CRDB Bank Plc & Another vs Asina Mfaume Kawawa (Civil Appeals No. 72 and 73 of 2019) [2025] TZCA 1174 (6 November 2025)

IN THE COURT OF APPEAL OF TANZANIA AT DODOMA fCORAM: NDIKA. J.A.. KIHWELO. 3.A. And NGWEMBE. J.A.^ CIVIL APPEALS NO. 72 AND 73 OF 2019 CRDB BANK PLC ............. ............................ ........... ...... 1 st APPELLANT DAMISI RAJABU BILALI (As administrator of the Estate of the Late SALUM ABDALLAH SALUM)..... .................. 2nd APPELLANT VERSUS ASINA MFAUME KAWAWA ......................... . .................. . RESPONDENT (Appeal from the decision of the High Court of Tanzania at Dodoma) (Mansoor, J.) dated the 23r d day of February, 2018 in Land Case No. 1 of 2016 JUDGMENT OF THE COURT 6th October & 6th November, 2025 KIHWELO, J.A.: On 23r d February, 2018 the High Court of Tanzania at Dodoma in Land Case No. 1 of 2016 ("the suit") between the respondent as Plaintiff by then and the appellants herein as welt as another person not a party to this appeal as Defendants, pronounced judgment in favour of the respondent and ordered as follows: i 1. The sale o f House No. 34 MHmani Area Dodoma Municipality made by a Public Auction on 2&h November, 2011 is null and void. 2. The Plaintiff is awarded general damages to the tune TZS. 300,000,000.00 to be paid by the 1st defendant for the purposes o f bringing the Plaintiff in the original position she was before the 1st defendant breached the agreement 3. CRDB Bank , the 1st defendant herein shall pay the Plaintiff interest on the entire decretal amount at the court's rate from the date o f the decree until the date the decree is satisfied in full. 4. Costs o f this suit shall be borne by the 1st defendant, and be paid to the Plaintiff. At the outset, it is imperative to briefly give a historical account of this matter, which is, apparently, not very difficult to grasp. The respondent herein and her husband the late Rashid Mfaume Kawawa incorporated a limited liability company styled as Kawasina Company Limited (the Principal Debtor). The duo were its sole directors and shareholders. Apart from that, they jointly acquired and owned landed property described as, Plot No. 34 Mlimani Area within Dodoma Municipality under the Certificate of Title No. 15736-DLR and LO. No. 96253/15906 (henceforth "the suit property"). It occurred that, the Principal Debtor applied for a loan facility from the first appellant to the tune of TZS. 350,000,000.00 for the purposes of construction of apartments for residential and rental purposes. The first 2 appellant having accepted the request, it issued a Loan Facility Letter (the loan agreement) in favour of the Principal Debtor on 1s t October, 2009. As security for the loan facility, the respondent and her late husband Rashid Mfaume Kawawa mortgaged the suit property. Each of them also executed a Personal Guarantee and Indemnity. It was agreed that, the Principal Debtor was to engage a competent contractor and a project consultant who were to be accepted by the first appellant, and the Principal Debtor was duty bound to submit a contract between itself and the contractor. In compliance with the contractual terms, the Principal Debtor submitted a contract between itself and Kuringe Contractors Co Ltd, a registered limited liability construction company engaged by the Principal Debtor on 17th April, 2009 to construct a single slab floor, block work, roofing and including finishing works. The first appellant, in compliance with the terms of the loan agreement on 23r d December, 2009 disbursed the first tranche of TZS. 74,962,737 which was paid directly to Kuringe Contractors Co. Ltd. Sadly, sometimes in December, 2009 the late Rashid Mfaume Kawawa the co director and shareholder of the Principal Debtor passed away leaving the company with one director who was also the sole shareholder. Quite unfortunately, the second director and shareholder of the Principal Debtor could not be appointed in time, resulting in the affairs of the company being halted and the bank did not disburse the loan in tranches as scheduled in the loan agreement. A dispute ensued between the first appellant and the respondent as the first appellant issued a demand notice to the respondent for an immediate payment of T7S. 102,623,321.94 being arrears of the principal sum and interest owing to the first appellant from the date of default. The respondent, according to the demand notice, was given thirty (30) days within which to settle the outstanding amount else the property would be auctioned. Later on, the deadline was extended to 31s t October 2011 and by then the outstanding amount stood at TZS. 121,815,999.04. As the respondent did not honour the demand the first appellant appointed Comrade Auction Mart & Court Brokers (the Auctioneer) to sell the property by public auction. To that end, the Auctioneer advertised the public auction in the newspaper following which the second appellant emerged the highest bidder during the public auction conducted on 26th November, 2011. Finally, the property was transferred and registered in the second appellant's name having complied