tanzania tractors manufacturing co ltd psrc vs gracious mwanguya another 2003 tzhc 98 25 july 2003

IN THE HIGH COURT OF TANZANIA (DAR ES SALAAM DISTRICT REGISTRY) AT DAR ES SALAAM CIVIL APPEAL N0.302 OF 2001 CONS WITH CIVIL APPEAL N0.291/2001 TANZANIA TRACTORS MANUFACTURING CO LTD./P S R C.......................... APPELLANT VERSUS • i GRACIOUS MWANGUYA RESPONDENT C.R.D.B. LTD......................... ...... 3Kl) PARTY JUDGEMENT LUANDA. J : - S'- Before me are two civil appeals. The two appeals namely Civil Appeal N o.291/2001 and Civil A ppeal No.302/2001 are arising from Civil Case No. 186/1992 filed and adjudicated by D ’Salaam Resident M agistrate Court sitting at Kisutu. In Civil Appeal Case N o.291/2001 the appellant is Cooperative and Rural Development Bank Ltd; whereas the Respondents are Tanzania Tractors M anufacturing co. Ltd; Gracious M wanguya and the Presidential Sector Reform Comm ission. In Civil Appeal N o.320/2001 the Appellant is Tanzania Tractors M anufacturing Co. Ltd. The Respondents are Gracious M wanguya and Cooperative and Rural D evelopm ent Bank. As the two appeals emanate from one civil case, the two appeals were consolidated. And as it is not easy to refer the parties as appellant and/or respondent, I would use their respective nam es when they had sued or been sued.. Briefly the facts o f the case are to this effect: On 17th March, 1992 Gracious Mwanguya entered into a loan agreement with the Cooperative and Rural Developm ent Bank (hereinafter referred to as CRDB). Gracious M wanguya was advanced a loan o f Tshs.6,823,000/= to buy a tractor. He fulfilled all conditions stipulated therein in the agreement. Gracious M wanguya was to repay the loan by instalment. But he was required to settle the debt by 31/2/1995. Having been satisfied, the CRDB wrote a letter to Tanzania Tractors M anufacturing Co. Ltd (hereinafter referred to as TRAM A), m anufacturer o f Valm et tractors to release one unit to Gracious Mwanguya. Gracious M wanguya collected the said tractor from TRAM A. The CRDB rem ained with the original registration card registered in the name o f Gracious M wanguya. Gracious M wanguya was given a photocopy o f that card. The registration number o f the tractor is TZC 4002. Upon acquiring possession, Gracious M wanguya hired the tractor to the Kilombero Sugar Company. An agreement was entered whereby Gracious M wanguya undertook to transport sugar cane from out growers fields to the Company factors referred to as K1 and KII; o f course on payment. The contract was reduced into writing and it was executed on 23/7/1992. As to when will the contract come to amend, the agreement indicate that the contract will come to an end at the end o f the M illing Season, w hatever that means. On 8/10/1992 the CRDB wrote a letter instructing TRAM A to seize the tractor. The tractor was seized on 13/10/1992 with the assistance o f Police. And around the same time TRAM A filed a Civil Case No. 186/1992 against Gracious M wanguya. I said so because I was unable to trace the Exchequer Revenue Voucher (ERV). W hatever the position, the claim was for the balance due o f Tshs. 1,432,830/= in respect o f the purchased tractor, costs and interest. G racious M w anguya was able to defend the claim by filing his written statement o f defence. He also counter claimed for Tshs. 120,000/= per day being loss o f earning for unlawful seizure o f the tractor, costs and interests. On 13/4/1994 when the case came for hearing, TRAM A who were aw'are o f the hearing date did not appear. The suit was dismissed and the prayers o f Gracious Mwanguya contained in his counter claim was granted. TRAM A made several attempts to set aside that judgm ent entered in favour o f Gracious Mwanguya but to no avail. The m atter was referred to this court (N sekela, J) by way o f revision. Nsekela, J. directed the court to abide with 0 .8 r.9(2) o f the Civil Procedure Code, 1966 and ordered the case i.e. Counter Claim be heard in accordance with the Law and be tried by another magistrate. That Order was complied with . The Ruling was delivered on 12/8/98 in the presence o f Mr. Shiyo for the Applicant and Mr. M sirikali for the Respondent. On 10/11/98 TRAM A made an application - third party notice be issued against CRDB. The application was granted. The CRDB was joined in the proceedings. The order was made on 13/11/98. On 14/6/1999 The Presidential Sector Reform Comm ission (hereinafter referred to as PSRC) was joined as party to the proceedings. For reasons 1 will explain at a later stage, I prefer to reproduce the Court proceedings dated 14/6/99. 