Gross Investment Limited vs Rehema Hamza Chegeka t/a Ibonike Enterprises (Civil Appeal No. 1441 of 2023) [2025] TZCA 1251 (10 December 2025)

IN THE COURT OF APPEAL OF TANZANIA AT MOROGORO ( CORAM: WAMBALI. J.A.. MAIGE. J.A. And FELESHI. 3.A . ) CIVIL APPEAL NO. 1441 OF 2023 GROSS INVESTMENT LIMITED ................................................... APPELLANT VERSUS REHEMA HAMZA CHEGEKA t/a IBONIKE ENTERPRISES ......... RESPONDENT (Appeal from the Judgement and Decree of the High Court of Tanzania, Commercial Division at Dar es Salaam) (Mbagwa. J.) dated the 15th day of December, 2023 in Commercial Case No. 82 of 2022 JUDGMENT OF THE COURT 2n d & 10th December, 2025 MAIGE. J.A.: In the plaint initiating the suit at the High Court, Commercial Division (the trial court), the respondent represented herself as a natural person trading as Ibonike Enterprises. In the respective capacity, she was claiming against the appellant mainly, for payment of TZS 955,921,572.00 being the outstanding purchase consideration for the building materials she supplied to the appellant. The factual materials constituting her cause of action as per the plaint was that, sometimes between June and September, 2018, she entered into multiple agreements with the appellant for supply of

building materials out of which, she supplied to the respondent building materials worth TZS 328,620,000.00. When the payments became due, she issued several invoices for payment of the amount but in no avail. As a result, she resorted to amicable means to recover her debt which ultimately resulted into signing of the deed of settlement in exhibit P4. It would appear that, the appellant defaulted in terms of exhibit P4 which is why, the respondent commenced the suit at the trial court with the end result of which a judgment in her favour for payment of the outstanding amount pleaded plus interest thereon at commercial rate of 20% was pronounced. Being aggrieved, the appellant instituted the current appeal faulting the decision of the trial court on numerous grounds, which, for the reason which shall be apparent gradually as we go on, may not be relevant to mention. When the appeal came for hearing, Mr. Elisa Abel Msuya, learned advocate appeared for the appellant, whereas his learned friend advocate Donald Mwakingwe appeared for the respondent. Before hearing could take off, Mr. Msuya prayed for leave to present additional grounds of appeal. The prayer having not been objected, we granted it, 2

and, therefore, Mr. Msuya raised two additional grounds based on points of law as follows:

1. The judgment o f the trial court was wrong because it was based on exhibit P4 which was contracted between Ibonike Enterprises Limited, a limited liability company and the appellant.
2. In the alternative, exhibit P4 relied upon by the trial court and forming the basis of the decision is in violation o f section 41(1) and (2) o f the Companies Act. In respect to the first additional ground, Mr. Msuya argued that as the judgment of the trial was based on breach of the deed of settlement in exhibit P4 to which the respondent was not a party, it was fatally erroneous for the trial court to pronounce a judgment in favour of the respondent. In his contention, being a stranger to the deed of settlement, no lawful judgment would have been made in favour of the respondent. He prayed, therefore that, the judgment of the trial court be set aside and the proceedings thereof quashed. In the alternative, it was submitted that, exhibit P4 being a deed of settlement allegedly entered into on behalf of a company, official seal of the respective company was, in terms of section 41(1) of the Company Act, required to be affixed. To the contrary, it was submitted, exhibit P4 does not bear any seal of the company. It further contended 3

that, while under section 41(2) of the Companies Act seal of the company has to be witnessed by two directors or one director and a company secretary, in this matter, it was witnessed by one director. The cumulative effect, in his contention, is to render exhibit P4 not a valid document of the company capable of being relied upon in evidence. Mr. Msuya thus implored the Court to allow the appeal. In response, while conceding that the respondent was not a party to exhibit P4, it was Mr. Mwakingwe's submission that in the interest of justice, the judgment of the trial court should not be nullified but the merit or otherwise of the claim should be considered based on other evidence. In respect to the second additional ground, Mr. Mwakingwe submitted that it was not appropriate for the same to be raised at this stage. In his humble view, it should have been raised during production of the same in evidence in order that the respondent would be heard on the issue. He, therefore, urged us not to consider it. In his brief rejoinder, Mr. Msuya submitted that the suit cannot be determined based on other evidence because the only issue at the trial court was whether the respondent breached the terms and conditions of 4

exhibit P4. On the second additional ground, he repeated what he submitted in chief. We have examined the record of appeal and duly considered the rival submissions. It is common ground that, the suit before the trial court as per the plaint and the judgment, was between the respondent herein trading as "Ibonike Enterprises" and the appellant. Importantly, the respondent described herself as per the plaint, as a natural person. Conversely, the deed of settlement in exhibit P4, the breach of which was the basis of the respondent's cause of action was executed by "Ibonike Enterprises Limited" which described itself as a company duly incorporated and existing under the laws of the United Republic of Tanzania. In line with that, it was express in the judgment of the trial court that, the respondent was a legal person. With the above facts and the respondent being neither a party nor privy to the deed of settlement in exhibit P4, a judgment arising therefrom could not be pronounced in her favour. This is because, it is an elementary position of the law that a stranger to a contract cannot sue upon it unless he is given statutory right to do so. See for instance, Austack Alphonce Mushi v. Bank of Africa Ltd and Another (Civil Appeal No. 373 of 2020) [2021] TZCA 521 (27 September 2021, Tanzlii). 5

Therefore, Ibonike Enterprises Limited being a juristic person had, in view of the principle in the famous case of Solomon v. Solomon [1897] AC 22, MLCL, a separate legal personality from the respondent so that the latter could not, in the absence of express authority from the said company, institute a claim on its behalf. As the suit was substantially based on a breach of the deed of settlement in exhibit P4 to which the respondent was irrefutably neither a party nor privy, there is no way that the suit at the trial court could have been validly determined based on other pieces of evidence as submitted for the respondent. In that regard, we find that the suit before the trial court was, insofar as it was brought by a person with no suable interest, untenable and it ought to have not been determined on merit. Instead, it should have been rejected right from the outset under Order Vii rule (11) (c) of the Civil Procedure Code. On that account, we find the first additional ground of appeal with merit and allow it. As the suit before the trial court was unmaintainable for want of suable interest, we find it inappropriate to consider the remaing grounds of appeal. As a result, we nullify the proceedings of the trial court and set aside the decree and substitute it with an order 6

rejecting the plaint. We shall, in the circumstances of this appeal, not make an order as to costs. DATED at MOROGORO this 8th day of December, 2025. F. L. K. WAMBALI JUSTICE OF APPEAL I. J. MAIGE JUSTICE OF APPEAL E. M. FELESHI JUSTICE OF APPEAL Judgment delivered this 10th day of December, 2025 in the presence of Mr. Elisa Abel Msuya, learned advocate for the appellant, Ms. Ester Peter holding brief for Mr. Donald Mwakingwe, learned advocate for the respondent and Ms. Jasmin Kazi, Court Clerk through Visual Court; is hereby certified as a true copy of the original. A. L. KALEGEYA DEPUTY REGISTRAR COURT OF APPEAL 7