URAFIKI TRADING AGENCIES LTD VS ABBASALI AUNALI KASSAM COMM CASE NO

IN THE HIGH COURT OF TANZANIA (COMMERCIAL DIVISION) AT PAR ES SALAAM COMMERCIAL CASE NO. 59 OF 2010 URAFIKI TRADING AGENCIES LIMITED SMART RENTAL CAR LIMITED .........................PLAINTIFFS VERSUS ABBASALI AUNALI KASSAM SAVINGS AND FINANCE COMMERCIAL BANK LTDl.... DEFENDANTS 7th December, 2015 & 18th February, 2016 JUDGMENT MWAMBEGELE, J.: This is perhaps one of the oldest cases in this registry. Its plaint was presented for filing on 12.07.2010. To the date of composing this judgment, it was approximately 51/2 years; an age enough for a child to go to a kindergarten school. This was not by design of this court, but as the record of the case would have it, its history is a chequered one. I will endeavor to tell it here albeit briefly as it appears from the considerably bulky file. 1 The suit was preceded by an application under a certificate of urgency seeking an interim order to preserve the status quo of the suit property from being disposed of. That application was granted on 15.07.2012 following a no objection endorsement by counsel for the defendants. Attempts to serve the 1st defendant ordinarily were made to no avail and hence on 16.08.2010 re-service by way of substituted service was ordered. Eventually, having so done and without success, on 16.11.2010 an order to proceed ex parte against him was made by this court. On the advent of Court vacation, the first pre-trial conference was scheduled to be held on 10.02.2011. Come that day, all parties were absent. On 23.03.2011 Mr. Weiwei, learned counsel for the 2nd defendant appeared and reported to the court that Mr. Amour, learned counsel [as he then was (now a Justice of the High Court)] was bereaved. The learned counsel therefore sought and was granted an adjournment to 17.05.2011. Come that day all parties and their counsel were absent. The record further show that mediation was attempted and marked failed marked on 11.07.2011. Hearing then was set to take off on the on 14.09.2011. As it turned out, the trial judge was engaged in other administrative duties and therefore it could not proceed as planned. It was then set for 19.09.2011. On that date, Mr. Amour reported that his client who was appearing on behalf of the plaintiff had proceeded to Iraq for Pilgrimage and unfortunately sickness befell on him. Mr. Weiwei could not object to the prayer for adjournment. It was then reset to proceed consecutively on 17.11.2011.and 18.11.2011. 2 On 17.11.2011, Mr. Amour yet faced another hurdle. His client this time had been, according to him, rushed to Nairobi for an emergency treatment whereby he had an eye surgery. Though Mr. Weiwei expressed his frustration, there was nothing to be done as, according to Mr. Amour this client was the connection between other plaintiffs and the defendants therefore he was potential for the case progress. The matter was adjourned to 20.02.2012 and 21.02.2012. On 20.02.2012 the trial judge was attending an administrative meeting in Bagamoyo. The matter was set to 08.05.2012 and 09.05.2012. On 08.05.2012 at last, the hearing took off and went on through 09.05.2012, 14.06.2012 to 15.06.2012 whereby the last plaintiff witness could not be held on 21.08.2012 due to his sickness. Instead it was adjourned to 29.10.2012 whereby the plaintiff's case was marked closed. On the 30.10.2012 Defence case kicked off. It was further set to proceed on 22.11.2012 due to some intervening court matters. On 22.11.2012 it could not proceed as Mr. Amour, then learned counsel, was once again bereaved of his sister. It was adjourned to 14 & 15.02.2013. Thereafter it was scheduled to proceed on 17.04.2013, but could not as the 2nd defendant's counsel in conduct of the matter was reported sick by Mr. Lutema, learned counsel. The matter was set sown for hearing on 20.05.2013. On that date the counsel for the Defendant came prepared and ready to proceed. The Plaintiff was not there due to misrepresentation on the cause-list issued by the court. It was set to 10.07.2013 but both parties were absent whereby on a further date of 12.08.2013 the trial judge was engaged in other official duties. The matter was set to proceed on the 17.10.2013 but it turned out on that day that Mr. 3 Amour was out of country; he had travelled for Hijat. Yet on 27.11.2013 the date planned for continuation of hearing Mr. Amour was appearing in the Court Appeal and on 04.03.2014 he could not make it to court as he was reported by Mr. Mark that he had gone to India to attend to a sick child. Alternative dates of 05.05.2015 and 23.06.2014 were set but those too were not utilized because the trial judge was on official duty and sick on the said dates respectively. It was then set to 08.09.2014, but come that date, the matter was adjourned to give time to the plaintiff's counsel to "prepare himself" as Mr. Amour had been appointed a judge of the High Court. It was then set to 23.11.2014, but unfortunately the trial judge on the said date was bereaved. On 11.12.2014 which was an alternative date to the said 23.11.2014, the counsel for Plaintiff was reported to be appearing on a land case before Mziray, J. (as he then was; now Justice of Appeal). From there on, it was further adjourned twice for the reasons of Court meetings (the Court of appeal on the 18.02.2015) and other court sessions in Arusha on 13.03.2015. It was not until the 12.05.2015 that the last witness was held before me. Both learned counsel having filed their closing submissions, then some of the proceedings were still not transcribed for preparation of a judgment. From the Court's Reporters' Unit a technical problem had befell on the devices such that it was not until the 07.12.2015 that all proceedings were made available. All gears were set for delivery of this judgment today 18.02.2016. There are two suits in this matter. The main suit is by the plaintiffs Urafiki Trading Agencies Limited and Smart Rental Car Limited. I shall henceforth 4 refer to them as 1st and 2nd plaintiffs respectively. Where necessary, I will be making reference to their actual names as appearing in the pleadings. The defendants in this main suit are Abbasali Aunali Kassam and Savings and Finance Commercial Bank Ltd. These will also maintain their identity as such throughout the judgment; as 1st and second defendants, but where necessary their real name shall be referred to as well. The second suit is a counterclaim. Therein, the 2nd defendant in the main suit is the sole plaintiff, suing the 1st and 2nd plaintiff as well as a co-defendant in the main suit alongside other two persons namely Aunali Akberali Kassam and Kassamali Akberali Kassam. A bit more of the litigation details at the outset would add value into this judgment. I will attempt the same as appearing from the pleadings. It goes thus: the plaintiffs' claim against the defendants jointly and severely is for declaration that the purported loans issued to the 2nd plaintiff by the 2nd defendant and mortgage of right of occupancy by the 1st plaintiff in favour of the 2nd defendant over a property on Plot No. 128, Regent Estate, comprised in CT No. 186151/37 (herein the mortgage) are unlawful and void ab initio. They also seek a permanent injunction to restrain the defendants from selling and or disposing of the said property. The plaint has it that sometimes in October, 2008 the 1st plaintiff learnt that a loan to a tune of USD 160,000 had been advanced to the 2nd plaintiff on her (1st plaintiff's) certificate of Title No. 186151/37 as a mortgage security thereof. Upon following up the matter, she discovered that the 2nd plaintiff was neither aware of the loan nor the mortgage, but rather the same were 5 processed fraudulently by the 1st defendant who was a director of the 2nd plaintiff without knowledge of other directors. It is also stated that at the time of processing such fraudulent loan, the 1st Plaintiff had deposited the original title deed in respect of the said property to one Sabodo for a Tshs. 500,000,000/= loan. The 1st plaintiff had then put to notice to the Registrar of Titles and the 2nd defendant whereby the latter misrepresented to the 1st plaintiff that she had to sign some papers in order to settle the matter once and for all. The plaint further discloses that the documents she (the plaintiff) signed without her knowledge were unilaterally conditioning her to accept a loan of Tshs. 100,000,000/= as an "additional" loan which was utilized to set off the fraudulent loan advanced to 2nd plaintiff. The plaint also shows that the 1st plaintiff upon referring the loan and mortgage documents to the handwriting experts of the police CID Identification Bureau Department, it was reported that all documents were forged. The plaint further states various elements of fraud including non-mortgage of the Right of Occupancy by 1st plaintiff, non-involvement of the plaintiff in loan processing, forged signature of the Aunali Kassam and Abbasali Kassam who is not a director of the 1st plaintiff, false allegations of loss of Certificate of Right of Occupancy over the said plot, false application for a new title by the said Abbasali A. Kassam who was not the owner of the said title as well as forged motor valuation report for purpose of further securing the loan. On those grounds, the plaintiffs knocked at the doors of justice administrator asking for: 6 a) Declaration that the disputed Mortgage of a R.O in respect of C.T 186151/37 in favour of the 2nd Defendant is unlawful and void ab initio-, b) Declaration that the certified true copy of CT No. 186151/37 issued to the 1st defendant and deposited with the 2nd defendant is unlawful; c) Declaration that the purported loan is unlawful; d) General damages to be assessed by the court; e) A