nam enterprises limited others vs commercial bank of africa tanzania limited 2016 tzhccomd 2061 23 may 2016

IN THE HIGH COURT OF TANZANIA (COMMERCIAL DIVISION) AT PAR ES SALAAM MISCELLANEOUS COMMERCIAL CAUSE NO. 258 OF 2015 (Arising from Commercial Case No. 98 of 2012) NAM ENTERPISES LIMITED ELIAS LUKUMAY APPLICANTS STEPHEN KORDUNi-UKUMAY VERSUS C O M M E R C IA L BAN K OF AFRICA (TAN ZAN IA) LIMITED RESPONDENT r l l tR February & 23f,< Miy,|2016 RULING MWAMBEGELE, 3,: Against an application for leave to defend a summary suit filed by the applicants NAM Enterprises Limited, Elias Lukumay and Steven Kordun Lukumay, Mr. Nyika, learned counsel for the respondent Commercial Bank of Africa (Tanzania) limited has filed a preliminary objection going thus: TAKE NOTICE. THAT at the hearing of the application counsel for the Respondent shall raise a Preliminary Objection on the point of law to the i effect that the application is incompetent for failure to cite the relevant and correct provision of the iaw moving the court to grant the orders sought.'7 As the preliminary objection (henceforth "the PO") is essentially a challenge of jurisdiction of the cpurt and if sustained it renders the application incompetent, it had to be determined first. The PO, notice of which was filed in court on 04.11.2015, was therefore argued on 11.02.2016. At the hearing, both parties were represented; Mr. Mosha, learned counsel, represented the applicants while the respondent had the services of Mr. Nyika, learned counsel. Both learned counsel for the parties had earlier filed their respective 'skeleton written arguments in support of and against the PO as dictated by rule 64 of the High Court (Commercial Division) Procedure Rules, 2012 - GN No. 250 of 2012 (henceforth "the Rules''). Mr. Nyika, learned counsel for the respondent was very brief but to the point % in arguing for the PO. Having adopted the skeleton written arguments earlier filed, Mr. Nyika, learned counsel for the respondent submitted that the applicants have cited Order XXXV rule 3 (1) (b), and Order XLIII rule 2 and section* 95 of the Civil Procedure Code, Cap. 33 of the Revised Edition, 2002 (henceforth "the CPC") to make their application. He submitted that these • provisions are not the correct provisions under which an application for leave to defend a summary suit on the recovery of money secured by mortgage should be made. . He argued that the provisions relied upon deal with suits related to Promissory Notes and Bills of exchange. The relevant provisions for recovery of money secured by mortgage are the provisions of Order XXXV rule 3 (1) (c) either (i) or (ii) of the CPC. The learned counsel submitted further, that Order XXXV of the CPC was amended by the Mortgage Financing (Special Provisions) Act, 2008, whereas rule 3 (1) (c) (i) and (ii) was added. He went on to submit that the suit before the court is for recovery of money secured by mortgage and therefore the appropriate. provisions are the ones added by the amendment. To reinforce this argument, he cited Jo m o K e n y a tta T rad ers L td Vs N a tio n a l B a n k o f Com m erce, .Miscellaneous Commercial Cause No. 195 of 2015 (unreported); a ruling which I delivered on 28.10.2015 regarding this very point. He thus submitted that.-'an application which has cited wrong provisions to' move the court is bound to be struck out as was the case in C itib a n k T an zania L td . Vs T an zania T e le co m m u n ica tio n s Co. L td . & 4 O thers, Civil Application No. 64 of 2003 (CAT unreported) as well as., the four cases cited with approval therein (at page 16). The learned counsel landed by a prayer that the application should be struck out with costs for being incompetent. Responding, Mr. Mosha, learned counsel for the applicants resisted the PO submitting that the provisions under which the application was filed are quite appropriate. In a bid to impress upon the court, the learned counsel prayed, and the court granted the prayer, to read out loud the provisions of Order XXXV rule 3 (1) (b) of the CPC. Having read out loud the provisions of Order XXXV rule 3 (l).