20040227 TZHC Dar es Salaam

~...i - ~~ r • •: ,tt,~, IN THE HIGH COURT OF TANZANIA CCOMMER,CIAL DIVISION) AT DAR ES SALAAM [1 COMMERCIAL CA\SE NO. 115 OF 2002 r THE NATIONAL BANK OF :COMMERCEiTD ..... PLAINTIFF 1 " VERSUS I , ABRAHAM ELANGWA SHOGHOLO ................ ; DEFENDANT JU JG ME N.T KIMARO, J. j '~ The plaintiff claims from t, e defendant an amount of T.shs )i 78,288,021/ = allegedly being lian ,, outstanding debt comprised of T.shs 37,314,281/= as the PHncipal and T.shs 40,973,740/= as interest as of 30th Novembe~ 2001. The plaintiff avers that the 1; defendant was granted a ban~ing I facility of overdraft to the limit of T.shs 40,000,000/= by a lbanking facility letter dated 19th November 1997. The facility ~as charged interest at the rate of 23% p.a floating. upon default, a penal interest at the rate of 5% above the usual rate was to i1be charged from the date of the default. , ... , The plaintiff avers that there was been a default and hence this sultagainsuhe defendant. I The defendant's written staJement 1 of defence is contradictory. Whereas he denied having apblied for and received any banking facility from the plaintiff, hf at the same time, blamed the plaintiff for having failed to offer I! him an additional loan. 2 The issues to be resolved lb¥ this court are: {i) Whether the Plaintiff advanced the Defendant the overdraft faciliiy of T.shs 37,314,2181=. I, (ii) If the answer td mabove is in the affirmative~ how I . much interest Had accrued as of November, 30, 2001. (iii) What was the t ta/ outstanding balance as of 30th J [ . November, 2001. fivJ Whether the bank breached its contractual duty by ' failing to disbur1e the amount agreed. ' (V) Whether or not 'the plaintiff was bound to disburse additional facilities and if yes whether such facilities I were actually di~bursed. rviJ To what relief's are the parties entitled to." I The evidence to support the plaintiff's case came from Mr. Micah Mrindoko. He was the sble witness for the plaintiff. The I witness is the Plaintiff's Loans Officer whose duties is debt collection. His testimony was that the defenldant was granted a banking facility which consisted of two componets; an overdraft and a term lo.an. He tendered into court a loan agree~ent which was admitted as exhibit P1. Exhibit P1 shows that the dJfendant was granted an overdraft facility with a llmlt of T.shs 40,~00,000/= which was valid fOr one ,, )' ....J 3 year. Its expiry date was 15/11/98. He was also granted a Term Loan of T.shs 12,900,000/= which was to expire on 30/09/2001. The interest rate was 23% p.a. floating, with a penalty of 5% p.a. above the normal rate to be charged on expired limit and any excesses created without prior arrangements. ' Para 7 ofthe exhibit P1 reads~ 11 UM over CT No.3009 on plot No.11 Block 'B' c.n.o Mr. Abraham E. Shogholo valued at T.shs 14.6 Million but stamped to cover T.shs 15 million and UM over CT No.12667 L.O No.145390 Kiomoni Industrial Area, Tanga Municipality c.n.o. Abraham Elangwa Shogholo valued at T.shs 152 Million to be executed and stamped to cover total exposure by 130%/' i Exhibit P1 required the defendant to acknowledge receipt of the duplicate thereof. Exhibit P1 bears ,the following remarks which the defendant admitted being his; 11 Nimekubaliana na masharti haya." $ignature. I ' In his defence the defendant admitted receipt of exhibit P1 as well as his endorsement signifying acceptance to the conditions of the loan agreement. However, he said he did not know how much of 4 the loan was disbursed because ,he never saw a bank statement for the account. In his final submissions, Mr. semgalawe who appeared for the defendant asked this court to make a finding that the plaintiff failed to prove that the defendant was granted an overdraft facility of T.shs 37,314,218/04. He traversed the evidence of PW1 and said that, much as the defendant desired to borrow and the plaintiff to lend, that intention was never fulfilled by the plaintiff. He quoted portions of answers made by PW1 in cross examination on disbursement and repayment schedules and came to a conclusion that the plaintiff failed to prove that the loan was ever disbursed to the defendant. According to him, the plaintiff failed to establish that the amount of T.shs 37,314,218/~ was disbursed to the defendant, hence making issues No. m, cm and Ciiil fail. Mr. Mtafya, Learned Advocate appearing for the plaintiff required this court to focus its attention on Exhibit P1 and other exhibits authored by the defendant which speak about the banking facility, particularly exhibits P2, P3 and PS. Exhibit P2 is a letter which was written by the defendant to the plaintiff on 21 st September, 1998. It notified the plaintiff that the defendant's factory had started operations. It required updates on the overdraft and the term loan for purposes of enabling the defendant to plan how to service his financial obligations. Exhibit P4, dated 20/02/1999 is a request by the defendant to have the overdraft of T.shs 37.5 be restructured as a term