore proceed to order an interim injunction against the Respondent to restrain her from proceeding further with the commenced recovery measure pending determination of Commercial Case No. 4 of 2022. The application is granted with costs. Dated at Arusha this 25th day of October, 2022. Z. A. MARUMA JUDGE 9