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Tanzania Judgment

TZHC

ni c limited vs hernes mutatina 2009 tzhc 241 5 june 2009

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Source document

01

Holding and result

The Resident Magistrate's Court lacked jurisdiction to entertain the suit against the applicant, a specified public corporation under receivership, as such matters fall exclusively within the jurisdiction of the High Court. All proceedings and decrees of the trial court are a nullity.

Court disposition

Application for revision allowed; proceedings and decree of trial court quashed as a nullity.

Orders

  • Judgment and decree of the trial court quashed and set aside
  • Respondent at liberty to institute proceedings in the court having jurisdiction, subject to limitation law
  • Each party to bear own costs

02

Material facts

Parties

N.I.C. LTD

Applicant Counsel: Oscar E. Msechu

Hermes Mutatina

Respondent Counsel: Mr. Mugamizi

Amounts and remedies

  • Amount Attached by Garnishee Order: TZS 9,444,240

03

Procedural history

  1. Posture

    Civil Revision / Ruling on Application for Revision

04

Questions and positions

Legal issues

Party arguments

Applicant
The trial court lacked jurisdiction as the applicant was a specified public corporation under receivership, requiring proceedings to be instituted in the High Court; the trial court acted on a forged document; and erred in refusing extension of time and stay of execution.
Respondent
The applicant was not insolvent, so the Bankruptcy Ordinance did not apply; the application for stay was brought under the wrong provision; the alleged forgery was not proven and is time-barred; and the applicant failed to show sufficient cause for extension of time.

05

Court’s reasoning

  1. 01

    Section 97 of the Bankruptcy Ordinance; Section 43 of the Public Corporations Act

    The High Court has exclusive jurisdiction over bankruptcy proceedings involving specified public corporations under receivership.

  2. 02

    Section 9(1) of the Bankruptcy Ordinance

    No proceedings shall be commenced against a specified corporation under receivership without leave of the High Court.

  3. 03

    Section 44(1)(b) of the Magistrates Courts Act; Kulwa Daudi vs Rebecca Steven (1985) TLR 116

    Revisionary powers of the High Court may be invoked to correct errors resulting in injustice committed by subordinate courts.

06

Ratio, limits and disposition

Ratio decidendi

The Resident Magistrate's Court lacked jurisdiction to entertain the suit against the applicant, a specified public corporation under receivership, as such matters fall exclusively within the jurisdiction of the High Court. All proceedings and decrees of the trial court are a nullity.

Obiter and limits

  • The remaining grounds regarding alleged forgery and refusal to grant extension of time or stay of execution would not qualify as errors on the face of the record and are appealable, not revisable.

Court disposition

Application for revision allowed; proceedings and decree of trial court quashed as a nullity.

  • Judgment and decree of the trial court quashed and set aside
  • Respondent at liberty to institute proceedings in the court having jurisdiction, subject to limitation law
  • Each party to bear own costs

Source and reliance status

TZHC · 5 June 2009

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Judgment text

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Source document

TZHC

Judgment· 5 June 2009

ni c limited vs hernes mutatina 2009 tzhc 241 5 june 2009

AT DAR ES SAIAAM C V l l REVISION NO. A OF 2005

APPLICANT N 1. c l l ^ TED ..........

VERSUS ... RESPONDENT HERNES MUTATINA ................ Date of Last O rd er: Date of Ju d g m e n t. os/uo,

RULING MLAY, J. , H„ h tor of Civil C a se No. 169 N. 1. c m L.T.D who is a ludg™®" of Dar es salaa m at of 2001 in the court of the Res' ^ n ns seeking for the K suta has filed an application by ch a m b e rs following orders:- 1. interim order staying execution pending Revision.

2. This Honourable Court be pleased to call for records and proceedings in Civil C a s e No. 169 of 2003 (Mingi, SRM) for 1 inspection and revision and setting the same aside for illegality a n d other grounds.