(b) of the CPC, the learned counsel stated that the application was properly filed under proper provisions of the law. The learned counsel underlined that the applicants' application does hot fall under-the provisions of Order XXXV rule 3 (c) (i) and/or (ii) as the learned counsel for the respondent tries to impress upon the court. The learned counsel for the applicants went on to submit that in order to know whether the provisions relied upon are appropriate, the court should read the contents of the' affidavit, in support of the application, particularly paragraph 7. He relied upon K u n d a n la l R e sta u ra n t Vs D e rs h i (1953) 20 F.ACA 77, at page 79 where it was stated: "The principle on which the courts act is that where the defendant can show by affidavit that there is . a bonafide friable issue, he" is to be allowed to defend as to that issue without condition". The same observation, the learned counsel added, was made in Z o la Vs R a lli B ro s L td [1969] EA 691 in which it was held: "If the judge to whom the application is made considers that there is any reasonable ground of defence to the claim; the plaintiff is not entitled to summary Judgment" In the circumstances, he submitted,-the application has been filed under a proper law and thus the PO should be dismissed with costs. In a short rejoinder, Mr. Nyika for the respondent reiterated that Order XXXV of the CPC was amended by adding rule 1 (c).(i) and (ii) and that that is the provision which specifically applies for an application for leave to defend a summarysuit for a claim secured by mortgage. He repeated thatthe suit for which the applicants are seeking leave to defend is one for claim ofmoney secured by mortgage and therefore an application for leave to defend ought to have cited Order XXXV rule 3 (1) (c) (i) or (ii) of the CPC. On the authorities relied upon by the learned counsel for the applicants to reinforce his arguments; Mr. Nyika submitted that they are not relevant at this stage; they are relevant to the substantive application. The learned counsel reiterated to have the application struck out with costs. I have subjected the learned rival arguments of the two learned counsel for the parties to serious. scrutiny they deserve. • The central issue for. determination in the present matter is whether the proper provisions to be relied upon in the present application are the provisions of Order XXXV rule 3 (1) (b) of the CPC as submitted by the learned counsel for the applicant or the provisions of Order XXXV rule 3 (1) (c) either (i) or (ii) of-the CPC as argued by the learned counsel for the respondent; .As rightly stated by Mr. Nyika, learned counsel for the respondent, I dealt with the issue falling in all fours with the one in the case at hand in Jo m o K e n y a tta (supra). In view of the fact that I hold the same position today, I will reiterate the arguments in the present case and will perhaps arrive at the same conclusion. The Mortgage Financing (Special Provisions) Act, 2008 amended several laws including the CPC under Part IV thereof. Section 25 thereof amended Order XXXV of the CPC by adding rule 1 (c) (i) and (ii). to it. Let the amendment speak for itself: • "The first Schedule to the principal Act is amended in rule 3 of Order XXXV by- (a) deleting a full-stop which appears at the end [of] paragraph .(b) of sub-rule (1) and substituting for it a semi-colon; (b) adding, after paragraph (b) of sub-rule (1) the following paragraph: '(c) in suits arising- out of mortgages, where the mortgagor demonstrate that- (i) loan or the portion of the loan claimed is indeed discharged; or (ii) loan was actually not taken'; and (c) adding after sub-rule (2) the following provision: • "(3)'For the purpose of paragraph (c) of sub-rule (1), a mortgagor or an applicant acting on that behalf shall be deemed to have complied with or discharged his responsibility if upon a bank account through which loan was given it is shown that loan is full paid." The Mortgage Financing (Special Provisions) Act, 2008 was enacted with an overarching n.eed for providing better operation of the mortgage financing regimes then introduced in the country. This can be gleaned from the long title thereof which reads; 6 "An Act to amend certain written laws with a view to providing further provisions for mortgage financing." Flowing from the above discussion, it is no gainsaying therefore that the provisions relied upon by the applicants in supporting their