NBC LTD VS MM WORLDWIDE TRADING CO

IN THE HIGH COURT OF TANZANIA (COMMERCIAL DIVISION) AT PAR ES SALAAM COMMERCIAL CASE NO. 166 OF 2014 NATIONAL BANK OF COMMERCE L T D ........................ PLAINTIFF VERSUS MM WORDWIDE TRADING COMPANY LTD JACOB FREDRICK MSAKI I..... DEFENDANTS ANNETE JACOB MSAKI 29th April & 25th May, 2015 RULING MWAMBEGELE, J.: This is a ruling in respect of a preliminary objection raised by M/S Appex Attorneys for and on behalf of the defendants - MM Worldwide Trading Company Limited, Jacob Fredrick Msaki and Annete Jacob Msaki - to the effect that the suit filed by the National Bank of Commerce; the plaintiff, is time barred. The preliminary objection was argued before me on 29.04.2015 during which Mr. Gasper Nyika, learned advocate, appeared for the plaintiff and Mr. Frank Mwalongo, learned advocate, appeared for the defendants. The oral hearing was preceded by the skeleton arguments earlier filed in conformity with rule 64 of the High Court (Commercial Division) Procedure Rules, 2012 - GN No. 250 of 2012. Mr. Mwalongo, learned counsel, was the first to submit in amplification of the skeleton arguments earlier filed which he opted to adopt in support of the preliminary objection. He submitted that reading paras 6, 7 and 11 of the plaint, the course of action emanates from two credit facilities the first one having been executed on 21.11.2005 and expired on 30.11.2006 and the second one was executed on 27.04.2006 and expired on 30.11.2006. On 13.02.2007, a notice of default to the facilities was issued to the defendants which means that by 13.02.2007 the cause of action had arisen. Counting from the date of the default notice to 24.12.2014 the date when the suit was filed, it is seven years and nine months. Reading section 3 (1) and para 7 of Part I of the schedule to the Law of Limitation Act, Cap. 89 of the Revised Edition, 2002 (henceforth "the Law of Limitation"), the time limit for institution of a suit based on contract is six years, he submitted. This suit, having been based on contract was required to be instituted within six years after the cause of action arose, he added. As per section 3 (1) of the Law of Limitation, the suit instituted out of time has to be dismissed, he concluded. In response, Mr. Nyika for the plaintiff submitted that the suit is for recovery of the amount outstanding out of a loan facility. The loan 2 facilities were advanced to the defendants in 2005 and 2006 respectively. The borrower undertook to repay the principal sums and interest accruing and in terms of the facility letters, the interest was to be charged monthly on the outstanding amount. Upon default, the plaintiff filed the present suit. He submitted that this suit is not time barred because the nature of the breach is continuing. Every month an interest is added on the outstanding amount and that creates fresh cause of action. That, he submitted, can be confirmed by the Bank Statement which was attached to the plaint as Annexture NBC 7. The learned counsel went on to submit that continuing breaches are covered by section 7 of the Law of Limitation Act. He concluded that the suit is not time barred. In a short rejoinder, Mr. Mwalongo, learned counsel, submitted that there is nowhere the continuing of breach has been pleaded in the plaint as required by Order VII rule 6 of the Civil Procedure Code, Cap. 33 of the Revised Edition, 2002 (henceforth "the CPC") which requires a party who would wish to seek exemption from the Law of Limitation to plead the facts to support such exemption. He added that as we stand now, those facts on the continuity of breach which the plaintiff has banked on in his arguments are nowhere to be seen in the plaint. He insisted to have the suit dismissed for being filed out of time. I have heard the rival submissions by both learned counsel for the parties. The ball is now in my court to decide whether or not the suit 3 before me is time barred. The plaintiff has burnt a lot fuel elaborating the fact that this cause of action in the present suit as the continuing breaches which create new causes of action every month. The learned counsel has cited Chitty on Contracts Volume I General Principles (at page 1787) to reinforce the proposition of and existence of continuing breaches. Fortunately, Mr. Mwalongo seems to concede that the cause of action in the present matter is in respect of continuing braches. However, he argues with force that if the plaintiff was aware that the breaches were continuing, he ought to have stated in the plaint that he was exempted from the Law of Limitation as required by Order VII rule 6 of the CPC. This issue has caused me some anxiety. As rightly pointed out by Mr. Nyika, learned counsel for the plaintiff, the law in this jurisdiction recognizes continuous breaches and causes of action emanating therefrom. And the Law of Limitation recognizes the same in section 7 which provides as follows: "Where there is a continuing breach of contract or a continuing wrong independent of contract a fresh period of limitation shall begin to run at every moment of the time during which the breach or the wrong, as the case may be, continues." 