with all the requirements. The respondent attempted to keep off the public auction by lodging Miscellaneous Land Application No. 90 of 2011 before the High Court of Tanzania at Dodoma for an injunctive relief which was successfully granted on 24th November, 2011 two days before the auction day on 26th November, 2011. Unfortunately, the auction went ahead as planned as hinted before owing to what the first appellant and the Auctioneer stated that they were unaware of the injunction order which was applied and granted ex parte. Based on the foregoing, the respondent lodged the suit before the High Court against the first and the second respondent along with the Auctioneer as third defendant claiming among other things declaration that the sale of the property by the appellant was null and void. The respondents in their written statements of defence stoutly denied the allegations and justified their conduct in that they were entitled to exercise their power of sale of the property. The trial court framed four issues for determination at the trial, namely: 1. Whether there was full disbursement o f the loan to the plaintiff. 2. Whether there was a default in loan repayment 3. Whether the procedure for the sale o f the mortgaged property was adhered to. 4. To what reliefs are the parties entitled to. Having scrutinized the evidence on record and considered the submissions of the learned trained minds, the trial court determined all the framed issues in favour of the respondent. On the first issue, the trial 5 court held that, the first appellant released only TZS. 74,000,000.00 but refused to disburse the second and subsequent tranches without giving any explanation, and that amounted to breach of contract. On the second issue, the trial court held that, the first appellant did not assign any reasons as to why they refused to disburse subsequent tranches, thus making the first appellant in default of the entire agreement and therefore, the respondent was not in default. As far as the third issue is concerned the trial court held that, since there was no default on the part of the respondent or the Principal Debtor and because the remaining guarantor did not fail to pay the outstanding debt, the first appellant erroneously embarked on recovery processes and everything that followed was illegal and void ab initio. As regards the fourth issue, the trial court took the view that, having found that the first appellant did not perform part of its bargain, it entered judgment in favour of the respondent and ordered as hinted earlier on. The appellants now seek to overturn the judgment and decree of the High Court on several points of grievances. Initially, the first appellant lodged in Court Civil Appeal No. 72 of 2019 with six grounds of grievance as follows: 1. The learned High Court Judge grossly erred in law in holding that the respondent had locus standi to sue the appellant; 6 2. The learned High Court Judge grossly erred in law in holding that the appellant had committed breach o f contract or promise to give loan arbitrarily or mala fide or with oblique motive; 3. The learned High CourtJudge grossly erred in law by ignoring the appellant's assertion that the respondent, being the only remaining Director o f Kawasina Company Limited\ was required under the law to appoint another Director so as to be in compliance with the Companies Act, 2002 before being given the remaining amount o f loan; 4. The learned High Court Judge grossly erred in law by holding thatpayment o f the loan was to come from the rents obtained after completion of the project; 5. The learned High Court Judge grossly erred in law by holding that there was no any default on repayment o f loan; 6. The amount decreed by the learned High Court Judge against the appellant is colossal and wholly unsubstantiated. Later on, the second appellant lodged in Court Civil Appeal No. 73 of 2019 with three grounds of grievance as follows: 1. The trial Judge erred in law and in fact in deciding that the sale by way o f public auction of Plot No. 34 Miimani Area, Dodoma Municipality o f the appellant being the highest bidder was illegal; 2. The trial Judge erred in law and in fact in deciding that the transfer o f Plot No. 34 Miimani Area, Dodoma Municipality of the appellant was illegal and void ab initio; and 3. The trial Judge erred in law and in fact by completely failing to subject the entire evidence adduced by the appellant to evaluation hence reaching to an erroneous decision. Ahead of dealing with the substance of the appeal, it is essential to state that, on 12th March, 2025 when Civil Appeal No. 72 of 2019, CRDB Bank Pic v. Asina Mfaume Kawawa and Civil Appeal No. 73 of 2019, Salum Abdallah Salum v. Asina Mfaume Kawawa were called on for hearing, we invited the parties to address us on whether the two appeals should be consolidated or not. Ultimately, and in terms of rule 110 of the Tanzania Court of Appeal Rules, 2009 ("the Rules"), we were of the opinion that consolidation of Civil Appeal No. 72 of 2019 and Civil Appeal No. 73 of 2019 will be in the interests of justice and therefore, on 