ZEBEDAYO MKODYA VS BEST MICROFINANCE SOLUTIONS LTD COMM CASE NO

IN THE HIGH COURT OF TANZANIA

COMMERCIAL DIVISION

AT DARES SALAAM COMMERCIAL CASE NO 95 OF 2016

BETWEEN ZEBEDAYO MKODYA------------------------------------------------------------------- -PLAINTIFF

VERSUS BEST MICROFINANCE SOLUTIONS LIMITED----------------------------------------------- 1stDEFENDANT GEOFREY WILLIAM MALAMIA----------------------------------------------------------------- -2ndDEFENDANT ALOYCE KISSENGA MCHILI----------------------------------------------------------------------- 3rdDEFENDANT VERONICA ALOYCE KISSENGA----------------------------------------------------------------- 4thDEFENDANT REDIMNA GINWAS HAMAY------------------------------------------------------------------------5™DEFENDANT

JUDGMENT SONGORO, J Zebedayo Mkodya the plaintiff instituted a suit claiming that, on the 1/2/2012 he executed loan agreement and advanced to Best Microfmance Solution Limited the 1st defendant a sum total sum of shs 1,000,000, 009 which carried an interest’s payable on monthly basis. Further the plaintiff claim that, the Best Microfinance Bank the 1st defendant and have defaulted to repay the loan. Also he claim that, Geofrey William Malamia, Aloyce Kissenge Mchili, Veronica Aloyce Kissenga and Redimna Ginwas Hamay who are the 2nd 3rd 4th and 5th defendants who are directors and shareholders of the 1st defendant have failed to re-pay the loan and interest which has accrued. Consequently, the plaintiff prayed against all defendant for the following orders that;- i. The immediate payment of the principal sum of Tanzania Shillings One Billion Two Hundred and Fifty Million and Six Hundred Thousands (1,253,600,000/-) only. ii. The payment of the interest at the commercial borrowing rate of the above sum of money in prayer (i) above, from the date of the agreement on 1st February, 2-15 to the date ofjudgment. iii. An order for the payment of the interest at Commercial rate for the sum of money un prayers (i) and (ii) herein above from the date of judgment to the date of full payment. Page 1 of 16 IV. An order for tire payment of general damages at the discretion of the court. V.

Costs of this suit. VI. Any other and/or relief(s) as this honourable court may deem fit and just to grant. In response to the plaintiff s claim, the 1st 2nd and 5th defendants they did not file any written statement of defence and did not appear to defend the suit. On their part of the 3rd and 4th Defendants, they filed a Joint Written Statement of defence, and opposed all plaintiff claims. They also indicated that, they have no knowledge of the loan advanced by the plaintiff to the 1st defendant. In the light of the plaintiff claim and defence of the 3rd and 4th defendants the Court after consulting the parties it draw the following as issues for determination being; 1. Whether there was loan agreement/ contract between the plaintiff and defendants.

2. Whether or not there was any breach of contract on the part of the defendants.

3. Whether or not the plaintiff advanced the claim amount to 3rd and 4th defendants.

4. If the answer in items 1 and 2 are informative whether the plaintiff suffered any damages 5. If the amount in item (1) and (2) are in affirmative whether the defendants are jointly and severally liable.

6. What relief are parties entitled. So the plaintiff suit was heard and determined on the basis of the above mentioned agreed issues. During the hearing of the suit the plaintiff was represented by Mr. Francis Makota, Learned Advocate, while Mr. Aloyce Bahebe, Learned Advocate appeared for the 3rd and 4th defendants. In support of the plaintiff claims, the plaintiff called Zebedayo Mkodya who testified as PW1. In his testimony PW1 informed the court that, initially in year 2011 was transacting business with Aloyce Kissenga Mchili the 3rd defendant who was known as Kimbori. Page 2 of 16 Later, PW1 told the court that, in year 2012 was informed by the Aloyce Kissenga Mchili the 3rd defendant that, they have incorporated a business 1 company known as Best Microfinance Solution Limited, which is the 1st defendant's company which its Managing Director is Geodfrey William Malamia the 2nd Defendant. Then PW1 told the court after knowing the 1st defendant's company they started a business of borrowing money. Thus on the 24/4/2012 the 1st defendant borrowed from the plaintiff a sum of shs 400,000,000/= on consideration that, the plaintiff will be paid interest on the principal sum of 5% every month. The payment of interest every month was also assured by the 3rd Defendant who also requested the plaintiff to inject a capital of shs 1,000,000,000/= into the 1st defendant's company which

