registered trustees of vignan educational foundation bangalore india another vs national development corporation others 2018 tzhclandd 33 27 february 2018

IN THE HIGH COURT OF TANZANIA (LAND DIVISION) AT DAR ES SALAAM LAND CASE NO. 210 OF 2012 THE REGISTERED TRUSTEES OF VIGNAN EDUCATIONAL FOUNDATION BANGALORE, INDIA............................................1st PLAINTIFF INTERNATIONAL MEDICAL AND TECHNOLOGICAL UNIVERSITY (IMTU)....................2nd PLAINTIFF VERSUS NATIONAL DEVELOPMENT CORPORATION............ DEFENDANT 1. THE HONOURABLE ATTORNEY GENERAL 2. THE CHIEF SECRETARY PRESIDENT'S OFFICE, STATE HOUSE 3. THE PERMANENT SECRETARY, MINISTRY OF EDUCATION, SCIENCE, TECHNOLODY AND VACATIONAL TRAINING 4. THE PERMANENT SECRETARY, MINISTRY OF FINANCE AND PLANNING 5. THE PERMANENT SECRETARY, MINISTRY OF LANDS, HOUSING AND ^>.....3RD PARTIES HUMAN SETTLEMENTS DEVELOPMENT l 6. THE PERMANENT SECRETARY, MINISTRY OF HEALTH, COMMUNITY DEVELOPMENT, GENDER, ELDERLY AND CHILDREN 7. THE PERMANENT SECRETARY, MINISTRY OF FOREIGN AFFAIRS, EAST AFRICA, REGIONAL AND INTERNATIONAL COOPERATION JUDGMENT (Amended pursuant to the Court order o f29/6/2018) 27/ 11/2017 - 27/ 02/2018 MZUNA, J.: The plaintiffs are joint ventures working in Tanzania. They were allowed by the Government of Tanzania to run a University otherwise known as International Medical and Technological University, commonly known by its acronym IMTU. Since they had no plot and buildings to operate the said institution they were accommodated at the premise owned by Saruji Corporation. There was a lease agreement signed between the parties. It came out that the said Saruji Corporation was among the companies which were under liquidation. Its properties worth about Tshs 3,353,676,450/= were transferred to the National Development Corporation referred herein after as NDC, the defendant. All this was supervised by Public Sector Reform Commission (PSRC). In other words, NDC claims that they became the new Land Lord of the plaintiffs as the plaintiffs were housed in 2 the premises now owned by NDC. Subsequent thereof, NDC issued an eviction notice to the plaintiffs' after they have failed to sign a new lease agreement and payment for the rent due. The plaintiffs are challenging that move hence the institution of the present suit. The plaintiffs argue that they do not recognize her as their Land lord. That, it was wrong to offer NDC the right to purchase Saruji Corporation properties instead of the plaintiffs who were in long occupation of Saruji buildings/property where IMTU currently operates its business. The plaintiffs further impleaded the 3rd Party (ies) for breach of the memorandum of understanding (MOU) signed between The Government of Tanzania and Vignan Education Foundation Bangalore, India (VEF) whereby they were promised to be offered some plots both within and outside Dar es Salaam. The plaintiffs are therefore praying for a restraint order not to be evicted, extension of further term to 25 years, general damages plus costs (among others). On the other hand, the defendant claims that she is a lawful owner of the disputed premise and should therefore be paid Tshs. 1,033,680,000/= VAT inclusive, being rent arrears covering the period from September, 2011 to August, 2012 plus an eviction order and costs of the suit. She prayed for the suit to be dismissed and her counter claim be granted. On their part, the 3rd party (ies) claim that they fully complied with the terms of the MOU including offering a plot to the plaintiffs. Above all that the plaintiffs refused to accept the offer for other plots offered to them. That even the offer to purchase the premises was given to the plaintiffs who declined to do so. They prayed for the dismissal of the suit. Both parties were represented Mr. Mbakileki, Mr. Ntalula and Mr. Nditi, the learned counsels represented the plaintiffs, Mr. Msemwa the learned counsel represented the defendant. The 3rd Party (parties) were represented by Mr. Mwakahesy and Ms. Greener Aden, the learned State Attorneys'. Both parties made their written submissions. Issues for adjudication are:- 1. Whether the defendant has breached the terms and conditions o f the Lease Agreement? 2. Whether the lease was extended for a further period o f 25 years? 3. Whether the lease agreement for 25 years was varied to be for 5 years renewable; 4. Whether the defendant is entitled for rent arrears from September, 2011 and for eviction order against the Plaintiffs for failure to pay rent? 5. Whether Saruji Corporation, the former Landlord failed to offer the terms o f sale o f the suit premise? 6. Whether there was fair and equal treatment between NDC and IMTU (the second plaintiff) by the Ministry o f Lands, Housing and Human Settlement Development? 