19950821 TZCA Dar es Salaam

IN THE COURT OF APPEAL OF TANZANIA J AT ARUSHA (CORAM: KISANGA, J.A., RAMADHANI, J.A., And LUBUVAt J.A.) CIVIL APPEAL NO. 31 OF 1993 BETWEEN .. . / NATIONAL BANK OF COMMERCE. • 0 • ., APPELLANT AND MACU SHAH LIMrl'En. . . . . . . . • RESPONDENT (Appeal from the Judgement and De<:!ree of the H.i.gh ~ of Tan~nia at - Arti.sh..\\}. ( Munuo,. J.) dated the 16th day of January,. 1992 in Civi~ Case No. 138 of 1990 JUDGEMENT OF THE COURT ~11...am~ ;r~ The National Bank ...-E c,,__~e,. £01: t!'l4 i:-~J. 4 ~e-e: 'd th,-. ·•~1.. deeds which the comp~ny had deposited in the .. J, bank ae·· 9011,ate~al. In what seems to be a confused defence, ~he ~a1',den1ect· the ~laim oh the grounds that the respondent 'fmpa•v ~ad eee.se<l to exist since 1976, and that the said , title deed• we»e held as a security for a loan of ~hs.1,701,632.15 which we• •w@~ to it by the defunct Arusha Region Cooperative .Uni.ofl Limiee~ (ARCU Ltd.). The appellant bank.while maintaining that the·»esPtnd~nt company did not exist, then went on t~ set ' up a c:eu•teyla~ m against the respondent company for the said· 1 sum of Slille t, Y01f,632.15 plus interest on the basis that the i assets and l1abiiities . ,· of the respondent company had vested in •••• /2 • . ; 2 ARCU ttd. before the latter_ was dissolved in 1976. This appears to be confused because it is not easy to see how a counter-claim coµld properly be set up against a company which, it is clai~ed at the same time, has-ceased to exist since 1976. Be tha_t as.it may, the High Court (Munuo, J. (Mrs.)) found that the respondent company has never ceased to exist. The learned jUdge further found that the. respondent company .was ,net. ·inde-bted t.o the appellant bank; consequently she ordered the release ·of the three title deeds by the appellant bank to ~ Jacob Meibaku Nyari (PW.1), one time the General Manager ..pf the respondent compa~y. And finally, she ordered that the AJ!lu.sha Region cooperative Union Enterprises Company Limited (ARCU Enterprises Ltd.) repays the· bank loan of Shs. 1,701,632.15 ~ by the Arusha Region Cooperative Union (1984) Limited (ARCU (1984) Ltd., on the basis that ARCU Enterprises Ltd. is the successor of ARCU (1,s4) Ltd. It is from that decision that this appeal i.s now preferred. Before us the appellant was represented by Miss Bigeye, learned advocate, while ,,Mr. Merinyo, learned advocate, appeared f~r the respondent. Miss Bigeye f;led four grounds of appeal. In the first ground she criticises the trial judge for finding that the respondent company was not liquidated or was not in liquidatien. When the appeal came on for hearing, and after hearing both Counsel for some time, we found it.necessary tc- adjourn it and duly instructed Counsel to enquire from the Registrar ot Companies about the precise status of the respondent company. It took quite some time before any response came, but •••• /3 • II. 3 eventually a reply was rece.1ved stating that the resp•ndent compariy was still on the Companies Register. The communication further says that some time in June 1993 a ninety days notice was issued to the general public with a view to striking the company off the register but nothing further than th.at was done. Mr~ Merinyo submitted that this step did not complete the process of striking the company off the register. There were yet othc-r requirements, including publications in the Gazette Under Section 283 of the Companies Ordinance (Cap. 212), which have not been complied with. As such therefore, the respondent company is still in existence. we entirely agree with Mr. Merinyo, and Miss Bigey~ did not seem to' have strong views to the contrary. That ground of appeal, therefore, fails. Ih the second ground Counsel critices the learned judge for ordering ARCU Enterprises Ltd. to rep.ay the. bank loan of . Shs. 1,701,632.15 with interest from the date of judgement till payment in full. Mr. Merinyo rightly conceded this ground for the simple reason that ARCU Enterprises Ltd.· was ·not a ·party to this suit. As such no award could properly be made against it because that amounted to condemning it unheard, an infringement of the principle of natural justice. This is linkP.d up with ground four in which at si~st Miss Bigeye argued that the trial judge having found ARCU Enterprises Ltd. to be the successor of MACU Shah Ltd., the learned judge should have made an order substituting ARCU Enterprises Ltd. for MACU Shah Ltd. and then proceed.to order •••• /4 .J 4 ARCU Enterprises Ltd. to repay the loan in question plus interest to the appellant bank. On second thou~ht, however, learned Counsel conceded that such course was untenable in view of the fact that MACU Shah Ltd. had not ceased to exist. That is to say, although there was ample evidence that ARCU Enterprises Ltd. was r~centiy formed with.the de~lar,ect object of taking over all asset.s .an.ct lia.biliti-es of MACU Shah Ltd., ' ' ' i , ' and MA.CU Shah Ltd. had pasUQ. a resolution endorsing this proposed transfer; the whole move was not yet implemented and~ ,, t.h~~e, MA.CU Shah Ltd. continued to be in existence. Lastly in _gr~ ~e. Counsel. -canplained that the trial judge wrongly ordered the release of the title deeds to Jacob Meibaku Nyari (PW.1). There is s.om.e _juGU:fio.a-eJ..on .ncu,.a_ TM' &vid..en.ca shows th.a~ .Ja.oob M.4,iba.ku l\lyari who wa$ one. time-- General Manager of Macu Shah Ltd. was no longer in the made. Therefore the title deeds could not properly be released to him on behalf of the respondent company. However, Mr. Meriny,o rightl;,- took the view that the error was harmless necause the essence of the judgement remains the same, namely, that the securities are to be released to MACU Shah ' Ltd., which we order accordingly, In the event, the appeal fails and it is accordingly dismissed with costs here and in the Court below. ·DATED at DAR ES SALAAJ.~ this 21st day of August, 1995 • • . . . /5 5 R.H. KISANGA JUSTICE ·OF APPEAL J\.S.L. Rl\MADHANI ' JUSTICE OF AP~ n.z. LUBUVA JUSTICE OF APPEAL I certify that'this is a true copy of the original. ( M.S.~ DEPUTY P;.1::~: ,. !;