would generate an interest of 2% percent per annum. PW1 maintained in his witness statement that, there was a default in paying interest and 1/2/2015 the 2nd Defendant acting under instruction of the 1st, 2nd 3rd, and 4th defendants executed an agreement that, all outstanding amount which was agreed to be paid within 9 months from the date of commitment which is 1/2/2015, but the promise was not honoured. It was his statement that, the outstanding claim of shs 1,253,600,000/= was not honoured and he decided to demand the immediate payment of outstanding money by writing a demand letter through his attorney on 12/5/2016. PW1 claim that, there was no response then he decided to institute the present suit. To support his claim PW1 tendered a letter reference AD /Gen/2016/ 28 dated 12/5/2016 with has a title demand letter which was admitted as Exhibit Pl, A letter from Aloyce Kissenga the 4th defendant which was admitted as Exhibit P2, A letter reference MIT/RC/ 82761 of 1/8/2016 from Business Registration and Licencing Agency which was admitted as Exhibit P3, and a document with title Hati ya Makubaliano ya kulipa fedha which was admitted as Exhibit P5. Next PW1 was cross examined and re-examined by defence and plaintiff counsel in which he maintained his claim against all defendants. Then PW 1 close his testimony, and the plaintiff called Scola Lauriano Sibene who testified as

PW2. In his testimony PW2 informed the court that, has no exhibits to tender and was subjected to cross examination and re-examination by the plaintiff as well defence counsels and to a certain extent, he supported the plaintiff case. Page 3 of 16 After the testimony of PW2, Mr. Makota, Learned Advocate for the plaintiff close his case and the defence case was opened whereby Aloyce Kissenga Mchili appeared and testified as DW1. Relying on his witness statement, DW1 informed that, is the Director of the Best Microfinance Solution Limited the 1st defendant's company. Then the witness told the court that, on 12/5/2016 he received a demand notice from the plaintiff Advocate demanding an immediate payment of shs 1,253,600,000 (One billion two hundred fifty three million Six hundred thousand and a claim of interest of shs 426,224,000/=. Then DW1 stated that, after receiving a demand notice, he instructed his advocate to respondent and they denied all allegations on the ground that, he never operated any money transaction business with the plaintiff. Also, DW 1 refuted that, as a director he did not entered into any agreement with the plaintiff of investment of shs 400,000,000/ or shs 1,253, 600,000/= . It was also part of his testimony that, he did not agreed with the plaintiff to deposit or invest any sum in their company account as claimed in the plaint. Next, DW1 claim that, he

has never sit in any meeting negotiating with the plaintiff on investment or depositing any sum to the 1st defendant's company and there was no Board Resolution to that, effect. He further explained in paragraph 12 of his “witness statement” that, in their company Geofrey William Malamia the 2nd Defendant was the signatory of all loan documents It was the views of DW1 that, the so called agreement was between the plaintiff and second defendant and whatever sum advanced was not advanced to the 1st defendant's company or its directors. Also the agreement and its terms was not known by the directors and shareholders. He also request the court to consider that, a company is a different legal personality from its directors or shareholders. DW1 maintained that, the plaintiff s claims are baseless and there no contract which exists between the plaintiff and 1st defendant's company. After DW1 testified the defence case was closed and that, was the end of the plaintiff as well as the defence case. Next, both counsels with the leave of the court were granted time to file closing submissions which they timely submitted their submissions. Page 4 of 16 On his part Mr. Francis Makota, Learned Advocate of the plaintiff submitted that, it is only 3rd and 4th defendants who appeared and filed written statement of defence and opposed the plaintiff claim. The 1st 2nd and 5th defendants did not