3. This Honourable Court be pleased order stay of execution of the decree dated 20th November 2003 pending hearing and determ ination of this Revision. 4 . Costs of this ap p licatio n to be provided for 5 . Any other further relief/s as this court shall d eem fit to grant. The application is m ade under Sections 44 (,) of the Magistrates Courts Act, ,984 Order XXXIX rule 5 and Section 95 of the Civil Procedure C o d e 1966 ' and any other enabling provision of the law". The application is duly supported by the affidavit of OSCAR EPAFRA MSECHU, ad vo cate who has deponed as follows:- I . That I am th e A d v o c a t e of the High Court and Courts subordinate thereto and I w as handling this ca se in the subordinate Court. 2 That in the Resident Magistrate's court at Kisutu, the respondent was given judgment an d d e c r e e despite the f a c t that the court had no vafcf jurisdiction. 3 That in a bid far the matter to be reviewed by the sam e court the court refused to extend time to the a p p lica n t for th e said review to b e Med and d e te r m in e d b y the court.

4. That the co u rt had acted upon fraudulent documentation and p r o c e e d e d to o w o rd 5. That, in the original suit, the co u rt refused to grant a stay of execution and extension of time although there was strong grounds for the same. 6 That s u b s e q u e n t to the ruling of the Hon. Mi ngi SRM d ated 11"’ January 2005, following the application for stay of execution and extens,on of t,me to file Review out of time the respondent has by way of garnishee order 2 a tta c h e d the a c c o u n t of the a p p lica n t at the CRDB HOLLAND HOUSE BRANCH a n d the respondent intends to debit the said a c c o u n t by 14.00 HRS to d a y the 13th d a y of January 2005. A c o p y of garnishee order absolute is herewith a tta c h e d as Annexture "N 11" of which lea ve is cra v e d for the sam e to form part of the affidavit.

7. That the court h ad erroneously relied upon the satisfaction vou ch er which was the basis of the respondent suit issued by the a p plican t to b e signed by the insured, while known it is a forged docum ent.

8. That despite prior warning, the court p ro c e e d e d to a c t upon a forged docu m en t When the application c a m e up for hearing on 18/1/2005, the respondent did not contest the granting of an order for stay of Execution pending the determination of the application for revision, and the order to stay w as duly granted. Counsel for both parties were then allowed for file written submissions on the main application for revision. In the written submissions the applicants counsel Mr. O scar E. Msechu has put forward three grounds for granting of the application. The first grounds is that, in the proceedings in the subordinate court, the court a cte d on a forged docum ent in the main suit, inspite of a prior warning by the applicant. The counsel contended that this has occasioned “injustice not only to the applican t but also to the rest of the insurance holders a n d public in general w hose funds are a t the dangers of being s c o o p e d by the re sp o n d e n t...." . The second ground is that “The subordinate court vested itself with powers which is not ve ste d upon it". He submitted that the court "had exercised the powers which is only exercisable by the High court for entertaining matters upon which the specified corporation is a party". He contended that pursuant to section 97 of the Bankruptcy O rdinance read together with section 43 of the Public 3 Corporations

A ct, the High court is the only court with exclusive jurisdiction on matters pertaining to Bankruptcy. The learned a d vo ca te then proceeded to demonstrate how this court is clothed with the powers to revise the proceedings by quoting the provisions of section 44 (1) (B) The Magistrates Court Act 1984 and also referred to the case of KULWA DAUDI VS REBECCA STEVEN (1985) TLR 116 in which it w as held; “the revisionary powers of the High Court m ay b e invoked b y any party to a civil ca se or on the motion of the High court to co rrect an error resulting in injustice com m itted by a District court or court of the Resident M agistrate” He argued that in Civil C ase No. 169 / 2004 which was instituted in the Kisutu Resident Magistrates Court, it is obvious that there are errors which were committed by the trial court which are a manifestation of injustice on the part of the applicant, which should not be left to persist . Lastly, the A pplicant’s a d v o ca te submitted “that the Resident Magistrates court should h ave used its inherent pow ers of section 95 of the CPC to exten d time. The subordinate court did not do so an d therefore pray for the court to co rrect irregularity so that justice ca n b e seen to b e d o n e" The respondents a d vo ca te supported the Magistrates refusal of extension of time and stay of execution. Starting with the refusal to stay execution,