14.6.99 Coram: A. Kabuta, Rm For Plaintiff - M aira For defendant - M koba M wakipesile for the 3rd party. Maira: We have agreed that the pleadings be amended because the defendant is liquidating we have agreed that the parties be: Gracious M wanguya V ersus PSRC and Third party M koba will proceed to defend PSRC O rder; Hearing 20/7/99 Kabuta Sgd. 14/6/99" But the trial court did not make any decision or order whether it agreed with the proposal. H ow ever, w hat follows thereafter shows very clearly that PSRC were joined as a party to the proceedings. One w onders whether that was proper. Be that as it m ay Mr. M koba who is advocating for TRAM A and who was present when Mr. M aira made the prayer raised a preliminary point in that the PSRC was wrongly substituted as defendant for want o f leave under the Bankruptcy Ordinance. And two the suit was subjudice. The objection was filed on 20/8/1999 vide ERV 09220771. The objections were overruled. Let me com m ent on the first point raised. On 14/6/99 Mr. M aira informed the Court that they had agreed that pleadings be amended so that parties to the suit be Gracious Mw'anguya Vs. PSRC and Third Party (CRDB) W hen Mr. M aira v/as inform ing the court Mr. M koba w'as around. Common sense dictates that if Mr. M koba was not in agreement, with what Mr. Maira had said or proposed, lie would have said so. Mr. M koba kepi silence. Mr. M koba is not entitled to raise it at a later date. He was estopped. But the im portant thing is that the trial court was not allowed to reopen the issue. The court was functus officio. Be that as it may, the trial court dismissed both objections. The case court then proceeded with trial. At the end o f the day Gracious M w anguya emerged as the winner. Judgment was entered against TRAM A/PSRC who were to be indemnified by CRDB. It is this judgm ent which is the subject matter o f appeals mentioned earlier. Mr. Kisusi and Mr. M koba who are advocating for the CRDB and TRAM A/PSRC respectively argued their appeals with force. Mr. M aira who is advocating for Gracious M wanguya supported the finding o f the trial court. I have given the details o f the case as I believe there are legal issues which were not seriously considered or not considered at all. However, I will refrain m yself and discuss the issue o f jurisdiction. W hen Gracious M wanguya filed his written Statement o f defence in which he counter claim ed, and therefore that is a suit against TRAM A, TRAM A was not a Specified Public Corporation. On 14/6/1999 PSRC was joined as a party to the proceedings because TRAM A was a Specified Public Coiporation. But Mr. Maira did not cite the relevant Government Notice and the operative date. And Mr. M koba when raising the objection did not cite the Government N otice either. Now where did they get that information, that TRAM A is a specified Public Coiporation? But all the same the trial court did not demand evidence to that effect; it included PSRC as a party to the proceedings. I took the trouble and make a research. My research bear fruits in that TRAM A is a Specified Public Coiporation as evidenced by GN 321 published on 25/10/1996. And the GN is deemed to have come into operation on 1st January, 1996. So from that date TRAM A was a Specified Public Corporation. By virtue o f Section 43(1) o f the Public Corporation Act, 1993 once a corporation is declared to be a Specified Public Corporation, the PSRC is vested with power to act as an official receiver o f that Specified Public Corporation. Section 43(1) o f the said Act provides: 43(1) Notwithstanding any other law to the contrary, with effect from the date o f publication o f an order declaring a public corporation to be a Specified Public Corporation the Commission shall (a) W ithout further assurance on appointm ent have pow er to act as official receiver o f the Specified Public Corporation, and (b) have the power and all the right o f a receiver appointed in accordance to the Bankruptcy Ordinance. The PSRC is established under S.49 o f the Act a amended. It provides: 49(1) There is hereby established a Comm ission to be know n as the Presidential Sector Reform Comm ission which shall be an autonomous organ o f the Government (2) The Comm ission shall be a body Corporate with perpetual succession and com mon Seal and shall be capable in its coiporate name of:- (a) Suing and being sued. (b) taking, purchasing or otherwise acquiring, holding, charging and disposing o f both movable and im movable property. (c) borrow ing and lending m oney (d) entering into contracts (e) doing or performing all such other things or acts necessary for the proper performance o f itsfunctions under this Act which may lawfully be done by a body corporate. But what are the functions or duties o f an official receiver; these have been stated under S .75 o f the Bankruptcy Ordinance, Cap. 25 Section 75 reads: 75(1) The duties o f the official receiver shall have relation both to the conduct o f the debtor and the adm inistration o f his estate. (2) The official receiver may, for the purposes o f affidavits, verifying