HARPAL SINGH VIRDEE VS RAJINDER KAUR BIRDI MISC

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA (COMMERCIAL DIVISION)

AT PAR ES SALAAM MISCELLANEOUS COMMERCIAL CAUSE NO.42/2023 HARPAL SINGH VIRDEE.......................................................... PETITIONER

VERSUS RAJINDER KAUR BIRDI & BANSON ENTERPRISES LIMITED................................................ RESPONDENT

RULING Date of last Order: 10/06/2024 Date of Ruling: 23/08/2024 GONZI, J. The Petitioner raised preliminary Objections against the Answer to the Petition and the Cross Petition filed by the Respondent that the same are defective for not being accompanied by affidavits verifying the Answer to the Petition and the Cross Petition. The Petitioner prayed that the Cross Petition 1 and the Answer to the Petition be struck out with costs and that the Petition be determined without factual objections from the Respondent. The Petitioner was represented by Mr. Thomas Rwebangira, learned Advocate, while the Respondent was represented by Mr. Robert Rutaihwa learned Advocate. In his brief submissions in support of the Preliminary Objection, Mr. Rwebangira, learned Advocate, submitted the petitioner filed the Amended Petition which was accompanied by an affidavit verifying the Petition. Upon serving the Petition to the Respondent, the Petitioner was served with an Answer to the Petition and a Cross Petition from the Respondent but both were not accompanied by affidavits verifying the same. He submitted that filing the Cross Petition and the Answer to the Amended Petition without being accompanied by affidavits verifying the same, was contrary to the order issued by this Court on 28th February 2024. He argued that after discovering that the Petition, the Answer to the Petition and the Cross

Petition lacked verifying affidavits, the Court ordered both parties to amend their pleadings and in that regard the Respondent was supposed to amend both the Answer to Petition and the Cross Petition. 2 Mr. Rwebangira, learned Advocate, submitted that once a petition, any petition, or an answer/reply thereto is filed in Court, it has to be accompanied by an affidavit verifying the petition because in cases initiated by way of a petition there is no hearing of witnesses, rather the statements in the petition upon being verified take the position of evidence. He submitted that it has been the practice of the Court for every petition to be verified by an affidavit. Mr. Rwebangira, learned Advocate, gave examples of petitions in probate cases where affidavit verifying a petition are also mandatory. He argued that if the petition is not verified by an affidavit, the other party shall not be in a position to cross examine the party presenting the petition. Mr. Rwebangira, learned Advocate, submitted further that the petitioners in the second Preliminary point of Objection have raised an issue that the petition without verification remains as mere paper without any evidential value. He submitted that absence of an affidavit verifying the petition means that there is no statement as to the accuracy of the deponent's knowledge or information or belief in the petition. He argued

that the essence of affidavit was considered in Jitesh Jayantilal Ladwa versus House and homes Limited, (2022) decided by the High Court at pages 23, 24, 25 and 26. He submitted that an affidavit verifying petition should 3 accompany the petition. He submitted that the petition in this case was made under section 233(1) of the Companies Act CAP 212, the Answer to the Amended Petition and the Cross Petition were supposed to have been accompanied by an affidavit of verification. He submitted that the two documents cannot be entertained and should be struck out as they are mere papers without evidential value as they deny the Petitioner the right to cross examine the Respondent because cross examination can only be done in respect of sworn evidence. Mr. Rwebangira, learned Advocate, submitted that the Answer to Petition and Cross Petition should be expunged from the records and the Respondent may be allowed to argue the Petition on points of law only. Mr. Robert Rutaihwa, learned Advocate, made reply submissions. He submitted that the so called Preliminary objections do not qualify to be preliminary objections as they seek to exercise the discretion of the Court. He argued that a point seeking the Court to exercise discretion is not a preliminary objection in law. He prayed that the preliminary objections be dismissed. 4 In alternative, Mr. Rutaihwa, learned Advocate submitted in

response to the arguments advanced by the learned counsel for the Petitioner. On the Cross Petition and Answer to Petition not being verified by affidavit, he submitted that the Cross Petition just like the Petition itself is made section 233(1) of the Companies Act, CAP 212. He submitted that this provision requires the applications under it to be made by way of a petition. He submitted that it is a rule of statutory interpretation that express mention of one thing excludes the other which is not mentioned. He argued that as the statute requires of a petition without an addition that there should be an affidavit verifying it, then the affidavit accompanying this kind of petition is a mere decoration to what the law provides. Mr. Rutaihwa, learned Advocate, submitted that affidavits are not required in proof of the averments in the petition or an answer thereto, but such affidavits are to be filed in accordance with the Companies Insolvency Rules of 2005. He submitted that there are two governing Rules in the Companies Insolvency Rules of 2005, under Part VI. These are Rule 414 which talks of application of the Rules to every application made under the Act except two petitions that is petition for administration order and petition for winding up order. He submitted that the rest of the applications are 5 governed by Part IV of the Insolvency Rules. He submitted that Rule

