Unique Agro-Industrial Limited vs CRDB Bank Limited & Another (Civil Appeal No. 956 of 2025) [2025] TZCA 1288 (15 December 2025)

IN THE COURT OF APPEAL OF TANZANIA AT PAR ES SALAAM fCORAM: KEREFU. J.A. KHAMIS, 3.A. And NANGELA, 3.A.) CIVIL APPEAL NO. 956 OF 2025 UNIQUE AGRO-INDUSTRIAL LIMITED.............................APPELLANT VERSUS CRDB BANK LIMITED ...................................... ...» 1 st RESPONDENT STEAM GENERATION RECOVERIES LIMITED ......... 2 nd RESPONDENT (Appeal from the Judgment and Decree of the High Court of Tanzania, at Dar es Salaam) ( Kirekiano, J.) dated the 19th day of February, 2025 in Civil Case No. 84 of 2023 JUDGMENT OF THE COURT 3rd & 15th December, 2025 KHAMIS. J.A.: Sometimes in the year 2020, the first respondent advanced to the appellant a loan facility of TZS 958,500,000.00 for the purchase of two brand new cane loaders and towards working capital. The terms of the loan were contained in the facility letter executed between the two on 16th July, 2020. Under the agreement, TZS 808,500,000.00 was for asset financing, while TZS 150,000,000.00 was a working capital. i The loan was secured by a first ranking specific debenture over two cane sugar loaders to be purchased and registered in the joint names of the appellant and the first respondent, the appellant's directors' guarantee and indemnity executed by Fidel is Christian Bashasha and Christina Fidelis Christian, a tripartite agreement between the first respondent, AMCOS, and Kagera Sugar Company Limited as well as a deed of assignment of the contracts proceeds for harvesting sugar cane between the appellant and UWAMMISE AMCOS. The appellant defaulted to repay the loan and was accordingly served with a 30 days' notice of default expressing an intention to exercise the right to take possession and sell the secured assets if the default continued. The appellant successfully requested for restructuring of the outstanding loan and parties executed the deed of variation. Under the new terms, the outstanding sum of TZS 985,529,968.51 was repayable within 36 months from 7th December, 2021 for the asset finance facility and 24 months for the working capital facility. Despite the restructuring, the default persisted, hence the first respondent invoked her remedies under the chattel mortgage by appointing the second respondent to attach and sale the securities. Following the attachment and sell of the secured properties, the appellant filed a suit against the respondents for breach of contract claiming loss of TZS 2,970,348,334.00. It was alleged that, the first respondent acted illegally and unprocedurally in dealing with the securities under the loan facility and that, the first respondent failed to deduct the instalments due under the loan agreement hence a monetary loss to the appellant. In the plaint, it was alleged that, a heavy rainfall, in the year 2021, distorted the process of sugar cane haulage and loading for almost two months rendered the appellant's secured machines to lay idle, a predicament that was timely communicated to the first respondent. The appellant also averred that, the 3 years' tripartite agreement with AMCOS, the first respondent and Kagera Sugar Company Ltd executed as per the terms of the credit facility was not observed by the first respondent. Further, the appellant relied on a 3 clause for force majeure to address the alleged bad weather as a justification for frustration of the agreement. The appellant further pleaded that, Kagera Sugar Factory, a strategic party in the tripartite agreement, encountered a technical fauit leading to reduction of the appellant's production and affected other out growers. The situation allegedly deteriorated in September, 2021 when the factory was completely shut down for major maintenance and repairs. Further, the appellant averred that, the restructured facility agreement did not specify the monthly instalments, although, it stipulated that the outstanding sum was to be repaid within 36 months but without specific monthly quantum. While such payments were regularly made, it was alleged, the first respondent circumvented the agreement and instructed the second respondent to attach and sell the securities before lapse of the contractual period which was contrary to the terms of the facility agreement. Furthermore, the appellant alleged that, the securities were attached and illegally sold without carrying a valuation to ascertain their values at that time as per the terms of the agreement The respondents filed a joint written statement of defence admitting existence of a loan agreement, the restructured facilities and the default by the appellant to pay an outstanding sum of TZS 985,529,968.51. The alleged repayment of loan by the appellant was disputed and to the contrary, the respondents stated that, when the payments fell due, the appellant had no money to pay. The respondents challenged the alleged bad weather and stated that, at no point in time were the appellants' cane loaders laid idle. The weather events mentioned by the appellant, it was claimed, did not form part and parcel of the facility agreement. Generally, the first respondent maintained that, the appellant defaulted to repay the outstanding loan and that, she was justified to exercise her powers under the Chattels Transfer Act, the first respondent appointed the second respondent to auction the securities. It was further averred that the securities were