permanent injunction restraining the defendants from selling off or disposing the property on CT 186151/37; f) Costs of the suit; and g) Such other or further relief as the Court deems fit and just. I note through the record that only the 2nd defendant entered a defence. This, as it appears, is because, service to the first defendant had proved futile after several attempts whereby this court ordered the case to proceed exparte against him. In her defence, the 2nd defendant primarily denies the claim in toto putting that both the loan and the mortgage are legal and enforceable. She states further that the 1st plaintiff was aware of the USD 160,000 term loan availed to the 2nd plaintiff because the mortgage deed securing the same was signed by the 1st plaintiff's Managing Director signifying her knowledge of the said loan and mortgage. It is further stated that the said credit facility was channeled through the 2nd plaintiff's account operated at the 2nd defendant's bank and was secured, 7 apart from the said mortgage, by a debenture securing an exposure of USD 250,000 securities which were duly registered with the Registrar of Companies. The defence further is to the effect that the 1st plaintiff applied for and was, through a facility letter dated 10.10.2008, granted a credit facility to the tune of Tshs. 100,000,000, that also on 28.11.2008 she had applied and granted by the 2nd defendant for transfer of the 2nd plaintiff exposures of USD 160,000 term loan of the 2nd Plaintiff whereby the same was offered through execution of a credit facility dated 06.11.2008 to the tune of Tshs. 173,550,000/=. The defence also disputes the handwriting expert report on the falsity of the mortgage and loan documents on grounds of her non-ininvolvement in procuring the same. As for the fraud elements, the 2nd defendant vehemently controverts them putting further that the mortgage was properly executed as the 2nd defendant was at all material times aware of the true owner of the said property. Further to the defence and by way of a counterclaim, the 2nd defendant claims against the plaintiffs and the said other two persons for a total of Tshs. 301,413,532.71 emanating from the said two credit facilities. The averment in that regard has it that the initial facility of USD 160,000 term loan disbursed to the 2nd plaintiff (defendant in the counterclaim) through facility letter dated 31.01.2008 was, upon an application for take-over of the same by the 1st plaintiff, converted into Tshs. 173,550,000/= and issued as another credit facility dated 28.11.2008 with reference No. 8 ADV/LSM/1008/08. It is also stated that the 2nd defendant (plaintiff in the counterclaim) had approved a term loan facility of Tshs. 100,000,000/= to the 1st plaintiff to enable her to meet its working capital requirements. The statements are further a reiteration of the defence that the said facilities were channeled through the respective bank accounts of the 1st and 2nd plaintiffs operated at the defendant's bank and that were duly secured. It is also stated that the 1st defendant made payments but later defaulted and hence, failed to pay heed to the demands. It is for such account that the 2nd defendant counter-prayed against the plaintiffs as well as other persons mentioned for: a) A sum of Tshs. 301,413,532.71; b) Interest on (a) at the Commercial rate of 18% from accrual date to the date of judgment; c) Interest on the decretal sum from the date of judgment to the satisfaction of the decree; d) Costs of the case; and e) Any other orders or reliefs as the honorable court may deem fit. A reply thereto by the plaintiffs-cum-defendants reiterates their claim with an addition that the Tshs. 100,000,000 credit facility was forcefully issued to them as they had no evidence by then to prove the suspected fraud in the creation of the USD 160,000 term loan and purported mortgage over the property comprised in CT No. 186151/37 and also due to the Bank of Tanzania's (BOT's) pressure upon the 2nd defendant to reconcile its accounts. 9 That, in my view, saves the purpose of a brief as to what transpired leading to this legal battle I am set to determine the winner and declare the looser between these adversaries. Given the background and brief account of this matter, it is no wonder that mediation collapsed on the very first session it was attempted. Pleadings and all preliminary matters having been completed, the parties prepared their arsenals. A total of 10 issues were, by proposal of counsel for the parties, framed and recorded by this court for the determination of this matter. For purpose of logical flow of reasoning and judgment, I will rearrange the order of the issues as follows: 1. Whether the loan facility in the amount of USD 160,000 purportedly issued by Savings and Finance Commercial Bank Ltd in favour of Smart Rental Car Ltd pursuant to a Facility Letter dated 31.01.2008 is lawful and valid; 2. Whether the mortgage deed creating a charge over the property registered on CT No. 186151/37 dated 01.02.2008 was duly signed by directors of Urafiki Trading Agencies Ltd; 3. Whether at all material times, Urafiki trading agencies Ltd was aware of the term loan of USD 160,000 purportedly availed to Smart Rental Car Limited; 4. Whether the mortgage deed creating a charge in respect of the property on Plot No. 128 Regent Estate, Dar es Salaam Comprised in CT No. 186151/37 is valid and legally enforceable; io 5. Whether the Original Certificate of Title No. 186151/37 in respect of a property on Plot No. 128 was deposited by 1st plaintiff with Mr. Sabodo as security for a loan; 6. Whether there are other valid securities in favour of Savings and Finance Commercial Bank Ltd to secure total exposure of both plaintiffs; 7. Whether Urafiki Trading Agencies applied for the transfer of Smart Rental Car Limited exposure of USD 160,000 which transfer was accepted by savings & Finance Commercial Bank Limited vide the facility letter dated 06.11.2008 referenced as ADV/NSM/1008/08; 8. Whether Urafiki Trading Agencies made part payment in favour of Savings and Finance Commercial Bank Limited in respect of the loan facility; 9. Whether Savings and Finance Commercial Bank Limited Lawfully issued the term loan facility of Tshs. 100,000,000/= in favour of Urafiki Trading Agencies; and 10. To what reliefs are the parties entitled. At the outset, I note that this is a broad spectrum commercial case of its own kind. It involves various intricate issues, all centered on the validity or rather legality of the loan facilities issued to the plaintiffs at various times. Thus there are basically three facilities in contest: One; for a term loan of USD 160,000 allegedly issued to the 2nd plaintiff, two; a facility for Tshs. 173,350,500/= as an amount equivalent to the former term loan of USD 160,000 purportedly transferred to the 1st plaintiff; and three, a term loan of Tshs 100, 000,000/= issued to the 1st plaintiff by the 2nd defendant. 11 A controversy is also with regard to the legality or validity of, first, the mortgage purportedly created by the 1st plaintiff in favour of the 2nd defendant and the transfer of the liability of the 2nd plaintiff to the first plaintiff. Thus, at the centre of controversies, lie several issues regarding the veracity of both claims, to wit: (i) Fraud in execution/procurement of the USD 160,000 facility; (ii) Illegality of the mortgage created; and (iii) Illegality or invalidity of the loan transfer. Out of the above matters, there are areas that need attention of this court so as to arrive at a fair and conclusive determination of the issues. Those areas of concern include: (i) Powers of a director vis-a-vis borrowing powers of a Company; (ii) Fraud and misrepresentation in banking transactions pleaded in civil case; that is, standard of proof; (iii) Creation of a mortgage or contract to mortgage and its validity or invalidity; and (iv) Expert opinion particularly that of the handwriting expert, validity or weight and qualities. Other incidental matters will be tackled as they arise herein. To dispose the matter, are various documentary exhibits (24 in total) plus testimonies of 8 12 witnesses contained in 601 pages of typed transcripts and a total of 34 pages of written concluding remarks filed by both counsel for plaintiffs and defendants. Before I delve further into the issues, suffice to gather up the undisputed facts. These are: 1. That the 1st plaintiff sought and was granted loan of Tshs. 100,000,000/=; 2. That the 1st defendant had reported loss CT 185161/37 on Plot 128 to the police and applied for a new title to the Registrar of Titles and actually issued with a new one; and 3. That repayment in respect of the Tshs. 100,000,000 /= term loan was partly paid to some extent by the first plaintiff vide its loan account held at the 2nd defendant bank. On the basis of the testimonies of the witnesses for both parties as well as exhibits and on the basis of a list of undisputed facts, (fact No. 1) issue No. 9 which is whether Savings and Finance Commercial Bank Limited lawfully issued the term loan facility of Tshs. 100,000,000/= in favour of Urafiki Trading Agencies, is provided with an answer. Issue No. 9 is thus indisputably answered in the affirmative. The first issue is; whether the loan facility in the amount of USD 160,000 purportedly issued by Savings and Finance Commercial Bank Ltd in favour of Smart Rental Car Ltd pursuant to a Facility Letter dated 31.01.2008 is lawful and valid. In respect of this issue, the plaintiffs dispute the legality and 13 validity of the facility by a claim to disown the whole transaction that led to the facility. It is their claim that the respective facility letter was signed by only one director whereas the second director one