ms ilabila industries ltd 2 others vs tanzania investment bank another 2004 tzhccomd 5 18 november 2004

IN THE HIGH COURT OF TANZANIA (COMMERCIAL DIVISION) AT DAR ES SALAAM COMMERCIAL CASE NO. 27 OF 2002 M/S ILABILA INDUSTRIES LTD...1st APPLICANT JOHN MOMOSE CHEYO............. 2nd APPLICANT NGULA VITALIS CHEYO............. 3rd APPLICANT VERSUS TANZANIA INVESTMENT BANK.. 1st RESPONDENT PHILEMON N.MGAYA t/a ] ERICK AUCTION MART ] AND COURT BROKER ]....... 2nd RESPONDENT RULING KIMARO, J. This is a highly contested application in which the applicants are seeking for leave to appeal against the decision of this court dated 14th September 2004 (Kalegeya J). That decision rejected to set aside Sale of Landed Property on Plot No. 1472 Msasani Peninsular, comprised of CT No. 321324, conducted on 5th September, 2004. The application has been filed under Section 5 (2) (c) of the Appellate Jurisdiction Act, 1979 and Rule 43 (a) of the Court of Appeal Rules, 1979 Order XLIII rule 2 and Section 95 of the Civil Procedure Code 1966. The application is supported by the affidavits of John Momose Cheyo and Moses Maira. 2 The respondent’s opposed the application through support of counter affidavits by Mr. Lugano Mwandambo, Raymond Baravuga, Philemon Mgaya, Azim Hooda and Suleiman N. Alhilal. The main reasons for seeking for leave to appeal as given in paragraphs 3 and 4 of the affidavit of John Momose Cheyo and paragraphs 3,4 and 6 of the affidavit of Moses Maira when the application was filed on 15th September, 2004 are: John Momose Cheyo’s affidavit: “Para 3- That as one of the applicant and owner of the house I am aggrieved by the said decision since the house has been sold at a throw away price. Para 4 - Further that the sale has resulted from a decree the validity of which is being contested in the Court of Appeal. ” Moses Maira’s affidavit: “ Para 3 - That the applicant’s are aggrieved by the said decision on the main ground that the judge erred in interpreting the law, Section 133 of the Land Act, 1999 as amended and sanctioning the sale of the house at T.shs 3 Para 4 - That after making a finding that the Land Act, 1999 is applicable in this matter this Honourable Court ought to have found the sale illegal. Para 6 - There are serious matters of law of public importance arising out of section 133 of the Land Act 1999 as amended which should be determine by the Court of Appeal of Tanzania. ” In a counter affidavit sworn by Mr. Lugano J.S. Mwandambo, he denied that the validity of the decree which gave rise to the sale of the house has ever been challenged prior to the sale of the property or at all much as an appeal is intended to be pursued on the matter. As regards Mr. Maira’s affidavit on Section 133 of the Land Act 1999 Mr. Lugano J.S. Mwandambo deponed that it has never been a subject of interpretation by the Honourable Court in an application for setting aside sale and so this court cannot be faulted for an error not committed. It is deponed further that the decision of this court was given after thorough scrutiny of the evidence which was before the court and that the granting of leave to appeal is not mandatory but a discretion of the court. 4 Subsequent to the Counter affidavit by Mr. Mwandambo, Mr. John Momose Cheyo filed a supplementary affidavit in which he challenged how the auction was conducted contending that the sale of the property was visited by many irregularities and errors which merit the scrutiny of the Highest Court in the land. He prayed that the application be granted. As stated before the application is highly contested and I feel that it is important to have the entire supplementary affidavit of Mr. Cheyo be reproduced in this ruling: a 1. That upon reading in yesterdays newspapers a statement by Mr. Philemon Mgaya, the Second Respondent herein copies of which are annexed hereto and collectively marked JMC “A”, I personally conducted a search at the Company Registry at the Lumumba Street Dar es Salaam. 2. The said statement indicate that the purchase price of my property on Plot No. 1472 Masaki Dar es Salaam id est shs. 143,000,000/ = was paid in whole by the 2nd Respondent into the Commercial Court on 20th September, 2004. 3. I am informed by the Chambers of Messrs Maira and company Advocates that the said payment was made 5 well after Mr. Hamisi Dihoni of that firm had made a perusal in the court file and found as a fact that no payment had been made as at 12.30 p.m. on the said 20th September, 2004, when he perused the file. 4. That there is no evidence that the bidder Mr. Twaha Yakubu of P.O.Box 78067 Dar es Salaam did deposit Ths.35, 750,000/= being 25% at the fall of the hammer as per condition stipulated in the advertisement contained in the Guardian dated Friday august, 6th 2004. See Annexure JMC ‘B’. 