attached and sold as per the required procedure. Four issues were framed and recorded for determination by the trial court: one, whether there was a loan facility agreement between the parties; two, whether there was a breach of the terms and conditions of the loan facility; three, whether the procedure for the 5 disposal of the two crane machines was followed; and four, to what reliefs are the parties entitled to. To address those issues, the appellant presented one witness, Melchieades Rweuyongo Chades (PW1), who tendered two exhibits, a facility letter dated 16th July, 2020 (exhibit P2) and the bank statement for the appellant's account No. 0150516228700 (exhibit P3). On the other hand, Octavian Oiso (DW1), testified for the respondents and produced five documentary exhibits that were admitted into evidence: deeds of variation of the two loan facilities dated 7th December and 4th August, 2021 (exhibits D2); directors' guarantee dated 22n d July, 2020 (exhibit D3); the bank statement for the appellant's account No. 011N516228702 (exhibit D4); two notices of default dated 20th February and 28th August, 2023 (exhibits D5); and a notice of auction published in the Zanzibar Leo Newspaper dated 13th May, 2023 (exhibit D6). At the conclusion of trial, the trial Judge was upbeat that the appellant's claims were not proved and thus, dismissed the suit with costs. Aggrieved, the appellant resorted to filing this appeal premised on four grounds which faulted the trial Judge for: one, holding that there was no breach of contract despite the fact that there was no monthly repayment schedule; two/ failure to analyse exhibits P2, P3 and D2 which led to incorrect determination of the case; three, holding that the procedure for the disposal of the securities was followed contrary to clause 8.2 of exhibit P2; and four, failure to analyse the reliefs claimed by the appellant considering that the testimony of PW1 on specific damages was not challenged by the respondents. At the scheduled hearing of the appeal, the appellant was represented by Mr. David Ndossi, learned advocate, while Messrs. Qassim Mussa Abdallah and Steven Mhando, also learned advocates, teamed up to act for the respondents. Both parties adopted the written submissions in support of their respective positions which were earlier on filed as per rule 106 of the Tanzania Court of Appeal Rules (the Rules) and exercised their right to highlight. Highlighting his submissions, Mr. Ndossi consolidated the first and second grounds of appeal while he separately canvassed the third and fourth grounds. On the consolidated first and second grounds of appeal, he faulted the trial Judge for the alleged failure to analyze exhibits P2, P 3 and D2 leading to incorrect determination of the case. He referred us to page 520 of the record of appeal where the trial Judge referred to exhibit P2 which was set to last for 36 months until January, 2024. He also referred us to the Judge's comments on exhibit D2 which allegedly amended exhibit P2 to reduce the term loan to 24 months which expired on 4th August, 2021. The learned counsel contended that, the trial Judge erred to find that, there was no breach of contract whereas the respondent failed to draft a clear and enforceable loan facility agreement with a clause to outline the monthly repayment schedule as required by the standard practice and applicable laws. Whereas, exhibit P2 indicated the outstanding loan was to be repaid in equal monthly insta!ments/ exhibit D2 showed the repayment was to be done in equal semi annual instalments. He contended that, exhibit P2 violated the requirements of section 53 (a) and (b) under Part VI of the Microfinance Act, Cap. 407 which deals with consumer protection, thus: 8 "53. A microfinance service provider shall ensure transparency and full disclosure of its products and sen/ices by ensuring that the loan agreement: a) is legible and written in simple and understandable language, and b) contains terms and conditions that are transparent, fair and protect the rights o f the borrower. * On the time frame, he argued that, exhibit P2 showed the tenor was 36 months for the asset financing loan and 12 months for the working capital. Through exhibit D2 the term loan for the working capital was varied to 24 months from the date of execution (7th December, 2021) and 42 months for the asset finance reckoned from the date of execution (4th August, 2021). He argued further that, since each term loan had its own time frame for expiration, the securities were prematurely attached and sold as the agreements had not expired. Mr. Ndossi further referred us to item 15 in exhibit P2, exhibit P3 and the evidence of DW1 in asserting that, no act of default had occurred at the time of the attachment and sale of the securities and thus, the respondent's breach of contract. He insisted that, the appellant made deposits in his accounts kept at the first respondent's bank which was deducted from time to time towards repayment of the outstanding loan. He challenged the testimony of DW1 on the automatic deductions on the due dates on the ground that, there was no clear pattern for deductions as evidenced by exhibit P3. On the third ground of appeal, Mr. Ndossi faulted the trial Judge for holding that, the procedure for the disposal of the securities was followed. He contended that, in the exercise of her right under the chattel mortgage, the first respondent acted in breach