petromark africa limited another vexim bank tanzania limited 2022 tzhccomd 57 18 march 2022

IN THE HIGH COURT OF TANZANIA (COMMERCIAL DIVISION) AT PAR ES SALAAM MISC. COMMERCIAL APPLICATION NO. 183 OF 2020 (ARISING FROM COMMERCIAL CASE NO. 38 OF 2007) PETROMARK AFRICA LIMITED................................ 1st APPLICANT FREDDIE ALLY RASHIDI MBONDE.......................... 2nd APPLICANT VERSUS EXIM BANK (TANZANIA) LIMITED.............................. RESPONDENT Date of Last Order: 07.03.2022 Date of Ruling: 18.03.2022 RULING MAGOIGA, J. The applicants, PETROMARK AFRICA LIMITED and PREDDIE ALLY RASHID MBONDE preferred the instant application by way of chamber summons made under the section 89(1) and (2) of the Civil Procedure Code, [Cap 33 R.E 2019] against the above named respondent praying for this court, be pleased to grant the following orders, namely: 1. That the honourable court may be pleased to order the respondent to refund the 1st applicant the proceeds ensuing from the sale of the 1st applicant's immovable property known as Farm No. 596 Mahenge Village, Iringa district bearing Title No. 6358 i MBYLR, which is Tanzania Shillings Three Hundred Million (300,000,000/-); 2. That the Honourable court may be pleased to order the respondent to refund the 2nd applicant the proceeds of the sale of the 2nd applicant's immovable property described as Plot No. 1 Block 'E' Sinza area, Dar es Salaam with Title No. 3770 which is Tanzania Shillings Sixty Million only (60,000,000/=); 3. That this honourable court may be pleased to make an order compelling the respondent to pay the applicants an interest at the rate of 25% per annum on their respective dues in prayers (1) and (2) hereinabove for the period from 1st March, 2016 to the respective dates the same is paid to each of the applicant; 4. That this honourable court may be pleased to make an order compelling the respondent to pay the applicants general damages of the sum it will deem fit and proper to award; 5. The costs of this application be provided for in favour of the applicants; 6. Any other relief in favour of the applicants that the Honourable court deems fit to grant. 2 The chamber summons as usual was accompanied with affidavits affirmed by ZAID ZAKARIA and FREDDIE ALLY RASHID MBONDE stating the reasons why this application should be granted. Upon being served with the application, the respondent filed a counter affidavit deposed by Mr. EDMUND AARON MWASAGA principal officer of the respondent stating the reasons why this application should not be granted. For better understanding this ruling, the facts, albeit in brief, pertaining to this application are imperative to be stated. In 2007 the respondent instituted Commercial Case No. 38 of 2007 against the respondents (and other three not in this application) claiming several reliefs, based on loan agreement in which after hearing parties', this court eventually decided in favour of the respondent and applicant were ordered to pay a total of TZS.469,767,017.36 plus accruing interest at the rate of 25% from 1.5.2007 up to the date of judgement, interest on the decretal sum at the court rate of 7% from the date of judgement up to full and final payment and costs of the suit. The respondent successfully executed the High Court decree against the applicants by attachment and sale of immovable properties known as Farm 3 No.596 Mahenge village, Iringa district with Title No. 6358 MBYLR and plot No.l Block'E' Sinza area, Dar es Salaam with Title No. 37705. Further facts went on that, aggrieved by the High Court judgement, the applicants successfully appealed to the Court of Appeal of Tanzania and the decree of the High Court was reversed. It was against the above background, the applicants preferred this application praying, among others, for restitution of the proceeds that were realized after sale of the said immovable properties, interest, general damages and costs of this application, hence, this ruling. The applicants in this application are represented by Mr. Audax Kahendaguza Vedasto, learned advocate. On the hand, the respondent had the legal services of Messrs. Gabriel Simon Mnyele and Roman Masumbuko, learned advocates. On 24.11.2021 when this application was called on for hearing, Mr. Vedasto, learned advocate for the applicant prayed, which prayer was not objected by the respondent counsel, that the instant application be heard by way of written submissions. I granted the prayer and gave a schedule of filing the written submissions. I am grateful to and commend the learned counsel for 4 parties for complying with the schedule and for their insightful input on this application to enable this ruling to be delivered. Mr. Vedatso in his written submissions in support of the application charged by citing the provisions of section 89(1) of the Civil Procedure Code and pointed out that, section 89(1) allows a person to file an application to