RAYMOND LUDOVICK ANOTHER VS AKIBA COMMERCIAL BANK PLC OTHERS MCA NO

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA DAR ES SALAAM SUB-REGISTRY AT DAR ES SALAAM MISC. CIVIL APPLICATION NO. 23336 OF 2024 (Arising from Civil Case No. 22783 of 2024) RAYMOND LUDOVICK TENGA………………………………..........1ST APPLICANT TEMSO ENGINEERING & CONSTRUCTION CO. LTD…………..2ND APPLICANT VERSUS AKIBA COMMERCIAL BANK PLC……………………………………1ST RESPONDENT NUTMEG AUCTIONEERS & PROPERTY MANAGERS CO. LTD…………………………………….2ND RESPONDENT MAJEMBE AUCTION MART LIMITED……………………………….3RD RESPONDENT RULING Date of last order: 25/11/2024 Date of ruling: 26/11/2024 A.A. MBAGWA, J. This is an application for a temporary injunction order against the respondents. The applicants have moved this Court by way of a chamber summons made under Order XXXVII R 1(a) and 2(1), Sections 68(c) and 95 1 of the Civil Procedure Code, [Cap. 33 R.E 2022] praying for the following orders; 1. That the Honourable Court may be pleased to issue an interim order of temporary injunction in respect of land with CT No. 58326 Plot No. 2000 Block A, Pugu, Ilala Dar es Salaam, mortgaged motor vehicles as described in the affidavit and various machinery for metal and timber works installed therein against the respondents, their workers, agents, contractors, assigns and anybody working under them or their instructions from any kind of interference whatever pending hearing and determination of the chamber summons inter partes. 2. Costs for this application and any other reliefs. The application was supported by an affidavit sworn by Raymond Ludovick Tenga, the 1st applicant who is also the Managing Director of the 2nd applicant. Upon service, the application was strongly contested by the respondents through a counter affidavit sworn by Mr. Ezekiel Ephraim Fyandomo, the Senior Manager of Recoveries of the 1st respondent bank. According to the facts as gleaned from the pleadings and depositions, 2 on 14th June 2016, the 2nd applicant and the 1st respondent entered into credit facilities agreements. Consequently, the applicants mortgaged their various properties including a landed property comprised in CT No. 58326 Plot No. 2000 Block A, Pugu, Ilala Dar es Salaam to secure the said loans. However, the applicants failed to service the loans as per the agreement terms as such, on 27th February 2018, at the instance of the applicants, the parties entered into a restructuring agreement whereby an overdraft facility and term loan facility were merged into one term loan facility. Nonetheless, the applicants continued to default on loan repayments. In a bid to facilitate the applicants pay the debt, the parties entered into another restructuring agreement in which the repayment period was extended for forty-eight (48) months. Despite all these efforts, the applicant continued to default on loan repayment. As such, the 1st respondent bank instructed the 2nd respondent to carry out the recovery measures including the sale of the mortgaged properties. According to the 1st respondent, the applicants’ debt stood at TZS 584,040,805.26 being the principal sum, accrued interest, and penalties as of 30th August 2024. 3 The applicants contend that the 1st respondent has all along been charged flat rate interest instead of using the reducing balance method hence an extraordinary pile up of the debt amount. The applicants also contend that disposal of the mortgaged assets would cause them irreparable loss. On the contrary, the 1st respondent states that the interest is charged at a reducing rate and not a flat rate as contended by the applicants. The 1st respondent also avers that no irreparable loss would be occasioned to the applicants because in the event the applicants succeed in Civil Case No. 22783 of 2024 they would be compensated in monetary form. Following the above account, the applicants filed a suit to wit, Civil Case No. 22783 of 2024 followed by the present application. When the matter was called on for a hearing, the applicants were represented by Mr. Amin Mohamed Mshana assisted by Ms. Sara Kironde, learned advocates whilst the respondents had the services of Ms. Joyce Sojo and Mr. Ezekiel Fyandomo, learned advocates. Submitting in support of the application, Mr. Mshana adopted the affidavit and a reply to the counter affidavit of Mr. Raymond Ludovick Tenga. He also 4 drew the Court’s particular attention to the contents of paragraphs 5, 6, 12, 14 to 26 of the affidavit. Mr. Mshana argued that the applicants, under paragraph 19 of the affidavit, have alleged that the respondents have been destroying the business of the applicants. He amplified that having agreed to settle the debt by paying a sum of 280,000,000/= through the sale of the mortgaged property, the respondents went astray from the agreement and started causing hindrances to the intended sale. The learned counsel added that the 1st respondent is not certain as to how much money the applicants should pay to liquidate the debt. Mr. Mshana candidly submitted that the above fact was not countered by the respondents hence an admission that the applicants’ failure to repay the loan has been contributed by the respondents themselves. To bolster his arguments, the learned applicants’ counsel referred this Court to the cases of CPC International Inc vs Zainab Grain Millers, Civil Appeal No. 49 of 1995, CAT