247 Communications Limited & Others vs CRDB Bank PLC (Civil Appeal No. 805 of 2023) [2025] TZCA 1280 (15 December 2025)

IN THE COURT OF APPEAL OF TANZANIA AT PAR ES SALAAM fCORAM: KEREFU. 3.A. KHAMIS. 3.A. And NANGELA. J.A. CIVIL APPEAL NO. 805 OF 2023 247 COMMUNICATIONS LIMITED .............................. MIRZA HAMIS NGOSHANI............... ........................... DOROTHY KULWA KIPEJA.......................................... VERSUS CRDB BANK PLC . ....................................... . ....... . ................... RESPONDENT (Appeal from the decision of the High Court of Tanzania, Commercial Division at Dar es Salaam) (Agathg, JQ dated the 4th day of August, 2023 in Commercial Case No. 114 of 2023 JUDGMENT OF THE COURT 2n d & 15th December, 2025 KHAMIS, J.A.: This appeal arises from the judgment and decree of the High Court, Commercial Division, Dar es Salaam delivered on 4th August, 2023 in which the trial Judge found that the appellants had breached the standby, overdraft facility, the joint and personal guarantees and the indemnity agreements. They were ordered to pay the sum of TZS 426,568,906.36, interest thereon and costs of the suit. i . l S TAPPELLANT 2N DAPPELLANT 3 rd APPELLANT Vide a plaint dated 17th October, 2022, the CRDB Bank PLC (the respondent) pleaded that, the appellants applied for and were granted loan facilities based on a number of facility letters totaling TZS 3,096,299,850.00 which included the purchase order financing facility (TZS 2,014,320,000.00), invoice discounting facility (TZS 481,979,850.00), overdraft facility (TZS 100,000,000.00), and a standby overdraft (TZS 500,000,000.00). The facilities were intended to finance the operational expenses of the business of the first defendant as well as taking over the appellants' outstanding loan balance from the Barclays Bank Tanzania. It was further pleaded that, to secure the said facilities, the respondent and the first appellant entered into deeds of assignment dated 21s t December, 2019; 27th December, 2019; and 3rd January, 2020 respectively in which the first appellant assigned all proceeds in relation to the procurement agreement entered into with Vodacom Tanzania PLC for the purchase of products as detailed in the facility letter of 20th December, 2019. To guarantee the facilities, the second and third appellants executed the deeds of guarantee undertaking to pay on demand to the respondent, alt monies that would become due to the respondent in relation to the debt, if the first appellant defaults. Upon extensive default, it was alleged, the respondent issued a demand letter followed by a reminder letter to the first appellant on 7th October, 2020. Subsequently, the respondent issued formal notices of default to the first, second and third appellants for payment of the outstanding sum of TZS. 426,568,906.36. The respondent sought an order for payment of the outstanding sum (TZS 426,568,906.36), declaration that the second and third appellants were liable for payment of the outstanding sum which constituted of the principal and interest thereon, interest at the bank's rate of 20% per annum from 1s t September, 2022 to the date of judgment, interest at the court's rate of 12% per annum from the date of judgment to the date of full and final payment, costs of the suit and any other relief that the court deems fit and just to grant. In reply, the appellants filed a joint written statement of defence in which they generally denied each and every allegation contained in the plaint but admitted to have applied for and were granted the credit facilities by the respondent. They averred that, the sums advanced were timely repaid until when the first appellant decided to terminate its contract with Vodacom Tanzania Pic which was its major source of the income and the sole purposes of the loan. The appellants further averred that, the parties signed the deeds of assignment on 21s t December, 2019 and 3rd January, 2020 through which the respondent was entitled to all proceeds or receivables in connection with the procurement agreement between Vodacom Tanzania Pic and the first appellant. The contract between the first appellant and Vodacom Tanzania Pic was terminated and, hence, frustrated the business of the first appellant hence the alleged default. In further reply, the appellants averred that, the business of the first appellant was frustrated by the outbreak of COVID 19 pandemic which frustrated its contract with Vodacom Tanzania Pic. The alleged notices of default were disputed and the appellants pleaded that, even assuming the notices were duly issued, the relief available to the respondent was to resort to the debenture over the assets of the first appellant before dealing with the securities offered by the second and third appellants. The issues recorded for determination by the trial court were four, to wit: one, whether the 1s t appellant defaulted to pay the standby