420 talks of the use of affidavits as evidence. In particular under sub rule 1, provides that the applicant may apply in Court to file an affidavit. He argued that the scope of this Rule includes an application at hand. He submitted that under Rule 421(1) under paragraph (a) the prayer to use affidavits should be done 14 days before the date of hearing and in case of the Respondent, it is 7 days before the date of hearing. Mr. Rutaihwa, learned Advocate, argued further that the Commercial Court Rule under Rule 52(1), empowers the Court to order a party to use affidavits in support of the application. Mr. Rutaihwa, learned Advocate, submitted that the argument that it has been a good practice for every petition to be accompanied by an affidavit verifying petition is not a good argument. He submitted that a practice, however good it maybe, does not take away the requirements of the law. It cannot take away the right vested upon a party by the law. He submitted that the example of probate petitions is irrelevant because there is a specific law, namely the Probate Rules that requires verifying affidavits in probate matters. He argued that there is a special prescribed form under the Probate Rules used to verify the probate petitions. That is not the case under Section 6 233 of Cap 212 which is silent on the use of affidavits. He submitted that Part VI of Insolvency Rules should be

the one governing similar applications like the present one. On violation of the Court Order, Mr. Rutaihwa, learned Advocate, submitted that the Court order of 28th February 2024 that ordered amendments did not extend to filing verifying affidavits. It only allowed the Petitioner to amend the petition to include in the petition, a verification clause that was lacking. The Order also allowed the Respondents' prayer to raise a cross petition. Mr. Rutaihwa, learned Advocate, submitted that the Cross Petition and the Answer to the Amended Petition are the basis of pleadings before the Court and cannot be said to be mere papers. The evidential value in support of the facts therein will be found in Insolvency Rules where the Applicant will have an opportunity to file an affidavit 14 days before the date of hearing or as may be ordered by the Court. Similarly, the Court under Rule 52 (1) Commercial Court Rules may grant leave to file an affidavit in support of the petition and the cross petition. 7 Mr. Rutaihwa, learned Advocate, submitted that there have been different decisions on the use of affidavits as evidence but some of the decisions are to the effect that absence of affidavit does not defeat a petition. In Chandra Ladwa and Others versus Jitesh Jayantilal Ladwa, Misc. Commercial Cause No. 35 of 2020 decided by this Court, there was no affidavit filed along with the petition

yet the Court used the petition alone to deliver its Ruling. Again, there is another decision in Dhilalji Ladwa Walji and 2 others versus Jitesh Ladwa, Misc. Comm Cause No.2 of 2020 where, also, the question was that an answer to petition was not verified by affidavit, the Court held that an affidavit verifying a petition is not a requirement. Mr. Rutaihwa, learned advocate, argued that the question of cross examination, is a step to come after all pleadings are complete including the affidavits in terms of the Insolvency Rules. Lastly, he submitted that the decision supplied by the Petitioner's counsel, is distinguishable from the facts of the case at hand because the Court was discussing whether an affidavit verifying a petition is a document known in law? He referred to page 23 thereof. He submitted that the Court held that an affidavit verifying a petition is a document in law and cited Rule 100 of Company Insolvency Rules as it 8 can be seen at page 24: of the decision. He argued that the finding was specific that a petition for the winding up requires an affidavit verifying the petition and is actually excepted by Part IV of the Rules. Mr. Rutaihwa, submitted that the preliminary Objections raised are due to misinterpretation of the provisions governing this special application and that they should be overruled with costs. By way of rejoinder, Mr. Rwebangira, learned

