19980618 TZHC Dar es Salaam

IN THE HIGH COURT OF· TANZANIA AT :DAR .ES SALAAM CIVIL APPEAL NO. 78/95 OTTU (TAFICO BRANCH) ON BEHALF · OF 82 TA FICO WORKERS ............................ APPELLANT VERSUS THE PARASTATAL SECTOR REFORM COMMISSION ....................................... ~ ........ RESPONDENT JUDGMENT KAt'EGEYA, J:: The Appellant, OTTU {TAFICO BRANCH) on behalf of 82 TAFICO workers, advocated by Mr. Maira, Advocate, is appealing against the ruling of Kisutu Resident Magistrate's Court in which it was held that the R~spondent, The Parastatal · Sector Reform Commission (PSRC) cannot.be sued·before that court because being an auto,nomous organ of the Government, it can only be sued before the High Court. The argument ensued because the Attorney General, represented by a Principal State Attorney,· stepped into the proceedings for and on his own behalf and that of PSRC. This Court has proceeded to write a judgment exparte - basing only on the wriUen submission by Maira for the Appellant because the Respondent failed to file their wr[tten submission as ordered by the court. In arriving at its conclusion the lower court observed that the PSRC has two faces - a corporate body which can sue and be sued, and an autonomous body of _th~ government; that in the former capacity PSRC can be represented by a private· , member of the ba,r, but also that in second status it has a right to be defended by the Attorney General for the purposes of safeguarding Government interests and that a suit against PSRC automatically would be a suit against the Government t1ence triable by High Court. On the other hand, Mr. Maira, both in the court below and before this court insisted that Act 2 of 1992 (The Public Corporations·Act)as amended by Act 16 of 1993 does not provide where public corporations, including PSRC, should be sued and that therefore they are covered under the Civil Procedure Act; that the Government Proceedings Act No. 16/67 does not apply because in its preamble it clearly spells out that it relates to Civil Proceedings by and against the Government and not simply where the Government owns more than 51 % of the shares in a corporation. He insists that the Attorney General can just participate in a case to defend the Government interests by using and following the provisions of the Civil Procedure Code, 1966 and not Government Proceedings Act (No. 16/67) for otherwise, in every civil matter in which a State Attorney appears compliance with the provisions of the Government Proceedings Act would be mandatory. He quoted - CORPUS JURIS SECCUNDUM - CORPORATIONS, para. 717 where the learned authors on American Reported cases and legislation (Lawrence J. Culligan and Milorad Nikolic) state, "In absence of applicable constitutional or statutory Provisions expressly dealing with the Venue of Civil actions by or against corporations, the venue of such actions is governed by Constitutional or statutory provisions relating to civil actions generally." - 3 - It is not disputed that the Government ownscshares in PSRC as per definition of a "public corporation" provided under s.3of Act 2 of 1992 (as amended under Act 16 of 1993), where it i$ defined as follows, "Public Corporation'' means any corporation estab_lished under this Act or any other law and - in whfch the government or its agents owns fifty one percent or more of the shares but does not include an institution of ·,earning, a district development corporation. a research institution or a sports institution." PSRC is an autonomous organ of the Government, and in its corporate capacity is capable of suing or being sued. S. 21 of Act 2 of 1992 as amended by Act 16 of 1993 clearly provides: "(1} There is hereby established a Commission to be known as the Presidential Parastatal Sector Reform Commission which shall be autonomous organ of the Government. (2) The Commission shall be a body corporate with perpetual succession and common seal and shall be capable in its corporate name of:- (a) Suing and being sued." The question is whether the mere fact that PSRC is an autonomous body of the Government and being owned 51 % sharewise by the Government makes its civil liabilities fall under the Government Proceedings Act. Under s. 7 of the Government Proceedings Act, 1967 as amended by Act 40 of 1974: "Notwithstanding any other written law no civil proceedings against the government may be instituted in any court other than the High Court". - 4 - According to the spirit of the District Court Ruling, which is being challenged by Mr. l\/1aira, every suit against a public corporation would automatically be a suit against ihe govc1 nment which has lo be commenced in the High Court. While conceding that the Government has an interest in each public co1poralio11. and not a light one for that matter as the Government is the main shareholder. I cannot accept an argument that that in itself makes any suit against any public corporation commensable only in the High Court as per the provisions of the Government Proceedings Act (as amended). If the legislature had so intended it would have expressly reflected it in the law. In the case at hand the legislature clearly, under s. 21 of the Public Corporations Act (Act 2 of 1992 as amended) defined the legal status of PSRC - it can sue or be sued as any corporate body. This in itself does not interfere or in any way undermine the government interest therein, PSRC b~ing an autonomous organ of the government. In fact, if anything it relieves the government of the otherwise susceptibility to some frivolous actions, and also provide a shield in certain issues which would otherwise be thrown unto the face of the government but •at the same time leaving it with an option. This state of affairs leaves the government with liberty on its own (obviously through the Attorney General) to apply to be _joined as a party, or upon the application by PSRC itself under third paIiy procedure. Either channel however does not mean that the Aito1 ney Gene, ni can simply appear in court and declare himself a party to a suit - he musi come under the procedure provided under the Civil Procedure Code. Once the ' .:lpplication is received and the government made a party then the lower court would i - 5 - µrococd to lransfer the case to the High Court and not before. I should point out that the Guvernme1 it would be defending its other interest in PSRC - as an autonomous organ of the Govei·nrne11t and not as a shareholder. It is not of insignificance to point out that the term "Government", .under the "lntupretation of Laws and General clauses", is defined as "the government of the United Republic of Tanzania" which would include its Ministries and Departments. It does not cover public corporations which are separate entities notwithstanding the government being a ,w~jor shareholder. For the reasons discussed above the case is sent back to the Resident Magistrate's Court Dar-es-Salaam, at Kisutu, for trial as the said court is vested with jurisdiction to try the same treading on the parties so far on record. Appeal allowed with costs. KALEGEYA JUDGE 19/5/98 Delivered on