overdraft loan facility: two, if the first issue is answered in the affirmative, then, whether the 2n d and 3rd appellants are liable to pay the standby overdraft loan facility; three, whether the plaintiff followed the procedure for loan recovery; and four, what reliefs are the parties entitled to. At the trial, the respondent had one witness, Sweya Shija (PW1), the relationship cum credit officer who testified through a written witness statement and then cross examined as per the requirements of the High Court (Commercial Division) Procedure Rules, 2012 (G.N No. 250 of 2012) (the Commercial Court Rules). He produced twelve documentary exhibits consisting of facility letters, deeds of assignment, directors' guarantee and indemnity bonds, personal current account statement, demand notice and intention to pursue recovery remedies and demand notice issued by the respondent (exhibits PI - P12). The appellants lined up two witnesses, Mirza Hamis Ngoshani (DW1) and Dorothy Kulwa Kipeja (DW2), who were equally cross examined as per the Rules but did not produce any documentary exhibit in support of the appellants' case. In his judgment, the trial Judge found that, the respondent had proved her case on a balance of probabilities. On the first issue, he concluded that, the appellants defaulted to repay the standby overdraft facilities and the reasons advanced for failure to service the loan were unjustifiable. On the second issue, the trial court found the second and third appellants were liable to pay the outstanding amount as the notices issued and served on them by post were sufficient to hold them liable as guarantors. On the third issue/ the trial court found the respondent had followed the proper procedure for recovery of the outstanding loan and regarding the fourth issue, the appellants were ordered to pay the sum of TZS 426,568,906.36 plus interest thereon at the bank's rate (20% per annum) and the court's rate (12% per annum) as well as costs of the suit. Aggrieved, the appellants issued a notice of appeal against the whole of the trial court's decision and lodged a memorandum of appeal faulting the trial Judge on four grounds, to wit: one, to hold that the reasons for non - payment of the outstanding sum as testified by the appellants were insufficient; two, to hold that the procedure for recovery of the overdraft facilities was followed despite lack of proof; three, for failure to appreciate that the default to repay the loan was due to force majeure and frustration of the contract due to termination of the contract between the 1st appellant and Vodacom Tanzania Pic; and four, the failure to properly evaluate the evidence hence failure to appreciate the fact that the procedure for recovery of the outstanding amount was not followed and the reason for default was justified. At the hearing of this appeal, the second appellant appeared in person, unrepresented and also as a principal officer of the first appellant. The third appellant was absent but duly served. On the other hand, Messrs. Shukran Elliot Mzikila and Boniface Evans Woiso, learned advocates, teamed up to act for the respondent. Both sides had earlier on filed written submissions in support of their respective cases as per the requirements of rule 106 of the Tanzania Court of Appeal Rules, 2009 (the Rules). To address the absence of the third appellant, we resorted to rule 112 (4) of the Rules which provides that, a party who has lodged written submissions as per the Rules is deemed to have appeared at the hearing. When invited to address the Court, Mr. Ngoshani adopted the appellants' joint written submissions on record and prayed that, the appeal be allowed and the judgment and decree of the trial court be set aside with costs. In the written submissions, the second and fourth grounds of appeal were consolidated while the first and third grounds were separately addressed. Regarding the first ground of appeal, the appellants contended that the respondent failed to cross examine the witness for the first and second appellant on the termination of a procurement agreement with Vodacom Tanzania Pic and on the outbreak of COVID 19 which frustrated the agreement between the appellants and the respondent. The appellants argued that, by failure to cross examine on such important facts, the respondent is deemed to have accepted the fact that the parties' agreement was indeed frustrated. They cited the case of Shad rack Balinago v. Fikiri Mohamed @ Hamza & 2 Others, Civil Application No. 25 of 2019, [2021] TZCA 45 (25 February 2021) for the proposition that, the failure to cross examine a witness amounts to acceptance of the truthfulness of the other party's account. On the second and fourth grounds of appeal, the appellants asserted that, the trial Judge failed to properly evaluate the evidence on record and, thus, arrived at a wrong conclusion regarding the procedure for recovery of the outstanding