Imranali A. Kassam did not sign. Their further claim is to the effect that the first defendant had fraudulently processed the loan without knowledge of a co-director. From their pleadings and their testimonies, I note at the outset that the validity or lawfulness of the loan of USD 160,000 purportedly issued to the 2nd plaintiff will be better examined in light of the validity of the facility letter dated 31.01.2008. This, per the testimony of Hassan Rashid Singano DW1, Lyanda Macha DW2, is one of the most important documents before a loan can be issued. Counsel for plaintiffs and defendants seem to fault and defend the said facility respectively on the basis of the alleged fraud towards the transaction. The counsel for the defendants in his final submissions has forcefully, and rightly so in my considered view, disputed the evidence and testimonies adduced in respect of the said fraud and forgeries with emphasis on the report and testimony by the handwriting expert, which is an epicenter of the plaintiffs' case as being lacking in objectivity and accuracy. I will turn to this aspect at an opportune moment herein. On the other hand, counsel for the plaintiff faults the facility claiming that it was procured through fraud. In my considered view, as I have noted, the validity of the facility or otherwise is pegged on the validity of the document itself rather than any other process or document attached or connected thereto. This is because, indisputably, and drawing from DWl's testimony in this respect, a signed or 14 rather acknowledged Facility Letter is a representation of a written agreement to lend and borrow money at an agreed consideration in form of interests on conditions expressed therein. Therefore, an immediate sub question arises at this juncture is whether the facility letter executed by a single director of the 2nd defendant was valid and effectual so as to create obligation in favor of the 2nd defendant against the 2nd plaintiff. To be able to establish this, it is crucial to look up into the internal arrangement of the 2nd plaintiff in so far as directors and their powers are concerned in respect of business transaction with the third parties. At the aid of this court was the Memorandum and Articles of Association (Exh. P8 - henceforth "MEMARTS") of the 2nd plaintiff. Therein, under article 8 in the Articles of Association, it is provided thus: "The quorum of Directors for transacting business shall, unless otherwise fixed by the Directors, be one." It is apparent therefore that a single director could transact business of the company, among which is borrowing. It follows therefore that for all intent and purpose, the facility letter itself was valid so far as appears on face value since, as rightly submitted by learned counsel for the defendant, the 2nd defendant was not duty bound to inquire into the internal arrangements in the 2nd plaintiff in light of sections 35, 36 and 37 of the Companies act, Cap. 212 of the Revised Edition, 2002. It follows therefore that the lawfulness or otherwise of the said facility letter cannot be disputed by the plaintiffs. The 15 first issue is therefore answered in the affirmative. That is to say, the loan facility in the amount of USD 160,000 purportedly issued by Savings and Finance Commercial Bank Ltd in favour of Smart Rental Car Ltd pursuant to a Facility Letter dated 31.01.2008 is lawful and valid. Guided by the above, I will now look into the second issue; whether the mortgage deed creating a charge over property registered on CT 185161/37 dated 01.02.2008 was duly signed by the directors of Urafiki Trading Agencies Ltd. On the face value, the said deed bears the names and signatures of one Aunali Kassam designated as director and one Abbas Kassam as director too. It also bears the common seal of Urafiki Trading Agencies. Aunal Kassam PW1, who is the alleged signatory disputes this document from various fronts; one, that he could not have created that mortgage since the real title over that property was mortgaged to one Mustafa Jaffar a.k.a Sabodo in respect of a 500 million loan. Two, that therefore, certainly his signature was forged and it was not his. Three, it is stated that Abbasssali was never a director of Urafiki and therefore had no mandate to sign any document for Urafiki Trading agencies Limited. Four, that the said Certificate of Title was fraudulently procured by the said Abbasali because the original title has never been lost as was reported, and Abbasali has never been owner of the same or even a director as he masqueraded himself before the police authorities as well as the Registrar of Titles in the process of procuring the duplicate. On the other hand, when questioned as to the capacity of signing the said document by Abbasali, DW1 and DW2 claimed that Abbasali had a power of 16 attorney from 1st plaintiff and therefore, they believed he could sign. The said power of attorney was not produced in court to back up their allegations. To me, first, I will not go into the nitty gritty as to the process that led to procuring a purported duplicate title over CT No. 186151/37 which was not tendered in court. As far as this court is concerned, I am called to determine the validity or otherwise of the Mortgage Deed over the said title. Given that the title itself (Exh. P13) is existing and was tendered in court, I do not see the relevance of dealing with the process of procuring its alleged duplicate. That exercise, in my view, will open up a Pandora's box in so far as conduct and integrity of the office of the Registrar of Titles is concerned. This court is not legally versed in the circumstances to take up that exercise since it cannot turn itself into an investigator and determiner of the claims in that respect. As to the same having been deposited with Sabodo, that too as far as this court is concerned is not a material issue. In fact, it confirms existence of the title deed over which a mortgage deed which is in issue, was created. That notwithstanding, deposit of the same with the said Sabodo was not proved on the balance of probabilities. I say so because, having been deposited as a security of a Tshs. 500,000,000/= loan, monies allegedly owed to Habib Bank and paid from the said Sabodo's account held at the Bank of Baroda (as per the testimonies of both PW1, and PW6), one would at least expect to see documents relating to such transaction say bank statements or facility documents in that regard or at least a written acknowledgement or understanding by Sabodo and PW1. 17 Secondly as PW1 said, he took the loan from Sabodo. This did not come out clearly as to whether the loan was taken in the name of Urafiki Trading Agencies limited or personally. The scenario to me looks like it was rather a personal loan for which a title over a property belonging to a company could not legally be deposited with the said Sabodo. That apart, the said Sabodo, being a seasoned businessman who boasts to have positively impacted the society through his mult-million projects donations to the society, who went to the extent of publicizing his nephew (PW1) for unpaid cheques (see Newspaper cutting; Exh. P5), could have failed to prepare a simple written note in respect of the Tshs. 500,000,000/= loan in consideration of deposit of the said title deed. I will therefore, on the basis of the above, assume, and do so without any doubt, that at the time of creation of the purported mortgage, the title over the said property legally existed and in custody of the true owner thereof. Whether the said mortgage to cover the said USD 160,000 was created on a sham title or otherwise remains in the confines and custody of the participants. At this juncture, the pertinent immediate question is whether the said mortgage deed was duly signed by the directors of Urafiki Trading Agencies, and if in the affirmative whether it was effectual. The undisputed fact is that Abassali Kassam is not among the directors of Urafiki Trading Agencies. Hence, contrary to the submission by learned counsel for the defendant that such fact was not proved, I find it to be adequately proved through the MEMARTS of Urafiki Trading Agencies (Exh. 18 Pl) at page 12 wherein only four persons namely Kassamali A. Kassam, Bashir A. Kassam, Aunali A. Kassam, Mohamed A. Kassam (as per pleadings, "A." stands for Akberali and all the directors of the 1st plaintiff are sons of Akberali Kassam), are mentioned as directors. Therefore an allegation that Abbasali had a power of attorney, it seems to me, is a mere concoction which cannot be bought anyhow, no matter how cheaply it is offered. The sub-issue then becomes whether indeed Aunali Kassam signed the said mortgage deed and if in the affirmative, whether his signature was effectual to the extent of legalizing the document. Further, if these are answered in the affirmative, then whether the signature by Abbasali could operate to vitiate the said mortgage deed against the mortgagee - the 2nd defendant. PW1 alleges that his signature was forged. He went to the extent of producing the handwriting expert report from the police forensic bureau (Exh. P12). It was his testimony that upon discovery of fraud he reported the matter to his firm of lawyer styled as M.A Ismail advocates who instructed them to procure their signature specimen before a certain Pardhan advocate. The pleadings and testimonies has it that then their counsel (then Amour Khamis Advocate), delivered the specimen to the said bureau with specific instructions to examine the said specimen and establish whether there is a similarity or otherwise between the disputed and undisputed signature. It was the testimony of the expert witness (Othman Amour Abdulla PW5) that the examination related to the documents or rather signatures