the Respondents a d vo ca te submitted that the application was brought under a wrong provision of the law. He contended that Oder XI rule 24 of the Civil Procedure C o d e, 1966 “Operates in a situation whereby a d ecree has been sent for execution to be stayed for a reasonable time, to enable the judgment debtor to apply to the Court that passed a d ecree to stay the sam e". He 4 argued that the provisions of the said Order do not apply to the decore passed by the Kisutu Resident Magistrates court and that the proper provision would be Order XXXIX Rule 5 ( 4) of the Civil Procedure C od e, 1966, under which the present application has been properly brought. He submitted that the applicant co n ce d e s to have brought the application under the wrong provision of the law and the trial court was right in dismissing it. On the refusal of extension of time, the Respondent's a d vo cate referred to and quoted the provisions of section 14 of the Law of Limitation At which state: 14- (1) Notwithstanding the provisions of this A ct, the court m ay, for any reasonable or sufficient ca u se , exten d the period of litigation for the institution of an a p p e a l or an application .....................” (2) for the purpose of this section "the court" m eans the court having jurisdiction to entertain the a p p e a l or, as the ca se m ay be, the application". The respondent contended

that for the court to extend time, there are conditions which must be fulfilled first. The respondent pointed out the said conditions by underlying the words, “for any reasonable or sufficing ca u se " in sub section (1) and the words, “having jurisdiction" in subsection (2) of section 14 of the Law of Limitation A ct, quoted abo ve. The Respondent further contended that on 8/11/2001 the Applicant filed a notice of preliminary objection but on 8/5/2002 the Applicant through their ad vo ca te Mr. Msechu, decided to abandon the, preliminary objection when they prayed to am end their d efen ce and filed an am ended d e fen ce on 24/5/02 without a preliminary objection. The Respondent submitted that, “the Law with regard to review denies a party who 5 I raised a question o f o b je ctio n a n d a b a n d o n s it in the cou rse of the hearing to bring the so m e question later in other p ro ce e d in g s." The Respondent quoted MULLA, CO D E of CIVIL PROCEDURE VOL III page 2728, where it is stated: “a party w ho not only h a d an opportunity of raising a question but w ho did raise it a n d on argum ent abandoned it c a n n o t under ordinary circu m sta n ces b e a llo w ed to a g ita te the question in review . Nor is a sufficient reason for granting a review that if an oth er opportunity w as given to the A p p lica n t w ould satisfy the co u rt that its previous order w as w

rong. Omission to raise a point o f low is not sufficisnt . The Respondent submitted that “the A p p lica n t having abandoned his objection raising it now is resjudicata". The Respondent citing SCOLASTICA BENEDICT Versus MARTIN BENEDICT [1993] TLR 1. argued that as a general rule, a court has no jurisdiction to overturn its own decisions as it becom es functus of ficio” the exception being setting aside exparte decisions and review of decisions induced by fraud. The Respondent quoted the provisions of Order XL II rule 1 of the Civil Procedure Code, 1966 on powers of review. They submitted that the powers of review are restricted to. a) Discovery of new and im portant m atter or evidence, which, after the exercise of d u e diligen ce, was not within fhis knowledge or would not be p ro d u c e d b y him a t the time w h en the d e c r e e was passed or order m ade, or on a c c o u n t o f some m istake or error a p p a re n t on the fa ce of re c o rd b) For an y sufficient reason" 6 I The Respondent submitted that the court has no jurisdiction to review its findings on point of la ck of jurisdiction. They argued that pow er to review must be conferred by law and the Civil Procedure C o d e does not specifically, or by necessary im plication confer power of review on grounds of jurisdiction. They further co n ten d e d that jurisdiction c a n be raised in an a p p e a l if the A