25th March 2025, we ordered the two appeals be consolidated into one. We heard the parties on 6th October, 2025 and Mr. David Pongolela and Mr. John Seka both learned counsel appeared representing the first and second appellants respectively, while Mr. Jeremia Mtobesya, learned counsel appeared for the respondent. In terms of rule 106 (1) of the Rules, the first appellant lodged written submissions in support of the appeal to which Mr. Pongolela prayed to adopt them but the second respondent did not lodge any written submissions while the respondent, in terms of rule 106 (7) of the Rules, lodged written submissions opposing the appeal. However, Mr. Mtobesya prayed for and obtained leave to 8 abandon the written submissions and instead make oral submissions in accordance with the Rules. In support of the first ground of appeal Mr. Pongolela contended that, the respondent was not party to the loan agreement as the same was between the appellant and the company and it is common knowledge that, a person who is not a party to the contract cannot sue on it. He cited to us the case of Tweddle v. Atkinson [1861] QB 393 and Dunlop Pneumatic Tyre Co. Ltd v. Selfridge & Co. Ltd [1915] AC 847 for the proposition that, only parties to the contract can receive rights or be bound by duties under it. It was his submission that, it was erroneous for the High Court Judge to come up with the findings that the respondent brought an action against the appellant and others as the mortgagee and she had focus standi to sue the appellant as a guarantor. In support Mr. Seka submitted that, the suit at the High Court had four issues for determination and there was no way out these issues could sufficiently be determined in the absence of the Principal Debtor. On the adversary side, Mr. Mtobesya had an opposing argument He spiritedly argued that the essence of the suit before the High Court was in relation to the property in dispute which belonged to the respondent and her late husband Rashid Mfaume Kawawa them being guarantors to the loan agreement. In further response to this criticism, 9 Mr. Mtobesya submitted that, the liability of the guarantor in the loan agreement like the one in the instant appeal co-exists that of the principal debtor and therefore, he was of the considered view that the respondent had focus standi to sue the appellant and others. Elaborating, Mr. Mtobesya argued that the High Court Judge discussed at considerable length the issue of the respondent's locus stand/ and came to the conclusions that the respondent had locus to sue. On our prompting as to why the plaint mainly referred to the loan agreement between the first appellant and the Principal Debtor and not the Personal Guarantee and Indemnity executed between the appellant on one hand, and the respondent and her late husband on the other, Mr. Mtobesya admittedly argued that to a large extent the plaint refers to the loan agreement which was the basis of the dispute and to him this is sufficient to give the respondent locus standi to sue the appellants. After a careful consideration of the submissions of the learned trained minds, the issue before us is a narrow one and that is whether the High Court Judge erroneously held that the respondent had locus standi to sue the appellants. Put differently, was the non-joinder of the Principal Debtor a serious matter in the appeal before us? The answer to this question lies in the provision of Order 1 rule 9 of the Civil Procedure Code, Cap 33 R.E. 2023 ("the CPC"), which provides that, a suit cannot 10 be defeated for the reason of misjoinder or non-joinder of parties, but every case must be decided according to the circumstances prevailing in that particular case. We are equally, mindful of the peremptory principle of law that, where the court discovers that a necessary party has not been joined in the suit and neither the plaintiff nor the defendant is willing and ready to apply to have such a party added, the court is duty bound to direct that such a party be added. There is, in this regard, a considerable body of case law, See, for instance Tanga Gas Distributors Ltd v. Mohamed Salim Said and Two Others [2011] TZCA 583 TANZLII and NUTA Press Limited v. MAC Holdings and Another [2021] TZCA 665 TANZLII. We are at one with Mr. Seka that looking at the Plaint on record, it is a result of badly pleaded case in which the Principal Debtor was not impleaded while a number of paragraphs referred to the loan agreement. All in all, in view of the settled position of the law particularly Order 1 rule 9 of the CPC, and the circumstances obtained in this case we are of the considered opinion that, the respondent had standing to sue and what was before the High Court was sufficient to enable it fairly, completely, effectively and adequately adjudicate upon the matter in dispute which was challenging the sale of the suit property that was security for the loan which the Principal Debtor secured. The basis for our deliberation is that, li there were no issues that were raised and remained unanswered. There is a stark contrast between cases in which there