brought to him and not actual signatories. According to him, the specimen was not taken before his presence and therefore had no means to verify whether they 19 belonged to the actual signatories because he was not an investigator but an examiner. The question that lingers in my mind at this stage is; why did the plaintiff not report the incident to the proper investigative authorities, given the nature of the claim itself? That a part, as rightly put by counsel for the 2nd defendant, without involvement of the defendants and or their counsel, how can the plaintiffs, their counsel and or the handwriting expert guard against the allegation of bias in the examination report? These questions all arise out of the fact that the whole process was initiated without involvement of the proper investigative authorities particularly the criminal investigators. This, in my view, was contrary to the required procedure in establishing the culprit of the offence of forgery and the crime of forgery itself. As can be discerned from the testimony of the handwriting expert (PW5), always, such specimen or a document is normally brought to his department by investigators, whereby, according to him, the said M. A. Ismail Advocates and Amour Khamis, then learned advocate, who instructed him were the investigators in this case (see page 19 the proceedings of 15.06.2012). To my understanding of the roles of lawyers practicing as advocates either in solo or in a firm, investigation of crimes has never been part of their primary roles. The fact that the specimen were procured by plaintiff at the behest of their advocates denied the handwriting expert a basis for objective examination of the same and as such, his conclusion, regardless of the technology and experience employed in the examination, is far from being fair, accurate and objective. It cannot be said to be the true account as to 20 the nature and accuracy as to the similarity or otherwise of the said specimen. It follows therefore that the question of the signature of Aunali Kassam being forged is not established let alone beyond reasonable doubt as required, but also on the preponderance of probability. It is trite law founded upon prudence that proof of allegations of fraud in civil cases is beyond the ordinary. That this is the law was stated in Ratilal Gordhanbhai Patel Vs Lalji Makanji [1957] EA 314 at 316, in the following terms: "Allegations of fraud must be strictly proved. Although the standard of proof may not be as heavy as beyond reasonable doubt, something more than a mere balance of probability is required". The principle was reiterated in Omari Yusuph Vs Rahma Ahmed Abdulkadr [1987] TLR 169 in which it was, i quote from the second headnote, articulated: "When the question whether someone has committed a crime is raised in civil proceedings that allegation need be established on a higher degree of probability than that which is required in ordinary civil cases." [see also persuasive decisions Kampala Bottlers Ltd Vs Damanico (U) Ltd [1990-1994] 1 EA 141 and Musoke Vs Mayanja [1995-1998] 2 EA 205 (SCU); both decisions are by the Supreme Court of Uganda]. 21 The remaining question now is whether such a signature Aunali Kassam was effectual to the extent of legalizing the document. As regards the number of directors signing the mortgage, it was the plaintiffs' contention, through their line of pleadings, testimony and final submissions on their behalf, that since Abbasali was not a director to of Urafiki Trading Agencies and since there is only one signature of Aunali; then the document is signed by only one director and as such it is invalid because it is supposed to be signed by two directors. Inasmuch as it is undisputed that Abbas was not a director of the first plaintiff and admittedly that under article 37 of the MEMARTS (Exh. Pl), the quorum of directors to transact business in the said 1st plaintiff is two, that apart, there is her (1st plaintiff's) common seal affixed thereunto. With respect to the company seal, it is provided under article 11 of the MEMARTS (Exh. Pl), that a company seal shall not be affixed to any instrument except by the authority of the resolution and by and in the presence of a director who shall also sign such an instrument. For clarity and easy reference let me quote hereunder article 40 of the MEMARTS (Exh. Pl): "40. Clause 71 of Table A shall not apply and the following clause shall be substituted therefore viz:- 71. The Seal of the Company shall not be affixed to any instrument 22 except by the authority of a resolution of the Board of Directors and shall be affixed by and in the presence of the Director or Directors by such resolution appointed and the said Director or Directors shall sing every instrument to which the seal of the Company is so affixed in his or their present." Unfortunately, the plaintiff did not tender any explanations as to the affixation of the said seal on the instrument. I presume that they lumped it up in the forgery assertion, forgetting that it was necessary to substantiate the same in relation to the process that led to affixation of the said seal. Thus, they did not dispute the genuineness and appropriateness of the seal. Neither did they allege to have had lost the same. That apart, they had stated, both in pleadings and testimony that apart from being blood relatives, their business was separate and therefore the 1st defendant (allegedly fraudster) had no access to the office or property of the first plaintiff. The plaintiff did not tender any evidence as to have either reported to the police or their lawyers for that matter either the loss of the said common seal or such fraudulent affixation of their company's seal to an instrument illegally. To be precise, it was not a matter of their concern and hence, the handwriting expert or otherwise fraud investigators had no chance to look into the veracity of the seal. Apparently, the criminal investigation department of the police was completely ousted in the process of establishing the crime and the criminal or offender. 23 Further to the above, I am oblivion to the requirement of there to be a board resolution authorizing such signature on to such instrument and subsequent affixation of the common seal thereto (see article 71 in Exh. Pl). That notwithstanding, in the absence of any contrary evidence as to the validity of the said seal and its affixation as well as absence of credible evidence to dispute the said signature thereunto, I am of the settled mind, that the signature of Aunali Kassam was effectual in so far as the mortgage deed was concerned. This is because, any third party dealing with the said Urafiki Trading Agencies will be justified to conclude that the said single signatory thereof had implied authority to sign the instrument, and will be deemed by this court to have been dealing in good faith in terms of section 37 of the Companies Act. It is thus not his (third party's) duty to inquire into whether internally there had been such authorization that being an internal control mechanism which regulates the internal operations of a company. To this extent therefore, in my considered view, where a third party is dealing with the said Urafiki Trading agency bona fidely, can a signature of a person who holds himself as a co-director and in the presence of another that other director of the said company invalidate a document so duly endorsed? In my considered view, an answer is an emphatic no! The 2nd defendant, having expressed its conditions upon which it is ready to offer the credit facility, and the 2nd defendant having expressed their intention to acquire the same by, inter alia, executing the said documents by persons and in the manner so executed, the transaction cannot be faulted on the basis that one of the 24 signatories actually lacked capacity more so where the document is deemed to have been authorized internally in terms of affixation of seal and signing the same. Can this conclusion be held to be a ratification of DWl's and DW'2 naked statement that the said Abbasali Aunal Kassam had a power of attorney which made them to believe him to sign such a document? I am certain in my mind that it cannot be, on the simple ground that my conclusion herein does not in any way lean to such line of argument or fact but rather on what actually transpired in light of the law and the 1st plaintiff's internal rules of regulation (the Articles of Association). To this extent therefore, I can safely affirm the second issue. That is to say, the mortgage deed creating a charge over the property registered on CT No. 186151/37 dated 01.02.2008 was duly signed by "directors" of Urafiki Trading Agencies Ltd. Without much ado, the conclusion hereinabove further affirms the 3rd issue. Thus, the plaintiff having failed to evidentially disassociate themselves fully from the said mortgage document, it can certainly be concluded that the 1st plaintiff was aware of the said loan or at least as to all the transactions pertaining thereto. My conclusion is further vindicated by the episode depicting how the plaintiff found out about the said loan. This has left much to be desired. I shall demonstrate infra. PW1 and Kassamal Akberal PW2 both testified that upon being approached by a certain Hassan from Morogoro in respect of a claim he maintained against Abbassali (first defendant), they proceeded to his apartment. At the said 25 residence, they did not find him but only a watchman whereby all his (Abbasali's) property was found lying outside. Among them were documents relating to the loan as well as the said application for the duplicate title deed. They mentioned them to include affidavits sworn in the process of application for a new title and police loss report (Exh. P9 collectively) a government gazette dated 14.12.2007 (Exh. PIO) as well as a letter to the Registrar of Titles (Exh. Pl 1) requesting direct assurance of the title to the 2nd defendant. Strangely, apart from them, no other person was there to witness such discoveries; say at least a neighbor, let alone a ten cell leader and neither was the said watchman brought to testify as to the veracity of that story. The watchman was a very important witness to call in support of the plaintiffs' case. Failure to call the watchman entitles this to court draw an adverse against the plaintiffs. It is now settled law in this jurisdiction that where a party fails to call a material witness on his side, the court is entitled to take an adverse inference that if the witnesses were called to testify, they would have testified against the party's interest. I find fortification on this stance in the case of Hemedi Saidi Vs Mohamedi Mbilu [1984] TLR 113; the decision of this court. In that case it was held (I quote from the third headnote) that: "Where, for undisclosed reasons, a party fails to call a material witness on his side, the court is entitled to draw an inference that if the witnesses were called they would have given evidence contrary to the party's interests." 