5. That on the 23rd day of September, 2004 I learned through the press as aforesaid in para 1 hereinabove that the Tshs. 143,000,000/ = had been paid by Cheque No.002041 by a Company known as Victoria Real Estate Developers Limited. I state on oath that neither this company nor any of its directors did attend and bid at the said auction. The list of bidders as reported in Mtanzania Newspaper dated Monday 6th day of September, 2004 were as follows: S.No Name Address Amount Result Offered 1. Twaha Yakubu P.O.Box 78067 143,000,000.00 Declared 6 Winner 2. Azim Mahunda N/A 142,000,000.00 2nd Bidder 3. Ben Mulokozi N/a 140,000.00 3rd Bidder A copy of the said Mtanzania Newspaper is annexed hereto marked annexure JMC’C’ 6. An official search conduced in the Registry of Companies at Lumumba Street Dar es Salaam in respect of Victoria Real Estate Developers Ltd reveals the following: Company Registered Name: Victoria Real Estate Developers Limited. Registered Office: City Centre Jamat/India Street Plot/Block No. 11 A/2-371 -499/101 Date of registration: 7th January, 2004 Registration No: 47869 Directors/ Managers: 1. Suleiman Mohamed P.O.Box 2465 DAR ES SALAAM 2. Hemed Nassor Mohamed Town Planner P.O.Box 3988 ZANZIBAR 3. Rashid Nassor Mohamed P.O.Box 2465 DAR ES SALAAM 7 Company search reports, receipts are annexed hereto and marked JMC (D’ 7. I aver that none of this officers/Directors and /or Managers of this Company did attend nor bid at the auction on the 5th day of September, 2004 nor is it shown that any of the bidders in para 5 hereinabove aced as a representative or agent of any limited liability Company. 8. In the premises I pray that the said sale of my property was visited by many irregularities and errors which merit the scrutiny of the Highest court in the land I therefore pray that the orders sought in the application should be granted. 9. All what is stated in paras 1,2,4,5,6,7 are true as of my own personal knowledge, Para 3 is true as per sources indicated therein and 8 is the according to my own belief. Solemnly sworn by the sai ] Sgd. by. J.M.Cheyo. John Momose Cheyo ] .............................. At Dar es Salaam this 24th ] Day of September, 2004 ] 8 Before Me: COMMISSIONER FOR OATHS Presented for filing this 24th day of September, 2004.” In a counter affidavit by Mr. Mwandambo, he deponed that the supplementary affidavit of Cheyo contain matters which do not fall within the ambit and scope of the ruling which was given by this court on 14th September, 2004. There is also a counter affidavit filed by Mr. Baravuga in which he denied some of the reasons given by Mr. John Momose Cheyo and that of Mr. Maira. He among others, contends that no sufficient reasons have been given to allow the grant of the application. The other counter affidavits filed by Azim Hooda, Philemon Mgaya and Suleiman N. Alhilal basically reply the supplementary affidavit filed by Mr. John Momose Cheyo and they did not feature in the arguments when the application was heard. The respective advocates appearing for the parties in this application namely; Mr. Maira for the applicants, Mr. Mwandambo for the 1st Respondent and Mr. Baravuga for the 2nd Respondent, adopted their own affidavits sworn to support their case. 9 Mwandambo for the 1st Respondent and Mr. Baravuga for the 2nd Respondent, adopted their own affidavits sworn to support their case. Mr. Maira for the applicants argued that an aggrieved party in our jurisdiction has got a right to go for another opinion at a Higher Court and that the affidavits filed in support of the application show that the applicant has an arguable appeal in the Court of Appeal both on facts and on law. He said the central argument which will preoccupy their arguments is that the certificate of sale states interalia that a limited liability company was the highest bidder and won the sale. They will argue that the limited liability company was neither the bidder nor the successful one. They will also argue that the sale was void ab initio and that the respondents did not give full facts when the application was argued. They failed to disclose that no sale had taken place as the bidder had not paid. They also did not disclose to the court that the successful bidder failed to comply with the requirement for payment of the 25% of the bid price on the same day. Further argument will be that the 75% of the balance of the bid price was not paid and so the public auction failed to materialize. The sale to the Limited liability company was not a public sale but a private sale. 10 is what this court failed to appreciate. The sale must get the best price. It was further argument by Mr. Maira that the only value on record is T.shs 391,000,000. Arithmetically, 25% below T.shs 391,000,000/= would be T.shs 291,000,000. Mr. Maira said the applicant is entitled to leave because the ruling has errors which have to be corrected by the Court of Errors and that is the Court of Appeal. In his reply, Mr. Mwandambo asked the Court to ignore the submission made by Mr. Maira because it is based on the supplementary affidavit of Mr. John Momose Cheyo which contain matters which do not fall within the ambit and scope of the order upon which leave is sought. He said it will be irregular for me to fault matters which were not at issue before my Brother Judge and even the Court of Appeal cannot be called upon to determine matters