are issues raised and remain unanswered and cases in which there are no issues raised and remain unanswered like the one before us. On that basis we find that this ground has no merit. Next, we will deliberate on the second ground whose complaint is that the High Court Judge erred to hold that the first appellant breached the contract or promise to give loan. Arguing in support of this ground, Mr. Pongolela contended that, it was erroneous and wrong for the High Court to come up with a finding on default of the loan agreement in the absence of the Principal Debtor which executed the loan agreement with the first appellant as the respondent was a mere guarantor or mortgagee and therefore privy to the loan agreement. Elaborating, he argued that, the duty of the court is to interpret and enforce contracts but only between parties to it and not otherwise. He was thus, of the strong view that, the respondent was not privy to the loan agreement and as a guarantor was party to the Personal Guarantee and Indemnity and the Principal Debtor did not complain about not being given subsequent tranches or at all. He further argued that, it is common ground that the contract between the first appellant and the Principal Debtor was expressly clear 12 that the loan had a grace period of 6 months from the date of the first disbursement which was on 23r d December, 2009, and therefore, repaying the loan was to commence from the expiration of the grace period of 6 months forthwith and quite unfortunate the Principal Debtor did not discharge its obligation until when the suit was lodged in court, the learned counsel emphasized. In response, Mr. Mtobesya was fairly brief. He submitted that, since the purpose of the loan was for project financing, therefore, failure to disburse subsequent tranches was a breach of contract and therefore, the High Court Judge was right to hold that the appellant breached the contract or promise to issue loan arbitrarily. In his further submission, Mr. Mtobesya argued that there was no justification for the first appellant to recall the loan prematurely and therefore, there was no legality for the respondent to sell the suit property in the absence of the breach. Upon our prompting on the applicability of clause 5.1 of the loan agreement whose substance is on grace period of 6 months of repaying the loan from the date of the first disbursement, Mr, Mtobesya, initially appeared momentarily thrown, but recovered quickly and insistently reiterated that since the loan was meant for project financing then it was incumbent upon the first respondent to finance the project to its finality. 13 In the light of the foregoing submission, the vexing issue which stands for our determination is whether or not the first appellant breached the contract. We think, it is appropriate that we set out the relevant parts of the loan agreement to put matters into their right perspectives. It reads: "2. PURPOSE OF THE LOAN To finance construction costs of two units of double storeys commercial /residential Building on Plot. No. 34, Miimani Area, Dodoma Capital City. 3. CREDIT PERIOD No. of Months: 66 Expiry Date: 31s t March, 2016 4. RATE OF INTEREST The rate of interest shall be seventeen (17) per cent per annum accrued daily on the outstanding balance and charged to the account monthly. The rate of interest agreed herein may be varied at any time and the change of interest shall be communicated to the Borrower individually to his/her last known address or by publication at the Bank's respective branch. 5. GRACE PERIOD AND PAYMENT OF INTEREST a. The loan shall have a grace period of 6 months from the date of first disbursement. b. The interest rate charged during the grace period shall be payable in the following manner as it accrues. 6. DISBURSEMENT: a. Pre-disbursement 14 The Borrower shall comply with the following pre-disbursement conditions: (a) The Borrower shall execute all relevant documents. (b) The Borrower shall change the land use from residential purpose to commercial/residential purpose. (c) The Borrower shall engage competent contractor and project consultant who are acceptable to the Bank before any disbursement of the term loan. (d) The Borrower shall submit the contract between the contractors prior to any disbursement. (e) The Borrower shall open and operate business account as shall be advised by the Bank. b. Disbursement After complying with pre-disbursement conditions, the borrower shall follow the procedure outlined herein below when accessing disbursements. (a) The Bank shall disburse the loan funds in tranches. All subsequent tranches shall be allowed after the Bank has assessed the construction development and being satisfied with utilization of the former tranches. (b) All disbursement shall be against the certificates issued by the Contractor and verified by the Project Consultant. c. Disbursement Schedule (a) The Loan will be disbursed in tranches upon verification that the previous disbursement was used for the intended purpose. The Bank reserve the right to vary the disbursement arrangement. (b )The Loan amount drawn will not exceed the amount agreed in the loan facility letter. The Bank reserves the right not to disburse the entire loan amount or any part thereof if the business or project costs indicate that no more money is needed." 