recover the money which he lost because of a decree of a court but which decree has been varied in any proceedings, be it on appeal, review, revision or like proceedings. According to Mr. Vedasto, the section allows him to ask for recovery of costs, interest, damages, compensation and mesne profit and the relief so sought are to be granted on application and not on a suit. It was, thus, the strong submissions of Mr. Vedatso that, the decree subject of Commercial Case No.38 of 2007 applicants were ordered to pay principal sum, interest thereon at 25% per annum from 1.5.2007 to the date of judgement and interest at the rate of 7% per annum from the date of judgement to the date of full payments. According to Mr. Vedasto, much as the decree of the High court was reversed by the Court of Appeal by setting aside the judgement and decree of the High Court against all defendants, the applicants are entitled to 5 restitution or refund of the amount the properties fetched in execution together with the consequential orders of interests which are imperative in the circumstances of this application. On that note, Mr. Vedasto urged this court to grant the application as prayed in the application. On the other hand of the respondent, Mr. Mnyele, learned advocate was perplexed for Mr. Vedasto treating this application as simple interlocutory application while to him this application is to be treated with seriousness it deserves. According to Mr. Mnyele, the proper remedy was for the applicants to open a suit under Rule 89(2), but which sub rule was not argued at all. Strangely and unexpectedly, Mr. Mnyele despite being a seasoned advocate opened up the discussion on my ruling on preliminary objection. This is irregular and unacceptable. According to Mr. Mnyele, the applicants are not entitled to the reliefs claimed because they have failed to prove their claims, the reliefs claimed are not tenable under section 89(1) and (2) because are not in nature of restitution or otherwise. According to Mr. Mnyele, the applicant wants to benefit from a decree that was nullified, that is not what the Court of Appeal decided, the^^ 6 court has no power to order refund (which according to Mr. Mnyele is not restitution) because what the applicant lost is landed properties and not proceeds of sale, orders prayed for are not directly consequential to reversed or set aside decree and the respondent has right to lien. In the alternative, the respondent counsel argued that, even if this court finds that the applicants are entitled to what they prayed but still are not entitled to any interest, unless the money was directly paid to the decree holder, by the applicants from their own pockets, which is not the case here. As to the prayer for costs and general damages, it was the reply by Mr. Mnyele that, much as the counsel for applicants failed to bring evidence and cannot be granted without reason because they are still indebted to the respondent by virtue of the loan taken and still unpaid to date. For the foregoing reasons, Mr. Mnyele invited this court dismiss this application with costs. Mr. Vedasto had nothing to submit in rejoinder. Having carefully followed and considered the rivaling arguments by both counsel for parties', I noted that, the borne of contention in this application is the interpretation and applicability of the provisions of section 89 (1) and 7 (2) of the CPC, to a party who successfully appealed and have the decree of the first court of instance reversed or varied can claim refund or is limited to restitution alone? And to be fair to the parties, let me allow the provisions of section 89(1) speaks by themselves. The said provisions for easy of reference provides: Section 89. Application for restitution (1) Where and in so far as a decree is varied or reversed, the court of first instance shall, on the application of any oartv entitled to any benefit by wav of restitution or otherwise, cause such restitution to be made as will, so far as may be, place the parties in the position which they would have occupied but for such decree or such part thereof as has been varied or reversed; and, for this purpose, the court may make any orders, including orders for the refund of costs and for the payment of interest damages, compensation and mesne profits, which are property consequential on such variation or reversal, (emphasis mine). c 8 (2) No suit shall be instituted for the purpose of obtaining any restitution or other relief which could be obtained by application under subsection (1). In my ruling when determining the objections on point of law, in my interpretation of the above provisions, I hold that: "Going by the provisions of the above cited provisions, in particular, the underlined and bolded words is very clear that for this application to apply the following must co exists: i. There must be a decree that has been varied or reversed on appeal; ii. The application for restitution or otherwise must be made to the court of first instance which passed the decree (emphasis mine) iii. An application can be made by any party entitled to any benefit by way of restitution or otherwise (emphasis mine). iv. The aim is to restore parties to the original position before c the passing of the decree. 