20060601 TZCA Dar es Salaam 1

IN THE COURT OF APPEAL OF TANZANIA A,T DAR ES SALAAM (CORAM: RAMADHANI, l.A., MSOFFE, J.A., And KAJI, J.A.) CIVIL APPEAL NO. 67 OF 1999 NATIONAL INSURANCE CORPORATION ........... APPELLANT VERSUS J. MBUNA ·······••11••········································ RESPONDENT (Appeal from the Judgment and Decree of the High Court of Tanzania at Dar es Salaam)) (Mackanja, J.) dated the 5 th day of December, 1997 in HC Civil Appeal No. 82 of 1997 RULING OF THE COURT 23 May & 1 June 2006 MSOFFE, J.A.: Mr. Mafuru learned advocate for the respondent filed a notice of preliminary objection seeking that the appeal be struck out with costs. His main ground was that the National Insurance Corporation, the appellant herein, is a specified public corporation by virtue of GN 330A/98 of 12th June 1998 made under section 38 (1) of the Public Corporations Act, 1992, and in which under the Public Corporations (Specified Corporations Declaration) Order, 1998 which came into operation on 1/5/1998, the appellant was declared a specified public 2 corporation. Mr. Mafuru submitted that under section 43 (1) of the Public Corporations Act, 1992, as amended by Act No. 16/93, once a corporation is declared a specified public corporation the Presidential Parastatal Sector Reform Commission, commonly known by its acronym PSRC, becomes the official receiver and the provisions of section 9 (1) the Bankruptcy Ordinance, Cap. 25, apply. Mr. Mafuru submitted further that the appeal is incompetent because the official receiver (PSRC) is not joined as a party. He cited to us A.LR. Commentaries, The Code of Civil Procedure (V of 1908), 6th (1957) Edition by V.V. Chitaley and S. Appu Rao at page 1247 where it is stated as follows:- "(4) Where pending an appeal the appellant is declared an insolvent, the official receiver who represents the estate can continue the appeal". In conclusion, Mr. Mafuru urged that in the absence of an amendment to the memorandum and record of appeal sought for and granted under rules 102 and 104 of the Court Rules, 1979 to join PSRC, the appeal is incompetent and should be struck out. 3 On his part Mr. Sylvester Shayo, learned advocate for the respondent, was of the general view that there is nothing in the above cited provisions of the law to suggest that the appellant has ceased to exist after being declared a specified public corporation. The appellant continues to exist, he urged~ and cited the following passages by Kisanga, J.A. sitting as a single judge in Kampuni ya Uchukuzi Tabora (ltd) v. Praxeda Paulo and Another, Civil Application No. 45/1999 that:- "I can see nothing in this provision which suggests that upon being placed under receivership a public corporation ceases to exist as a legal person or ceases to own property. What the provision says is that from the effective date the PSRC shall be responsible for the restructuring of the corporation which continues to be a living legal person with a view to improving its performance." And also that:- " 4 "The provision does not transfer the assets and liabilities of the· specified public corporation to the PSRC as claimed by counsel. It merely constitute PSRC the ·receiver of the property of the corporation in question, but it does not say that the said corporation ceases to own that property. My understanding of the provision is that a public corporation under receivership can continue to own property, and that the creditor of any debt provable in bankruptcy can, with the leave of the court, proceed against such property. Of course there is nothing to prevent such creditor from joining the PSRC, the receiver, as a co-defendant." Therefore, according to Mr. Shayo, since the appellant continues to · exist, and can sue and be sued for that matter, then it can stand on its own in the appeal without necessarily joining PSRC. In Mathias Eusebi Soka v. The Registered Trustees of Mama Clementina Foundation and Two Others, Civil Appeal No. 40/2001 (unreported) this Court, speaking through Ramadhani, J.A. stated:- 5 "\/\le have no doubts at all that the unambiguous words of section 4.3 of the Act are that once a corporation has been declared a specified corporation the PSRC becomes its official receiver and the provisions of the Ordinance are engaged. That is the position as borne out by the authorities cited to us by Mr. Maruma: Said Mnimbo andl Others v. ·State Travel Services Ltd, Civil Case No. 296/1997 (Dar es Salaam Registry) and Ali Haji Damdusti v. BP (T) Import and Export Co. Ltd, Civil Case No. 53/1999 (Dar es Salaam Registry), and others by this Court." With respect, the reasoning by this Court in Soka similarly applies for purposes of this appeal. Hence the point need not detain us much. It will be observed that the record of appeal was filed on 4/12/1999,. which was well after the appellant was declared a specified public corporation by virtue of the above GN. That being so, it was necessary for the appellant to seek amendment of the record, as suggested by Mr. Mafuru, to join PSRC. Since this was not done it will follow that the appeal is incompetent. I 6 In similar vein, since the appeal is incompetent the notice of cross-appeal filed on 18/5/2006 and the resultant notice of preliminary objection to the cross-appeal lodged on 22/5/2006 also crumble because they have no leg to stand on. In the end, we sustain the respondent on the preliminary objection, and we hereby strike out the appeal with costs. DATED at DAR ES SALAAM this 1st day of June, 2006. ·\.~·. •..;."""· -::;...::-;.- I certify that this is a true copy of the original.