of its statutory and common law duty by failure to take reasonable care to obtain the best price reasonably obtained which could be achieved by conducting a proper valuation prior to the sale of the two cane loaders. In support of his line of argument, he cited clause 8.2 of exhibit P2 which provided that, the properties pledged as security shall from time to time be subjected to valuation at the borrower's cost to ensure the value of the security adequately covers the total outstanding exposure of the facility by at least 154%. The learned counsel referred the Court to its previous decision in the case of National Bank of Commerce Ltd v. Dar es Salaam Education 10 and Office Stationery Ltd & Another [2005] T.L.R 183, where it was held that: "A mortgagee exercising the power of sale has a duty to act in good faith and to take reasonable precautions to obtain the true market value o f the property at the time of sale." He also cited our decision in the case of Cashew Nut Industry Development Fund v. Pern be Flour Mills Ltd, Civil Appeal No. 56 of 2005 (unreported) for the proposition that, failure to conduct a valuation was a breach of the statutory duty to act in good faith and to take reasonable care to obtain best price reasonably obtained. On the fourth ground of appeal, Mr. Ndossi submitted that the trial Judge erred by failure to analyse the reliefs of specific damages claimed by the appellant. He contended that, the said relief was expressly stated in the witness statement of PW1 and was not challenged by the respondent. He referred us to page 528 of the record of appeal where the trial Judge concluded that the reliefs sought could not be granted as the appellant failed to prove her claims. He argued that, the said i i conclusion was erroneous in view of paragraph 7 and 9 of the witness statement of PW1 who said the act of the respondents to attach and sale the securities at a throw away price in sheer disregard of the tripartite agreement with other companies was a breach of agreement. He also referred us to the witness statement of DW1 and contended that, it lacked any testimonial substance disputing the loss suffered by the appellant as per exhibits P2 and P3. To buttress his assertion, he cited the case of Browne v. Dunn [1893] 6R 67 (HL) for the proposition that, a party who fails to cross examine a witness on a material fact is deemed to have accepted the truth of that testimony. Reliance was also placed on the cases of Shabani Daudi v. Republic, Criminal Appeal No. 28 of 2000 [2004] TZCA 84 (11 March, 2004) TANZLII and Paulina Samson Ndawavya v. Theresia Thomas Madaha, Civil Appeal No. 45 of 2017 [2018] TZCA 218 (12 October, 2018) for the proposition that, unchallenged evidence remains uncontroverted and the court is entitled to rely upon it as credible and truthful. Having adopted the written submissions on record, Mr. Abdallah reviewed history of the parties' contractual relationship and 12 the resulting litigation to the present appeal. In the process, he materially differed with the appellant's counsel submissions. On the first and second grounds of appeal, he contended that exhibits P2 and D2 expressly set out the repayment terms which imposed an obligation to the appellant to repay the loan in instalments, that is monthly equal instalments and semi-annual instalments respectively, while preserving the first respondent's right to demand the immediate repayment upon default. Regarding exhibit P3, he contended that, the bank statement showed irregular deposits and insufficiency of funds in the appellant's account which prevented the first respondent from deducting the due amounts as per the terms of the agreement. He added that, the irregular deposits and insufficiency of funds in the appellant's account constituted a default to repay the loan. Further, the learned counsel submitted that, the contention that, the appellant was exonerated from the obligation to repay the outstanding loan due to the alleged lack of a repayment schedule was immaterial and untenable. He submitted that, the facility agreements stipulated the repayment terms as equal monthly instalments and semi-annual instalments while preserving the first 13 respondent's right to accelerate the repayment upon an act of default. On the alleged failure to analyse exhibits P2, P3 and D2, Mr. Abdallah urged us to ignore the assertion as the trial Judge sufficiently attended to the three exhibits. He contended that, contrary to the appellant's assertion, the trial court carefully considered exhibits P2, P3 and D2 in establishing the substance of the agreed repayment terms under the initial loan agreement together with the deeds of variation, while also evaluated the bank statement (exhibit P3) to assess the appellant's transactional history and the persistent default. On the third ground of appeal, the respondent's counsel referred us to clause 8.2 of exhibit P2 and the evidence of DW1 at page 404 of the record of appeal. On that page, DW1 stated that, the valuation involving the borrower is required only where parties remain in good faith and cooperation. He argued that, given the appellant's failure to honour the terms of the agreement, the first respondent was justified to conduct an independent valuation without involving her in order to protect its interest on the securities. 