the liquidator tri telecommunication t ltd vs anael kavishe another 2004 tzhccomd 46 4 june 2004

IN THE HIGH COURT OF TANZANIA (COMMERCIAL DIVISION) AT OAR ES SALAAM IN THE MATTER OF THE COMPANIES ORDINANCE CAP.212 AND IN THE MATTER OF A PETITION FOR WINDING UP TRI TELECOMMUNICATION TANZANIA LIMITED THE LIQUIDATOR, TRI-TELECOMMUNICATION TANZANIA LIMITED , APPLICANT AND ANAEL. KAVISHE. 1st RESPONDENT GOTFRID S. TESHA 2nd RESPONDENT In a ruling dated 7th June 2003 this court gave several orders. Among them was the winding up of TRI-TELECOMMUNICATION TANZANIA LIMITED (TRITEL) hereinafter referred to as the company, under Section 167 (e) and (f) of the Companies Ordinance Cap.212 and the appointment of Mr. Peter Clever Bakilana as the Liquidator of the company. Other orders were the invalidation of a Debenture dated 6th April 2001 issued 2 Kavishe and Gotfrid Stolis Tesha who were jointly appointed Receivers/Managers of the Company by Citibank Tanzania Limited under the Debenture which was nullified by the court and had made appearance to oppose the petition, were ordered to prepare two statements of the Affairs of the Company. One had to give the position of the company as of 14th January 2003 and the other, as of 12th June 2003. In addition, they were also ordered to hand over and account for all the affairs of the company to the Liquidator as required by Section 188 of the Companies Ordinance Cap 212 and Rules 76 and 77 of the Companies (Winding Up) Rules 1929. Revisional proceedings were filed in the Court of Appeal of Tanzania challenging the lawfulness of the orders given by this court which affected the Citibank Tanzania Limited while it was not a party to the proceedings. Unfortunately the revision ended at a preliminary point, declared incompetent and dismissed with costs. The Liquidator of the company has now filed a notice of motion under Rule 5 (1) (e) and Rule 8 (1) of the Companies (Winding Up) Rules 1929 praying that Anael P. Kavishe and Gotfrid S. Tesha (the respondents) be jointly and severally declared to have committed acts of contempt to the orders which were made by this court and to have them arrested and respectively committed to prison for the offence of contempt of court in contravention of Section 114 (1) of the Penal Code until they unreservedly comply with the court orders. Other prayers include an order to require 3 the respondents to prepare and hand over to the applicant another statement of Affairs of the Company as at the date of the actual handover as well as disclosure and paying bank of all the properties of the company including cash and bank balances which were jointly or severally disposed off contrary to the orders of this court. The applicant is represented by FK LAW CHAMBERS; with Dr. Lwoga appearing. The respondents on the other hand are represented by MIS M.A. ISMAIL & CO; with Dr. Twaib appearing. Basically, the major ground upon which this application is founded as deponed by the applicant, is that the respondents have been conducting themselves and carrying out activities contrary to the orders given by this court in its ruling referred to above. Dr. Twaib has raised a preliminary objection to the application: " i) The applicant has no locus standi. ii) The matter is res sub judice in the Court of Appeal. iii) The motion is seeking for comphliance to a judgment/order which is not capable of being enforced. " 4 The court allowed the preliminary objection to proceed by written submissions. Dr. Twaib's submission on the first point is that the application is not properly brought before the court and or has been brought by a wrong party. His argument is that the applicant being a liquidator, and not a party to the initial proceedings, his role is merely confined to execution of court orders just like a court broker and he has no capacity to step into the shoes of the decree holder and file contempt proceedings. Dr. Twaib argued further that the applicant has not cited the provisions which give this court the power to grant the orders asked for. The provisions cited are only procedural rules which prescribed the place where the proceedings should be heard that is in the open court and the format for preferring the application. Dr. Twaib views are that given the seriousness of contempt proceedings in that they are intended to take away the freedom of a person because of the Criminal sanctions which may be imposed, citing of the relevant provision is essential. "Failure by the Liquidator to cite the legal provision empowering the court to grant the orders prayed for means that the court has no jurisdiction to grant such a prayer, argued Dr. Twaib. His concluding argument on this matter is that failure to cite the relevant law, or even citing a wrong one is fatal. He cited the decision of the Court of Appeal given in this case. That is Citibank Tanzania Ltd V TTCL & Others Civil Application NO.54 of 2003 (Court of Appeal) (Unreported). In response, Dr. Lwoga submitted that the respondents have misconceived the status of the respondent because the proceedings