proofs; petitions, or other proceedings under this Ordinance adm inister oath. (3) All provisions in this or any other Ordinance, referring to the trustee in a bankruptcy shall, under the context otherwise requires or the Ordinance otherwise provides, include the official receiver when acting as trustee. If one reads the above quoted sections, he will no doubt form an opinion that once a corporation has been declared a Specified Public Corporation which is taken to undergo liquidation, it ceases to be a body Corporate and as such it cannot sue and be sued. Further, it cease from owning properties. Properties o f such Specified Public Corporation are vested with the PSRC w hich has powers o f alienating them, inter alia. And it is no w onder that any civil litigation filed against a Specified Public Corporation ought to include the PSRC after obtaining leave o f court to sue. And such suit is taken or treated to fall under bankruptcy. That is m y understanding. However, I am very much aware with the decision o f CAT in Kam puni va Uchukuzi Tabora Ltd V. Praxed Paulo& another Civil A pplication N o.43/99 (unreported) which decision is binding upon this court. The CAT held that a specified Public Corporation does not cease to owai properties. My concern is w hether the trial court was competent to adjudicate bankruptcy m atter while it knew TRAM A was a Specified Public Corporation. But before we go further we have to ask ourselves this question. Is it property to raise the issue o f jurisdiction at this stage? In Michael Leseni Kweka V. John Eliafe Civil Appeal No.51/1991 CAT(unreported) the Court o f Appeal o f Tanzania held, inter alia, that matters o f jurisdiction may be raised at any stage and any time as they go to the root o f justice. Now back as to w hether the trial court had jurisdiction. Strictly speaking a com petent court which has power to adjudicate bankruptcy matters is the High Court save in same incidences where the C hief Justice by an Order delegate to any subordinate court either generally or for purpose o f any particular case or class o f cases. This is provided for under S.97 o f the Bankruptcy Ordinance, Cap. 25. The section reads: 97. The court having jurisdiction in bankruptcy shall be the High Court provided that the Chief Justice may by order delegate all or any part o f the jurisdiction o f the High Court in bankruptcy to any subordinate court either generally or for the puipose o f any particular case or class o f cases. The record o f the trial court does not indicate or show to have been conferred with such powers. To my best recollection so far no resident magistrate as resident m agistrate has been appointed to handle bankruptcy cases. It is only the District Registrar o f Tanga, M wanza and A rusha who have such powers. But the powers are limited to the examination o f debtors in bankruptcy case filed in High Court (See GN 15 and 88 o f 1931; and GN 440/1957). Taking the free m arket econom y prevailing at the moment whereby commercial activities are been carried out, probably it is high time to confer with such powers to some or all resident magistrates. H owever, one m ay pose this question. Upon discovery that the tried court had no jurisdiction what action or step one should take? The answers to this question is found under S.21 o f the Civil Procedure code, 1966 and 0 7 .r.l0 (l)(2 ) o f the code which is all about transfer withdrawal and return o f plaint before the conclusion o f the trial. Section 21 provides:- 21(1) On the application o f any o f the parties and after notice to the parties and after hearing such o f them as desire to be heard, or o f its ow'n motion without such notice, the High Court may at any stage - (a) N/A (b) W ithdraw al any suit or other proceeding pending in any court subordinate to it, and (I) try or dispose o f the same; or (ii) transfer the same for trial or disposal to any court... (iii) N/A Order V ll, r. 10(1) & (2) reads 10(1) The plaint shall at any stage o f the suit be returned to be presented to the Court in which the suit should have been instituted. (2) On returning a plaint the Judge or M agistrate, shall endorse thereon the date o f its presentation and return, the nam e o f the party presenting it, and a brief statement o f the reasons for returning it. The two situations do not apply in our case as the trial was concluded. All in all the trial court had no jurisdiction to entertain this case. It follows therefore that the trial is a nullity. The proceedings are quashed.the Judgment and decree set aside. Gracious M wanguya is at liberty to take any action he deems it fit. As the issue was not raised by any party to the appeals, I award no costs. Each party to bear its costs. O rder accordingly. JU DGE. 23/7/2003 Judgem ent read over in the presence o f Mr Kisusi and Mr. M koba and holding brief o f Mr. Maira.