MIHAMBO SELELI MASUNGA VS SME IMPACT FUND TANZANIA LIMITED AND OTHERS

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA TABORA SUB-REGISTRY

AT TABORA MISC. LAND APPLICATION NO. 15272 OF 2024 MIHAMBO SELELI MASUNGA ................................. APPLICANT

VERSUS 1. SME IMPACT FUND TANZANIA LIMITED............................... 1st RESPONDENT 2. MANGWEMBE 2011 COMPANY LIMITED ............................ 2nd RESPONDENT 3. MAGANGA G. MASUNGA ................... 3RD RESPONDENT 4. BARIKINSHIP GROUP LIMITED .......... 4™ RESPONDENT Date of Last Order: 24/09/2024 Date ofDelivery: 08/10/2024

RULING KADILU, J. The applicant is seeking a temporary injunction. to restrain the respondents, their agents, and any person acting under their instruction from entering and using the disputed property and grinding machine which was not part of the collateral used to secure the mortgage agreement pending the hearing of the main case that is ongoing in this court. The application is made under Section 68 (c) and (e), and Order XXXVII, Rule 1 of the Civil Procedure Code (CPC) [Cap. 33 R.E. 2019]. It is also supported by the affidavit sworn by him in which he alleges that he is the owner of farm No. 175 with certificate No. 38125 located at Nata Village, Nzega District within Tabora Region. The applicant avers that on 02/07/2019, he signed a mortgage deed with the 1st respondent to secure a term loan of TZS. 150,000,000/= issued to the 4th respondent and charged farm No. 175 as collateral. He added that between 23rd and 24th May 2024, the 1st, 2nd, and 3rd respondents closed his i godown with bags of rice, bran, rice, and grinding machine No. 75 which were not part of the collateral used to secure the mortgage agreement. According to the applicant, the grinding machine used to secure the loan agreement between the 1st and 4th respondents was machine No. 55 but the respondents attached machine No. 75 which he bought after the mortgage was created. He opines that he stands to suffer

irreparable loss and inconveniences if the application will not be granted hence, he urged the court to consider his application. The 14, 2nd, and 4th respondents filed counter affidavits opposing the application. The 4th respondent stated nothing regarding the mortgage deed and collateral. The 1st and 2nd respondents contended generally that the applicant failed to service a loan facility as agreed hence, farm No. 175 was sold to the 3rd respondent who emerged as the highest bidder in the public auction. According to the 1st and 2nd respondents, the applicant is no longer the owner of farm No. 175 and the attached grinding machine which was pledged to secure a loan facility. They refuted the allegation that there were properties in the godown allegedly owned by the applicant. In their view, the applicant failed to bring material evidence on the strength of which the court can exercise its discretion in granting him a temporary injunction pending the determination of the main suit. When the application was called for a hearing, the applicant was represented by Advocate Saleh Makunga, the 1st and 2nd respondents were represented by Mr. Helmes Mutatina also the learned Counsel, whereas Ms. Sophia Gabriel, the learned Advocate, appeared for the 4th respondent. The 3rd respondent never appeared in court despite being duly served. 2 Supporting the application, Mr. Saleh submitted

that in the case at hand, there is a serious triable case as evidenced in the main suit. He elaborated that among the applicant's properties sold by the respondents is the cereal grinding machine which is hot part of the mortgage transaction. According to Mr. Saleh, there are sacks of maize and rice in the godown that belong to the applicant and are not part of the mortgage. He argued that the respondents' control of those properties affects the applicant by denying him the opportunity to continue with agricultural activities, lack of food, and shortage of income. In supporting his argument, the learned Advocate cited the Case of Atiiio v. Mbowe [1969] HCD n.

284. On his part, Mr. Helmes Mutatina argued that the law is clear that the applicant of a temporary injunction should show the existence of the factors laid down in Atiiio z, Mbowe. According to him, the applicant has not proved the factors in his affidavit and su b miss ions 4 The mortgage deed shows on page 14 that the machines in the godown are part of the mortgage transaction. The learned Counsel explained that an injunction is only granted to prevent irreparable loss; the loss that cannot be compensated by monetary compensation/general damages. He cited the case of Thomas A, Mbega & Another v. Lipina Michael Mrema t/a Basic Stop Shop & Another, Misc. Land Application No, 2 of 2018, High Court at Dar es Salaam, to buttress his stance. Mr. Helmes argued that the applicant did not show any irreparable loss that he is likely to suffer if this application is not granted. To him, all the losses he claims are capable of being repaired by award of general damages. Mr. Helmes concluded that there is no way the applicant may claim the loss he 3 is alleging to be irreparable. He contended that on the balance of convenience, the applicant does not deserve to be granted a temporary injunction because he failed to service the loan as contracted. Granting the applicant an injunction shall cause more inconvenience to the respondents than what will result to him if the injunction is not