file written statement of defence and the court order that, the plaintiff was granted leave of the court to proceed ex-parte against them Submitting on the 1st agreed issue of whether or not there was a contract between the plaintiff and all defendants relying on the testimonies of PW1 and PW2 Mr Makota told the court that, there is evidence that, from Exhibits P4 and P5 that, the plaintiff advanced loan to the 1st defendant's company because the agreement was signed by Geofrey William Malamia the 2nd defendant. He then explained that, since Exhibit P3 is official document from BRELA shows the 1st defendant is a registered company and the 2nd and 3rd defendants are shareholder and directors of the 1st defendant that, means all directors and shareholders are bound by the acts of their company So the counsel applied to the court to find that, there was a contract between the plaintiff and all five defendants. Submitting on the second point whether there is any breach of the loan agreement, the Plaintiffs counsel relying on clause 1 of Exhibit P4 “Hati ya Makubaliano ya Kulipa fedha” he submitted defendants agreed to pay the plaintiff a sum of shs 1,253,600, 000/= on or before 30/9/2015. Taking into account the demanded money has remained un- paid, certainly defendants breached the repayment terms thus there is a breach of the loan agreement committed by defendants. Also

submitting on the point whether the plaintiff advanced the claimed sum to the 3rd and 4th Defendants and if the defendants are liable, the plaintiff s counsel submitted that, they being shareholders and directors, are liable for any act committed by 1st defendant's company. He then argued that, take into account the granted loan was injected in the “ Bureau De Change Company ” which 3rd and 4th Directors are shareholders there are the ones who borrowed the money because “ Bureau De Change " in itself has no legal capacity to borrow the money. Responding to the 3rd and 4th defendants response that, they were not aware if the 1st and 2nd defendants took loan from the plaintiff, Mr. Makota relying on decision in the case between the National Bank of Commerce Limited Versus Empire Ulanda & Another (2005) TLR 15 emphasized that, shareholders and directors of the company by virtue of their position in the company they have full knowledge of all transactions which are going on the company. Page 5 of 16 In line with the said court decision, Mr. Makota also replied that, by virtue of position of the 3rd and 4th defendant as shareholders and directors of the 1st defendant's company that, enables them to have full knowledge and understanding that, the loan transaction took place between the plaintiff and the 1st defendant company under there are directors. Responding to a point that, the

1st defendant is separate legal entity frbm its shareholders and directors, the plaintiff counsel replied that, the Court of Appeal in the case between Yusufu Manii Versus Edward Masania and Abdallah Juma (2006) TLR 127 had the opportunity of considering that, doctrine of legal personality and it stated that; "Therefore having regard to the facts that, the appellant was the managing director of the company, we do not accept the contention that, the evidence was ■ required to prove the appellant's relationship with the company or that, he has shares in the company. The Court of Appeal then went on to state that, the principle enunciated in the Solomon would apply to the contrary once special circumstances and exceptional circumstances is shown. Here as just shown such the circumstances is premises upon the fact that, the appellant was the managing director ofthe company. Then relying on a decision in die case of Yusufu Manji cited above, Mr. Makota submitted that, the 3rd and 4th defendants their company positions as shareholders and directors enable them to ’ aware and have full knowledge on transactions which took place at the 1st defendant company. So they are liable and may not rely on shield of corporate legal personality. In view of the above, the plaintiff counsel prayed to the court to find 3rd and 4th defendant's liable to the loan advanced to the 1st