pplicant wished but not by the b a c k door. (Revision?) On the specific issue of la ck of jurisdiction as submitted by the Applicant, the Respondent having quoted section 97 of the Bankruptcy O rdinance C a p 25, con ced ed that, “ the section deals with the pow ers of the High Court d e sig n a te d as the Bankruptcy Court a n d that, the section vests on the High Court exclusive jurisdiction to h ea r a n d determ ine all b an kru ptcy p ro ce e d in g s u n der the Bankruptcy O rdin an ce". In a nutshell, the Respondent submitted that “it is not true that upon specification of a ffe c te d public corporation b e c o m e s insolvent”, within the m eaning of the Bankruptcy O rd inance C a p 25, "especially for public corporation w hich are still going co n cern like the A pplicant. The Respondent referred to two cases, MUHIMBILI MEDICAL CENTRE VS TANESCO NO. 35 OF 2003 (Bw ana J, unreported) and ENOCK D. MAKENGE VS PRINTPAK LTD TRADE DISPUTE NO. 1 4 / 1994(Mwipopo J, unreported) to support the proposition that, "specifying a public a corporation does not render such public corporation insolvent". The Respondent distinguished the ca se of NATIONAL MILLING CORPORATION AND MOTHER VS JOH PAUL HC, CIVIL APPEAL NO. 71 O G 2002 (Luanda, J, unreported) in w hich it w as held that o n ce a corporation has been d e cla re d a specified public corporation is taken to be insolvent

and the provisions of the Bankruptcy O rd inance apply. The Respondent argued that in the JOHN PAUL c a s e , the court held that the Bankruptcy O rd inance including section 97 applied b e ca u se by then the NATIONAL MILLING Corporation had b een d e cla re d insolvent and the liquidation process had not taken p la c e while in the A pplicant is not yet liquidated nor the process to liquidate it has started . 7 The respondent argued that the Applicant “therefore is not insolvent a n d as such provisions Bankruptcy O rdinance including those o f section 97, do not a p p ly h a d it b e e n insolvent the PSRC would b e appearin g in co u rt.....” In reply to the applicants claim “that the subordinate court a cte d on forged docum ents” , the Respondent argued that such statements “are time b a rre d ”, they further argued that "no d o cu m e n t was p ro ve d a n d held to b e fraudulent d o cu m e n t is an afterthought ” . The Respondent referred to the e vid e n ce of DW 1 who, allegedly stated that “there w ere discrepan cies on the D ischarge vo u ch e r an d p o w e r of Attorney". The Respondent contended that the Discharge (voucher) w as signed and returned to the A pplicant on 23/3/99 while the pow er of Attorney w as executed on 3/5/2001 for the purposes of suing the A pplicant following refusal [to pay] as per discharge voucher. They argued that the power of Attorney

could not h ave hindered the A pplicant to indentify the Respondent as it is not am ong the documents needed to m ake paym ent to the Respondent. The Respondent claim ed that all the docum ents w ere signed by the Legal Representative of the insured and further that when the Discharge V oucher w as tendered in court, the Applicants counsel did not object to its being adm itted. Lastly, the Respondent addressed the question of whether, there w as “REASONABLE OR SUFFICIENT CAUSE FOR EXTENSION OF TIME". The Respondent submitted that the trial court could not have “invoked it powers under section 95 of the Civil Procedure C o d e and extend the tim e” .... without reasonable or sufficient cau se for extension of time being shown” . The respondent contended that the record shows that the Applicants a d v o c a te Mr. Msechu defaulted a p p e a ra n c e in court for more than a year. The Respondent submitted that the A pplicant did not m ake a follow up of its c a se in court and that “tw elve months is a long time for the counsel who promised to bring a witness in court to aver that he w as waiting to be notified of the d ate of 8 I judgm ent” . The Respondent cited three cases to show that the courts have not tolerated failure to m ake a follow up on cases or to be diligent. The cases are MOHSIN MOHAMED TAKI MOHAMED versus TARIQ MURZA & OTHERS CIVIL APPLICATION NO. 100 OF 1999 (CA