amount. Outlining the procedural aspects that were not observed by the respondent and overlooked by the trial court, the appellants referred us to pages 444 to 446 of the record of appeal, and contended that, the respondent failed to serve the appellants with a 60 days' notice of default, omitted to appoint a receiver in case of default and failed to invite the appellants for an amicable settlement as per the agreement. In support of these two grounds, the appellants sought to rely on the case of Materu Leison & J. Oya v. R. Sospeter [1988] T.L.R 102 which underscored that, an appellate court may interfere with the trial court's findings of fact where the trial court had omitted to consider or had misconstrued some material evidence or had erred in its approach in evaluation of the evidence. On the third ground of appeal, the appellants faulted the trial court for failure to consider that, the appellants' defaulted to repay the outstanding loan due to force majeure. He contended that, the frustration was clear in the witness statement of the first and second appellants' witness which featured at page 268 of the record of appeal. Further, reference was made to the case of Joseph Kahungwa v. Agricultural Inputs Trust Fund & 2 Others, Civil Appeal No. 373 of 2019 [2021] TZCA 325 (23 July 2021) in support of the argument that, force majeure applies to unexpected circumstances such as wars, civil unrest, floods, earthquake and the like. On that basis, it was submitted that, owing to termination of the first appellant's agreement with Vodacom Tanzania Pic and the outbreak of COVID 19, the appellants should have been exonerated from the respondent's claims. The respondent's written submissions adopted by Mr. Mzikila were a reiteration of the averments in the plaint and the evidence tendered at the trial court. At the outset, he pointed out that, frustration of the contract and force majeure were not drawn as issues for determination at the trial court although they prominently featured in this appeal. He therefore, invited us to ignore them for the lack of legal basis. On the specific reply to the first ground of appeal, Mr. Mzikila contended that, frustration of the first appellant's contract with Vodacom Tanzania Pic was irrelevant as the respondent was not privy to the said contract. He submitted that, in view of the privity of contract between the first appellant and Vodacom Tanzania Pic, it was not necessary for the respondent to cross examine the appellants' witnesses on the alleged frustration. On the outbreak of COVID 19, the learned counsel admitted its existence which he said, was undeniable. On that basis, he contended that, the cross examination would have been redundant. However, he was also quick to add, that, the respondent's alleged failure to cross examine the appellants' witness did not amount to admission of the alleged force majeure as the rule on failure to cross examine was not absolute. In support of this contention, he cited the case of Zakaria Jackson 10 Magayo v. Republic [2021] TZCA 207. He further placed reliance on the case of Kwiga Masa v. Samweli Mtubatwa [1980] T.L.R 103 where the Court stated that, the failure to cross examine a witness is merely a consideration to be weighed up with all other factors in the case when deciding the truthfulness or otherwise of the unchallenged evidence. On the second and fourth grounds of appeal, the learned counsel for the respondent submitted that, exhibits P ll and P12, which appeared at pages 435 to 437 of the record of appeal, were clear evidence to show that, the procedure for recovery of the outstanding loan was followed. He pointed out that, as per the guarantee and indemnity agreement (exhibit P9) which was signed by the second and third appellants, the respondent called upon the guarantors to indemnify the default as per clause 7 of the said agreement. He submitted that, the said procedure was correct and applicable in the event of default. He added that, the respondent sufficiently led evidence to establish that it was followed. On the alleged non-appointment of a receiver, Mr. Mzikila contended that, it was not necessary to appoint a receiver as the first appellant was not declared insolvent. He referred us to the evidence of PW1 at page 304 of the record of appeal for the proposition that, no debenture was created between the first appellant and the respondent and, therefore, the li appropriate procedure was to call on the guarantors to repay the loan upon default by the first appellant. On the amicable settlement of the outstanding sum, the respondent's counsel contended that, the respondent attempted to contact the second and third appellants on the settlement as evidenced in exhibits P ll, P12, P13 and paragraphs 14 and 15 of PW l's witness statement. He maintained that, since the respondent followed the due procedure stipulated in the facility agreement and made reasonable efforts to contact