defendant Commenting on a point whether or not the plaintiff suffered any damages, the plaintiff counsel replied since the huge sum of money was advanced as loan which attracted interest and the amount has remained un paid. Since the defendants have retained the granted sum, Mr. Makota claim the plaintiff has suffered damages and loss.On what reliefs are parties entitled too, the plaintiff s counsel prayed to the court to grant reliefs prayed in the plaint? In his closing submission, Aloyce Bahebe, for the defendants first submitted that, the plaint does not disclose a cause of action on the part of defendants. Secondly they pointed out that, even exhibits P4 and P5 which were tendered and admitted in court do link the 3rd and 4th defendants with the plaintiff claim. In addressing the 1st agreed issue of whether or not there was a loan agreement between the plaintiff and defendants, the 3rd and 4th defendant has admitted that, the agreement was entered between the plaintiff and the 2nd defendant. Page 6 of 16 Also, the defence counsel argued that, Plaintiff who was investing huge amount of money in terms of billions of shillings was supposed to be furnished with a Board Resolution signed by all or majority of Board Members to approve the investment. The counsel then argued that, involving just a mere one director without a board resolution on such investments was not proper.

The defence counsel also argued that, the agreement was not properly executed and in that, regard they apply to the court to find that, the agreement is void. And if that, is done the 1st agreed issue must be answered in negatively. Also in response to agreed issue No 1 of whether there was loan agreement/ contract between the plaintiff and defendants the 3rd and 4th defendants, the defence counsel argued that, the plaintiff has admitted that, the contract was signed by the 2nd defendant. Likewise in answering whether or not there was any breach of contract on the part of the defendants the 3rd and 4th defendant, the defence counsel answered that, there is no such breach for reason that, the contract was signed by the 2nd defendant. Thus the 3rd and 4th defendants were not parties to the agreement. Responding to the 4th and 5 agreed issues the plaintiff suffered damages and is entitled to relief claimed, the defendant's counsel submitted that, there is no evidence which shows that, defendants jointly and together enter into investment agreement. Also there is no legal basis of holding all defendants are jointly and severally liable. More, the 3rd and 4th defendants contest that, there is no a deed of director's guarantee which was signed and imposes a joint liability to directors So finally on the 6th issue they prayed to the court to dismiss the plaintiff claims and suit for

lack of merit. The court has considered the plaintiff claims and find it is trite law that, under Section 110(1) and (2) of the Evidence Act, 1967, Cap 6 R.E. 2002 that, whoever request a court to give judgment in his favour as to any legal right on the existence of any fact which he asserts, must prove that, the fact exist. In the present case it is plaintiff who is alleging and the burden of proof is on his shoulders and the level of proof is that, of the balance of probability. Page 7 of 16 Guided by Section 101 (1) of the Evidence Act that, burden lies of the plaintiff, I straight went to address the 1st agreed issue of whether there was loan agreement/ contract between the plaintiff and defendants. In analyzing the evidence of both sides I find from paragraph 3 of the witness statement of PWI he stated that, previously he was doing business with the Aloyce Kissenga Mchili the 3rd defendant who is also known as Kimbori. Then PW1 stated that, the 3rd defendant visited his shop and informed him that, they have a company known as Best Microfinance Solution Limited, the 1st defendant. Also the 3rd defendant went further and informed PW1 that, their managing Director on the 1st Defendant company is Geodfrey William Malamia the 2nd Defendant. Next PW1 stated that, the 3rd defendant assured him that, all his business transaction with the 1st defendant's company will be in the