application for leave to defend a summary suit involving recovery of money secured by mortgage were amended by the provisions of section -25 of the Mortgage Financing (Special Provisions) Act, 2008 in the manner stated above. That is to say, and I must state that I am-reproducing and re-quoting (infra) for necessary repetition, that the first Schedule to the CPC was amended in rule 3 of Order XXXV by deleting a full-stop which appeared at the end of paragraph (b) of sub-rule (1) and substituted for it a semi-colon and by adding after paragraph (b) of sub-rule (1) the following paragraph (quoted above): "(c) >n suits arising out of mortgages, where the mortgagor demonstrate that:- (i)' loan or the portion of the loan ctaimed is indeed discharged; or (ii) * loan was actually not taken'; ..." The suit which the applicants are seeking leave to defend is about recovery of monies secured by a mortgage. The proper provisions under which the applicants could have legally filed -their application are those brought by the amendment effected by section 25 of the Mortgage Financing (Special Provisions) Act, 2008. 7 The above discussion shows crystal clearly that the applicants have cited wrong provisions of the law to move the court and therefore their application is incompetent deserving to be struck out. It is now settled law in this jurisdiction that where, as here, an applicant does not cite a proper section or sub-section to move the court, that non-citation amounts to a fatal ailment. That this is the law has been stated in a number of cases. These cases are N a tio n a l B a n k o f C om m erce Vs S a d ru d in M e g h ji [1998] TLR 503, C itib a n k T an zania L td . Vs T an zania T e le co m m u n ica tio n s Co. Ltd. & 4 O thers, Civil Application No. 64 of 2003 (unreported), A lm a s id d ie M w in y i Vs N a tio n a l B a n k o f C om m erce & A n o th e r [2001] TLR 83 and M b eya-R u kw a A u to p a rts a n d T ra n sp o rt L td Vs Je s tin a G eorge M w akyom a, Civil Appeal No. 45 of 2008 (unreported) to mention but a few. ' Before I pen off, I fee! pressed to deal with two matters. First, I agree with Mr. Nyika, learned counsel for the respondent that the K u n d a n la l R e sta u ra n t and Z o la cases cited by the learned counsel for the applicants are not applicable at this stage of the preliminary objection. They have been brought prematurely as they are applicable in the impugned substantive application. And even if they were applicable, they were decided long before the amendment brought by the Mortgage Financing (Special Provisions) Act, 2008. To be precise, they are not applicable in the situation at hand. Secondly, both learned counsel for the parties did not argue; neither in the written submissions nor in the oral hearing before me on the provisions of section 95 of the CPC which have also been used in supporting.the applicants' application. It could be either an oversight or deliberate. Be that as it may, 8 even if the parties were to argue on section 95 of the CPC which is about inherent powers of this court, I would not have allowed the application to stand. This is because the inherent powers of the court are only brought into play when there is no provision of law to cater for a particular situation. The position is also settled in this jurisdiction - see: A e ro H e lic o p te r (T ) L td Vs F. N. Ja n se n [1990] TLR 142 and T an zania E le c tric S u p p ly C om pany (TA N ESC O ) Vs In d e p e n d e n t P o w e r T an zania L td (IP T L ) & 2 O rs [2000] TLR 324; the decisions of the Court of Appeal and V IP E n g in e e rin g & M a rk e tin g L im ite d Vs S o cie te G enerate D e S u rv e illa n c e (S .A ) & Anor, Commercial Case No 16 of 2000 (unreported), B u nda D is tric t, C o u n cil Vs V in a i [2000] TLR 49 and A th a r M u jta b a Vs H eena M ujtaba, Miscellaneous Civil Application No, 42,5 of. 2013 -(unreported); the decisions of this court. In the end of rt ail, I find merit in the preliminary objection raised by Mr. Nyika, learned counsel for the respondent and sustain it. The application for leave to defend the summary suit is consequently struck out for being incompetent. Costs to fdlow the event. Order accordingly. DATED at DAR ES. SALAAM this 23rd day of May, 2016. 3. C: M. MWAMBEGELE 3UDGE 9