CIVIL APPEAL NO

IN THE COURT OF APPEAL OF TANZANIA AT DODOMA (CORAM: KEREFU, J.A.. FIKIRINI, J.A. AND MASOUP. J.A.^ CIVIL APPEAL NO. 318 OF 2022 PETROFUEL (T) LIMITED................................................................APPELLANT VERSUS BAHDELA COMPANY LIMITED..................................................... RESPONDENT (Appeal from the Decision of the High Court of Tanzania, Commercial Division at Dar es Salaam) (Nanqela, J.) Dated the 22nd day of April, 2022 in Miscellaneous Commercial Cause No. 42 of 2021 JUDGMENT OF THE COURT 18th & 21st February ,2025 KEREFU, J.A.: Before the High Court of Tanzania, Commercial Division, at Dar es Salaam, PETROFUEL (T) LIMITED, the appellant herein, filed a winding up petition against BAHDELA COMPANY LIMITED, the respondent. The said petition was filed under sections 279 (1) (d) and 281 (1) of the Companies Act, Cap. 212 of the Revised Laws (the Companies Act). In that petition, the appellant prayed for the following reliefs: l (i) A declaratory order for the winding up o f the respondent for failure to discharge its debts; (ii) Appointment o f an interim liquidator pursuant to section 295 (1) o f the Companies Act; (Hi) Other reliefs as the court may deem fit to grant; and (iv) Costs o f the petition. The appellant's petition was confronted with a notice of preliminary objection raised by the respondent, that: (a) The petitioner, being not a creditor in terms o f the provisions o f the Companies Act, has no locus standi to petition for the winding up order against the respondent; and (b)The petitioner has not complied with the mandatory provisions o f the Companies (Insolvency) Rules, 2004 for winding up proceedings. Having heard the parties on the two points of objection, the learned trial Judge was satisfied that the petitioner did not have the locus standi to file the winding up petition against the respondent. Consequently, the learned trial Judge sustained the preliminary objection and dismissed the appellant's petition for being incompetent. The decision of the High Court prompted the appellant to lodge the current appeal to express her dissatisfaction. In the memorandum of appeal, the appellant raised the following grounds of complaints: (1) That, the learned trial Judge erred in law and fact by dismissing the petition; and (2) That, the learned trial Judge erred in law and facts by awarding costs to the respondent upon dismissal o f the petition. At the scheduled hearing of the appeal, the appellant and the respondent were represented by Messrs. Stephen Mosha and Samson Mbamba, both learned advocates respectively. When invited to amplify on the grounds of appeal, Mr. Mosha faulted the learned trial Judge for dismissing the appellant's petition while it was not determined on merits. He argued that, after having heard the parties bn the preliminary objection and sustained it, the learned trial Judge was required to struck out the petition instead of dismissing it. That, if the said order is not set aside, the appellant's rights on the matter will be curtailed. To bolster his proposition, he cited the case of Mary Agness Mpelumbe v. Shakha Mnasa Hamad, Civil Appeal No. 136 of 2021 [2021] TZCA 667: [5 November 2021: TanzLII], He then urged us to find that the first ground of appeal is merited. On the second ground, Mr. Mosha also faulted the learned trial Judge to have awarded costs to the respondent without taking into account that, the case was only determined at the stage of preliminary objection. That, since costs depends on the amount of work done by a party in prosecuting his/her case, there was no justification of awarding costs to the respondent at that stage. Based on his submission, he urged us to allow the appeal *1 and substitute the dismissal order issued by the High Court with an order * of striking out the winding up petition. In his response, Mr. Mbamba, at the outset, expressed his stance that he was not resisting the first ground of appeal, because it is clear that the learned trial Judge erred in dismissing the appellant's winding up petition which was not determined on merits. On that regard, Mr. Mbamba also urged us to find that the appellant's first ground of appeal is merited. On the second ground, Mr. Mbamba challenged the submission of his learned friend by citing section 30 (1) of the Civil Procedure Code, Cap. 33 i of the Revised Laws and argued that, since the appellant's winding up V petition was dismissed on the basis of the preliminary objection raised by the respondent, the learned trial Judge was justified to award costs to the respondent. He thus urged us to find that the second ground of appeal