7. To what reliefs are the parties entitled thereto? Let me start with the first, second and third issues which are closely interrelated. They touch on the breach of lease agreement by the defendant (if any), renewal of the same and whether it was varied? How did the plaintiff come into occupation of the said plot? This was clearly demonstrated by PW1 Omprash Gupta. He said that the study and then the inception of the IMTU University in Tanzania was from the efforts made between him at the time when he was serving as a Diplomatic Officer to Tanzania between 1994 to 1998 and the negotiation with the late Julius Nyerere, then the President of the United Republic of Tanzania. His Excellency Julius Nyerere, the late, proposed to have a Medical School here in Tanzania for Tanzanian Students, the idea which bore fruits after the Minister for Health and Minister for Science and Education worked on the idea. Indeed, a Memorandum of Understanding was signed on 6th December, 1995 at the time when PW1 was the High Commissioner to Tanzania. The same was admitted as Exhibit PI. Parties to the said MOU were the Government of Tanzania and VIGNAN Education Foundation Bangalore. PW1 was a witness to the said MOU. It was agreed that the terms and conditions were to be honoured by the Government of Tanzania despite the fact that it was signed by the Ministry. It was a condition precedent that in order to have the University operational within the shortest time possible, the Government was required to offer a plot within two to three years as evidence by exhibit P2. In that connection, five acres of land were to be offered in Dar es Salaam and another 100 acres near Dar es Salaam. He says, the government failed to offer a plot within the agreed period of time, so they decided to take a Plot owned by Saruji Corporation which was in a dilapidated state. They rehabilitated it so that it can be habitable at least temporarily. They entered into the lease agreement. 5 According to PW1 the said lease agreement with Saruji Corporation was for 15 years renewable, however Saruji Corporation stopped from operating. Though the defendant was not a party of the Memorandum of Understanding (MOU) however being the successor of Saruji Corporation whom they entered into an agreement for lease they are bound by the agreement as a new landlord. That they are bound by the commitment entered into like issue of extension of time and issue of settlement of account. Even PW2 said during re examination that:- "NDC was not a party to the MOU but the Government was a party thereto. Since the Government owns NDCso impliedly NDC was a party." In contrast to the above evidence, DW1 David Basu who is the Head of Human Resource at NDC said that Plot No. 2338 Mbezi Beach changed in 2005 to Plot No. 2348. They are one and same plot located at Block 'H\ It measures 24721 M2. He tendered the title deed at Exhibit Dl. That NDC became the owner in 2007 after PSRC transferred the Saruji Assets including Mbagala Sheet Glass whose residential houses are where IMTU is now operating its business. That they notified IMTU who said their 15 years lease agreement was yet to expire until in August 2011.They served them with invoice Exhibit D2 to pay Tshs 73 million per months which covered Sept 2011 - August 2012 making a total of Tshs 1,033,680,000/. The Third Party through their witness DW2 Professor SiliviaTemu who is the Director of Higher Education in the Ministry of Education Science and 6 Technology said she deals with supervision of Higher Learning Institutions/Universities and supervision of projects among others, IMTU inclusive. She said, at one time IMTU had been barred to register students for failure to meet University standards. She brought to the attention of the court that although it is said they charge nominal fees, however they charge Tshs 6 Million per student which is far above KCMC and Muhimbili Universities. She said that although Principal Secretary Ministry of Science and Technology and Higher education is among those who signed the MOU, however, issue of allocation of land is not the prime functions of her Ministry. So matters connected therewith are normally channeled to the Chief Secretary. It was also found that IMTU further runs a Hospital there. DW3 Kajesa Minga, the Land Officer under the Office of Commissioner for Lands informed court that the plaintiffs were given offers for plots but never accepted it. He gave an example of exhibit P10 which shows that the Ministry of Lands was offering them land at either Kibaha or Bunju. They never took same. Further that in 2015 IMTU were offered two plots formerly owned by NIT (i.e. Plot No. 906 "H" and No. 916 "H") each with 30,000 square feet located at Mbezi Beach. That even a letter, Exhibit D3 directed the plaintiffs