at Dar es Salaam, Tanzania Motor Services LTD vs Tantrack Agencies Ltd, Civil Application No. 86 of 2004, CAT at Dar es Salaam and Ramla Aziz Msuya vs Equity Bank (Tanzania) 5 Limited and 2 Others, Misc. Civil Application No. 28 of 2021, HC, Dar es Salaam Zone. In the end, Mr. Mshana urged the Court to grant the injunction order saying that the applicants have established all the prerequisites for the issuance of temporary injunction orders. In rebuttal, Mr. Ezikiel Fyandomo vehemently opposed the application. Like his counterpart, he, at the outset, adopted the contents of the counter affidavit. While significantly relying on the case of Atilio vs Mbowe (1968) HCD 284, Mr. Fyandomo argued that the applicants were under obligation to sufficiently establish three elements namely, triable issue, irreparable loss, and likelihood of prejudice in the event the application is not granted. Expounding on the element of a triable issue, Mr. Fyandomo had it that the applicants are disputing the outstanding loan amount. The respondents’ counsel submitted that the bank agreed on the settlement of TZS 280 million that was to be paid by March 2021 but the same was not done. He went on that failure to pay the settled amount triggered a recall of the full loan amount and accrued interest which stands around TZS 611 million. He added 6 that the applicants were served with a demand notice indicating the outstanding amount. Mr. Fyandomo submitted that the act of disposing of the mortgaged property is a contractual right and at that time there was no order of status quo. He added that the bank has been charging interest based on a reducing method and not on a flat rate as claimed by the applicants. He referred this Court to Clause 9 of the loan agreement of 2020 that requires the 1st respondent to use a reducing method in charging the interest. He lamented that the applicants had failed to repay the loan for seven good years thereby hampering the bank’s lending business. He concluded that from the grounds presented by the applicants, there is no triable issue established. On irreparable loss, Mr. Fyandomo briefly submitted that damages claimed by the applicants can be conveniently atoned in monetary form. Concerning the balance on convenience, the respondents’ counsel submitted that if this loan remains unpaid the Bank stands to run bankrupt. He complained that the applicant has paralyzed the bank’s lending powers for 7 seven years and the Bank of Tanzania (BOT) already has issued guidelines that if the trend continues the bank would lose the trading license. The learned counsel further submitted that the applicant is continuing to use the court as a parking bay and hiding bush to discharge their contractual obligations. He beseeched the Court to dismiss this application with costs. I have keenly appraised the parties’ depositions and considered the rival submissions. There is no dispute that the applicants borrowed money from the 1st respondent bank. It is also undisputed that to date the applicants have not fully repaid the loan amount. Furthermore, it is an undeniable fact that the applicants deposited the properties in dispute to secure the loan. The applicants’ main contest is that the 1st respondent has been charging interest based on a flat rate instead of a reducing method. They also lament that the respondents have contributed to the applicants’ failure to repay the loan. As rightly submitted by both counsel, it is a trite law that to obtain a temporary injunction order, the applicants are duty-bound to establish three 8 elements namely, triable issue, irreparable loss, and likelihood of prejudice in the event the application is not granted. The three elements must be established cumulatively. Therefore the pertinent question for determination is whether all three elements exist in this application. I have considered the fact that the applicants willingly mortgaged the properties in dispute with the view to secure the loan. It is to be noted that the essence of collateral is to secure and enable the lender to recover its money in the event the borrower fails to repay. Further, the applicants have instituted a suit namely, Civil Case No. 22783 of 2024 challenging the outstanding loan amount, among other things. Thus, if the applicants emerge as the winners, they would be atoned in monetary form. In the upshot, all the above considered, I do not see how the applicants would irreparably suffer injury in the circumstances where they instituted a suit against the respondents for the alleged unjustified interest rates, among other reliefs. Besides, having considered the balance of convenience, it is my unfeigned view that the 1st respondent that is, Akiba Commercial Bank PLC 9 stands to suffer more if the application is granted than the applicants would do if the application is not granted. In the final analysis, I find the application wanting in merits and consequently, I dismiss it. The applicants should bear the costs. It is so ordered. The right of appeal is explained. Dated at Dar es Salaam this 26th day of November 2024. A.A. Mbagwa JUDGE 26/11/2024 Court: The ruling has been delivered on this 26th day of November 2024 in the presence of Ms. Sara Kironde, learned advocate for the applicants and Ms. Joyce Sojo learned advocate for the respondents. A.A. Mbagwa JUDGE 26/11/2024 10