rehema anyamwile mwantingo another vs self microfinance fund limited another 2023 tzhclandd 17034 17 october 2023

-il

IN THE HIGH COURT OF TANZANIA (LAND DIVISION)

AT DAR ES SALAAM MISC LAND APPLICATION NO.547 OF 2023

REHEMA ANYAMWILE MWANTINGO APPLICANT

NEEM SALHA COMPANY LIMITED APPLICANT

VERSUS SELF MICROFINANCE FUND LIMITED 1®^ RESPONDENT THE ATTORNEY GENERAL 2"" RESPONDENT

RULING 11th to 17th October, 2023 The First and Second Applicant named above are seeking for a mareva injunction against the First Respondent named above, pending expiry ninety days notice. In the two affidavits in support of the application deposed by the First Applicant and David Edson Mayenga Principal Officer of the Second Applicant, the question to be tried and for which the Appiicants alleged there is a high probability and chance to be entitled reliefs are: One, a notice from Yono Auction Mart indicate a house belong to David Mayanga while it be long to the First Applicant; Two, the First Respondent has not issued and served the Appiicants with a sixty days notice as required by the law. Three, the Second Applicant has been honouring terms and conditions of the loan. 1 timely payment of the loan and has paid Tshs 16,531,000/= as per annexure A-2. In the counter affidavit deposed by Peter Donaid Sambo, asserted that the Second Appiicant has been making partial payment contrary to the loan agreement and repayment schedule as per her account of statement annexure OSG-1; Two several reminders annexures OSG-2 were issued to the Second Appiicant, but neglected; Three, the Second Applicant was supposed to complete servicing her loan since 30/04/2023, but has not completed. Mr. Eiay Edward Nyomoga learned Counsel for the Applicants submitted that the application fail within the

ambit of mareva injunction and can be granted if three conditions for granting temporary injunctions provided for under famous cases of Atilio vs. Mbowe [1968] HCD 284, are met, that is existence of primafacie case, balance of convenience and suffering of irreparable loss. He cited also Ilona Lawrence Kadri & Another vs. National Housing Corporation, & Three Others, & A.G. Misc. Land Application No. 20/2023 Land Division; Decent Investment Ltd vs. Tanzania Railways Corporation Misc. Civil Application No. 13/2023 HC Tabora, regarding granting mareva injunction pending ninety days notice. The learned Counsel submitted that the First Respondent failed to issue a sixty days notice, which according to him is fatal, and argued the Court to grant mareva injunction so that they can challenge the illegal conduct of the First Respondent. He submitted that on 04/11/2022 the First Respondent through Yono Auction Mart Limited gave the Second Applicant fourteen days notice for intention to auction the house, but was never conducted. The learned Counsel contended that a seven notice issued by Yono Auction Mart on 24/08/2023 to the hamlet chairman at Msumi, was illegal, irrational and irrelevant because it portray it is an auction to sell a house of the borrower David Mayanya. He submitted that directors are not liable for the debts of the company, citing Salmon vs. Salomon [1968] HCD (sic, Salomon vs- Salomon & Co. Ltd [1897] A.C.

22. The learned Counsel submitted that the Second Applicant has repaid a sum of Tshs 16,531,000/= arguing will suffer irreparable loss if the auction will be conducted because her family are dwelling in the suit house. Ms. Pauline Mdendemi learned State Attorney for the Respondents prefaced her submission with principles governing grant of temporary injunction, being discretionary, the three principles and commulative effect. She cited T.A- Kaare vs. General Manager Mara Cooperative Union (1984) LTD (1987) TLR; Christopher P. Chale vs. Commercial Bank of Africa, Misc. Civil Application No. 635/2017; Atilio vs. Mbowe (supra). She submitted that there is nothing to be tried before the Court as the First Respondent notified the Applicant on her intention to sale mortgage property if they fail to pay the arrears, citing letters annexure OSG 3 to the counter affidavit, specifically a letter dated 10/08/2022, where the Applicants were given fourteen days notice. She submitted that the First Respondent did not take any action to sale the mortgaged property until on 24/08/2023 when the Applicants were issued with the notice from Yono Action Mart through hamlet council, arguing that the Applicants had knowledge of the First Respondent intention of selling mortgaged property for more than a year. She submitted that the Applicant failed to service the loan within the term of twenty four

months, ending on 30/04/2023. The learned State Attorney submitted that the Applicants failed to establish a primafacie case with likelihood of success in the main suit in relation to the alleged illegal action by the First Respondent. She submitted that the Second Applicant want to benefitfrom his own wrong by seeking protection of this Court, citing British Tobacco (supra) and Neiman vs. Hurff (1952). She submitted that the particular of alleged loss has not been stated by the Applicants. She submitted that as long as the value of the house will be known, she argued a loss is capable of being compensated for an award of damages. She cited the case of Alhaj Muhidin A. Ndolanga & Another vs. The Registrar of Sports and Sports Association & Others, Misc. Civil Case No. 54/2000. May be I should at the outset of my findings,state that, my profound interest is what was expressed by my learned Sister Honourable Msafiri, J in Ilona Kadri (supra) at page six, I quote, "AsIhave observed earlier this Is a mareva Injunction butsince It Is a specie of temporary Injunction, the principles In temporary Injunctions are also applicable to mareva Injunctions. This means that the applicant has to establish all three conditions which are mandatory In the applications for Injunctions" The principles for granting temporary injunctions were promologated in the celebrated case of Atiiio vs. Mbowe