15 Quite clearly, the excerpt above is unambiguous that the purpose of the loan was to finance construction costs for a commercial/residential building. It is further to be noted that, the loan had grace period of 6 months from the date of the first disbursement which in this case was on 23rd December, 2009 when the first tranche of TZS. 74,962,737 was paid directly to Kuringe Contractors Co. Ltd, the contractor engaged in compliance with the contract. It was an express term of the contract that all subsequent tranches were to be allowed after the first appellant has assessed the construction development and being satisfied with utilization of the former tranches. It was a further express term of the contract that disbursement was to be subject to the contractor issuing certificates which were to be verified by the project consultant. Quite unfortunately, and for an obscure cause none of the above were complied with by the Principal Debtor and therefore, the first appellant exercised the right to vary the disbursement and recall the loan in accordance with the contract. We therefore, find considerable merit in the submission by Mr. Pongolela that the first appellant did not breach the terms of contract and in the contrary, it is the Principal Debtor which breached the contract and the first appellant was right to go for the legal mortgage charged as security to recover the loan under the terms of the guarantee and powers of sale in the Deed of Mortgage. 16 It is a peremptory principle of law that, contracts belong to the parties who are free to negotiate and even vary the terms as and when they choose. We took this view in the case of Abualy Alibhai Azizi v. Bhatia Brothers Ltd [2000] T.L.R. 288. In that case, we quoted with approval the principle of Sanctity of Contract as stated in Chitty's Law of Contracts, Volume 1, 24th Edition at page 5 where it is stated that, the law is consistently reluctant to admit excuses for non-performance where there is no incapacity, no fraud (actual or constructive) or misrepresentation, and no principle of public policy prohibiting enforcement. We made corresponding observations in the case of JNM Mining Services Ltd v. Mineral Access Systems Tanzania Limited [2022] T7CA 686 TANZLII in which the appellant did not issue notice of termination of contract as required under it prior to formal termination of contract and we found that to be a total disregard of the contractual obligation. We therefore, find this ground laudable. Next, we consider the third ground of appeal, faulting the High Court for ignoring the fact that the respondent being the sole director of the company was duty bound under the law to appoint another director. Arguing in support of this ground, the learned counsel contended that it was unsafe for the first respondent to continue with disbursement knowingly that the company was illegally operating. In his further submission, and while drawing our attention to the observation of the 17 High Court at pages 395 and 396 of the record of appeal, he was of the considered view that, it was erroneous for the High Court Judge to blame the first appellant for not assisting the family of the late Rashid Mfaume Kawawa in appointing another director knowingly that the first respondent had neither mandate nor obligation to do so. He urged us to disregard this complaint as baseless. On the adversary side, Mr. Mtobesya was quick to respond and argued briefly that, death of one director was not the sole reason for withholding the disbursement and submitted that, there was no justification in withholding the disbursement. In our view, this criticism need not detain us, our evaluation of the record of appeal and considering the contending submission, we find validity in the submission by the learned counsel for the first appellant that, the first appellant had neither mandate nor legal obligation to assist the family of the late Rashid Mfaume Kawawa to appoint the second director. That mandate was left upon the family of the late Rashid Mfaume Kawawa and the respondent in terms of the Companies Act, Cap 212 as well as the Articles of Association of the Principal Debtor. We equally find this ground to be meritorious. In the fourth ground of appeal the criticism is on the misconception on the part of the High Court which made assumption that since the 18 purpose of the loan was on project finance, then obviously payment of the loan would have begun after the completion of the project. In response to this ground, Mr. Mr. Pongolela did not argue it at considerable length but merely reiterated the submissions made earlier on that, the terms of the loan agreement between the first appellant and the Principal Debtor were very clear referring us to page 2 clause 5 of the loan agreement in which parties agreed that payment would commence after the grace period of 6 months from the date of first disbursement