14 He added that, the respondents' actions, including sale of the cane loaders were executed following issuance of the requisite notices which included a notice of public sale published in the Zanzibar Leo Newspaper (exhibit D6). Further, the respondents' counsel urged us to ignore the appellant's assertion on this ground as she failed to tender a valuation report or any other piece of evidence to substantiate her claim that, the sale price was significantly below the market value or that, the first respondent acted in bad faith. He submitted that, in view of that omission, the trial court correctly found the respondent followed the proper procedure in disposing of the securities. On the fourth ground of appeal, Mr. Abdallah submitted that, specific damages must be specifically pleaded and strictly proved. The mere production of a witness statement or an oral assertion even if unchallenged by way of cross examination does not amount to automatic proof of the damages. He referred us to our decision in Zuberi Augustino v. Anicet Mugabe [1992] T.L.R 137 where it was held that, it is not enough for a party to simply aver a claim for specific damages as the same must be strictly proved. Reliance was also placed on sections 110 and 111 of the Evidence Act, [Cap. 6 R:E 2019] which provides that whoever desires any court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts must prove that those facts exist. We have considered the grounds of appeal, the record of appeal and the counsel rival submissions. The issues that prominently feature for our determination are three: one, whether the trial court was justified to hold that the first respondent did not breach the loan facility agreement; two, whether the trial court was justified to find that the first respondent followed the procedure for disposal of the securities; and three, whether the trial court was justified in refusing to award the special damages to the appellant. To start with, the duty of this Court on an appeal arising from the decision of the High Court in its original jurisdiction falls squarely under rule 36 (1) (a) of the Rules. The said rule empowers this Court to re-appraise the evidence and draw inferences of fact. Therefore, we shall treat the appeal in the context of that rule. On the first issue, we noted that in attending to the issue on whether there was a loan facility between the appellant and the first 16 respondent, the trial court reviewed the pleadings, the testimonies and the exhibits tendered by both sides to establish that, a valid loan agreement existed. Regarding breach of the terms and conditions of the said loan facility, the trial court was convinced that, the deductions from the appellant's account were not subject to an agreed schedule but rather when the repayment date was due, the account had no sufficient funds for deduction by the first respondent. In concluding that the first respondent did not breach the agreement, the trial court observed that as existence of the loan was established, the appellant could only be exonerated if it proved that the loan was repaid. Since, there was no such proof, the first respondent was justified to resort to recovery measures against the appellant. The question is whether these findings as shown at pages 519 and 523 of the record of appeal were justified in view of the evidence on record. The appellant's counsel contended that, had the trial Judge analysed exhibits P2, P3 and D2, he would have arrived at a completely different conclusion. Exhibit P2 is the facility letter dated 16th July, 2020, which shows that the first respondent granted the appellant the sum of TZS 17 958,500,000.00 comprising of TZS 808,500,000.00 as term loan for asset financing and TZS 150,000,000.00 as a working capital. The tenor was 36 months and the repayment was to be made in equal monthly instalments. Exhibit P3 was the bank statement for the appellant's account No. 015050516228700 which covered the period from January 2021 to April, 2023. Exhibit D2 was the first deed of variation dated 7th December, 2021. It amended the tenor of the facility letter for the working capital from 12 months to 24 months. The repayment was changed to equal semi-annual instalments. These three exhibits were examined and analysed by the trial court at pages 516, 517, 518, 519, 520, 521, 522 and 523 of the record of appeal. Upon such analysis, the trial court found that, no evidence was led to prove that the tripartite agreement was signed with the outgrowers and therefore, the first respondent was not bound to involve the parties to the tripartite agreement in the steps to recover the outstanding loan. Therefore, it is not true that the said exhibits were not analysed by the trial court and we see nothing to fault the trial court. The appellant alleged that, the first respondent omitted to include clauses stipulating the modalities of repayment in the deeds of variation. Upon examining the relevant exhibits, we did not find any substance in the assertion by Mr. Ndossi. As rightly submitted by Mr. Abdallah, exhibits P2 and D2 expressly set out the repayment terms. The facility letter dated 16tfl July, 2020 (exhibit P2) which features at pages 416 to 435 of the record of appeal provides that: 'Without prejudice to the continuous right of the Bank to demand repayment o f aii amounts due under this Facility Letter (upon an occurrence of an event o f default as specified under the Facility Agreement) the outstanding term ban facility and any interest accrued thereon from time to time, shall