26 On this point, I find it apposite to borrow a leaf from criminal cases in reinforcing this point further. I wish to refer to Chacha Pesa Mwikwabe Ks R Criminal Appeal No. 254 'B' of 2010 (unreported) wherein the Court of Appeal referred to it earlier decision of Jolina Sowaki Vs R, Criminal Appeal No. 5 of 1998 (unreported) and quoted another earlier decision of Gallus Faustina Stanislaus @ Wasiwasi & Another Vs R Criminal Appeal No. 231 of 2007 (unreported) as follows: "Non-calling, as witnesses of neighbours who came to the scene of the crime gives rise to doubts as to whether or not the appellants were the culprits. No explanation was given by the prosecution why even a single neighbour was not called as a witness. In the absence of such explanation, it is fair and reasonable to infer that if any such neighbour was called would not have given evidence similar to that of PW1 and PW2." [Emphasis added]. And in Azizi Abdalah Vs R [1991] TLR 71, the court of appeal, quoting from the headnote, held: "The general and well known rule is that the prosecutor is under a prima facie duty to call those witnesses who, from their connection with the transaction in question, are able to testify on 27 material facts. If such witnesses are within reach but are not called without sufficient reason being shown, the court may draw an inference adverse to the prosecution." The Court of Appeal also held: "Adverse inference may be made where the persons omitted are with reach and not called without sufficient reason being shown by the prosection." The foregoing principle is applicable in civil cases as well as was the case in the MbHu case (supra). The watchman allegedly present when documents relating to the loan as well as the said application for the duplicate title deed together with affidavits sworn in the process of application for a new title and police loss report (Exh. P9 collectively) a government gazette dated 14.12.2007 (Exh. PIO) as well as a letter to the Registrar of Titles (Exh. PH) requesting direct assurance of the title to the 2nd defendant, should ordinarily have been called to testify in support of the plaintiffs' case. That was not done and certainly to the detriment of the plaintiffs. That apart, the incidents and circumstances leading to escape and/or truancy of the first defendant in such a manner were not well explained in court. It was not said whether that apartment was a leased one and who was the landlord who could at least have been of assistance regarding the whereabouts of his tenant or at least could have witnessed access/entry of 28 PW1 and PW2 and their taking the said documents. It is noteworthy that at all material times, PW1 and PW2 had carefully and cleverly avoided the involvement of police force that are empowered and entrusted to investigate, detect and prevent as well as apprehending and prosecuting criminals. All of these holes leave nothing but a huge clog of doubt that strongly and positively infers the first plaintiff's awareness of the said USD 160,000 loan facility. Therefore, the above state of affairs partly affirms the 4th issue. I say partly because executing the mortgage deed per se will not make it enforceable until and unless it is registered (see section 96 (1) read together with section 97 (1) (d) and (5) (a) of the Companies Act). Thus, according to S. 96 (1) any charge created but not registered with the Registrar of Companies shall be void against, inter alia, a creditor. Learned counsel for the 2nd defendant submits that the said mortgage deed was registered as an encumbrance on 04.03.2008 referring to Apolo Elias Laizer PW4's testimony, and concludes that the same was valid. With all due respect, I hold a different view with regard to registration of encumbrances with the Registrar of tittles vis-a-vis legality of such encumbrance. I shall demonstrate. First, apart from a mere statement by PW4 that the said duplicate title was issued to the applicant and later registered as encumbrance in favor of the 2nd defendant, nothing was led in evidence to prove that fact. To the contrary, exhibit P13 which is a true copy of the original of CT No. 186151/37 over a property on plot No. 128 Regency Estate, Dar es Salaam indicates that the 29 only encumbrances ever registered were mortgages in favour of Tanzania Housing Bank, International Bank of Malaysia (T) Ltd, as well as International Commercial Bank (Tanzania) Limited. These, apparently, are cancelled and marked "DISCHARGED" showing that the property and title thereof is free from any encumbrance. Up to this juncture, I pose to observe that registration of an encumbrance over a title to property with the Registrar of Titles does not in itself make the said encumbrance or mortgage legally enforceable as against the third party but rather, an encumbrance serves as a notice to the public against dealing with the same title in any manner whatsoever. It is a mere registration and notification of one's interest over and in the said property. It follows therefore that assuming there was evidence to prove such registration of the encumbrance, still it could not make the same legally enforceable. Secondly, and flowing from the above, it suffices to observe here that not all valid instruments in law are legally enforceable but all enforceable instruments may be valid. For some documents such as the mortgage at issue, in order to be legally enforceable they must comply with the particular statutory provision governing such enforceability such as the said provisions of section 96 (1) read together with section 97 (1) (d) and (5) (a) the Companies Act (Supra). It follows therefore that regardless of the instruments being valid as between the parties thereto in relation to its execution as in the case at hand, the same will be held void until and unless registered in the manner provided in the Companies Act (supra). This is why under subsection (2) of section 96 of the Act it is provided that the unenforceability of the instrument is without prejudice to any contract or 30 obligations for repayment of monies thereby secured which becomes immediately repayable upon being held void. Coming to the present instrument (Exh. D3) the last page thereof bears the seal and signature of the Assistant Registrar of Companies. Whether that constituted registration or not was not substantiated but since nothing was tendered in evidence to contradict the same, I will deem it as having been sufficient notice to the Registrar for the purpose of registration of the same. Accordingly, for that reason only I find the fourth issue in the affirmative. That is to say, the mortgage deed creating a charge in respect of the property on Plot No. 128 Regent Estate, Dar es Salaam comprised in CT No. 186151/37 is valid and legally enforceable. The fifth issue will not waste the precious time and energy of this court. I have already doubted the episode depicting the deposit of such Certificate of Title by the first plaintiff with Mr. Sabodo. To cement the foregoing conclusion in this respect, if at all such a title was deposited with the said Mr. Sabodo in respect of the loan, it was for all intent and purpose a security in the nature of mortgage. Nothing credible was tendered to prove that it was ever perfected as such considering that it was in respect of a colossal sum of money and allegedly in favour of a company. That apart, as intimated earlier, it was never made clear as to whether the same was deposited in the name of Aunali Akberali Kassam or Urafiki Trading Agencies Limited whereby in either case more tangible evidence to that effect was crucial. 31 I am alive to the fact that the said title was tendered in court by the said Mustafa Rajabal Jaffer @ Sabodo (PW6) under the pretext that the loan was not fully discharged. That notwithstanding, it is my considered view that in the absence of concrete proof of existence of the said loan, possession of the said title by Sabodo or any other person for that matter cannot be the basis to infer an act of actual depositing the said title in consideration of such a loan by Urafiki Trading Agencies Limited. The fifth issue is therefore answered in the negative. That is to say, it has not been proved on the balance of probabilities that the original Certificate of Title No. 186151/37 in respect of a property on Plot No. 128 was deposited by 1st plaintiff with Mr. Sabodo as security for a loan. The sixth issue is in relation to existence of any other valid securities in favour of the second defendant securing total exposure of both plaintiffs. As I have intimated hereinabove that validity of a security is one thing and its enforceability is quite another, especially when it comes to securitization. In that line of reasoning, the sixth issue can be conclusively determined by first identifying the securities against the facility of each plaintiff separately. With regards to USD 160,000 allegedly disbursed to the second plaintiff, I have found that the mortgage over property comprised in CT No. 186151/37 securing the same was valid. Apart from that, there is on a list of exhibits the debenture by Smart Rental Car Limited over its fixed and floating assets to the tune of USD 250,000 (Exh. D4). Apart from this there is no other security in relation to a loan offered to Smart Rental Car Limited. 