the appellants she could not be faulted for non- compliance of the loan recovery procedure. On the third ground, the respondent's counsel reiterated his submissions on the first ground of appeal and asserted that, the reasons stated by the appellants do not justify their failure to repay the outstanding loan. On specific response to the alleged frustration of the contract, Mr. Mzikila referred us to clause 4 of exhibit P6 which featured at page 395 of the record of appeal and contended that, the deed of assignment clearly stated that, the assignment of proceeds from the Vodacom 12 contract would not substitute the appellants' responsibility to repay the outstanding loan. The learned counsel placed reliance on the case of M/S Kanyarwe Building Contractor v. the Attorney General & Another [1985] T.L.R 161 where this Court observed that, courts do not readily invoke the doctrine of frustration unless it is shown that the contract as originally conceived, bears little or no resemblance to the new state of things. It was further observed that, it is not sufficient to merely show that conditions have changed so that one party is in a more onerous position, financially or personally. It should be shown that it is now impossible to perform the contract not merely more difficult or expensive. On the basis of that authority, Mr. Mzikila contended that, the appellants did not lead any evidence to establish the impossibility of fulfilling their obligations under the facility agreement which was necessary to invoke the doctrine of frustration. He insisted that, there was no evidence on record to show how the Vodacom contract and COVID 19 breakout frustrated the loan agreements. To buttress his assertion, he cited the persuasive decision of the High Court in the case of NMB Bank Pic v. Seiph Idd Seiph @ Seifu Iddy Seifu @ Seifu Idd Seifu @ Sifu Iddy Sif [2022] TZHC 14676 for the proposition that, frustration of a 13 contract is an evidential matter which must be proved by the party who alleges its existence. On further submissions, the respondent's counsel referred us at pages 143 to 144 of the record of appeal where the appellants jointly pleaded in their written statement of defence that, the first appellant decided to terminate its contract with Vodacom Tanzania Pic because Vodacom intended to reduce the commission paid to the first appellant. On that ground, the learned counsel contended that, the appellants were not entitled to rely on the doctrine of frustration since the contract with Vodacom was terminated by the first appellant herself. He emphasized that, such termination was not out of the parties' control and placed reliance on the case of M/S Kanyarwe Building Contractor (supra) where it was held that: "the doctrine o f frustration states that where events occur that make the performance o f the contract impossible, and these frustrating events are not the fault o f either party, then the contract is brought to an end with neither party at fa u lt" In the alternative, the learned counsel referred us to clause 12.3 of the standard terms and conditions of the overdraft facility which featured 14 at page 369 of the record of appeal and submitted that, if the appellant found the alleged termination of the contract with Vodacom had interfered with their ability to repay the loan, they should have communicated such predicament with the respondent. He asserted that, the appellants failed to comply with that clause and therefore, cannot invoke the doctrine of frustration. On the alleged outbreak of COVID 19, the respondent's counsel urged us to endorse the trial court's observation that, at the outbreak of COVID 19, the appellants had already failed to repay the loan. In addition, he submitted that, COVID 19 affected virtually all businesses and it would be chaotic to find that it affected the borrowers' capacity to repay the loans. We have considered the appeal in the light of the evidence on record and the parties' rival submissions on the grounds of appeal. This being the first appeal, our role is to re-evaluate and subject the evidence to a fresh scrutiny so as to reach an independent conclusion as to whether or not to sustain the trial court's decision. This is in line with rule 36 (1) (a) of the Rules. We are also conscious that, we did not have the advantage of seeing or hearing the witnesses testify. See also our decision in Adam Wamunza v. Kinondoni Municipal Council & Another [2023] TZCA 17512 (10 August 2023). Having considered the three grounds of appeal after consolidation of the second and fourth grounds and the parties submissions, we are of the view that, the issues commanding determination are three: one, whether the trial Judge was justified to find that the appellants are bound to pay the outstanding loan and interest thereon for breach of the loan facilities; two, whether the trial Judge was justified in finding that, the credit facilities advanced