20181026 TZHC Dar es Salaam

,) '"~:- __ ,ijJi,, IN THE HIGH COURT OF TANZANIA DAR ES SALAAM DISTRICT REGISTRY. · AT DAR ES SALAAM. MISC.CIVIL APPLICATION NO 795 OF 2016. (ARISING FROM CIVIL CASE NO 389 OF 1999) STANS LAUS ANTHONY ••..•.••••..•..•••..•.••••..••.••••••••• 1 sT APPLICANT. JAMES MTAMBALIKE •••..•.•••....••••..•.•••••..•..••••.•.•. 2ND APPLICANT. VERSUS. CHARLES RWECHUNGURA (Receiver Manager Tanzania Shipping_Line Co Ltd under Receivership) 1ST •••••••••••••••••RESPONDENT. TREASURY REGISTRAR .................................... 2ND RESPONDENT. Date of last order:28/08/2018. Date of ruling: 26/10/2018. RULING. MAGOIGA, l . ., The applicants,. STANSLAUS ATHONY AND JAMES MTAMBALIKE filed this application by notice of motion against the respondents hereinabove under the provisions of Rule 16 of the Bankruptcy Rules G.N. nos. 159 of 1931, 7 of 1948 and 188 Of 1948, section 100 Of the Bankruptcy Act, [Cap 25 R.E. 2002], section 4 of the National of Bank of Commerce (Re-organization and Vesting of Assets and Liability) Act, [cap 404 R.E. 2002] as amended by the National Bank of Comme_rce (Re-organization and. Vesting of Assets and II I 1 I .' ~t i ;c{JJi Liability) (Amendment) (2) Act, 2007, and any other provision of the law for the following orders:- a. The honourable court be pleased to join the second respondent in the application for execution of a decree awarded to applicants. b. Any other relief which this court may deem just to grant. The application is supported by affidavit of Stanslaus Athony setting reasons for the grant of the orders sought. The second respondent, upon served filed a counter affidavit sworn by Daniel Nyakiha, learned State Attorney resisting the grant of this application. When this application was called for hearing, the applicants were enjoying the legal services of Mr. Juma Kimwaga, learned advocate. The first respondent did not resist this application despite served and opted not to participate at this stage. On the other hand, the second respondent was enjoying the legal services of Ms. Grace Lupondo, learned State Attorney. Both advocates were ready for hearing. Mr.Kimwaga submitted by reciting the provisions under which the instant application is referred and the orders sought and prayed the supportive affidavit be adopted to form part of the his submission. Further submitting, 2 h Mr. Kimwaga informed the court that this exercise emanates way back in 2007, where similar application for execution was brought before this court but upon realizing all the properties have been sold by the first respondent who was appointed Receiver Manager of the then Coastal Shipping Line (TACOSHIRI). According to Mr. Kimwaga it was prudent that the Receiver Manager, PSRC had to be joined in the application, however, within the same year, there were changes, whereby the functions of PSRC were taken over by CONSOLIDATED HOLDING CORPORATION. But before the applicants could take up the matter another changes were introduced by the NBC (Re- organization of Assets and Liability) Amendment no 2 of 2007, whereby the provisions of 6A are to that effect. Again according to Mr. Kimwaga another attempt to file and join CHC was again met with changes whereby the Treasury Registrar took over the functions of the CHC by the Order under G.N. 2003 of 2014, hence this application to join the Treasury Registrar. The purpose of joining the Treasury Registrar is to show cause why execution for the payment of the award under the decree to the applicants amounting to Tshs. 195,153,525.10 with interest at 7% as at the time of filing this application which was Tshs. 136, 607, 467.50 giving a total of Tshs. 331, 760, 992.60 should not be executed Treasure Register. 3 Mr. Kimwaga further submitted that the reason for this amount has been given to the attached judgement to this application as at the time of computing the terminal benefits of the applicants were based on old salaries without taking into account salary increment of the 26/08/1997 and 14/08/1998. To conclude, Mr. Kimwaga humbly prayed that this application be granted as prayed. On the other hand, Ms. Lupondo, learned State Attorney opposed this application by asking the counter affidavit be adopted to form part of her submission. Ms. Lupondo joined hands with the counsel for applicants that joining of the Treasury Registrar in a matter before the court is by operation of law as cited by Mr.Kimwaga, but was quick to point out that the only assets and liabilities that can make the Treasury Registrar liable were which were under CHC from the effective date ie 30/06/2014 