loan together with the term loan of T.shs 12.s million. Exhibit P4, also 5 authored by the defendant, speaks of discussions held by the defendant and officers of the plaintiff where the defendant had an opportunity of exposing his financial constraints and the arrangements he had made for repayment of the loan. Mr. Mtafya submitted correctly that if the totally of the evidence is considered, the answer to the first issue will be in the affirmative. I Quite agree with him. The evidence given by PW1 together with the exhibits tendered in court which were authored by the defendant himself is clear proof that the plaintiff did grant to the defendant the overdraft facility of T.shs 37,314,218/ =. The evidence leaves no doubt on this. As regards the second issue the answer is that the evidence · which was tendered for the plaintiff was that the interest on 30/11/2001 stood at T.shs 40,973,410/- and the interest was charged at 26%. Although the rate of interest given in Exhibit P1 was 23% p.a. and 5% p.a penalty interest, PW1 said the interest was floating and that is why 26% p.a. was charged as interest, instead of 28% p.a. According to the testimony of PW1, the amount which stood outstanding on 30/11/2001 was T.shs 78,288,021.45. Mr. semgalawe's submission in respect of the fourth issue was that although exhibit P1 talks of an overdraft and a term loan, the evidence of PW1 is that the plaintiff only opted to disburse to the defendant the overdraft but not the term loan. He said that PW1 made an admission that the term loan was not incorporated in the plaintiff's claim. However, PW1 failed to prove that even the overdraft was disbursed to the defendant. His opinion was that the r 6 admission by PW1 that the plaintiff is not suing on the term loan confirms that the plaintiff did breach the terms of exhibit P1 in which it was agreed that both components should be disbursed to the defendant. The reply by Mr. Mtafya was that the plaintiff did disburse both components to the defendant. Only that the plaintiff has opted to sue on the overdraft only and this is allowed by the Civil Procedure Code 1966, Order II rule 2(1) and (2). He said since the term loan is secured by a mortgage of another property, the plaintiff may opt to enforce the same under the sale without recourse to the court. Mr. Mtafya submitted further that the defendant did explain the reasons which made him to default repayment. He can not now be allowed to blame the plaintiff for his failure to make repayment. He had already explained reasons for his failure. He said the evidence on record show that both facilities were granted to the defendant. The defendant has opted to exercise its right over one of the facilities and the law allows the plaintiff to do so. He invited the court to hold that the plaintiff is not in breach of its contractual duty by failing to disburse the amount agreed. The plaintiff made it clear that it was not suing on the Term Loan. It does not serve any purpose for the defendant to complain over a matter which does not form part of the plaintiff's claim. 1 say so because even if this court were to hold that the plaintiff did not disburse the term loan, evidence proves that the overdraft was disbursed. This is what forms the subject of the proceedings. The defendant accepted the overdraft as a loan and it has to be repaid. It has not been repaid. Issue number four is answered negatively. ,I h j, l Both Advocates concede th~t there is no issue in respect of the ' plaintiff advancing an additional ~acility to the defendant. This is an issue which was wrongly includeb in the issues framed in this suit. I Exercising the powers conferred under Order XIV rule SC2) of the Civil I' Procedure Code, 1966 I strike out issue no. v, which relates to the I plaintiff advancing additional facility to the defendant. I I Lastly is the relief<s) to whictlI the parties are entitled to. \ It has been demonstrated above that the plaintiff did establish I its case, and on the balance of pr0babilities, , I that the defendant was granted on overdraft which has; not been repaid. The plaintiff is ! entitled to judgment as prayedt for in the plaint save that the I interest on the principal amount should I be calculated from the date of filing of the suit till judgment at the rate of 26%. Thereafter I interest to be calculated at the co'urt rate of 7% till full satisfaction. !" ' The plaintiff is also granted costs. I I I I N.P\KIMARO, JUDGE I 24/02/2004 l ; I I 27/02/2004 I \ Coram: Hon. N.P.Kimaro, J. \ For the Plaintiff - Mr. Mtafya. I For the Defendant - Absent. I cc: Ngonyani. i I I l ..t il I . . court: Judgment delivered today:;. Order: Judgment for the plaintif~I as prayed for in the plaint, save that interest on the principal af11ount should be calculate at 26% from the date of filing of the suit:, till judgment. Thereafter, interest should be calculated at 7% till fu':1 I satisfaction. The plaintiff is also granted costs. I ;I· N.P.Kl~ARO, JubbE 27/02)6004 ,,, 1.961 - words . I ! ' i . ~~ I '. I' ! ' ·i