by the respondent to the appellants were not frustrated on account of the termination of the first appellant's contract with Vodacom Tanzania Pic and the outbreak of COVID 19 pandemic; and three, whether the trial Judge erred to hold that the respondent properly followed the procedure for recovery of the outstanding loan amount. On the first issue which covers the first ground of appeal, this Court was invited to determine whether the trial Judge was justified to find that the appellants are bound to pay the outstanding loan amount and interest thereon for breach of the loan facilities. From the outset, it should be noted that, the appellants did not challenge the existence of an outstanding loan or its quantum. Rather, 16 the appellants jointly submitted that, the trial Judge failed to consider the evidence given by the witness for the first and second appellant on the termination of agreement between the first appellant and Vodacom Tanzania Pic and the outbreak of COVID 19 pandemic. It was contended that, these were important facts which should have been cross examined by the respondent and considered by the trial court. The failure to cross examine amounted to acceptance of the appellants' evidence on force majeure. On the other hand, the respondent argued that the outbreak of COVID 19 was an undisputable fact which did not require any cross examination. The alleged contract between the first appellant and Vodacom Tanzania Pic was privy to its parties and that, as a third party, the respondent had nothing to do with it. The alleged failure to cross examine the appellants' witnesses was to be weighed up with all other factors in deciding the weight of the evidence on record and should not be construed as absolute. It is trite law that, in order to establish that a borrower is liable to pay an outstanding loan, a court of law should primarily verify the existence of a valid, legally binding loan agreement, confirming the borrower received the funds, and that a default has occurred based on 17 the agreed upon terms. In this case, an existence of a valid loan agreement, acknowledgement of the disbursed loan and the default to repay the outstanding sum were shown in the parties' pleadings, the witness statements, the oral testimonies of the witnesses and the documentary evidence on record. In paragraphs 5 and 6 of the plaint, the respondent averred that, the first appellant applied for and was granted credit facilities to the tune of TZS 3,096,299,850.00 which included the purchase order financing facility, invoice discounting facility, overdraft facility and a standby overdraft facility. This fact was admitted in paragraph 4 and 5 of the joint written statement of defence where the appellants noted that, the first appellant applied for and was granted the credit facilities. It was also averred that, subsequently, parties signed the deeds of assignment dated 21s t December, 2019 and 3rd January, 2020 under which the respondent was entitled to the proceeds or receivables in connection with the procurement agreement between Vodacom Tanzania Pic and the first appellant. In the witness statement of PW1, it was testified that, during the years 2019 to 2020, the first appellant applied for and was granted loan through several facility letters totaling TZS 3,096,299,850.00 for financing 18 the operational expenses of the business of the first appellant with Vodacom Tanzania Pic. It was also averred that, parties executed the facility letters, deeds of assignment and directors' guarantee and indemnity agreement. In paragraph 13 of the witness statement, PW1 stated that, the first appellant breached the repayment terms by failing to service the loan account in accordance with the terms and conditions of the agreement hence an outstanding sum of TZS 426,568,906.36 as on 26th September, 2022 . DW1 through his written witness statement admitted that, upon growth of the first appellant's business with Vodacom Tanzania Pic, the first appellant applied for the credit facilities which were accordingly granted by the respondent and that, the first appellant made some repayments as per the terms of the agreement. The repayment became difficult in 2020 when the agreement between the first appellant and Vodacom Tanzania Pic was terminated. The situation became even worse following the outbreak of COVID 19 which affected the first appellant's business. In further testimony, DW1 said the first appellant did not default to repay the overdraft facility but rather, what happened was beyond her control, hence, force majeure. DW2 testified along same lines as DW1. The appellants faulted the trial Judge for not considering the evidence of DW1 and DW2 on the force majeure. However, our examination of the impugned decision painted a different picture. We noted at pages 481, 482 and 483 of the record of appeal, the trial Judge summarized and assessed the evidence of these two witnesses. He