advocate, submitted that as follows. On the possibility to file an affidavit 14 days before the date of hearing in terms of the Insolvency Rules, he argued that the Respondent's counsel has mixed up the meaning of an "affidavit" and "affidavit verifying a petition". He submitted that the Rules cited by the Respondent's Counsel, namely Rules 420 and 421 deal with an affidavit not affidavit verifying petition. He submitted that the affidavit covered under Rule 420 and 421 of Insolvency Rules is one intended to complement or supplement the petition and may come from parties or a third party. It is not an affidavit verifying the petition and that the petition is filed by the petitioner himself not the witnesses. The affidavit under rule 420 and 421 is by witnesses. He submitted that an Affidavit verifying petition is covered by Rule 100(1), (2) and (3) which provides how an affidavit verifying a petition should be made. 9 He argued that an affidavit and an affidavit verifying a petition are two different documents with different meanings and functions. He submitted that an affidavit verifying the petition may be made by one of several petitioners if they are many, while affidavits may be made by all witnesses if there are many witnesses. He submitted that the affidavit which may be filed 14 days before hearing, is optional and may not be brought by a party. He submitted that at any

rate, the Respondent has not even notified the Petitioner of their intention to file and rely on additional affidavit evidence. Mr. Rwebangira, learned Advocate, submitted further that section 233(1) of Companies Act, CAP 212 that provides for petitions, is not a procedural rule and it does not provide on how a petition should be made. It only mentions the mode of filing the application is by way of a petition. Mr. Rwebangira, learned Advocate, submitted further that Rule 52 of the Commercial Court Rules is in respect of evidence by affidavit. It does not talk of verification of petition. It applies to application and not a petition, these are two different things. He submitted that an affidavit under Rule 52 is not the one for verification of the petition. 10 Mr. Rwebangira, learned counsel submitted that the case he had cited and relied upon is not distinguishable. It deals with section 233(1) of the Companies Act CAP 212 on unfair prejudice. Mr. Rwebangira prayed for the Court to uphold the preliminary objections. Having heard the learned Counsel on their submissions with regard to the Preliminary Objections, I am now in a position to determine the same. It is a fact that the Respondents Answer to the Amended Petition and the Respondent's Cross Petition are not accompanied with verifying affidavits. The Petitioner has taken two issues on that. The first was that the

non­ inclusion of the verifying affidavits violated the Court's Order of 28th February 2024. The second point of objection was that the Answer to the Amended Petition and the Cross Petition are defective for lack of verifying affidavits and thus they should be struck out. I find that the objection on violation of Court Order by the Respondent is not supported by the record of the Court as per the proceedings of 28th February 2024. On 28th February 2024, this Court only allowed the Respondent to file an amended Answer to Petition and to bring a Cross Petition. That leave was granted after the Petitioner had successfully prayed 11 for leave to amend the Petition to incorporate a proper verification thereon. Therefore, there was no Court order directing the Respondent also to rectify the verification of the Cross Petition and the Answer to the Petition. The Respondent in filing the Answer to the Petition and the Cross Petition, was left to his own devices in conformity with the applicable laws. Hence, as there was no Court order pertaining to the contents of the Respondent's pleadings, the Respondent cannot be held liable for violation of Court order by not verifying the Petition since the Court did not direct the Respondent to do so. The next point of objection was that the Answer to the Amended Petition and the Cross Petition filed by the Respondent are defective for not being

accompanied with affidavits of verification. I asked myself on the role and significance of an affidavit verifying a petition. I have come across a decision of the Court of Appeal of Tanzania in Mohamed Abdillah Nur & Others vs Hamad Masaiini & Others (Civil Appeal No. 630 of 2023) [2024] TZCA 129 (26 February 2024). The Court of Appeal, as per Hon. Mdemu,J.A., stated that: "It is dear from the quoted part of the proceedings in the trial Court above that, parties were given right to be heard through filing their written submissions. 12 However, that notwithstanding, what calls for our attention at this stage to resolve is whether, this being not a norma! suit, the trial Court was justified to dispose the petition basing on the grounds in the petition, answer to the petition, the affidavit verifying the petition and affidavit verifying answer to the petition. Coming to this end, Mr. Kiritta, as said, dwelt on failure to frame issues to guide written submissions and reliance on written submissions pf which the currentjurisprudence does not recognize it to be evidence. Going by this understanding, there is no reference supplied to us by the learned counsel to the effect that in petitions ofthis nature, issues must be framed to guideparties prior to filing written submissions. By this argument therefore, there is concession by Mr. Kirita and thus there is a consensus, which in our