that were not before the trial court. Mr. Mwandambo submitted further that although he stated categorically in his counter affidavit that the matters raised in the supplementary affidavit of Mr. John Momose Cheyo were not covered in the application to set aside sale, this is a fact which they have not disputed. While conceding that a party who is aggrieved has a right to appeal, Mr. Mwandambo said she/he must satisfy the court 11 that the appeal raises grounds which merit the attention of the Court of Appeal. He referred to the cases of Wambele Mtumwa Shamte Vs Asha Juma Civil Application No 45 of 1999(Court of Appeal) (Unreported) and Gandensia Mzungu Vs IDM Mzumbe Civil application No. 94 of 1999 (Court of Appeal) (Unreported) where Ramadhani JA held that for leave to appeal to the Court of Appeal to be granted, the applicant must satisfy the court that prima facie there are grounds meritting an appeal to the Court of Appeal. As regards Section 133 of the Land Law Act 1999, Mr. Mwandambo said every provision of the law touches matters of public importance. However, leave should not be granted simply because a litigant is aggrieved by the interpretation given by the court. Mr. Mwandambo’s opinion is that it would have been different if there were two conflicting decisions on the interpretation of the same provision. That position would have attracted the decision of the highest court of the land for an acceptable view. In the decision which is sought to be impugned, the decision was made correctly. He prayed that the application be dismissed with costs. Mr. Baravuga for the 2nd Respondent supported fully the submission made by Mr. Mwandambo. In addition, he submitted that the affidavits of Cheyo and Maira do not disclose sufficient grounds. Making reference to Mr. Cheyo 12 Mr. Baravuga for the 2nd Respondent supported fully the submission made by Mr. Mwandambo. In addition, he submitted that the affidavits of Cheyo and Maira do not disclose sufficient grounds. Making reference to Mr. Cheyo’s affidavit para 6, where he depones that he will suffer irreparable loss, Mr. Baravuga said that is the normal hazard of a judgment debtor who fails to satisfy a decree and it cannot be a ground of appeal. As for paragraph 6 of Mr. Maira’s affidavit, Mr. Baravuga said it is only a generalization which has not disclosed points of argument. Mr. Baravuga said it is now settled that leave can only be granted if there are points of law to be determined by the court. He said the points of law and facts listed by Mr. Maira in his submissions were not an issue before Hon. Justice Kalegeya and so this court has no basis to grant the application. He referred to the case of Elisa Moses Msaki Vs Yesaya Ngaten Matee 1990 TLR 90. In this case an application for leave to appeal to the Court of Appeal was refused because it was found out that matters on which the applicant sought leave to base his appeal were new matters which were never at issue in the trial court. In brief reply by Mr. Maira said that he will raise the issue of fraud which is not new and it suffices for grant of 13 closed up his submission by saying that the interest of justice requires that the application should be granted. Briefly those were the submissions made by the Advocates appearing in this application. In Wambele Mtumwa Chamte V Asha Juma Civil Application No. 45 of 1999 (Court of Appeal) (Unreported) Ramadhan JA said - “ Unfortunately, it is not provided what factors are to be taken into account when considering whether or not to grant leave to appeal to this court. However, it is obvious that leave will only be granted if the intended appeal has some merits whether factual or legal. ” In another case of GAUDENCIA MZUNGU V THE LD.M. MZUMBE Civil Application No.94 of 1999 (Court of Appeal) (Unreported) the same Justice held that: “Again, leave is not granted because there is an arguable appeal. There is always an arguable appeal. What is crucially important is whether there are prima facie, grounds meriting an appeal to this court. ” The question before this court is whether there are grounds meriting grant of leave to appeal to the Court of Appeal. 14 I deliberately reproduced a portion of the affidavit initially filed by Mr. John Momose Cheyo in support of the application and the supplementary affidavit for purposes of seeing whether the supplementary affidavit actually supplements the first affidavit filed or it introduces new matters altogether. Frankly speaking, the supplementary affidavit introduces completely new matters which were not before the court when the application for setting aside the sale was heard and determined by this court: This is what is gathered from a thorough reading of the proceedings and the ruling for setting aside the sale. The supplementary affidavit though heavily relied upon by Mr. Maira in advancing arguments in support of the application cannot be of any assistance to the applicants. The decision of the Court of Appeal in Elisa Moses Msaki V Yesaya Matee 1990 TLR 90 is clear. An application for leave to appeal to the Court of Appeal cannot