hands of Geofrey William Malamia the 2nd defendant. Further, PWI in his witness statement that, it was the business habit of the defendants to borrow money by using an umbrella of the 1st defendant's company. PWI then explained that, the 1st defendant company first borrowed from him a sum of shs 400,000,000/= which carried interest on the principal sum of 5% every month. Then in paragraph 6 of his witness statement PWI told the court that, he further injected as a capital into the 1st defendant company of shs 1,000,000,000/= which attract an interest of 2% percent per annum. Quite frankly I have analysed and assess the testimony of PWI on the granted loan and find it to be more credible and true because his claim on granted loan is supported by “Mkataba wa Uwekezaji” Exhibit P4, and Hati ya Makubaliano ya Kulipa Fedha kati ya Ndugu Geofrey Malamia na Ndugu Zebedayo Mkody signed on 1/2/2015 by Geofrey W Malamia kwa niaba ya Best Microfinance Solution Ltd and Zebedayo Mkodya. Exhibit P5. In clause 2 of Exhibit P4 “Mkataba wa Uwekezaji” it is provided as follows Mara baada ya kusaini Mkataba huu Mwekezaji atakuwa amewekeza junta ya kiasi cha shs 1,000,000/- kuanzia tarehe ya Mkataba huu 1/1/20114 hadi Kufikia 31/12/2014. On the interest Clause 2 provided as follows Page 8 of 16 Riba itakuwa asilimia 2 kwa mwezi kwenye kiasi kitakachokuwepo katika rekodi ya akaunti ya

Mwekezaji Then at page 2 of Exhibit P4 it is stated that Umesaintwa na Best Microfinance Solutions Limited Leo tarehe 01/01/2014 Jina; Geofrey William Saini Anwani; 33322, Dar es Salaam. Cheo; Managing Director. So the words which appears in Exhibit P4 reading “umesainiwa na Best Microfinance Solution” which appears in Exhibit P4 clearly proved that, the 1st defendant's company entered into investment agreement with the plaintiff. On the 3rd and 4th defendant defence that, they were not aware of the investment loan which was granted by the plaintiff and are not liable, the court find as per plaintiff testimony which I have find is more credible and truthful and 2nd and 3rd defendants were aware of the granted loans because as per his testimony it is Aloyce Kissenga Mchili who persuaded the plaintiff that, they have a company and may invest his money and the invested sum will be in the hands of Geofrey William Malamia the 2nd defendant. So I find the 2nd and 3rd defendants who are directors and shareholders of the 1st defendant company by engaging the plaintiff to grant a loan to the 1st defendant company took active role in encouraging the plaintiff investment, and that, amount to sufficient knowledge on investment which was channeled into their company after their encouragement and consent. Due to the role played by the 2nd and 3rd defendant of encouraging PW1 to invest in

then- company I find and decide that, there was contract of investment which the 1st, 2nd and 3rd defendants were fully aware with it as shareholders and directors. . With that, court finding I proceed to determine an issue of whether defendants are liable to repay the loan which was taken. I have said the 1st 2nd and 3rd defendants encouraged the plaintiffs to grant the investment loan. So they are aware of it and in my finding the 1st 2nd and 3rd defendants are liable On the part of Veronica Aloyce Kissenga and Redimna Ginwshamay the 4th and 5th defendants , the court find though are directors and shareholders of the 1st defendant's company their defence Page 9 of 16 that, they were not aware of the granted loan, has merit for reason that, the testimony of PW1 as far as the loan is concerned is silent on them. In other words there is no evidence if they took active role in encouragement and procurement of loan. Honestly, as directors and shareholders they may not be liable on the liability which they were not aware with it Turning to the second agreed issue of there was any breach of contract on the part of the defendants, I find a breach of contract occurs when one party fails to performs agreed term of the contract or performed it differently. Likewise in the decision in the case of Abdallah Yussuf Omar Versus Peoples Bank of Zanzibar and Another [2004] TLR 399 it was held