unreported) SALUM SURURU NABHAI VS ZAHOR ABDULLAH ZAHORO [1988] TLR 41 and MAUA MOHAMED VS KONDO SULEIMAN CIVIL APPEAL NO. 14/85 (DSM Registry unreported) The Applicant filed a rejoinder to the Respondent's submissions. The Applicant co ntended that the Respondent failed to show that there were no irregularities. They reiterated that the subordinate court has no jurisdiction on matters pertaining to Bankruptcy and that, there is no distinction betw een being specified and solvency of the co m p an y like the ap p licant. The Applicant co n ten d ed further that sections 97of C a p 25 and Section 43 of the Public Corporations A ct actu ally support the a p p lica n t’s contentions that the High Court has exclusive jurisdiction in matters pertaining to Bankruptcy. They cited High Court C om m ercial C ase No. 67 2003 CHINA ENGINEERING CONSTRUCTION CORPORATION VS NIC (T) Ltd and PSRC, Rose M apunda, Robert M apunda VS NIC (T) Ltd and PSRC, Misc Civil C au se No. 286/2002 and also National Milling Corporation Ltd Vs John Paul which has been referred to earlier on in this ruling. The Applicants submitted that the court ought to h ave addressed the question of jurisdiction before proceeding with the m atter. The Indian ca se of RAJKAKSHORI VS BANAMALT A. 1950 C510 cited at p ag e 135of Sarkar’s Law of Civil Procedure 8th Edition Vol. 1, w here it w as held: “ It is the duty of the

court to d e cid e question of jurisdiction even if no formal issue w as raised". 9 I The A pplicant also cited the c a se of LALAGO COTTON GINNERIES & OIL MILLS LTD AND LARF. Civil Applciation No. 80/2002 to the sam e a ffe ct. On the issue of reliance on a forged docum ent, the A pplicant co n tend ed that forgery of docum ents pertaining to insurance rendered the claim void o b initio. The C a se of BRITTON VS ROYAL INSURANCE C O . 1866 4F & F 905 w as cited an d the following holding w as quoted: "If the insured m akes a fraudentental claim the w hole p o licy a n d not only just the particular claim is vo id a b le". On the a b o v e submissions and those m ad e earlier by the Applicant, the Applicant prayed the proceedings of the trial court be invalidated, with costs. The Respondent, HERMES MUTATINA under a power of Attorney of THELESPHORU MUTAGANWA the Legal Representative of the late RENATUS RUGEMALILA, sued the present A pplicant NATIONAL INSURANCE CORPORATION (NIC) an d the PRESIDENTIAL PARASTATAL SECTOR REFORM COMMISSIONS for com pensation under a policy of insurance taken by the d e c e a se d and for d a m ag e s for failure to p ay the insurance claim . The suit w as instituted in the court of the Resident Magistrate of Dar es salaam at Kisutu, as Civil C a se No.

169. The suit w as heard by E. H. Mingi SRM, who in the judgm ent delivered on 18/11/2003, g a v e judgm ent to the Plaintiff, the present Respondent. The Record of the trial court shows that judgm ent w as delivered in the a b se n ce of the d efen d an t, w ho is the present A pplicant. The record of the proceedings also shows that on 3/3/04 an application for execution having been filed, the trial court ordered that a garnishee order be issued. On 11/3/04 the ap p lican t through the services of O scar M sechu, a d v o c a te , filed an Application by 10 1 C h a m b e r Summons in the trial court under a certificate of urgency, seeking the following orders: “a) That the H onourable Court order stay o f execution p en din g review . b) That a garnishee order issued on 313/2004 b e raised a n d set aside c) The extension o f time to file this application a n d review d) C ost in the c a u se e) A ny other relief (s) ...... " The Respondent raised a preliminary objection on points of law as follows.

1. That this application is m isco n ce ive d a n d not m aintainable in law 2. That this application is not brought in g o o d faith a n d not honest.

3. The affidavit in support of the application is d e fe c tiv e for containing extraneous m atters by w a y of opinion, argum ents a n d presum ptions on p aragraph s 6,7,8 a n d 9. The trial court having considered written submissions by counsels of both parties dismissed the preliminary objections but struck out the offending p aragraph of the im pugned affidavit. The application then p ro ce ed e d by w a y of written submissions and in the ruling of the court d ated 2/1/2005, the application w as dismissed. As regards extension of time, the trial Magistrate dismissed the application on grounds that, and I quote from the handwritten ruling: "on an application o f extension o f time, the a p p lica n t h a d not a d v a n c e d an y con vin cin g reason to m ove the court to exten d time to ch a llen g e the decision ". 11 I As for the application for stay of Execution the trial magistrate stated: “In this c o s e the a p p lica n t has not show n any plausible in co n v e n ie n ce or loss w hich wills suffer by a tta ch in g small am ount of Tshs.9,444,240/- . In the application for revision the judgment and d ecree of the trial court is being questioned on grounds that the trial court had no valid jurisdiction [para 2 of affidavit] and that the trial court acted upon a forged document [paragraphs 4,7,and 8 of affidavit). The ruing dated 2/1/2005 is sought to be revised on