32 As for Urafiki Trading Agency Limited, the immediate sub-issue is how many facilities were issued to her. Testimonies of witnesses as well as pleadings by the parties are varied with regard to the number and sequences of the facilities offered to this first plaintiff. First, as I have found, it is not disputed that the 2nd defendant issued a loan of Tshs. 100,000,000/= to the first plaintiff. Undisputed is also a fact that this facility was secured by personal guarantees by Aunali Akberali Kassamali and Kassamali A. Kassam guaranteeing repayment of Tshs. 100,000,000/= and interests thereon ,which is valid on the face value (Exhs. D8 and D9), as well as a promissory note executed by the two (Exh. D10). Save for these two documents, there is no other relevant and valid document in the nature of a security to cover the said facility. I have further noted from the learned counsel for the 2nd defendant's final submissions that there was a debenture by Urafiki Trading Agencies Limited admitted as Exh. D7 to be one of the securities in favour of the 2nd defendant. Upon looking at the same, I was at a loss as to which facility among the two alleged to have been offered to Urafiki Trading Agencies Limited was this related. I will show the source of my dilemma shortly. First, it is not disputed that the Tshs. 100,000,000/= term loan facility was offered to the first plaintiff. The duo differ sharply though in relation to the purpose thereof. Whereas the 2nd defendant insists through the pleadings and testimony that it was for meeting the working capital requirement, the plaintiff claims that it was forcefully and purposefully issued to her to make repayment of the USD 160,000 disbursed to the 2nd plaintiff. 33 Their difference notwithstanding, among the securities mentioned in exhibit D6 which is a Facility Letter in respect of the facility of Tshs. 100,000,000/= is "debenture over fixed and floating assets of Urafiki Trading Agencies Ltd including spares and parts for Isuzu Vehicles to be registered in the favour of the 2nd defendant for Tshs. 200Million" - (see clause 6 (ii) of Exh. D6). This security is also pleaded under paragraph 24 (ii) of the counterclaim though without specifically mentioning the particular facility against which it was created. Thus, the only document pointing to the actual facility which was to be covered by such a security is Exh. D6 which is in relation to the said 100,000,000/= term loan facility. To prove that such a security was created, Lyanda Macha DW2, tendered in evidence the said Exh. D7 on 15.02.2013. On being examined in chief as to an amount covered or secured by the said debenture, his response was "Tshs. 267,677,500/=". Upon a deeper scrutiny of the said document, it dawned on me that indeed its value is USD 300,000 to cover or secure credit facility of a term loan of Tshs. 267,677,500/=, plus interest and other charges thereon. To be precise, the said Exh. D7 which is neither dated nor indicating on which date it was executed partly reads on the cover page thus: "Being security of the value of United States dollars three hundred thousand only (USD 300,000) to secure credit facility (term loan) of 34 Tshs. (267,677,500/=) plus interest and other charges thereon entended (sic) to urafiki Trading Agencies Limited". The foregoing statement led me to revisit the pleadings, testimonies and evidence looking for any other facility in the amount of Tshs. 267,677,500/= which possibly might have been issued and covered by such a debenture. Unfortunately the search did not bear any fruits. As bad luck would have it, apart from tendering the said debenture nothing was offered by the 2nd defendant in explanation as to how and when was the said amount issued and or why was the said debenture offered to cover the said facility of Tshs. 100,000,000/= if at all that was its one of the valid covers. Thus, a blank field which was left unfilled by the 2nd defendant is in relation to the nexus between the said debenture and the Tshs. 100,000,000/=. A clear conclusion, in my considered opinion, is that this debenture was not related in any way to the loan over which it was purportedly created or any other loan as far as the dispute at hand is concerned. My conclusion is further vindicated by the fact, as appearing from the same Exh. D7, that the said debenture was created pursuant to "terms and conditions of Debenture Holder facility letters dated the 5th day of May, 2009 duly accepted by the company" (see the 14th line of clause 1 therein) as opposed to the purported debenture holder's Tshs. 100,000,000/= facility letter dated 19.10.2008 which is at t issue. Apart from the above, I have noted through the said Exh. D6 that other security over the said Tshs. 100,000,000/= facility was supposed be sharing 35 of the legal mortgage over the said CT No. 186151/37 on Plot No. 128 Regent Estate; property which was to be upstamped to cover Tshs. 400,000,000/=. Having scanned all the pleadings, exhibits, testimonies as well as final submissions by counsel for the 2nd defendant, I am certain that this security arrangement was never perfected as there was no cogent evidence tendered to prove the same. Thus, up-stamping of a mortgage being a practice of payment of additional duties on a mortgage document in a transaction of the increase of facility granted over and above a previous mortgage, proof of perfecting such transaction were necessary. Coming to the facility of Tshs. 173,550,000/= pleaded under paragraph 23 of the counterclaim purportedly issued upon a request by Urafiki Trading Agency of taking over the 2nd defendant's liability of USD 160,000. It was stated that the 1st plaintiff, having approached and proposed transfer of the liability, he applied for the same to be converted into Tanzania Shillings so as to harmonize repayment. To establish this, DW2 tendered a letter written by the plaintiff to that effect (Exh. D14). It is further alleged that in respect of this facility which was issued by the 2nd defendant, the following securities were created: 1. Personal Guarantees of both Aunali Akberali Kassam (exhibit D12); and 2. Letter of continuity, letter of Arrangement and a promissory note. 36 The plaintiffs, particularly the first plaintiff, dispute the validity or otherwise of the said securities on the basis of fraud and further circumstances leading to procurement of the said facilities. In fact, they do not dispute creation and or existence of such securities but rather the grounds and or circumstances leading to creating the same. It is stated both in the pleadings and on testimonies of DW1, DW2 that upon failure by Smart Rental Car to pay the loan, the 2nd defendant embarked on a series of negotiations with PW1 to take over the said liability. That upon negative response, the 2nd defendant threatened to sell the mortgaged property comprised in the said CT No. 186151/37 which is his residential house. It was his further testimony that he was forced to sign all the documents and letter accepting transfer of liability despite his discovery of forgeries because by then he had no evidence to back up such a claim. To me, as rightly put by counsel for the 2nd defendant, threats of such nature cannot in anyway invalidate the securities. That apart, the story of threats and then absence of evidence to prove fraud and forgery in the loan transaction leaves much to be desired. This is so because, firstly, considering the allegation that the original title deed over the said property was deposited and in the custody of the said Sabodo, one would wonder how the 2nd defendant could have managed to auction the said property. Secondly, if at all there were other subsisting loans over which the said security was deposited, how then could the 2nd defendant, allegedly with a forged copy of the title deed proceed to auction the property? Thirdly, having been so threatened, and being aware or at least having some clue on the 37 possibility of there being fraud, why did the 1st plaintiff decide not to report the same to relevant authorities such as the police. I am alive to the fact that M. A. Ismail Advocates had written a letter to the Registrar of Titles in respect of issuance of a duplicate title deed fraudulently. My assumption here is that, it could have been a worthy ground to resist any pressure or force whatsoever from the 2nd defendant regarding facility take over. The above raised queries were sufficient enough to raise an eyebrow of this court in total disbelief of the purported story regarding threats to create the said securities. Indeed, such flaws on the part of the plaintiffs remind me of an old adage which goes thus: "The guilty are always afraid". I therefore find that there was created the said securities for the said facility of Tshs. 173,550,000/=. In fine therefore and in answer to the 6th issue, other valid securities that existed to secure total exposure of both plaintiffs are: (i) Mortgage Deed over the property on