be granted where the applicant relies on matters which were not at issue in the trial court. While making a reply, Mr. Maira said he will rely on the issue of fraud and it suffices for granting leave. I pause here to remind Mr. Maira of what John Momose Cheyo said in respect of fraud in his affidavit to support the application for setting aside sale: 15 “ Para 4 - That the sale was taunted with fraud as the said decree is being contested against by the 3rd Applicant in the Court of Appeal to wit he did not consent to the settlement agreement which gave birth to the decree of the court. A copy of the notice of Appeal is hereby annexed to and marked JCMI to form part of this affidavit. ” The above paragraph is evidence that fraud was raised in connection with the decree which gave rise to the sale. It was not raised in connection with the auction. It was thoroughly discussed by the court and a decision made. Hon. Justice Kalegeya said: “ I will start with the complaint that the sale was taunted with fraud as the 3rd Applicant did not sign the settlement Agreement leading to the decree that formed the basis of the order for sale, and which is being challenged before the Court of appeal. With greatest respect to Mr. Maira this ground cannot legally support the application. 0.21 Rule 88 (1) quoted above is very clear on this. Here, there is no spec of irregularity or fraud as regards the decree that led to the sale. Yes, the applicants may have a quarrel with the decree but that in itself does not establish fraud. The 16 decree and subsequent orders of the court remain as they are until otherwise overturned by the Court of Appeal. A mere existence of a notice of Appeal, and for sake of argument, even an appeal, cannot suffice to secure the order sought. In any case, it should be noted that the intended appellant is only the 3rd Applicant. In fact, in the circumstances of this case, calling upon this court to hold that the decree resulting in the sale of the property is tainted with fraud tantamounts to calling upon this court to disown its own decision and more serious of them all, tantamounts to turning this court into an appellate court on its own decision. It will have stepped into the shoes of the Court of Appeal, where applicants allege are taking their complaints. ” The decision of the court shows that fraud was not raised in connection with the auction which took place. The issue of fraud as raised by Mr. Maira in his submission is a new matter. It is not a matter which was raised and discussed in the ruling as Mr. Maira wants this court to believe. Even the arguments by Mr. Maira that the respondents failed to disclose material facts are also new matters which cannot be considered by this court because of same reason. As regards Section 133 of the Land Act, 1999 it was never mentioned in the proceedings for setting aside the sale. I do not see how Mr. Maira can rely on it on appeal. 17 Having ruled out that the supplementary affidavit raises new matters and cannot be relied upon to grant leave, I will proceed to the other ground raised and that is the interpretation of section 132 of the Land Act, 1999. Again this was an issue which was canvassed in details by my Brother Judge starting at the botton of p.13 (typed ruling) up to p. 16 (typed ruling). I only need to add that sale by public auction may not necessarily fetch the market value of the property. The auction price may be higher or lower than the market value. There are a lot of determinant factors to the auction price. I do not think that it is easy to set a formula for prices in an auction. Due to this reason, I do not consider a low price (per se) in an auction to be a ground for an appeal. The cases of Wambele Mtumwa Shamte V Asha Juma (supra) and Gaudensia Mzungu V The IDM Mzumbe (supra) give circumstances under which an application to appeal to the Court of Appeal can be granted. While it is not disputed that a person aggrieved by a decision of the court has a right to appeal, that right can only be exercised where the intended appeal has some merit whether factual or legal. I have carefully read the proceedings and the ruling of the court dated 14th September 2004 and also all the affidavits filed in this application together with the 18 submissions of the advocates. I am afraid to say that in this application the applicant has totally failed to show that prima facie the intended appeal has merit, whether factual or legal. The application is therefore dismissed with costs. N.P.KIMARO JUDGE 16/11/2004 Date: 18.11.2004 Coram: Hon. N.P.Kimaro, J. For the 1st Applicant - Absent. For the 2nd Applicant - Absent. For the 3rd Applicant - Absent. For the 1st Respondent - Absent. For the 2nd Respondent - Present. CC: R. Mtey. Mrs. Cheyo: Mr. Cheyo has traveled. Court: Ruling delivered today. Order: The application is dismissed with costs. N.P. KIMARO, JUDGE 18/11/2004 3,951-words. JD. ( Certify that tMs ii i tlftie Correct 6’ the origLio! order h>dgement Rolling inn n a . . iiV z 1111/ C' •I - —vA. I- - - - -___ - - — — Registrar Commercial Court Dsm. Dite I y_L H