granted. The 1st respondent is the lending business institution so, stopping it from exercising the rights over mortgaged properties will paralyze its business completely. The Counsel referred to the case of Agency Cargo International v. EurafricanBank(T) Civil Case No. 44 of 1998, High Court of Tanzania at Dar es Salaam, (unreported). He urged the court not to allow the applicant to hide behind AtiHo k Mbowe \s avoid the obligation to repay the loan. The court should not assist him in avoiding to discharge of his contractual duties. Ms. Sophia Gabriel supported the application allegedly because the machines, maize, and rice were not part of the mortgage transaction. She submitted that machine No. 75 was purchased in 2021 while the Ioan agreement was entered into in 2019 so, it could not be part of the mortgage transaction. The machine that was part of the mortgage is machine No. 55 hence, its attachment could be okay, but not machine No.

75. Ms. Sophia stated that rice together with maize were obtained after the mortgage agreement, therefore, they are not part of it. After having considered the grounds of the application and submissions for and against it, I am now in a position to determine whether the application is meritorious or not. The application has been brought under Section 68 (c) and (e) of the CPC which stipulates: 4 "In order to prevent the ends ofJustice from being defeated, the court may subject to any rules on that behalf- (c) grant a temporary injunction... or (e) make such other interlocutory orders as may appear to the court to be Just and convenient" Order XXXVII, Rule 1 of the CPC provides that: "Where in any suit it is proved by affidavit dr otherwise that any property in dispute in a suit is in danger of being wasted, damaged, or alienated by any party to the suit of or suffering the loss of value by reason ofits continued use by any party to the suit, or wrongly sold in execution of a decree; or that the defendant threatens, or intends to remove or dispose of his property with a view to defraud his creditors, the court may by order grant a temporary injunction to restrain such act or make such other order for the purpose ofstaying andpreventing thewasting? damaging, alienation, sale, loss in value, removal or disposition of the property as the court thinks fit, until the disposal of the

suit or until further orders." In Atilio v. Mbowe, (supra) the Court laid down three principles to be considered in granting a temporary injunction and they include a demonstration of the existence of a prima facie case; the likelihood of suffering an irreparable loss; and that the balance of convenience should tilt in the applicant’s favour. The applicant herein gave a seeming statement that there is a serious triable issue as indicated in the main suit. His major concern is that the respondents attached his godown consisting of a machine, rice, and maize, which were not part of the mortgage agreement. According to the applicant, if the respondents are allowed to continue using those properties, he will suffer a loss that cannot be cured by monetary compensation. 5 With due respect to the applicants Advocate, I am unable to agree with him that the respondents' use of the alleged properties is likely to result in irreparable loss. In his affidavit, the applicant stated that the godown consists of bags of rice, maize, and bran but he did not indicate the number of sacks for each. He also argued that machine No. 75 was not part of the mortgage transaction as the machine that was involved was No.

55. On page 14 of the mortgage deed where the property is described (type of property), it is indicated as "One landed property (Rice Processing Factory Premise/building including the machines/' Further, clause 9.0 (b) of the Loan Agreement describes the security offered as, "Chattel Mortgage overall machinery and equipment for rice milling installed at the factory premises of Mihambo Seleli Masunga, located in Nata Village, Farm No.

175. The pledged machines include the following; rice milling, bucket elevators/conveyors, grading machine, De-stoner, and electrical switch box." With these descriptions, it is clear that neither the mortgage deed nor the loan agreement refers to machine numbers. The assertation that the mortgage agreement involved machine No. 55 not No. 75, is a mere statement from the bar. The documentation is unambiguous that the collateral was farm No. 175 with a rice processing factory consisting of machines therein. In the premises, this court finds that the applicant has not shown any justification for this court to grant him a temporary injunction. He has failed to demonstrate how the facts of this application fit the principles laid down in AtiHo v. Mbowew ttxo. requirements stipulated under Section 68 (c) and 6 (e), and Order XXXVII Rule 1 of the CPC. Therefore, I dismiss the application with costs. It is so ordered. KADILU, MJ.

JUDGE 08/10/2024 The ruling delivered in chamber on the 08th day of October, 2024 in the presence of Mr. Emmanuel Musyani, holding brief for Mr. Saleh Makunga, Advocate for the applicant, and Ms. Sophia Gabriel, Advocate for the 4th respondent.

JUDGE 08/10/2024 7