to apply for a plot of land at Kigamboni but was never responded to. That the provisions under the MOU requiring provision of 5 acres by the Government is covered by the said plot 906 and 916 "H" Mbezi Beach allocated to them. 7 It was also the defence evidence view that the lease agreement showed that they were to pay Tshs 100/- per year which from the ordinary course of events must have been construed to have included the renovation costs. Reading from the adduced evidence both for the plaintiff, the defendant and Third Party, there was no lease agreement entered into between the plaintiff and the defendant. If the plaintiff relies on the MOU, according to exhibit P8 the said MOU expired since August, 2011. Even PW1 admitted that it expired since August 2011 though he says that the MOU signed with the Government never expired a fact which was without concrete evidence. They received a letter (Exhibit P8) which in paragraph 3 (11) which shows: "The said M. O. U expired in August 2011 and since then you have not paid a single cent as rent..." It cannot be said with any degree of certitude that the defendant was a party or breached the lease agreement or that they cannot enter into a new lease agreement. With due respect, that may be a layman's point of view. DW4 Edgar Hirmar Luoga was clear that all Public corporations and Public Institutions alike have a right to enter into agreements on their own. He said that:- "The new Land Lord (not the ChiefSecretary) has a right to impose other terms on the renewal o f the lease (15 years term). The Public Corporation/Institution has a right to enter into another lease agreement without and not necessarily involve the Government." 8 That being the case, issue of renewal of the lease agreement or even being varied is out of place and indeed inapplicable. The first, second and third issue must fail. Now to the issue on the counter claim, whether the defendant is entitled for rent arrears from September, 2011. Second, should the eviction order be issued? This point was contested by the plaintiffs. PW1, PW2 says they cannot pay rent due while they invested heavily to renovate the buildings which were in a dilapidated condition. That there was soil erosion which made them spend a lot of money.This is what PW2 said:- .......... we incurred a lot o f expenses we had to create the drainage system. There was a move to make Final settlement account which was not made despite the fact that we used the contractors...... " Then PW2 continued during cross examination that:- "We are not ready to pay rent even if there is extension o f another 25 years because the Government has not given us land." It was also their argument that according to the letter exhibit P7, from Saruji Corporation, there was to be conducted final settlement of accounts to cover costs for repair which the plaintiff incurred during renovation caused by flood. DW1 said that there is no major repair which was conducted as all the five flats with three storey buildings each, were used by the employees for accommodation by the then Mbagala Sheet Glass. Above all that the lease agreement shows the plaintiffs were to pay Tshs 100/- annually which was not paid ever since when they owned the premise, that it was meant to foot for the expenses that might have been incurred. In other words they are liable for rent. The court visited the suit premise and saw that the site is at a slope. However, one thing which was unresolved was what and how much money was spent during the renovations. The only shortfall in this claim is that the figure for renovation costs could not easily be ascertained. Above all, it was a condition precedent that the process of evaluation and appointment of the contractor was to be in consultation with Saruji Corporation, a fact which was never adhered to. Unfortunately the lease agreement was not admitted due to some legal technicalities. I find that the plaintiffs have failed to discharge their burden of proof on this aspect. Another point which was raised which does not justify them to pay rent due is the fact that the plaintiffs had been there for more than 12 years and therefore have the right to own it by the principle of adverse possession. That even the Broker sent a 14 days' notice which was in respect of Plot No. 2348 Block 'H' Mbezi Beach which was contrary to the earlier on communication with NDC for Plot No. 233A. In other words, the plaintiffs says the defendant does not have the title deed just like the Saruji Corporation. The argument that the plaintiffs have a right to own the suit property by the principle of adverse possession with due respect is misconstrued and 10 misapplied. Mr. Msemwa the learned counsel submitted, and I think rightly so, that it was not pleaded in the