referred to their testimonies on the termination of agreement between the first appellant and Vodacom Tanzania Pic as well as the outbreak of COVID 19 in the year 2000. At pages 484, 485 and 486 the trial court upon revisiting the testimonies of PW1, DW1, DW2, exhibits PI, P2 and P3 and exhibits P4 - P7, was satisfied that, there was no justification for the appellants' failure to repay the loan as per the agreement. It did not end up there, it gave three reasons for its finding: one, termination of an agreement is not an excuse to service the loan so long as the borrower did not dispute existence of the loan and the default; two, exhibits P12 sufficient demonstrated that the appellants were duly notified of the default; and three, allowing the first appellant to shelter servicing the loan in the name 20 of COVID 19 pandemic would paralyses the respondent's banking business. Further, the trial court found that, before the outbreak of COVID 19 in April, 2020 the first appellant had already defaulted to repay the loan. We have examined exhibits PI (facility letter dated 20th December, 2019); exhibit P2 (facility letter dated 27th December, 2019); P3 (facility letter dated 2n d January, 2020); exhibit P4 (deed of assignment of receivables between the first appellant and the respondent dated 21s t December, 2019); exhibit P5 (deed of assignment of receivables dated 27th December, 2019); exhibit P6 (deed of assignment of receivables dated 3rd January, 2020); exhibit P7 directors' guarantee and indemnity executed by the second and third appellants in favour of the respondent on 21s t December, 2019); exhibit P8 (directors' guarantee by the second and third appellants in favour of the respondent dated 27th december, 2019); exhibit P9 ( directors' guarantee and indemnity by the second and third appellants in favour of the respondent dated 3rd January, 2020); exhibit P10 (the bank statement in respect of the first appellant's account 26th September, 2022); exhibit P ll (the demand notice issued by the respondent to the first appellant on 22n d December, 2020); exhibit P12 (the letter of notice issued by the respondent to the second appellant on 21 1s t August, 2022 calling on the guarantee and indemnity of the outstanding sum). The appellants did not dispute that they signed the loan agreements and that the second and third appellants were guarantors. The facility agreements (exhibits PI, P2 and P3) described the respondent as the lender and the first appellant as the borrower. The borrower undertook to pay all present and future monies, debts and liabilities due, owing or incurred by her to the respondent under the agreement. The directors' guarantee and indemnity (exhibits P7, P8 and P9) referred to the first appellant as the borrower, the respondent as the lender and the second and third appellants as the guarantors. The guarantors irrevocably and unconditionally undertook the obligations and liabilities of the borrower under the facility agreements if the first appellant fails, refuse or neglect to repay the loan in terms of the loan agreement. The obligations of a guarantor are well known under the law. It is trite law that, a guarantor's primary responsibility is to repay the borrower's debt in case of default by the borrower, making him fully responsible for the loan's outstanding balance. In Halsbury's Laws of 22 England, 4th Edition, Volume 20, Para 194 at page 124, the law was restated, thus: "On the default o f the principal debtor causing loss to the creditor, the guarantor is; apart from special stipulation ; immediately liable to the full extent o f his obligation, without being entitled to require either notice o f the default or previous recourse against the principal..." Likewise, in Patrick Edward Moshi v. Commercial Bank of Africa [2023] TZCA 170 (4 April 2023) this Court pointed out that, the guarantor's liability under the guarantee agreement crystalized when the borrower defaulted to pay the loan as agreed and not upon receiving a final report on the receivership process conducted by the receivers/managers. On strength of these authorities and for the reasons stated, we are of the view that, as rightly concluded by the trial court, the second and third appellants are liable to pay the outstanding loan plus interest thereon as decreed by the trial court because the borrower, the first appellant, failed to discharge her contractual obligation. The second issue is whether the trial Judge misdirected himself in not finding that, the credit facilities advanced by the respondent to the appellants were frustrated on account of the termination of the first appellant's contract with Vodacom Tanzania Pic and the outbreak of COVID 19 pandemic. This issue addresses the third ground of appeal. Under this heading, we were referred to the cases of M/S Kanyarwe Building Contractor (supra) wherein the High Court persuasively pointed out as to when a doctrine of