as are the ones to be transferred as per the law. According to Ms. Lupondo the matter before this court has never at any point in time CHC was a party between the applicants and the first respondent. As this is the dispute between the first respondent and the applicants there is no way CHC was involved at all, she insisted. Ms. Lupondo was of the strong view that in order for the applicants to benefit from what they claim, they must have been party in their dispute. There is 4 no dispute that CHC has never been a party in their dispute, the learned Attorney lamented, and went on submitting that being the case, the cited laws are inapplicable to join Treasury Registrar. According to the learned Attorney CHC has never been at any point in time accepted the assets and liabilities of TACOSHIRI, hence making this application to join Treasury Registrar lack legs to stand. It was the strong submission of the learned attorney that TACOSHIRI which is the basis of this application transferred its assets and liability to Receiver Manager and not CHC. Therefore, according to her, the applicable provisions is section 301 of the Company's Act, [Cap 212 R.E.2002] in particular subsections 1 (a) (c) (e) and (f) which provides for powers of the Receiver Manager or liquidator in the event that a company is dissolved. According to her the Receiver Manager has powers to sue and be sued, to pay creditors as per paragraph (e) and (f). Therefore, Receiver Manager has duty to pay liabilities of TACOSHIRI and in the circumstances he has been a party form the trial court and is responsible to pay and not Treasury Registrar. The learned Attorney dismissed the argument that the Receiver Manager sold all properties and. equates bringing the Treasury Registrar is to punish him for wrongs done by someone else who failed to perform his legal duties. Ms. 5 ..., Lupondo concluded by inviting this court to dismiss this application with costs. In rejoinder, Mr. Kimwaga submitted that TACOSHIRI was a divesture of scheduled public corporations. According to him the whole process of TACOSHIRI at the time of being wound up it was specifically over public corporations. According to the learned counsel the Receiver Manager was the agent of PSRC, who is the principal and therefore this is the basis of joining the existing takeover of the assets and liability of public liability by operation of law. From PSRC came CHC and now Treasury Registrar and therefore according to Mr. Kimwaga the instant application is proper and the changing of hands from PSRC to CHC and now Treasury Registrar is a proper legal process. Mr. Kimwaga dismissed the cited provisions of the Company Act as are provisions that covers matters of private companies while here we are dealing with public corporations with different procedures. He concluded by praying that this application be granted as prayed. This was the end of this hearing. Let me say, I respectively commend the learned counsel for their brilliant submission of this matter. I have careful listened to the learned counsel for parties in this application and have noted that there some of the facts no in dispute between the parties and which 6 facts will narrow the issue and help this court to make a fair ruling inter parties. One, there is no dispute that Treasury Registrar is the last takeover all assets and liability that arises from the CHC, which has roots from PSRC. Two, there is no dispute that the joining or not of the Treasure Registrar in any matter before the court is by operation of law. Three, there is no dispute that TACOSHIRI was put under Receiver Manager by PSRC as the principal. Four, there is no dispute that the receiver manager sold all the properties of the TACOSHIRI under the instruction of the principal. From the learned counsel of parties' submissions, the learned counsel lock horns on whether in the circumstances, a Treasury Registrar can be joined or not. I can say boldly that this is a dispute that has suffered due legal changes in our jurisdiction over a period of time since the exercise divesture of the public corporations started. The next question I ask myself is, who appointed the Receiver Manager who was winding up a public corporation? Mr.Kimwaga had it that it was PSRC who was the principal and the first respondent was the agent. The learned State Attorney did not address her mind on this aspect but her stance was that since PSRC and CHC were not parties then the Treasury Registrar cannot come in. I have seriously considered this rival arguments between the learned counsel but am inclined 7 ..,,... .