grounds that, the court refused to grant stay of execution and extension of time although there were strong grounds for the same", [see para 5 of the affidavit) and that the trial court acte d upon a forged document [paragraphs 4, 7 and 8 of affidavit]. The ruling dated 2/1/2005 is sought to be revised on grounds that, “ the co u rt refu sed to grant stay of execu tio n an d extension of time although there w ere strong grounds for fhis sam e” [ see para 5 of the affidavit and also para 3. The powers of revision of this court under section 44 (1) of the magistrates courts Act, 1984 under which this application has been preferred, are contained in paragraph (b) which states: 4 4 -( 1) in addition to any other powers in that behalf conferred upon the High Court, the High Court - a) .................................................. b) May, in any proceedings of a civil nature determined in a district 12 I court or a court of a resident magistrate on application being m ade in that behalf by any party or of its own motion, if it a p p e a rs thnt there hoc been an e rror m aterial to the merits o f the c a se involving injustice revise the proceedings and make such decision or order therein as it sees fit:" (emphasis mine). The issue for consideration in this application is therefore whether the applicant has demonstrated that there was an error material to the merits of the ca se

involving injustice, in the judgment and ruling of the trial court. The said errors must be on the face of the record of the trial court. The Applicant has pointed out three errors. The first error deponed to in paragraph 2 of the supporting affidavit, is that the trial court had no valid jurisdiction. In the written submissions the Applicants ad vo cate argued that the trial court exercised the powers vested in the High Court by Sections97 of the Bankruptcy Ordinance and 43 of the Public Corporations Ct Section 97 of C a p 25 provides.

97. The C ourt having jurisdiction in ban kru ptcy shall b e the High Court; sa ve that the C h ief Ju stice m ay b y order d e le g a te all or an y part of the jurisdiction of the High C ourt in Bankruptcy to any subordinate court, either gen erally or for the p ro p o se of an y particular c a s e or class of c a se s. Section 43 of the Public Corporations Act C a p 257 R.E 2002 provides: 43 (1) Notwithstanding a n y other law to the contrary, with e ffe c t from the d a te o f publication of an order d ecla rin g a public corporation to be a sp e cifie d public corporation. The Com mission shall - a) without 13 I further a ssu ra n ce on appo in tm en t, h a v e the p o w e r to a c t as the official re c e iv e r o f the sp e cifie d public corp o ra tion ; a n d b. H ave the p o w e r a n d all the rights of a re c e iv e r a p p o in te d in a c c o r d a n c e with o pursuant in the B an kruptcy A ct. In the Plaint filed by the Respondent in the trial court, the Respondent a v a re d in p aragrap hs 2 an d 3 of the said plaint, as follows: 2. That the Is' D e fe n d a n t is a public corporation established by an A ct of P a rlia m en t................ ”• 3 That the 2nd D e fe n d a n t is an autonom ous organ o f the g o vern m en t established under section 21 of the Public corporations (am en dm ent) A c t 1993..........................c h a g inter alia with the

function o f supervising, monitoring a n d enforcing the restructuring p ro ce d u re s in relation to specified m rn n rn tio n s. Further that the 7^ D efendant is heinq su e d a s , ho „ffirin l re c e iv e r of P' D efendant following th e r ^ fir-n tin n of th° D efendant as a specified corporation...." (em phasis mine). The 2"« Defendant in the suit who is referred to in paragraph 3 of the Plaint is the Presidential Parastatal Sector Reform Commission established by section 21 of the Public Corporations Act C a p 257 R.E 202. When the Respondent instituted the suit by filing the plaint, he, and the trial court, were therefore aw are that the Plaintiff who is the present Applicant, was a specified corporation and that the PSRC who were the 2"- Defendant, was the official receiver of the 1» Defendant 14 I [Applicant). The Applicant has alleg ed in this application that the trial court had no jurisdiction to entertain the suit by reason of the provisions quoted a b o v e . On the other hand , the Respondent has argued that since the Applicant by then w as not insolvent, the provisions of section 97 of C a p 25 did not apply. The Respondent's argum ent w as considered by K aleg eya J as he then w as, ,n the c a s e of CHINA ENGINEERING CONSRUCTION CORPORATION versus NIC |T) LTD AND PSRC, a c te d by the Applicant p a g e 6 of the ruling w here his Lo 'p stated: “The D e fe n