Plot No. 128, Regent Estate, DSM comprised in CT No. 186151/37 (Exh. D3) in respect of USD 160,000 to 2nd plaintiff and subsequently converted into Tshs. 173,550,000/= to the plaintiff (as the letter Exh. D14 shows) was to the effect that securities to remain the same); (ii) Debenture of Smart Rental Car Ltd (Exh. D4) in Respect of USD 160,000 to her subsequently Tshs. 173,550,000/= to the 1st plaintiff. (iii) Personal guarantees of Aunali Akberali Kassam for Tshs. 100,000,000/= (Exh. D8) and for Tshs 173,550(exhibit D12) 38 for the facilities issued to the first and second plaintiff respectively) (iv) Personal guarantee of Kassamali Akberali Kassam for the facility issued to the first plaintiff of Tshs. 100,000,000/= (Exh. D.9); (v) Promissory note, letters of Arrangement and letters of continuity for the facility of Tshs. 100,000,000/= and Tshs. 173,550,000 (Exh. D12 and D13 respectively). The foregoing goes to answer the 6th issue affirmatively to the extent shown hereinabove and without further ado answers the 7th issue in the affirmative as well. The 8th issue is equally a no-brainer one. It is also not disputed that the 1st plaintiff had made part payment of the loan. I note though that there are contradictions as to the respective loan facility which was partly repaid as between the Tshs. 100,000,000/= and the USD 160,000 converted to Tshs. 173,550,000/=. DW2's testimony was to the effect that both loans were partly paid through the 2nd plaintiff's loan account and later on stopped. On the other hand, PWl's statement is to the effect that several payments in the amount of Tshs. 300,000/= was being paid daily until upon discovery of fraud, and filing of the suit when they stopped payments. To corroborate such undisputed statements some pay-in slips (collectively Exh. D2) were tendered in court by DW1 bearing different amounts contrary to the allegations by the PW1. These are as follows: 1. 17 pay-in-slips of 300,000/= each 39 2. 14 pay-in-slips of 250,000/= each 3. 12 pay—in—slips of 200,000/= each All of the above were paid through the same loan account No. 0000302524620 of Urafiki Trading Agencies Limited. This to me concludes the fact that indeed there was loan repayment of the moneys by Urafiki Trading Agency in respect of the Tshs. 100,000,000/= facility extended to her for the purpose of meeting her working capital requirement. The totality of the above, the 9th issue having been answered above, has paved way to the last issue, which is, to what reliefs are the parties entitled. The plaintiff in the main suit has elected a total of 7 prayers whereas the defendants in the counterclaim elected a total of 5 prayers. Since most of the issues have been affirmatively answered, I chose to start with the prayers in the counter claim. The first prayer therein is for payment of Tshs. 301,413,532.71 being the total amount outstanding in the account of the facilities. This prayer, as it is, leaves much to be desired. Thus, it is outrageously naked to the extent of defying all legal morals in so far as dressing of claims of such nature are concerned. I shall demonstrate. To start with, as I have intimated earlier, loan processing as well as security documentation and perfection are quite different from actual loan disbursement. To the best of my understanding of the law and best practice, security documentation as well as all other processes antecedent to loan disbursal are conditions sine qua non towards best and safe lending. 40 In this respect, it is was the testimony of DW2 that, upon an application for a facility, the bank may subsequently issue facility offer letter accepting application and expressing the conditions to be fulfilled by the respective applicant(prospective loan beneficiary/grantee) before issuance of the loan. This, according to him, includes the applicant's signing and returning the said offer letter signifying acceptance of the terms and conditions. That upon receipt of all securities offered and other documents as part of compliance with the said conditions; such security documents will be assessed to check their appropriateness and validity. Thereafter, an approval memo will be prepared and sent to a department known as booking for the actual loan disbursal. This narration tells nothing but the undisputed fact that all conditions must first be complied with before the loan can be disbursed. Flowing from the above, it can be fairly observed that in establishing perfection of a loan transaction, proof of the actual disbursement of the monies as against the borrower is not a matter of choice but imperative. Therefore, regardless of the standard of proof being on the preponderance of probabilities or otherwise, there must be evidence to show that money in the amount and currency or otherwise applied for and approved was actually disbursed. In the present suit, there are two major facilities claimed to have been offered to the plaintiffs which forms the basis of the total amount prayed for in the first prayer. This is obvious despite the failure by the 2nd defendant to substantiate the composition of the claim, it being falling from two separate facilities which were allegedly compounded. Be it as it may, the pertinent question here is whether the said facilities were actually disbursed to the 41 plaintiffs. Despite their being compounded into one lump sum via undisclosed calculations, I choose to deal with each facility separately in the order of their purported issuance for the sake of clarity, brevity and logical basis of my conclusion. To start with the USD 160,000 term loan facility, this has been disputed by the plaintiffs all along on the ground that the same was fraudulently issued by the 2nd defendant in collaboration with the 1st defendant. I have actually found that the issue of fraud has not been adequately established and neither has claims of threats in respect of the loan take over and conversion of the USD 160,000 into Tshs. 173,550,000/= bought its way into the mental faculties of this court. That notwithstanding, I find there to be a serious loose connection as between loan processing, security documentation and perfection and the eventual actual loan disbursal of the said USD 160,000 which was later converted to Tshs. 173,550,00 and offered to the 1st plaintiff. All what DW1 and DW2 stated in their testimony were that the loan was actually disbursed through the 2nd plaintiff's account maintained at the 2nd defendant bank. Very unfortunate and displeasing though is the absence of evidence to prove such actual disbursement. It is irrefutably presumed that a seasoned banker like DW2 who vouched himself to that effect, as well as their learned counsel trained to marshal the law, could have failed to appreciate the relevance of establishing actual disbursal of the said amount. The usual documents recording banking transactions in the nature of deposit/crediting and or withdrawal/debiting of a 42 customer's account includes but are not limited to bank statements, cheques, withdrawal slips and any other related documents. Further to this, evidence as to existence of such an account as well as its relevant signatories which include but also not limited to account opening forms bearing photographic identities as well as signature specimen cannot be overlooked in this circumstance. I am informed, and undoubtedly so, by banking best practice that the primary custodian of all such documents and any other to that effect is the respective banker. Thus, apart from the mention of the 2nd plaintiff maintaining an account at the 2nd defendant, the nature of that account (whether USD or Tanzania shillings) was not fully explained to the court. In the suit at hand, apart from mere statements both in pleadings and testimonies of the 2nd defendant's witnesses (DW1 and DW2) that the said monies were credited into the 2nd defendant's current account and expended per the purpose (for instance see page 6 of the typed proceedings of 30.10.2012 - testimony of DW1), nothing was tendered to prove such actual disbursement and expenditure or withdrawal for that matter. In my considered opinion, since, according to DW1, the loan account is always created by the bank whereby they credit the approved customer's loan fund who is at liberty to withdraw at anytime, the 2nd defendant must be in possession of the records of such account opening, crediting the said amount and subsequent withdrawal transactions. Avoiding and or failure to tender the same in evidence entitle legally this court to draw an adverse inference 43 against the 2nd defendant to the effect that the said amount was not actually disbursed to the 2nd plaintiff. The above notwithstanding, as rightly submitted by counsel for the plaintiffs in the final submission, it is now trite law that special damages, being exceptional in their character, must be pleaded specifically and strictly proved - see: Zuberi Augustino Vs Anicet Mugabe [992] TLR 137, Maritim and Another Vs Anjere [1990-1994] 1 EA 312 and Stanbic Bank Tanzania Limited Vs Abercrombie & Kent (T) Limited, Civil Appeal No. 21 of 2001 (unreported), Masoieie Genera! Agencies Vs African Inland Church Tanzania [1994] TLR 192, Tangamano Transport Service Ltd Vs Eiias Raymond & Anor Commercial Case No. 50 of 2004 (unreported) and Cooper Motors Corporation (T) Ltd Vs Arusha International Conference Centre [1991] TLR 165, to mention but a few. I think it was Lord Macnaghten who laid down the principle in Stroms Bruks Aktie Boiag Vs John Peter Hutchinson [1905] AC 515 at page 525 in the following terms: "Special damages on the other hand are such as the law will not infer from the nature of the act. They do not follow in the ordinary course. They are exceptional in their character and, therefore, they must be claimed specifically and proved strictly." [Emphasis supplied]. 