amended plaint as one of the reliefs. Similarly, Mr. Mwakahesy the learned Senior State Attorney said that it was not one of the condition in the MOU that the plaintiffs were to own the plot where they run their business for good. That can also be deduced from the evidence of DW4 who said that:- "The MOU never provided that they have a right to own the plots where they are working (i.e. I MTU)." Part of the MOU reads:- "Article - II (a) The Government o f Tanzania agrees to make available 100 acres o f land on long term lease near the city o f Dar-es- Salaam to locate the IMU COMPLEX. (b) The Government o f Tanzania also agrees to make available another plot o f about five acres in Dar-es-Salaam. (c) Selection o f sites shall be done in consultation with the representative o f VEF. Article -III VEF proposes to commence the first academic session o f the IMU beginning 1996and the Government o f Tanzania agrees to render all assistance. Article - IV To begin with, VEF will require certain built up accommodation which the Government o f Tanzania will assist to obtain for first two years only so that classes could commence right from 1996. It shall li include provisions for staff quarters and student hostels. The VEF will start constructions as soon as the possession o f land is handed over to VEF so that within two years the IMU moves into its own regular complex. Artic/e-V As the IMU supplements the efforts o f the Government to Tanzania by producing qualified medical personnel and rendering better health services through teaching hospitals at nominal rates, the Government o f Tanzania agrees to grant tax exempt status to the IMTU as well as allow duty and all taxes free import by the IMU for its bona fide use..." Reading from the above provisions there is nothing to suggest they were to be absolute owners of the suit premise. The plaintiffs upon entering into the lease agreement, they were mere tenants or invitees. The principle of the law is clear that no invitee can exclude his host whatever the length of his occupancy (see the case of Mkakofia Meriananga V. Asha Ndisia (1969) HCD 204). The plaintiffs occupied it as "mere tenants at will". Based on the above evidence, by entering into the lease agreement with Saruji Corporation, the Government of Tanzania foresaw that the plaintiff could claim that they were allocated the plot for good, something which is not the case. NDC served them with a letter that they were lawful owners of Plots No. 2338 Block 'H'. That fact is clearly demonstrated by the Title deed Exhibit D1 which shows that they own Plot No. 2348 Block 'H' at Mbezi. The differences for Title No. 2348 and 2338 was clearly elaborated by DW3 Kajesa Minga. In fact DW3 answered the allegation by the plaintiffs that the plot where they operate their business is unoccupied to be unfounded. So, 12 even the contention that rent was demanded by NDC on 3rd February, 2015 while their title deed is of since April, 2015 is without any merit. Even assuming such argument is anything to go by that NDC had no title deed at the time they demanded for rent still issue of title deed was insignificant as even when they signed the lease agreement with Saruji Corporation they had no such title deed. It was learnt in due course of hearing that almost all Government entities, Corporations inclusive, had by then no title deed. That being the case, NDC has the right to receive rent. Now how much rent? This point has spent much of my time especially based on the point that, Article XII of the MOU indicated that in case of a dispute they should resort to Arbitration. It reads:- "Indemnity; The Government o f Tanzania shall fully indemnify the Vignan Education Foundation from any losses that occur in event o f nationalization or partial take over. Any dispute relating to amount o f indemnity/compensation to V.E.F shall be settled by arbitration; sole arbitrator to be selected by the Government o f Tanzania out o f panel o f three arbitrators submitted by the V.E.F; and, decision o f arbitration shall be final and binding." The plaintiff opted to come to court for what they said were under threat of eviction and infact they admit had no dispute with the Government that is why they never sued her. 13 It was held in the case of Tanzania Motor Services Ltd and Another vs. Mehar Singh t/a Thaker Singh, Civil Appeal No. 115 of 2005 CAT at Dodoma, unreported that, where parties have intimated to take the matter for arbitration "barring the parties from going to arbitration... The decision dosed the door to arbitration thus rendering provisions in contracts for arbitration meaningless. They are meant to serve the purpose..." The issue under discussion was whether refusal to allow parties to go for arbitration was tantamount to a determination