d a n t’s co u n sel a rg u e d further that the 1st D e fe n d a n t w as not put under PSRC for purposes of receiversh ip as su ch . While I did not u nderstand e xa ctly w h a t he m ean t b y th a t it is c le a r that S. 43 of the Public C orporations A c t (as a m e n d e d ) a n d w hich a p p o in te d 2nd d e fe n d a n t an au tom atic re c e iv e r m ade no e x c e p tio n 2nd D efe n d a n t is an official re c e iv e r to 1st d e fe n d a n t for all intents a n d p u rp o se s... His Lordship agreed with Mapigano J when he stated in HC Civil ca se No 3000 of 1995 MUKUBAGANYI MULOMBO VS TRC as follows: “ In view o f the provision of p a ra g ra p h (b) of the su b sectio n the PSRC has, v/2 -a-vis TRC, the p o w e r a n d all the rights o f a re c e iv e r a p p o in te d in a c c o r d a n c e with or pursuant to the B ankruptcy O rd in a n ce. It is c o rre c t to treat the order o f the Minister as eq u iva len t or tantam ounting to a receivin g O rder under the B ankruptcy O rdin an ce. If is also c o rre c t to treat TRC_a s nn insnlvent b o d y irrespective of the possibility that 15 I w h at the PSRC m av ultimately d o to the corporation is just to restructure it or lease nut its assets" (em phasis m ine). Like Kalegeya J as he then was, I also agree with the view of Mapigano J in the MAKUBAGANYI'S C ase. It is immaterial that the Applicant may not have

been insolvent when the Applicant was specified in a cco rd a n ce with the provisions of the Public Corporations Act. As provided by paragraph (b) of subsection (1) of section 43 of the Public Corporation Act, the Commissioner shall "have all the p o w e r a n d all rights o f a re c e iv e r a p p o in te d in a cco rd a n ce with or pursuant to the B ankruptcy A ct". What then is the effect of the appointment of a receiver? Section 9 (1) of the Bankruptcy Ordinance C a p 25 or C a p 25 RE 2002, provides as follows: "9-fIJ On the making of a receivin g order the official re c e iv e r shall be the th ereb y constituted re c e iv e r of the pro perty of the d eb tor, a n d thereafter e x c e p t as d ire c te d by this A ct, no credito r to w hom the d e b to r is in d e b te d in re s p e c t of an y d e b t p ro va b le in b a n kru p tcy shall h a ve an y re m e d y against the p ro p erty or person of the d e b to r in re s p e c t o f the d e b t, or shall com m en ce any actio n or other legal p ro ce e d in g s, unless wit le a v e of the cou rt a n d on such terms as the cou rt m ay im pose". 16 I In terms of section 9 (1) of C a p 25 RE 2002, quoted above not only that the receiver becom es the receiver of the property of the specified corporation, but also that no proceedings shall be com m enced against the specified corporation without leave of the court. "The

court" is defined by section 2 of the Bankruptcy Act C a p 25 RE 2002, as court havinq junsdiction j under this A c)". That court is, in terms of section 97 of the Act, the High Court. The Applicant referred this court to the ruling of E. M.E Mush,, J m Misc. Civil C au se No. 286 of 2002 cited earlier on this ruling, in which his Lord ship advised the parties to withdraw a suit filed in the Resident Magistrates court against the NIC and PSRC, and file the sam e in the High Court. The Respondent has argued that the two cases cited by the Applicant are distinguishable, on the basis of the two cases cited earlier on when considering the Respondent's submissions. We do not agree that they are distinguishable although w e did not have the benefit of reading the tex as , was not provided, and if they were, w e would feel free not to follow them . We find that since the Applicant was a specified corporation at the time the su. was filed the Respondent should first have obtained leave of this court before instituting the proceedings and the proceedings should have been instituted in the High Court. The trial court lacked jurisdiction. The Respondents' claim and the d ecree obtained by the Respondent, could only be satisfied against the property of the Applicant which, by virtue of section 9 of the Bankruptcy O rd in an ce, was p laced under the receiver. It is immaterial therefore if

