NSSF

IN THE HIGH COURT OF TANZANIA (MWANZA SUB-REGISTRY) AT MWANZA CIVIL CASE NO. 19573 OF 2024 THE BOARD OF TRUSTEES OF THE NATIONAL SOCIAL SECURITY FUND…………………………1ST PLAINTIFF THE ATTORNEY GENERAL…………………………………………….2ND PLAINTIFF VERSUS NDAWAVYA AUTOPARTS AND CO. LTD………………………………DEFENDANT EXPARTE JUDGMENT 25th and 31st October, 2024 KAMANA, J. The Board of Trustees of the National Social Security Fund, the plaintiff sued Ndawavya Autoparts and Co. Ltd, the defendant, for the breach of statutory obligations by failing to contribute its compulsory contribution and that of its employees. The first plaintiff, being the Government institution, knocked on the doors of this Court in the company of the Attorney General. The defendant did not defend the case despite being served with the summons. Hence, the matter proceeded exparte against it. In this matter, this Court focused on determining whether the first plaintiff and the defendant had statutory relationship; whether the 1 defendant breached its statutory obligations; and the reliefs the parties are entitled to. Led by Ms. Aisha Saleh, learned State Attorney, Ms. Neema Sawe, the Compliance Officer of the plaintiff testified that the defendant is one of the members of the first plaintiff with Registration No.614165. The witness tendered the certificate of registration which was admitted as Exh.PE1. The witness testified that according to the law that established the first plaintiff, the defendant, being an employer, is required to deduct 10 percent of the salary that is paid to each of its employees and submit the same to the 1st plaintiff. She added that the defendant as an employer is also required to contribute to the first plaintiff its contribution which is 10 percent of the salaries paid to its employees. The witness evidenced that for the period between June, 2022 and January, 2024, the defendant failed to discharge its statutory duty as TZS 7,346,596.97 was not remitted by the defendant to the first plaintiff’s coffers. Amplifying her evidence, the witness testified that the said amount comprises TZS 4,080,000/- as statutory contributions and TZS 3,266,599.97 as penalties. The witness testified that the defendant was aware of the debt as the first plaintiff inspected it after notifying him of the inspection 2 through a letter dated 6th March, 2024 which was received by it on the same day. She cemented her evidence by testifying that after the said inspection, there was an exit meeting in which a report was prepared and signed by the first plaintiff and the defendant. According to her, the amount due which is TZS 7,346,596.97 was reflected in the report. She added that after the said meeting, the schedule of arrears which reflects the outstanding debt was prepared and signed by the first plaintiff and the defendant. She evidenced that the inspection report which also reflects the outstanding debt was prepared. The notice of statutory inspection, the exit meeting report, the schedule of arrears and the inspection report were admitted collectively as Ech.PE2. The witness evidenced further that despite being issued with the demand notice and penalty notice, the defendant failed to discharge its statutory duties. The demand notice and penalty notice were admitted collectively as Exh. PE3. In summing up her evidence, Ms. Sawe asked this Court to grant the first plaintiff the reliefs it prayed for in the plaint including the amount that the defendant owes the plaintiff which is TZS 7, 346,599.97. 3 So far as the first issue is concerned, I am of the considered view that the defendant is a member of the first plaintiff since 1st August, 1999. This is proved by the certificate of registration which reflects the defendant’s name. According to the certificate, the defendant was registered by the first plaintiff as a contributing employer under section 11 of the National Social Security Fund Act, Cap. 50 [RE.2018]. Having taken that position, I now turn to determine the second issue. From her evidence, Ms. Sawe narrated in length how the defendant was supposed to remit its contribution as an employer and remit the deductions it made from its employees’ salaries to the first plaintiff. She also testified how the defendant was informed of the outstanding debts so far as its statutory duty is concerned. Likewise, the witness testified how the defendant failed to discharge its statutory duty despite being reminded of the same. Indeed, I am satisfied that the first defendant breached its statutory duty by failing to remit TZS 7,346,596.97/- to the plaintiff’s coffers. I hold that while mindful that under section 12 of the said Act, the contributing employer is required to remit its contribution and that of its employee at the rate stated in the First Schedule to the Act. According to the First Schedule, the total contribution for each employee 4 is 20 percent of the salary whereby the employer is required to contribute half of it. Further, having perused Exh.PE3 especially the exit meeting report and schedule of arrears, I am convinced that the defendant was aware of the debt as it signed and appended its stamp on those two documents. This means that by failing to settle the debt, the defendant is in breach of its statutory duty. As far as reliefs are concerned, without much ado, I order the following: 1. The defendant should pay the first plaintiff the sum of TZS 4,080,000/- being the outstanding principal members’ contribution covering the period between June, 2022 and January, 2024. 2. The defendant should pay the first plaintiff the sum of TZS 3,266,599.97/- being the outstanding penalties for late payment of statutory contributions for the period between June, 2022 and January, 2024. 3. Interest on the decretal sum at the Court rate of 7 percent from the date of delivery of this judgment until the same is fully satisfied. 4. Costs of the suit. Order accordingly. 5 Right To Appeal Explained. DATED at MWANZA this 31st of October, 2024. KS KAMANA JUDGE 6