of the suit. The court dismissed the preliminary objection and found the decision closed the door to arbitration. The case of Bozson v. Artricham Urban District Council (1903) 1 KB 547, 548 was followed and applied. The plaintiffs by passed the issue of arbitration because the defendant was not a party to the MOU. I would not think it is proper to refer them there either. The plaintiffs claims for indemnification by the third Party (ies). The evidence of PW1 shows there were various correspondence letters showing that the Government would offer them plots and maximum co-operation towards achieving that goal as agreed in the MOU (see exhibits P2, P3 and P4). PW1 says was a bit shocked upon receiving a letter from the Chief Secretary that they should sort out their demands with the relevant Ministry (see exhibit P5). I see no fault. The plaintiff never heeded to that directive. Actually two plots had been allocated to them. Further they ignored the offer for the plots at Bunju, Kibaha and Kigamboni. Payment of rent under the circumstance is inevitable. 14 I would assess it at 40,000,000/- per month instead of Tshs 73,000,000/- per month as proposed by the defendant payable from September, 2012 to date and other months subsequent to such occupation. I have excluded a year to cover such costs which might have been incurred by the plaintiffs. There has been raise issue of unfair treatment between the plaintiffs and the defendant. Further that Saruji Corporation failed to offer the right of sale. This is relevant for issues No.5 and 6. There is evidence that the plaintiff was offered the right to purchase the suit plot first but kept on raising some issues which the Government through its PSRC found were uncalled for. NDC then secured the bid. It is wrong to say they were unfairly treated as opposed to NDC. This is a mere assumption without factual evidence. If I may go further, Saruji Corporation being a Government corporation had no mandate to offer the right to sale the suit premise to the plaintiffs because that was not one of the condition precedent in the lease agreement. Above all the Government had an upper hand as opposed to Saruji Corporation for its disposal upon liquidation. I can safely say that it was not the intention for the Government to allow Investors to come to invest in the country to the detriment of the Nation and its citizens. We appreciate, much as IMTU had conferred degrees to many Tanzanians' Doctors who graduated from such University, however upon being fully fledged, the plaintiff must pay rent so that even the Government can benefit from the collected tuition fees. Exemption from payment of tax should not be construed to mean non payment of rent. 15 Mr. Mbakileki, the learned counsel submitted that there is non- observance of the rule of law for failure by the government to keep to her promise to the detriment of the plaintiff. He cited the case of Meljon B.V versus Consolidated Holding Corporation, Commercial Case No. 20 of 2007 (HC) unreported. That the Government has turned to its back to the terms of the MOU of which to date has never been varied. It is very unfortunate that copy of the decision sought to be referred on cannot be a point to rely upon for being unauthenticated. Even assuming such argument is anything worth merit, still I would say that each case is decided based on its own peculiar facts. In our case, the plaintiffs were allocated plots. They never showed desire to possess them. To this connection, I refer to exhibit D3, to illustrate my point. That letter was directed to the Managing Director to the team of Advocates who represents IMTU, responding to their letter of 14th March, 2016 requesting for 100 acres near the vicinity of Dar es Salaam. It reads is part:- "...Napenda kukujutisha kuwa katika eneo la Mpango Kabambe la M ji Mpya wa Kigamboni (Kigamboni New City) kuna eneo amba/o Hmetengwa kwa matumizi ya Chuo Kikuu. Hivyof unashauriwa kuwasilisha maombiyako kwa Wakata wa Uendelezaji M ji Mpya Kigamboni (KDA) kama utaona inafaa Hi taratibu za fidia ziweze kufanyika na hatimaye muweze kulimilikikisheria..." (Underscoring mine). That letter offered them a plot of the size which they requested. How then can we say the Government never complied with its commitment? Based on that reason, I see no justification for indemnification by the third party (ies) 16 as there is no Nationalization or partial takeover by the Government as well submitted by Mr. Mwakahesy, the learned Senior State Attorney. From what I have stated above the claim by the plaintiffs has no merit. It is hereby dismissed with costs, I would allow the counter claim by the defendant to the extent of Tshs 200,000,000/- (say two hundred million only) being rental charges due plus costs of the suit. 17