44 The above principle, which is often quoted in common law jurisdiction, was followed by the Court of Appeal as a correct statement of the law in the Stanbic Bank case (supra) in which, reiterating its earlier position in the Zuberi Augustino case (supra) in which it held that special damages must be specifically pleaded and proved, the Court held: "Although not as comprehensively expressed, this Court in one of its decisions - Zuberi Augustino v Anicet Mugabe, [1992] TLR 137, at page 139 said:- It is trite law, and we need not cite any authority, that special damages must be specifically pleaded and proved." And in the Masolele case, Court of Appeal underlined: "Once a claim for a specific item is made, that claim must be strictly proved else there would be no difference between a specific claim and a general one" In the instant case, the element of specific proof in so far as the actual disbursement of USD 160,000 term loan facility in the first place which led to the subsequent conversion of the same into Tshs. 173,550,000 is seriously is wanting. 45 An adverse spill-over effect of such vacuum in the evidence of the 2nd defendant is that all powers bestowed to the 2nd defendant by the securities created in respect of the said USD 160,000 as well as the subsequent Tshs. 173,550,000/= cannot be invoked against either of the plaintiffs. This rather painful conclusion is on the basis of the old Latin maxim; Commodum ex injuria sua nemo habere debet literally meaning No one should have an advantage from his own wrong - see: John N. Cotterell; A Collection of Latin Maxim and Phrases, 3rd Edition, Stevens and Haynes Law Publishers, London, 1913 at page 22. Thus, it is obvious that the first defendant purported to apply for the loan and at the aid of the 2nd defendant processed the same but the 2nd defendant never perfected his part of the bargain. No one of right mind could let the same enjoy the benefits from the purported securities. They were simply created in favor of a sham loan facility or else, they have chosen not to establish discharge of their credit facility agreement obligation at their own peril in this regard. As regards the second facility of Tshs. 100,000,000/= It is consistently notable through the pleadings and testimonies as well as exhibits tendered by the parties that the same was separate from the USD 160,000 facility. Though the 1st plaintiff has tried through PW1 and PW2 to show that it was procured with purpose of securing repayment of the USD 160,000 loan that nonetheless has not been established on the preponderance of probabilities. To the contrary, receipt of this facility is clearly admitted by the plaintiff. The only qualm however, is in respect of the actual amount outstanding on account of that facility. Once again, neither the plaintiffs nor the defendants 46 have been able to point out exactly the said outstanding figures. The learned counsel for the plaintiff seeking to take advantage thereof prays that the same be refused altogether on ground of failure to specifically prove it. I, with unfeigned respect hold a different view, for the reason that this court is empowered to enter judgment on admission for such amount which is clearly admitted through paragraphs 4 of the plaintiff's reply to the 2nd defendant's written statement of defence, paragraph 3 of the 1st, 2nd, 4th and 5th written statement of defence to the counter claim, as well as PWl's testimony particularly at pages 40, (last clip), 41 (4th clip) as well as page 115 (5th clip) of the 09.05.2012 proceedings transcripts. Further to this, it is without dispute that the plaintiffs had started to effect some payments and then stopped allegedly after discovery of fraudulent transactions. Though, as intimated above, both plaintiffs and the defendants are not exact as to how much out of the 100,000,000/= had been repaid, Exh. D2 is very clear and helpful in this take. As I have already shown, there are seventeen pay-in slips for Tshs. 300,000/= four pay-in slips for Tshs. 250,000 and twelve pay-in slips for Tshs. 200,000/=which were tendered as proof of the amount already paid fact which was not disputed by the plaintiffs. Simple mathematics involving multiplication, addition and subtraction brings the total of Tshs. 91,500,000/= as an outstanding principal amount. Thus, put in a simple arithmetic, for the sake of clarity, it is: 100,000,000/= - (300,000/= X 17 + (250,000/= X 4) + (200X12) = 91,500,000/=. 47 PW1 was of the prayer that the 1st plaintiff is ready to repay that loan facility but the interests thereof should be, to borrow his language, "wiped off". Very unfortunate to the plaintiffs, having failed to convince this court that this loan transaction was procured under duress or pressure and for the purpose of effecting payment of the said USD 160,000 loan, nothing can validly hedge them from bearing their liability in full. Given the fact that they took the loan on interest and admit the same, this court finds that their failure to repay the same per their agreed schedule was baseless and unjustified. There is no sufficient reason given why interest should be "wiped off". They must accordingly pay the outstanding amount as well as interest at the agreed 18% rate per annum as prayed by the 2nd defendant in her counterclaim plus 7% per annum at court rate on the decretal sum. I reserve my decision in respect of the prayer for costs for a later stage herein. Coming to the prayers by the plaintiffs, a total of seven of them; (a) - (g) have been fronted. The turn of events hereinabove goes clearly to show that all prayers save for the 6th crumble. This is simply due to the following reasons: 1. The plaintiff's having failed to satisfy this court on fraud and/or forgery in the creation and execution of the said mortgage deed over CT 186151/37 to the extent herein shown, the same cannot be declared unlawful and void; 2. There having no duplicate title of the original CT 186151/37, a declaration that its certified true copy purportedly issued to the 1st 48 defendant and deposited with the second defendant cannot be made in absentia. This is because the court of law cannot issue an empty declaration, for inasmuch as the allegation was made, all parties ended at showing that procedural steps were undertaken to procure a new title certificate including filing loss reports public, notices as well as registration of encumbrances but no such duplicate, be it original or copy was tendered in court. Apolo Elias Laizer PW4, who introduced himself as Assistant Registrar of Titles, and who denied to have participated in the process of application and issuance of the new Certificate of Title, brought the whole Registration file with him in court (see page 10 of the 14.06.2012 proceedings transcripts). From the file he tendered in evidence only a copy of an application for a new title, a copy of police loss report with him was also a file bearing the mark "CT No. 186151/37" which, on being examined by this court, responded that that was the actual file in respect of the said title over the said property. All these lacked a material document in the nature of actual Certificate such as Exh. P13 in its full form and content. PW4 stated further that the Registrar keeps custody of all files and he can access the same upon official authorization. The question which was not answered is why the duplicate title was not issued or at least any receipt or dispatch acknowledging collection of the same by the applicant; 3. The evidence tendered does not show that either of the Loan Facilities were unlawful to the extent shown herein, save for lack of actual disbursal of the USD USD 160,000; 49 4. General damages being discretional, nothing has been led in evidence to lay ground and convince this court to grant the same; 5. Since it has been found that the loan of USD 160,000 for which CT 186151/37 was mortgaged was not actually issued, and having found that such non issuance renders the securities ineffectual, the 2nd defendant must be restrained from selling off or disposing the said property; 6. Circumstances of this case dictate that justice will be served by letting each party bear its own costs. In fine therefore, I proceed to enter judgment for both plaintiffs and defendants to the extent shown hereinabove and proceed to decree follows: (i) The 1st plaintiff in the main suit and the 4th and 5th defendants in the counterclaim shall pay the 2nd defendant in the main suit a total of Tshs. 91,500,000 being principal outstanding amount on the loan facility extended to her by the 2nd defendant issued to her vide Exh. D6; (ii) The 1st plaintiff in the main suit and the 4th and 5th defendants in the counterclaim shall pay the 2nd defendant in the main suit shall further pay interest at a commercial rate of 18% on the principal sum form the date of accrual to the date of fling the suit; (iii) The 1st plaintiff in the main suit and the 4th and 5th defendants in the counterclaim shall pay the 2nd defendant in the main suit should further pay interest at a court rate of 7% on the 50 decretal sum from the date of this judgment till final and full satisfaction; (iv) The 2nd Defendant in the main suit is hereby restrained from selling and or disposing the property comprised in CT No. 186151/37 on Plot No. 128 Regent Estate. Further thereto, the 2nd defendant is herby restrained from exercising power conferred to her by any of the security instruments to secure the purported USD 160,000 and subsequently Tshs. 173,550,000/= in place of USD loan facilities. (v) Each party shall bear its own costs for the respective suits. Order accordingly. DATED at DAR ES SALAAM this 18th day of February, 2016. J. C. M. MWAMBEGELE JUDGE 51