which was on 23r d December, 2009. Mr. Mtobesya argued in response to this ground that, in terms of clause 2, 6 (1) (e) and 11 (1) of the loan agreement as well as the payment schedule the loan was to be serviced from proceeds of rent after completion of the construction. Referring us to page 390 of the record of proceedings, he strongly argued that, the loan agreement was meant to be a project finance and therefore, repayment of loan was to come from the rent after project completion. We must express our rather being surprised by Mr. Mtobesya's argument in respect of this ground which in our view is a total misconception. As we stated earlier on, and according to the express terms of the loan agreement we have reproduced above, clause 5 which is on grace period and payment of interest in particular subclause 1 the 19 loan agreement expressly provides that, the loan shall have a grace period of 6 months from the date of first disbursement, and therefore, the argument that repayment of loan was to come from the rental income after project completion is a total misapprehension. Furthermore, we must express more in sorrow than in anger that, where there are express terms of the contract the court cannot make invention, inference or assumption. It bears reaffirming that, the function of courts is to enforce and give effect to the intention of the parties as expressed in their agreement. For better or worse, courts must do their best to give proper meaning to the terms of contract. Lord Steyn, put it extra-judicially, in Democracy Through Law: Selected Speeches and Judgments (2004) 225-226 cited in A New Thing Under the Sun? The Interpretation of Contract and ICS Decision written by Lord Bingham of Cornhill in a paper delivered at the University of Edinburgh on 4th March 2008. "A thread runs through our contract law that effect must be given to the reasonable expectations of honest men... The function o f the taw o f contract is to provide an effective and fair framework for contractual dealings ." We wholly subscribe to the above passage to be the correct position of the law. We are therefore at one with Mr. Pongolela that, it was 20 erroneous for the High Court to come up with findings which were not backed by the express terms of contract. Put it differently, the High Court resorted in extraneous matters not on record. This ground too has merit. We will next deliberate on ground five which in our considered opinion presents no difficulty. In this ground the counsel for the first appellant is faulting the High Court for finding that the loan was recalled prematurely. He took the view that, since the Principal Debtor breached the terms of the loan agreement as we have exhaustively discussed at considerable length earlier on, the first appellant was justified in recalling the loan as it did and in line with the terms of the loan agreement. Mr. Mtobesya in response to this ground did not have much useful to submit apart from reiterating that the recalling of the loan was prematurely done and the High Court was justified in holding that the first appellant breached the contract. As we pointed out above, this does not require us travelling a long distance for the reasons that we have decidedly held that the first appellant did not breach the contract and in the contrary, it is the Principal Debtor that breached the contract and therefore, the first appellant was justified in recalling the loan since the company did not repay the loan up until when the recovery process was done despite seeking extension of time to repay the loan. We find merit in the submission by Mr. Pongolela 21 that the High Court was erroneous and wrong to find that the loan was recalled prematurely. We take inspiration from the statement by Lord Goff of Chieveley put it, extra-judicially in the "Commercial Contracts and the Commercial Court" [1984] LMCLQ 382 at page 391: "We are there to help businessmen ; not to hinder them, we are there to give effect to their transactions, not to frustrate them , we are there to oii the wheels o f commerce, not to put a spanner in the works, or even grit in the oii." The first appellant whose core business is banking and based upon the terms of the loan agreement had no option but to recall the loan as required by contract and that cannot be said to have been recalled prematurely. This ground too is laudable. In relation to the six ground of appeal whose criticism is on the award of general damages to the tune of TZS. 300,000,000.00 without there being any justification, Mr. Pongolela contended that, there was no any justification for awarding the amount stated to the respondent while pleadings and evidence on record did not demonstrate that the respondent suffered any loss which was occasioned by the first appellant. He was of the view that, it was erroneous for the High Court to award general damages and interest which was wholly unsubstantiated. In all, Mr. Pongolela urged us to allow the appeal with costs. 