view is a usual practice that, applications of this nature are determined through affidavits." In the Commercial Division of the High Court, for instance, rule 52 (1) of the High Court (Commercial Division) Procedure Rules, 2012 GN No. 250 of 2012 require evidence be by way of affidavit. "In the instant application for that matter, the affidavit verifying petition and the affidavit verifying answer to the petition are the evidence which the learned 13 trial judge rightly relied on in reaching at his findings...... This therefore concludes the other complaint that, the basis of the trial judge's findings was not on written submissions but rather the evidence on record through the affidavit verifying petition and the affidavit verifying answer to the petition." (Underlining supplied for emphasis). In the case at hand the Answer to the amended petition and the Cross Petition do not have accompanying verifying affidavits. It is the rule, which is settled and sanctioned by the Court of Appeal of Tanzania as it can be seen in Mohamed Abdillah Nur & Others vs Hamad Masauni & Others (Civil Appeal No. 630 of 2023) [2024] TZCA 129 (26 February 2024) that in determination of petitions under the Companies Act, it is the affidavit verifying the Petition or the Cross Petition, the affidavit verifying an Answer to the Petition or an affidavit verifying the Reply to Answer to the Petition that

supplies the evidence in the Petition which the trial Judge ought to rely upon in reaching at his findings. Therefore it is an affidavit verifying the petition that converts the statements therein into evidence. The rule is l described in the above quoted decision of the Court of Appeal that: "thus there is a consensus, which in our view is a usual practice that, applications 1,4 of this nature are determined through affidavits." The affidavits referred to by the Court of Appeal in the foregoing sentence are affidavits verifying the petition or answer to petition. Mr. Rutaihwa, learned Advocate, submitted that a practice, however good it maybe, does not take away the requirements of the law and thus it cannot take away a right vested upon a party by the law. On my part, I find that the practice requiring petitions to be accompanied by verifying affidavits has a force of law since there is a judicial consensus, which is the usual judicial practice that applications of this nature are determined through the evidence contained in the petitions which is conveyed through their verifying affidavits. Therefore, petitions must be accompanied with their verifying affidavits so as to carry the requisite evidence for their determination. Mr. Rutaihwa, learned Counsel, submitted that even if the Petition is not accompanied with the affidavit verifying the petition, still a party may

be able to bring affidavits in terms or Rule 52 of the Commercial Court Rules and Rule 420 and 421 of the Companies Insolvency Rules, 2005. He submitted that 14 days or 7 days before hearing, the Petitioner or Respondent respectively, may submit an affidavit supporting the application. 15 In this, I accept the arguments by Mr. Rwebangira, learned Advocate in total. It seems that the learned counsel for the Respondent has mixed up the affidavits in support of an application and the verifying affidavit. While I accept the differences between the two as supplied by Mr. Rwebangira, learned Advocate, I would add that the supporting affidavits envisaged under Rules 420 and 421 of the Companies Rules of Insolvency, 2005, are supporting affidavit. These are optional affidavits which may be filed with leave of the Court to bring additional evidence in addition to the one contained in the Petition itself. The supporting affidavits do not operate to convert the statements contained in the petition into evidence. They introduce evidence independently on their own. A verifying affidavit solely confirms the truthfulness of the statements contained in the petition thereby giving the same evidential value. An affidavit verifying the petition barely introduces any independent piece of evidence itself. Its focus is solely on what was stated in the Petition. There is another equally important

aspect to consider. The supporting affidavit which may be made under Rules 420 and 421 of the Companies Insolvency Rules may be sworn by any person whereas the affidavit verifying the petition must be sworn by the Petitioners or some of the petitioners. If I 16 were to accept the argument by Mr. Rutaihwa, learned Advocate, that a supporting affidavit could play the same role as an affidavit verifying the petition, then such argument could justify the reception of hearsay evidence in Court since another person, an outsider to the contents of the Petition, not the one narrating the facts contained in the Petition, would, in effect, thereby be testifying on the facts of the petition which facts were not stated by him. That would violate the cardinal rules governing reception of evidence in Court orally or by way of an affidavit. The rule is that a witness of fact is called to give an account Of those matters in respect of which the witness claims direct personal knowledge, often referred to as an eye witness. In Uganda vs Commissioner of Prisons, Ex parte Matovu cited by the Court of Appeal of Tanzania in the case of PHANTOM MODERN TRANSPORT (1985) LTD and D.T. DOBIE (TANZANIA) LTD and many other cases, the rule against hearsay evidence while using affidavits in Courts was encapsulated that: "..... as a general rule ofpractice and procedure, an affidavit, for use in Court, being a