that, a failure to pay any installment when the amount is due and notice has been served amount to breach of loan terms.. Reverting back to the plaintiff case, I find in clause 2 of Exhibit P4, the agreement signed by 1st defendant the loan sum of shs 400,000,000 was attracting interests 5 % each months on the principal sum. Also a loan of shs 1,000,000,000/= was attracting interest of 2% per annum on the amount which was in the 1st defendant bank account. None payment of such interests amount to breach of contract due to default in paying agreed interests. Next, the court find that, there is another breach of clause 2 of Exhibit P5 on repayment of the loan which was agreed in document with title “ Haii ya Makubaliario ya Kulipa Fedha in which the 1st and 2nd defendants promises the plaintiff to repay the entire loan by 1/2/2015. In deed Clause 1 an 2 of Exhibit P5 states as follows;- Kwamba ndugu Geofrey w. Malamia ambaye ni mkurugenzi mtendaji wa makampuni tajwa hapo juu ameahidi kurejesha fedha hizo kwa ndugu Zebedayo Mkodya ndani ya kipindi cha miezi tisa kuanzia tarehe 01/2/2015. Furthermore in clause 2 of Exhibit P5 the 1st and 2nd defendants promised as follows; Page 10 of 16 1. Kwamba kiasi chochote kitakachopatikana wakati wowote ndani ya muda huo kitawekwa kwenye akaunti ya Zebedayo Mkodya ili mradi ilifikapo 30/9/2015 kiasi chote kiwe kimekatnilika. To sum the above

mentioned paragraphs in clauses 1 and 2 of Exhibit P5 which are in Swahili language, I find in literal English translation means that, 1st defendant through the 2nd defendant is admitting that, the company took the loan from the plaintiff and it undertook to repay interests which accrued and the entire loan amount by 30/9/2015. Thus bearing in mind that, the plaintiff claim in his witness statement maintained that, the 1st 2nd and 3rd defendants have defaulted to repay the loan and interests as per clauses 1 and 2 of the Exhibit P5 and the 1st defendant's company promised to pay the demanded sum, and so far none of the defendant has lead evidence which shows that, the loan or part of has been paid, it is certain that, 1st 2nd and 3rd defendants has an obligation to re pay the loan , which has to be fully repaid fully. None repayment is indeed breached clause 2 of Exhibit P4 which required the 1st defendant's company to pay an interest of 2% on the amount which is available in the 1st defendant bank account. Likewise have breached the terms stipulated in clause 1 and 2 of Exhibit P5 on repayment of the loan. Therefore I also answer the 2nd agreed issue in the affirmative that, there was a breach of contract. Moving to the third point of whether or not the plaintiff advanced the claim amount to 3rd 4th and 5th defendants the court find Exhibits iP4 and P5 states that, the loan

money was invested in the 1st defendant's company, but there is no proof if the invested sum was deposited into the company bank accounts or coffers. PWI explained in his witness statement that, he was encouraged and persuaded by Aloyce Kissenga Mchili, the 3rd defendant to invest into the 1st defendant's company. He also claim that, the 3rd defendant even directed him that, the invested sum will even be in the hands of Geofrey William Malamia, the Managing Director, and the 2nd defendant. So court find the role played by the 3rd defendant of encouraging PWI to invest in their company, shows the 3rd defendant participated in the procurement of the loan by inviting PWI to invest in their company. So he had a prior knowledge of the investment money which was borrowed from the plaintiff. Page 11 of 16 It follows therefore, though the loan was not granted directly to the 3rd defendant but he actively as a shareholder and director of the 1st defendant's company from day one persuaded PW1 to grant loan. So, I safely find that, like 2nd defendant, the 3rd defendant claim that, he was not aware has no basis at all, because had a prior knowledge on investment scheme which was done by the P W1. On the liability of the 2nd and 3rd defendants who are shareholders and directors of the 1st defendant company, the court is mindful that, the loan was granted to the Best Microfinance Solution