have been filed in compliance with the provisions of Rule II (2) of the Winding Up Rules 1929 which govern the procedure for making applications subsequent to the issuance of a winding up order. He reminded this court that so long as the winding up order has not been challenged under section 198 of the Companies Ordinance, Cap 212 the company ceased to have capacity to act on its own in the conduct of its winding up proceedings and that is why the court appointed a Liquidator under section 182 of the Companies Ordinance for purposes of conducting proceedings for the winding up of the company in liquidation. Dr. Lwoga said that this provision alone establishes the locus standi of the applicant in making this application. Dr. Lwoga argued further that Sections 188,189 and 190 empower the applicant to do a range of activities related to the company in liquidation. Answering the point raised by Dr. Twaib on the applicant's status to step into the shoes of the decree holders, Dr. Lwoga cited section 177 of the companies Ordinance Cap.212 arguing that an order for the winding up of a company operates in favour of all creditors and of all contributors of the company as if it is made on a joint 6 application. These are the persons whose interest are handled by the applicant as envisaged under the provisions of Section 191 (2) of the Companies Ordinance. His concluding remarks are that it is a misconcemption in law to argue that the applicant cannot step into the shoes of the decree holder. As regards the question of the applicant filing contempt proceedings, Dr. Lwoga made reference to Sections 200 of Cap 212 read together with Rule 77 of the Rules together with Section 190 (2) (b) read together with Rule 66 saying that the provisions might have been over looked by Dr. Twaib because they allow the applicant to file these proceedings. Dr. Lwoga submitted that the ruling (supra) made by this court ordered the applicant to do a range of activities against the respondents who admitted failure to comply with them. Since Section 217 of Cap 212 allows orders made in winding up proceedings to be enforced in the same manner as any other decrees; it is competent for the applicant to institute proceedings seeking to enforce orders of this court against the respondent if it is proved that they have committed contempt. Dr. Lwoga submitted further it is not true that the enabling provisions under which the court can grant the orders sought for have not been cited. According to Dr. Lwoga citing the provisions prescribing the procedural requirement is sufficient. The 7 substantive part of the application will be covered during the hearing. This is therefore a matter which cannot be determined as a preliminary point. So far those were the argument raised by the Advocate. I have thoroughly gone through them and I will agree with Dr. Lwoga that the first point of objection is misconceived. The applicant was appointed a Liquidator by this court under Section 182 of the Company Ordinance. He was ordered to do a range of activities for the winding up of the company in liquidation. That appointment confers locus standi on the applicant to do all the necessary activities required for the purposes of ensuring that the duty assigned to him by the court is carried out. In the process of carrying out his duties, filing of proceedings like the current ones may be necessary. Whether proceedings for contempt will succeed or not is not a matter which can be determined at this preliminary stage. The court needs to be informed on what has not been complied with, before a decision can be made. At the moment it is premature to raise issues related to contempt. This court is yet to be informed why should contempt be preferred and whether they are appropriate. The second point raised is that the matter is res-sub judice in the Court of Appeal. Apparently, this court has not been told which matter is still pending in the Court of Appeal because the original file has been returned to this court . The normal practice which has always been taking place is that ,whenever the original call for record. The original case file for this court was returned to this court after finalization of Civil Application NO.112 of 2003. matter pending this court will be stopped from proceeding with whatever is before given. Dr.Twaib argues that they are not capable of being enforced. I will again say Having analysed the preliminary points raised and the observation made by this court, I will hold that all the preliminary points have no merit. They are all N.P.KIMARO, JUDGE 2/06/2004 For 1st Respondent } Mr. Lugaiya/Dr.Twaib For 2nd Respondent N.P.KIMARO, JUDGE Mr. Lugaiya: I pray that the application which is pending be argued by written submissions. We will be ready to file the same in two weeks time. Order: The application to be argued by written submissions Dr. Lwoga to file his submission by 18/06/2004 - Reply by Dr. Twaib to be filed by 2/07/2004. Rejoinder if N.P.KIMARO, JUDGE 4/06/2004 ~?fiJO" . ........ ~f~/"":'0(\ . &0' •••••••••••• _' "-.c' •••••••••