substitute for oral evidence, should only contain statements of facts to which the witness deposes either of his own 17 persona! knowledge or from information he believes to be true." Therefore, if an affidavit envisaged under Rules 420 and 421 of the Companies Insolvency Rules 2005, were to be accepted in lieue of an affidavit verifying the petition, it would justify some of the deponent thereto who might be total strangers to the contents of the petition to give verify the contents of the petitions and thereby give hearsay evidence in respect of matters contained in the Petition. In effect, the petition would have to be determined not based on What Was stated in the petition but on what was stated in the supporting affidavit only. How could there be a "supporting affidavit" in absence of the factual substance in the petition to be supported? The factual substance of the petition exists only where it is converted into evidence by way of an affidavit verifying the petition. It is for all these practical purposes that I stand guided by the decision by the Court of Appeal of Tanzania in the case of Moham6d Abdillah Nur & Others vs Hamad Masauni & Others (Civil Appeal No. 630 of 2023) [2024] TZCA 129 (26 February 2024) and I subscribe to the rule therein stated that it is the usual judicial practice that applications of this nature are determined through affidavits, the basis of

the Judge's findings is on the evidence on record 18 through the affidavit verifying petition and the affidavit verifying answer to the petition. In order for a petition to be determined on merit, there must be an affidavit verifying the petition. I therefore uphold the preliminary objection raised by Mr. Rwebangira, learned Advocate for the Petitioner and I find the Respondent's Answer to the Amended Petition and the Cross Petition were defective for not being accompanied with their respective verifying affidavits. The Petition and its accompanying affidavit of verification are presented in Court together. In this case, while the pleadings are complete and the petition is ripe for hearing, the Respondent has not yet filed verifying affidavits to the Answer to the Petition and the Cross Petition. In effect there is no evidence whatsoever before the Court upon which the Respondent could make submissions upon. Even if the Respondent were to apply for filing supporting affidavits in 14 days before hearing of the Cross Petition and 7 days before hearing the Main Petition, still those affidavits would not be affidavits verifying the Answer to the Amended Petition or the Cross I Petition. Mr. Rwebangira, learned counsel for the Petitioner, has argued that Respondent's Answer to the Amended Petition and the Cross Petition be struck out. On my part, I am settled that failure to file an

affidavit or counter 19 ; affidavit would not exclude a party from proceedings nor would it be fatal to his case. It would only imply that he has admitted the factual allegations made by the other side with nothing to say on his part. If the Respondent in this case fails to file affidavits verifying the Answer to Amended Petition and the Cross Petition, the two documents will thereby be rendered mere papers with no evidential value and the Respondent will be debarred from relying thereon in making his submissions or in challenging any factual arguments which might be raised by the Petitioner. From the submissions of Mr. Rutaihwa, learned Advocate, it is clear that the Respondent is desirous of relying on the factual allegations contained in the Answer to the Amended Petition and in the Cross Petition. However, the same are not verified. He cannot do so unless he files affidavits verifying the Answer to the Amended Petition and the Cross Petition to converts their contents into evidence. As the hearing of counsel's submissions has not yet been done, in my view, the Petitioner will not be prejudiced, save as to costs, if the Respondent is allowed to present affidavits verifying the Answer to the Amended Petition and the Cross Petition. In line with the overriding objective rule and the need for substantive justice, I am inclined to allow the Respondent some time to 20 file in

Court affidavits verifying the Answer to the Amended Petition and the Cross Petition. Therefore, I uphold the preliminary objections raised by Mr. Rwebangira, learned Advocate with costs. I order the Respondent to file affidavits verifying the Cross Petition and the Answer to the Amended Petition within 7 days from the date of this Ruling. It is so ordered. 23/08/2024 Ruling is delivered in Court this 23rd day of August, 2024 in the presence of Happiness Mkude, learned Advocate for the Petitioner and Ms. Rehema Samwel, holding brief for Mr. Robert Rutaihwa, learned Advocate for the Respondent.

JUDGE 23/08/2024 21