which is a separate legal entity separate from its director and shareholders. Further the court agrees that, in a decision in the case between Salomon Versus Salomon [1897] AC 22 it was stated that, a company is a separate entity from its shareholders or directors. So, shareholders or directors may not be liable for the acts committed by their company. Therefore, I have considered that, point of whether the 2nd and 3rd defendants may be liable to re-pay the loan which was granted by their company. In addressing the above mentioned point I find in the present case circumstances does not show if the investment loan was injected or deposited into the 1st defendant’s bank account or company coffers. So in the absence of any proof that, the granted loan was deposited in the 1st defendant's company account, or company coffers, definitely and impliedly the 1st defendant's company will have no financial ability of paying loan on money which were not delivered or deposited in its bank account or its coffers. It seem to me both the 2nd and 3rd defendants who took active role in procuring the Ioan from the PW1, has a duty of ensuring the granted loan was deposited in the 1st defendants bank account and was utilized for intended business transactions which would ultimately repay the loan and agreed interests. Due to the fact that, the granted loan ended somewhere else, and not in the

company's bank account or coffers and there is no proof that, the 1st defendant has financial ability to pay the granted loan. I therefore find there are exceptional circumstance which warrant the court to go beyond the scope of principle of legal personality for the purposes of recovering the loan. This court in a decision between Vita Foam (T) Versus Lumumba street Godoro Store Comercial Case No 34 of 2002 (Unreported) opined that, the court has inherent powers to lift the Page 12 of 16 veil of incorporation in certain circumstances and those powers are to be applied where the interest ofjustice demands. So in view of the above mentioned exceptional circumstances that, there is no evidence which shows the granted loan was deposited into the 1st defendant company bank accounts or coffers this court relying on the decision in the case of Yusuf Manji Versus Edward Masanja and Abdallah Juma |2006] TLR p 127 at page 131, it find and decided to go beyond the principle of corporate personality as enunciated in the case of Solomon Versus Solomon and lift the veil of corporate personality of the 1st defendant's company and hold the 2nd and 3rd defendants to be personally liable to repay the loan and the interest which is due. On the 4th and 5 th defendants, despite a fact that, were shareholders and directors of the 1st defendant's company that, alone may not make them liable because

as explained above, the court find the evidence of the plaintiff did not established if they took active role in procurement of the loan from the 1st defendant company. Also there is no evidence which proves that, they were even aware of the loan before and after it was granted. So honestly I find the 4th and 5th defendants are not liable to re- pay the granted sum. Turning to the point whether the plaintiff suffered any damages, the court find from the testimony of PW1 that, a loans shs 400,000,000 was invested on the 1st defendant company on 24/4/2012. It was the promise of the 1st defendant the granted loan will attract interest on the principal sum of 5% every month. Likewise the second loan of shs 1,000,000, 000 was also invested with a promise that, will attract an interest of 2% of each month on the sum which will be in the plaintiff's bank Account. Further the court find the granted loans has either express or implied contract term of re­ payment. Since there was an agreement to re pay interests on two loans and agreed condition of repayment of the entire loan as stated in clauses 1 and 2 of Exhibit P5 certainly the plaintiff had a legitimate expectation of receiving interests and the entire invested sum which he would have used the sum in his other business venture and realised profit. Taking into account that, the plaintiff was denied to be paid interests on the

investment sum and the loan was never repaid, court find the Plaintiff has suffered loss of earnings, and is entitled to damages. Page 13 of 16 The court finding that, the plaintiff is entitled to damages is supported by a decision in the case between Mwalwange v, Mwalwajo [1972] No 74 Mwakasendo Ag. J. (as then was) where it was stated that, it is a trite principle of law that, there is no entitlement to damage without loss or injury It follows therefor that, since the plaintiff has established that, he was entitled to interests on the invested sum, and he was not paid. Also there a promise that, the entire loan would be fully repaid by 30/9/2015 and nothing has been paid. Certainly none payment of agreed interests and the entire loan caused him to suffer financial loss and as stated above is entitled for damages. In respect of the issue of what relief are parties entitled too, the court find, defendants do not deny the existence of investment agreements, and do not deny that, the money was granted to the 1st defendant as loan which has to be repaid The 3rd defendant who I have said is equally liable as the 2nd defendant argues that, he was not aware of the granted loan, a defence which have been rejected, I find since the granted loan attracted interest and has implied and explicitly term of repayment as clause 1 and 2 of Exhibit P5,1 find and decide that, the plaintiff is