9 v. And the court of first instance can make orders, including orders for the refund of costs, and for the payment of interest, damages, compensation and mesne profits which are properly consequential on such variation, (emphasis mine) The words 'restitution or otherwise' according to Black Law Dictionary is defined to mean compensation or recompense for injury or loss. Therefore, from the above definition, in my considered opinion; one, the word 'otherwise' by using esjudem generis principle of interpretation as used in the provision can cover compensation of the value without necessarily returning to its original position. Two, the applicant need not be an appellant to make an application but the gauge here is any party entitled to any benefit by way of restitution such as administrator/administratrix, or assignee, beneficiary or any person with a recognized interest. Three, the general principal underlying the need of restitution is that the law should not approve unjust enrichment by permitting a person to retain a benefit derived from a reversed or varied decree. Four, the orders that the court of 1st instance is to give must be orders properly inconsequential to the varied decree and not otherwise. Five, subsection (2) of section 89 of the CPC, io was meant and has purpose to serve by bringing to an end, endless litigation on restitution or other reliefs-which can include compensation, interest, refund and other consequential orders. Indeed, subsection 2 of section 89 is to be used as an exception where restitution by way of application cannot work. It should be noted that the provisions of section 89 (2) for filing of a suit is an option and not restrictive route provided one can get the remedies by application and consequential orders to the reversed or varied decree is not mandatorily required to file a suit. Guided by the above, I find no exception that could have denied the applicants to make the application as they did. Even, the learned advocate for the respondent did not cite any exception save for reasons that the relief claimed are not tenable under section 89(1) and that the relief claimed are not directly consequential to the reversed or varied decree. These two reasons can easily be resolved by the contents of the decree. The decree subject of this application was granted in the following terms: THIS COURT DOTH HEREBY DECREE AS FOLLOWS: Judgement for the plaintiff. The defendants jointly and severally shall pay the plaintiff as follows: li 1. A total of Tshs.469,767,017.36 plus accruing interest at the rate of 25% from 1.5.2007 up to the date of judgement; 2. Interest on the decretal sum at the court rate of 7% from the date of jusgement up to full and final payment/ 3. Costs of the suit. In this application, the applicants are claiming restitution of the proceeds ensuing from the sale of landed properties in Iringa and Dar es Salaam as described in the application amounting to Tshs.300,000,000.00 and Tshs.60,000,000.00 respectively. The learned advocate for the respondent do not deny that the said properties fetched such an amount and that same was not given to the respondent but their objection for grant of this application was for reasons that the applicants were to open a suit and bring evidence to prove such an amount, are indebted to the respondent and other reasons outside the consideration when an application of this nature is preferred. This is not, in my considered opinion, the spirit and wisdom of our parliament behind the enactment of the section 89. 1 12 Further, there is no doubt as well that the above quoted decree of the court subject of sale of the said properties consequently ordered for payment of interest at 25% and 7% to the amount judged against the applicants. So is its costs which was not prayed for. Therefore, from the above facts which are results of the decree, I hereby grant this application and proceed to order the restitution of the amount prayed in paragraphs (1) and (2) to the applicants respectively with interests as prayed in (3) and from the date of varied decree to the date of full payment and not from 2016 to date as prayed. The prayer for general damages cannot be granted for simple reason that was not among the consequential relief in the varied decree. The applicants if felt there were compelling reasons for claiming general damages were to open a suit and not by way of application. In the end, this application is granted to the extent explained above with costs. It is so ordered. Dated at Dar es Salaam this 18th this day of March, 2022. S. M. MAGOIGA JUDGE 18/03/2022 13