is devoid of merit. In a brief rejoinder on the issue of costs, Mr. Mosha argued that in the circumstances of the appeal, the Court may consider to allow each party to bear its own costs. He then insisted for the appeal to be allowed. Having dispassionately considered the submissions made by the learned counsel for the parties and perused the record of appeal before us, our findings are consistent with the submissions made by the learned I counsel for the parties on the first ground. It is glaring from the reasoned ruling of the learned trial Judge that having sustained the preliminary objection raised by the respondent, this meant that he had acknowledged that the appellant's winding up petition was incompetent. Therefore, the said petition was thus, not capable of being dismissed as it was not determined on merits. We are fortified in that regard, because it is settled law that, where a suit, an appeal or application is found to be incompetent, t:he remedy is to strike it out instead of dismissing it. This was emphasised \n the case of Ngoni Matengo Co-Operative Marketing Union Limited v. Ali Mohamed Osman (1959) E.A. 577. In that case, the appeal was found to be incompetent for not being accompanied by a necessary decree. Having considered the distinction between a dismissal and striking out of an appeal, the Court was of the view that the proper remedy was to strike out the appeal instead of dismissing it for the latter phrase implies that a competent appeal has been disposed of, while the former phrase implies that there was no proper appeal capable of being Bisposed of. Specifically, the Court stated that: "In the present case therefore, when the appeal came before the court, it was incompetent for lack o f the necessary decree...this court, accordingly, had no jurisdiction to entertain it, what was before the court being abortive and not a properly constituted appeal at ail. What this court ought to have done in each case, was to 'strike out' the appeal as being incompetent, rather than to have dismissed it; for the latter phrase implies that a competent appeal has been disposed o f while the former phrase implies that there was no proper appeal capable o f being disposed of". [Emphasis added]. The above position has been restated by the Court in a number of decisions. See for instance, the cases of Cyprian Mamboleo v. Eva Kioso & Another, Civil Application No. 03 of 2010 [2011] TZCA 40: [28 March 2011: TanzLII], Yahya Athumani Kissesa v. Hadija Omar Athumani & Two Others, Civil Appeal No. 105 of 2014 (unreported) and Yusuf Shaban Matimbwa v. Exim Bank (T) Limited and 2 Others, Civil Application No. 162/12 of 2021 [2022] TZCA 618: [7 October 2022: f TanzLII]. Given the circumstances obtained in this appeal, we agree with the learned counsel for the parties that, the proper remedy was to strike out 'i the appellant's winding up petition instead of dismissing it to avail an { opportunity to the appellant, in future, to file a competent petition if need to do so would arise. That said, we find merit in the first ground of appeal. Consequently, we quash and set aside the dismissal order issued by the j f learned trial Judge and substitute it with the striking out order, to enable the appellant, at the opportune time, to revert to the court and seek for an appropriate remedy. The second ground of appeal is straight forward and should not detain us. It is a cardinal principle of law that in any suit between the S parties in a court of law, costs normally follow the events, unless found < < t otherwise for the reasons to be recorded as per the dictates of section 30 / (1) of the CPC. In the instant appeal, we agree with the argument advanced by Mr. Mbamba that, since the respondent, before the trial court had conducted some research, filed an affidavit in opposition to a winding up petition and raised a notice of the preliminary objection, it was entitled V to enjoy the fruits of its work. Therefore, we find no justifiable reasons to fault the trial court on that aspect. In view of what we have endeavoured to discuss, the appeal is hereby partly allowed to the extent stated above. Given the circumstances of this appeal, we make no order as to costs. DATED at DODOMA this 21st day of February, 2025. R. J. KEREFU JUSTICE OF APPEAL P. S. FIKIRINI JUSTICE OF APPEAL B. S. MASOUD JUSTICE OF APPEAL The Judgment delivered this 21st day of February, 2025, in the presence of Mr. Stephen Mosha, learned counsel for the appellant also holding brief for Mr. Samson Mbamba, learned counsel for the respondent, is hereby certified as a true copy of the original. C. M/MAGESA DEPUTY REGISTRAR COURT OF APPEAL