entitled to be paid agreed interests and the loan amount as per the defendants promises contained in clause 2 of Exhibit P5. It is a trite law derived from Section 37(1) of the Law of Contract. Cap 345. that, parties to a contract must perform and fulfil their respective promises which the agreed in the agreement. Likewise Courts in several decisions including a decision of EDWIN SIMON MAMUYA VERSUS ADAM JONA MBALA 119831 T.LR 410 at 414 whereas Lugakingira J relying on the decision in the case of Robertson & Minister of Pension (1949) 1 KB 227 emphasized that;­ . ............. jf a man gives a promise or assurance which he intends to be ' binding on him and to be acted on by the persons to who it was given - ' '' then, once it is acted on he is bound by it. Also in the same case of Edwin Simon Mamuya versus Jona Mbala. Lugakingira J as then was stated that:­ . ■ Once the parties bind themselves in contractfor a lawful consideration they are obliged to perform their respective promise, Page 14 of 16 Taking into account the provision of Section 37 of the Law of Contract Act Cap 345 insist that, parties to the contract must fulfill their promises and 1st 2nd and 3rd defendants promised to the plaintiff that, the invested sum will be in the hands of 1st and 2nd defendants, and will attract interests, then the 1st 2nd and 3rd defendants were under contractual obligation to fulfill

their promises and re-pay the plaintiff loan amount plus interests which was agreed upon.. So by the above mentioned provision of the law and cited court decision, I fmd all the 1st 2nd and 3rd defendants are liable to repay the loan amount and interest which is due plus damages On the damages the court find that, since Exhibit P4 its terms was varied by Exhibit P5 by extending loan re-payment period to 30/9/2015, the court find the 1st 2nd and 3rd defendants have been in possession of the plaintiff money for about 3 years, without paying the interest and loan amount. I hereby find and decide that, a sum of 50,000,000/= as general damages for none payment of interest and the loan will suffice. In view of the above, the Court finds the plaintiff has proved his claim on the balance of probability and hereby enter Judgment in favour of the Plaintiffs as follows;- a) The 1st, 2nd, and 3nd, defendants are jointly and severally ordered to pay the plaintiff a sum of Tanzania Shillings One Billion Two Hundred and Fifty Million and Six Hundred Thousands (1,253,600,000/-) as principal sum and interest accrued as prayed in the plaint. b) The 1st 2nd and 3rd defendants are jointly and severally pays the plaintiff a sum of shs 50,000,000 as general damages for loss which the plaintiff suffered. c) The 1st 2nd and 3rd defendants are jointly and severally pays the plaintiff interest rate of 8

% per annum on the amount granted in item (a) above, from the date the suit was filed to the date of Judgment. d) The 1st, 2nd , and 3rd, defendants pays the plaintiff an interest rate of 12 % per annum on the decretal sum from the date of Judgment to the date where the decretal sum will be fully paid Page 15 of 16 e) In respect of the 4th and 5th defendants the claim against them were not proved on the balance of probability, it fails and are not liable. f) Further, the 1st 2nd and 3rd defendant are ordered to pay the plaintiff costs of pursuing the suit. Consequently the plaintiff suit succeed as explained above. Right of appeal is explained to both parties. Date iyered at Dar es Salaam on this 13th day of July, 2018 H.T. SONGORO (JUDGE) The Judgment'^ e presence of Mr. Egbert Milanzi Learned Advocate of the plaintiff and Ms. Hafsa Saasi Learned Advocate of the 3rd and 4th defendant and absence of the 2nd and 5th defendants Page 16 of 16