4 As rightly stated by Mr. Mwalongo for the defendants, under the provisions of Order VII rule 6 of the CPC, a plaintiff is under obligation to state that he is exempted from the Law of Limitation and that the plaint shall show the ground upon which exemption from such law is claimed. Let the provision speak for itself: "Where the suit is instituted after the expiration of the period prescribed by the law of limitation, the plaint shall show the ground upon which exemption from such law is claimed." I must admit the little time I had to research for this ruling has not allowed me to land on any authority on the point in this jurisdiction. My reading of Mulla: the Code of Civil Procedure by Sir Dinshah Fardunji Mulla (18th Edition, Reprint 2012) at page 1823 gave me an insight on the solution to the present issue. The learned author is discussing Order VII rule 6 of the Indian Code of Procedure, 1908 which is in pari materia with our Order VII rule 6, except that the former was added with a proviso in 1976 which amendments may not be relevant in the present discussion. It should suffice to mention that my reading of this work has revealed that the provision is mandatory. Relying on the 5 case of Shiv Shiv Tiwari Vs Ganesh Prasad, AIR 1978 All 117, the learned author states at page 1823: "The language of the rule is mandatory and therefore whenever a plaintiff seeks exemption from the operation of the law of limitation, he must show the grounds on which he seeks such exemption." The learned author, relying on Order VII rule 11 (d), which is in pari materia with our rule 11 (c) of Order VII, which provides that the plaint shall be rejected where the suit appears from the statement in the plaint to be barred by law, goes on to state as follows: "If no ground of exemption is shown in the plaint, the suit shall appear from the statement in the plaint to be barred by limitation, the plaint shall be rejected." The mandatory nature of the provision can also be supported by the use of the term "shall". By the use of the term "shall", the provisions of Order VII rule 6 is couched in mandatory terms. Under authority of the provisions of section 53 (2) of the Interpretation of Laws Act, Cap. 1 of the Revised Edition, 2002, once the term "shall" is used in a provision, it 6 means that that function must be performed. For easy reference, subsection (2) of section 53 of the Interpretation of Laws Act reads: "Where in a written law the word 'shall' is used in conferring a function, such word shall be interpreted to mean that the function so conferred must be performed." In the present suit, the plaintiff has not shown in the plaint compliance with rule 6 of Order VII. Failure to do so, as already seen, attracts the court to reject the plaint. The word used in the provision is rejection. I am alive to the provisions of section 3 of the law of limitation requiring any matter filed out of time to be dismissed as Mr. Mwalongo has asked me to. Order VII rule 6 as well as rule 11 of the CPC are therefore at qualm with section 3 of the law of limitation. I say so because a suit which has been filed out of time and the plaint thereof has not complied with Order VII rule 6 of the CPC, attracts a course of action contained in rule 11 of Order VII of the CPC; to reject the plaint. I find myself loathe to reject the plaint at this stage; my sixth sense tells me such step is appositely taken at the time of institution of the plaint. Neither do I find it appropriate to dismiss it for this course of action may be devastating to the plaintiff. The peculiar circumstances of this case require me to strike the suit out. 7 In the upshot, I am in agreement with Mr. Mwalongo that the suit was filed out of time but having pleaded no exemption as required by the law, and having been not rejected from the outset, the same deserves to be struck out. I therefore strike this suit out. I do so with costs. Order accordingly. , DATED at DAR ES SALAAM this 25th day of May, 2015. J. C. M. MWAMBEGELE JUDGE 8