22 In response Mr. Mtobesya conceded with remarkable forthrightness that, the amount of TZS. 300,000,000.00 which was awarded by the High Court as general damages was excessive, but was quick to argue that the respondent was entitled to general damages anyway. In the foregoing, we find considerable merit in the submissions by the learned counsel for the first appellant that, the award of general damages to the tune of TZS. 300,000,000.00 was wholly unsubstantiated. We have read the record of proceedings carefully and found out that there is nothing on record to substantiate the award of damages which the High Court made and there is no plausible explanation to that effect besides vaguely stating that, it was awarded for the purpose of bringing the plaintiff in the original position. It has long been established and there is ample authority for saying that, general damages are generally at the discretion of the court based on specific circumstances of the case. However, this discretion is not arbitrary and must be exercised reasonably to provide fair compensation. We grappled with an akin situation in the case of Tanzania Saruji Corporation v. African Marble Company Limited [2004] T.L.R. 155 at pages 157 and 158 while quoting with approval the case of Stroms Brucks Aktic Bolag v. John and Peter Hutchinson [1905] AC 515 and we stated with sufficient lucidity that: "General damages are such as the law will presume to be the direct, natural or probable 23 consequences o f the act complained of; the defendant's wrong doing must; therefore, have been a cause , if not the sole or a particularly significant, cause o f the damage." In the authority of the foregoing decisions, even if we assume for the sake of argument that the first appellant breached the contract, which is not the case as articulately deliberated above, we are settled in our mind that the High Court was erroneous to award the respondent the colossal amount without substantiating it. This ground also succeeds. Now, we will turn to the deliberations of the grounds of appeal raised by the second appellant. For the sake of convenience and clarity we shall deal with the first and third grounds of appeal together as the issues are closely related. In these grounds the common complaint is the sale by public auction of the suit property and ultimate transfer to the second appellant which the High Court declared null and void. Mr. Seka assertively argued that the doctrine of bona fide purchaser for value is not abstract as such the second respondent being a bona fide purchaser for value without notice was protected under the provisions of sections 131 and 135 of the Land Act, Cap 113 ("the Land Act") and therefore, the High Court erroneously nullified the sale of the suit property to the second appellant since there was nothing to indicate any fraud, collusion or anything up until the time when the transfer process was accomplished. There was not even a caveat, Mr. Seka argued. Reliance was placed on the case of Suzana Waryoba v. Shija Dalawa [2019] TZCA 66 TANZLII which also cited our earlier decision in Stanley Kalama Masiki v Chihiyo Kuisia w/o Nderingo Ngomuo [1981] T.L.R. 143 in which we discussed the rights of the bona fide purchaser for value. Mr. Seka urged us to allow the appeal and the second appellant be exonerated from any liability. On his part, Mr. Mtobesya was fairly brief in response. He submitted that, since there was an injunction which was issued in Miscellaneous Land Application No. 90 of 2011 before the High Court of Tanzania at Dodoma on 24th November, 2011 two days into the auction day on 26t h November, 2011 hence the second respondent cannot be protected by section 135 of the Land Act, since there was no title to pass in the circumstances. He prayed for the appeal by the second appellant to be dismissed. Our starting point in the deliberation of this ground, we think, should involve reproduction of the relevant provisions of section 135 of the Land Act which provides that: "135- (1) This section applies to- (a)A person who purchases mortgaged land from the mortgagee or receiver, excluding 25 a case where the mortgagee is the purchaser. (b) N/A (2) A person to whom this section appiies- (a) is not answerable for the loss, misapplication or non-application o f the purchase money paid for the mortgaged land; (b) is not obliged to inquire whether there has been a default by the mortgagor or whether any notice required to be given in connection with the exercise of the power o f sale has been duly given or whether the sale is otherwise necessarily, proper or regular. (3) A person to whom this section applies is protected even if at, any time before the completion o f the sale, has actual notice that there has not been default by the mortgagor, that a notice has not been duly served or that the sale is in some way unnecessary, improper or irregular, except in the case o f fraud, misrepresentation or other dishonest conduct on the part o f the mortgagee o f which that person has actual or constructive notice." Time without number we have discussed the right of the bona fide purchaser for value without notice. See, Godebertha Rukanga v. CRDB Bank Ltd and 3 Others [2021] TZCA 72, Tanzania Commercial Bank Pic (Formerly known as Twiga Bancorp) and Others v. Mrs. 26 Shakila Parves and Another [2023] TZCA 17794 and Stanley Kalama Masiki v Chihiyo Kuisia w/o Nderingo Ngomuo (supra). In the case of Stanley Kalama Masiki we observed that: "... where an innocent purchaser for vaiue has gone into occupation and effected substantial development on land the courts should be slow to disturb such a purchaser and would desist from reviving stale claims." The rationale for protecting a bona fide purchaser for value is not far-fetched as we pronounced ourselves in the case of Peter Adam Mboweto v. Abdallah Kulala and and Mohamed Mweke [1981] T.L.R. 335 in which we aptly stated that: "If a reversal o f the decree would Invalidate sale, there would be less inducement in any intending purchaser to buy at an auction sale thus depreciating sale prices and there will also be no degree o f certainty as a purchaser cannot be expected to go behind a judgment to inquire into the irregularities." Now reverting to the matter before us, records bear out that, the first appellant followed all the procedures as required by law and all documents that the respondent and the Principal Debtor executed to secure the loan. A demand notice to the respondent for an immediate payment of arrears of the principal sum and interest was issued and the 27 respondent was given thirty (30) days within which to settle the outstanding amount else the suit property will be auctioned. This deadline was later on, extended to 31s t October, 2011 but since the Principal Debtor did not honour the demand the first appellant appointed the Auctioneer to sell the property by public auction. To that end, the Auctioneer advertised the public auction in the newspaper following which the second appellant emerged the highest bidder and the suit property was registered in his name having complied with all the requirements. At some point, the respondent attempted to keep off the public auction by lodging the case before the High Court for injunctive reliefs which were granted. Unfortunately, the auction went ahead as planned since the first appellant and the Auctioneer stated that they were unaware of the injunction order which was applied and granted ex parte. In the circumstances, we find that the High Court erroneously nullified the sale and transfer of the suit property without paying regard to the interest of the bona fide purchaser for value. Regrettably, and for an obscure cause the judgment of the High Court is conspicuously silent on the rights of the bona fide purchaser for value. Thus, this ground too has merit. In the fourth ground of appeal Mr. Seka faults the High Court for not properly evaluating the evidence on record and therefore, reaching to an erroneous decision. He therefore, beseeched us to step into the shoes of the High Court and evaluate the evidence on record and allow the 28 appeal. He further argued that, it was improper for the High Court to ignore clear provisions of the law. On his part, Mr. Mtobesya did not have much to say on this apart from reiterating his earlier submissions and defending the holding of the High Court. We hasten to state that this issue should not detain us. We are aware that this being the first appeal, in terms of rule 36 (1) of the Rules, we are entitled to re-appraise the evidence on record and come up with our own conclusion. There is abundant case law on this and we need not cite one. However, based on the foregoing deliberations of the other grounds which we have upheld, we find considerable merit in the submission by Mr. Seka that the High Court did not properly evaluate the evidence on record, else it would not have come to the conclusions it reached. Just to mention a few, the High Court did not properly evaluate clear express terms of contract in particular subclause 1 of clause 5 which was very categorical on when exactly was the loan due for repayment, which was six months from the date of the first disbursement and not from rent after completion of the project. The High Court did not consider other conditions of the loan agreement such as disbursement upon being satisfied that the previous tranches were properly utilized and also against certificates issued by the contractor and verified by the project consultant. Had all these been properly evaluated and considered the High Court 29 would not have come up with the conclusions it reached. This ground too is meritorious. In the final analysis, the appeal is meritorious and therefore, we allow it with costs. In the premises, we quash the High Court's judgment and order that the respondent's suit stands dismissed. DATED at DODOMA this 28th day of October, 2025. G. A. M. NDIKA JUSTICE OF APPEAL P. F. KIHWELO JUSTICE OF APPEAL P. J. NGWEMBE JUSTICE OF APPEAL The Judgment delivered virtually this 6th day of November, 2025 in the presence of Mr. David Pongolela, learned Counsel for the Appellants also holding brief for Mr. Jeremia Mtobesya, learned Counsel for the Respondent and Ms. Nise Mwasalemba, Court clerk, is hereby certified as a true copy of the original. SENIOR DEPUTY REGISTRAR COURT OF APPEAL