be repaid in equal monthly instalments." [Emphasis added]. The first deed of variation of the loan facility letter dated 7th December, 2021 (exhibit D2) as shown at pages 481 - 489 provides that: 'Without prejudice to the continuous right of the Bank to demand repayment o f all amounts due under this Facility Letter (upon 19 an occurrence of an event o f default as specified under the Facility Agreement) the outstanding facility and any interest accrued thereon from time to timef shall be repaid In equal semi-annual instalments." [Emphasis added]. The first deed of variation to the loan facility letter dated 4th August 2021 which featured at pages 490 - 495 reads that: "Without prejudice to the continuous right of the Bank to demand repayment o f aii amounts due under the Facility Letter (upon an occurrence o f an event of default as specified under the Facility Agreement), the outstanding term loan facility and any interest accrued thereon from time to time, shall be repaid in equal monthly instalments (first instalment to start on 30/08/2021)/' [Emphasis added]. With the above reproduced clauses in the facility letter and the deeds of variation, it is certain that the loan was to be repaid in clearly specified timelines. We therefore, entirely agree with Mr. Abdallah that, the said provisions imposed an obligation on the appellant to 20 repay the loan in either monthly equal instalments or semi- annual equal instalments. As such, there was no breach of agreement on part of the first respondent as rightly concluded by the trial court. The second issue is whether the trial court was justified to find the respondent followed the procedure for disposal of the securities. The standard terms and conditions signed between the appellant and the first respondent which featured at pages 422 to 435 of the record provides for the events of default. The relevant clauses 15.1.1 and 15.1.2 read, thus: "15.1 Without prejudice to the generality of the foregoing , the balance o f the facility together with interest thereon and other charges payable under that facility agreement shall immediately become payable and fall due if: 15.1.1 Failure of the borrower to pay any instalment and such instalments continues to be outstanding for a period of more than thirty (30) days (for the term ban facility). 15.1.2 There are no sufficient deposits in overdraft facility account for thirty (30) days consecutively or the deposits made do not 21 cover the charged interest (for in overdraft facility)." DW1 testified that, the appellant failed to repay the outstanding amount as per the terms and conditions of the variation deeds. PW1 admitted in his witness statement that, there was a delay to pay the outstanding sums and attributed it to the bad weather which paralysed the appellant's operational activities and affected her income. These testimonies established the events of default as per clauses 15.1 of the standard terms and conditions referred to herein above. H ie appellant's counsel contended that, following the default, the respondent was duty bound to value the securities before disposing them. On the other hand, the respondent's counsel submitted that, the valuation could not be conducted where the event of default occurred. It is not disputed that acting on the instructions of the first respondent, the second respondent attached and sold the securities, the two cane loaders and that prior to the said attachment, the notice of default was issued as per exhibit P5 which was published in the Zanzibar Leo Newspaper. 22 In paragraph 21 of the witness statement, DW1 said the first respondent conducted a valuation to determine the value of the securities. On further examination, he stated that, the appellant was not involved in the valuation process as she defaulted to repay the loan. Our reading of clause 8.2 of exhibit P2 shows the same required periodical valuation of the securities at the borrower's cost to ensure that the value of the securities adequately covers the total outstanding exposure of the facility by at least 154% per cent. In our view, the clause required such valuation to be done periodically at the cost of the appellant but not on consultation with the appellant as suggested by the learned counsel for the appellant. In the absence of comparative evidence by the appellant on the values of the machines, it is not possible to justify a claim that the securities were sold at a price below the market value. The last issue is whether the trial court was justified in refusing to award the special damages to the appellant. This issue should not detain us as the prayer for special damages in this case was consequential to the substantive claim for breach of contract. Flowing from the above, it is clear that when the trial court dismissed the 23 appellant's suit for lack of merits it could not go ahead to award damages even if pleaded. In the circumstances, we see no substance in the fourth ground of appeal which must fail. 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 15th day of December, 2025. R. J. KEREFU JUSTICE OF APPEAL A. S. KHAMIS JUSTICE OF APPEAL D. J. NANGELA JUSTICE OF APPEAL Judgment delivered through virtual Court this 16th day of December, 2025 in the presence of Mr. David Ndossi, learned counsel for the Appellant, Ms. Haika Belinda Macha, learned counsel for the Respondent and Ms. Harida Hamis, Court Clerk; is hereby certified as a true c ----- £iJ -----