(supra) set the conditions precedent for granting temporary injunction, to be:- i. That there is a serious question to be tried on the facts aileged and a probabiiity that the piaintiff wiil be entitled to relief prayed. That the Court's interference is necessary to protect the piaintiff from the kind of injury which may be irreparable before his legal right is established, and That on the balance there will be greater hardship and mischief suffered by the Piaintiff from the withholding of the injunction than will be suffered by the Defendant from the granting of it. Herein,the application for grant of injunction is premised on a fact that there is a serious triable issue, on the ground that the First Applicant did not issue a sixty days notice and a seven days notice issued by Yono Auction Mart was served to the hamlet chairman and portray a suit property belong to David Edson Mayanga. According to annexure OSG-2 to the counter affidavit, depict that on 02/02/2022 the Second Applicant was served with a first reminder for her cumulative arrears of 3,608,518.49, and was asked to remedy within fourteen days. On 24/03/2022 the Second Applicant was served with another polite reminder to remedy the default of 3,199,121.10 within fourtneen days. There is no evidence which vindicate that the Second Applicant heeded to those reminders, because a bundle of online bills payment slip

annexure A- 2 to the Applicant affidavit, indicate the last repayment were effected 11/01/2022, and It was a partial payment of a sum of Tshs 200,000 contrary to the payment schedule of Tshs 1,600,000/=. Annexure A-5 to the affidavit of the Applicants, reveal that the Applicants were served with a fourteen days notice from Yono Auction Mart & Company Limited on 04/11/2022. The alieged notice of seven days annexure A-3 which the Applicants allege is defective, was issued on 24/08/2023, being after eiapse of almost ten months from a first notice dated 04/11/2023. In other words from when the Second Appiicant made a partial payment on 11/01/2022 to 24/08/2022 when the seven days notice was is was issued, it is almost twenty months and from the last first reminder on 02/02/2022 it is nineteen months elapsed without the Second Applicant remedying the default or servicing her loan and the First Respondent did not take any recovery measures. The bottom iine, is that the First and Second Appiicant are aware of the default and were served with both polite reminder and fourteen days notice twice. Now, the main argument of the iearned Counsel for the Applicant is that neither the First Applicant nor Second Applicant (mortgagee) was served with sixty days notice interms of sections 127 and 132 of the Land Act, Cap 113 R.E.

2019. However, the iearned Counsel was unable to show or depict any instrument or mortgage deed for creation of the purported mortgage, as required under section 113(1) of Cap 113 (supra). It is to be noted that section 127 cap 113 fail under Sub Part 4(Mower of the Mortgagee) which is under Parttitled Mortgages. Going by the loan agreement annexure A-1 to the affidavit, at clause number two titled general information on the security to be pledged to SELF MF, depict the facility was secured by Director's personal guarantee(Ms. Rehema Anyawiie Mwantingo) comprised of unsurveyed suit premises. It is common knowledge that contract guarantee is regulated by the provision of section 78 of the Law of Contract Act, Cap 345 R.E. 2002, which provide A"contract of guarantee" is a contract to perform the promise, or discharge the iiabiiity, ofa third person in case ofhis defauit and the person who gives the guarantee is caiied the "surety"the person in respect of whose defauit the guarantee is given is caiied the "principai debtor,"and the person to whom the guarantee is given is caiied the "credidor";andguarantee may be either orai or written Seemingly the learned Counsel for Applicant was confusing guarantee and mortgage. The author Shekhar & Shekhar Banking Theory and Practice, 18''^ Revised Edition, at page 792 define mortgage, I quote, section 58 of the Transfer ofProperty Act

defines a mortgage as foiiows:- "A mortgage is the transfer interest in a specific immovabie property for the purpose of securing the payment of money advancedor to be advanced by wayofban,an existing orfuture debt, or the performance ofan engagement which maygive rise to pecuniary iiabiiity" The author went on to say, "Interms of the above definition, the essentiais ofa mortgage are 1. There must be a transfer ofinterestin an immovabie property.

2. The immovabie property must be a specific one.

3. The consideration ofa mortgage may either money advanced or to be advancedby wayofa ban, or the performance ofa contract" Actually there is no any correlation between mortgage and guarantee, therefore, the learned Counsel was equally wrong to refer the First Respondent as a mortagee, because there is no relationship of mortgagor and mortagge which exists. Rather the First Applicant is a surety,the Second Applicant is the principal debtor and the First Respondent is the creditor. In other words, the relationship of parties and the subject matter is typically a contractual relationship and has nothing to do with mortgage. Strictly speaking, there is no justifiable issue between the First Applicant, Second Applicant and First Respondent on the other side. In the book by Shekhar & Shekhar (supra) at page 836 referred to the case of Bank of Bihar, Ltd vs. Damodar Prasad & Another (AIR, SC, 297) the supreme court of India, observed as follows:- "The guarantee taken by the bank is usually taken by banks as collateral security. It will become useless If the bank's right against the surety can be so easily cutdown. ItIs the duty ofthe surety to pay the decretalamount. Therefore, having propounded that there is no triable issue between the parties, I cannot venture deliberating on the irreparable loss and on the balance of convenience. This is because for the temporary injunction to

be 10 granted, all the three conditions apply cumulative. In the case of Christopher Chale (supra), this Court ruled, "It is also the law that the conditions set out must all be met and so meeting one or two ofthe conditions must be met, they as will not be sufficient for the purpose of the court exercising Its discretion to grant an Injunction'' The appllcati( ^ed with^sts. o G 5 E.B LUVAIMDA o il^GE 17/10/2023 mnd Ruling delivered through video conferencing attended by Elay Edward Nyamoga learned Counsel for Applicants and Ms. Pauline Fhdoiine Mdendemi learned State Attorney for Respondents. \iRT o c ❖ U £ E.a y^VANDA V ★ A- /jtJDGE lAt)D O A711012023 11