frustration can be invoked, thus: "The doctrine o f frustration states that where events occur that make the performance o f the contract impossible and these frustrating events are not the fault o f either party then the contract is brought to an end with neither party at fault That doctrine is contained in section 56 (2) o f the Tanganyika Contract Act, Cap. 433 which states that a contract to do an act which after the contract is made becomes impossible, becomes void when the act becomes impossible . " We agree with the persuasive finding of the High Court in the case of NMB v. Seiph Idd Seiph (supra) that, frustration of an agreement is an evidential matter which is to be proved by a party who alleges its 24 presence. However, we are not able to agree with the appellants' assertion on this aspect for two main reasons. First, the appellants pleaded that the agreement between the first appellant and Vodacom Tanzania Pic was terminated by the first appellant following an intention to reduce the commission due to her. This means, the termination was not entirely out of the control of the first appellant. Secondly, as rightly submitted by Mr. Mzikila and properly established by the trial court, at the time of breakout of COVID 19 pandemic, the first appellant was already in default to repay the loan. In view of these facts and the circumstances, we are settled that, the doctrine of frustration was wrongly invoked by the appellants. The third issue is whether the trial Judge erred to hold that the respondent properly followed the procedure for recovery of the outstanding loan amount. The focus here is on the consolidated second and fourth grounds of appeal. This issue should not detain us. It was properly addressed by the trial Judge at pages 488 and 489 of the record of appeal where upon examination of exhibits P3, P ll and P12, he found that the respondent followed the recovery procedure and rejected the appellants' argument 25 that the respondent ought to have resorted to other recovery measures. In justifying its finding, the trial court, at page 488 of the record of appeal, stated that, the argument that the respondent ought to deal with the asset of the first appellant before dealing with the second and third appellants was misconceived and raised out of ignorance as there was no agreement to place the first appellant's properties as collateral for the loan. As regards to the procedure for recovery of the outstanding sum, the trial court was satisfied that the demand notices (exhibits P ll and P I2) issued by the respondent to the first and second appellants sufficed to notify the appellants of the first appellant's default to repay the outstanding loan. However, we noted that exhibit P12 was solely addressed to the second appellant and not the third appellant On cross examination DW2 insisted that she did not to receive any notification on default to repay the loan. Having established that exhibit P l l was duly served on the first appellant, which as a company is manned by the second and third appellants, we are certain that the third appellant was constructively served with the said notice of default. 26 It should be noted that the directors' guarantee and indemnity (exhibits P7, P8 and P9) outlines the procedure for enforcement of the respondent's rights against the guarantors, thus: "7.1 the guarantors jointly and severally agree that the Bank shall proceed to enforce its rights against them immediately upon the happening o f any o f the default events spelt out under the Loan agreement 7.2 I f the guarantors fail, neglect, or refuse to pay within the period specified, the Bank shall have the right to take action against the guarantors under this guarantee without any further notice. " We have no doubt that the procedure outlined above was duly followed by the respondent as exhibited by the contents of exhibits P ll and P12. Exhibit P ll is the demand notice and intention to sue for recovery of the outstanding sum dated 22n d December, 2020. Exhibit P12 is the notice calling on the guarantee and indemnity for the repayment of the outstanding loan. Since it was not disputed that the first appellant defaulted to repay the loan and the notices of default were duly served on the second and third appellants, we are satisfied that, they are liable for the outstanding loan. 27 In the result, we are satisfied that the appeal has no merit and we hereby dismiss it in its entirety with costs. DATED at DODOMA this 12th day of December, 2025. R. J. KEREFU JUSTICE OF APPEAL A. S. KHAMIS JUSTICE OF APPEAL D. J. NANGELA JUSTICE OF APPEAL Judgment delivered this 15th day of December, 2025 via Virtual Court in the presence of the 2n d Appellant and also as principal officer of the 1s t Appellant, Mr. Shukurani Mzikila, learned counsel for the Respondent, in the absence of the 3rd Appellant and Musa Amry, Court Clerk is hereby certified as a true copy of the original. 28