the proceedings instituted by the Respondent were not strictly bankruptcy proceedings. The Bankruptcy Ordinance applied to the Applicants ca se wi eq ual force. The finding of this court that the trial court la ck e d jurisdiction to entertain the Respondents suit, is sufficient to dispose of this application as the 17 I proceedings are a nullity. We would however state that, the remaining grounds raised by the applicant, that the trial court a cte d on a forged docum ent and that the trial court refused to exercise its powers to grant the applicant an extension of time, would hardly qualify as errors on the fa c e of the record. The trial court in its judgm ent m ade a decision on the alleged forged docum ent which was a difference on the signature on the discharge voucher and that found on the docum ent of power of Attorney. The trial court stated that the power of Attorney w as not a necessary docum ent for the Applicant to pay the claim under the policy of insurance. As for the refusal of stay of execution and to extend the time to file an application, the court found that the Applicant had not shown that the Applicant would be disadvantaged or shown sufficient reasons for extending the time. The findings of the trial court on the two issues if wrong, are ap p e a la b le if the ap p lican t w as dissatisfied with them. Revision is not an alternative to an a p p e a l.

However, since the trial court lacked jurisdiction to entertain the suit, all the proceedings are a nullity which m ade the remaining grounds for revision, only of a c a d e m ic interest. For the reasons given ab o ve, the application for revision succeed s on grounds of lack of jurisdiction. We accordingly exercise the powers of revision over the proceedings of the trial court which are therefore d eclared a nullity and w e quash the judgm ent and d e cre e of the trial court. Subject to the law relating to limitation, the Respondent is at liberty to institute the proceedings in the court having jurisdiction. Each party to bear own costs in this application. 18 I Delivered in the presence of Mr. Msechu a d v o c a te for the Applicant and Mr. Mugamizi a d v o c a te of the Respondent this 5th d a y of June 2009. j J. I. Mljay, ju d g W 05 /06 /2009 . 19

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Authorities

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Kulwa Daudi vs Rebecca Steven (1985) TLR 116

Case cited

Scolastica Benedict vs Martin Benedict [1993] TLR 1

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Muhimbili Medical Centre vs TANESCO No. 35 of 2003

Case cited

Enock D. Makenge vs Printpak Ltd Trade Dispute No. 14/1994

Case cited

National Milling Corporation and Mother vs John Paul HC Civil Appeal No. 71 of 2002

Case cited

China Engineering Construction Corporation vs NIC (T) Ltd and PSRC HC Commercial Case No. 67 of 2003

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Rose Mapunda, Robert Mapunda vs NIC (T) Ltd and PSRC Misc Civil Cause No. 286/2002

Case cited

Maua Mohamed vs Kondo Suleiman Civil Appeal No. 14/85

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Mohsin Mohamed Taki Mohamed vs Tariq Murza & Others Civil Application No. 100 of 1999

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Salum Sururu Nabhai vs Zahor Abdullah Zahoro [1988] TLR 41

Case cited

Britton vs Royal Insurance Co. 1866 4F & F 905

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Rajkakshori vs Banamalt A. 1950 C510

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Lalago Cotton Ginneries & Oil Mills Ltd and LARF Civil Application No. 80/2002

Case cited

Mukubaganyi Mulombo vs TRC HC Civil Case No. 3000 of 1995

Case cited

Magistrates Courts Act, 1984 s.44(1)(b)

Legislation

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Bankruptcy Ordinance Cap 25 s.9(1), s.97

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Public Corporations Act Cap 257 s.43

Legislation

Legislation referenced in the available case record.

Civil Procedure Code, 1966

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Legislation referenced in the available case record.

Law of Limitation Act s.14

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