Z.A.S Investment Company Limited & Others vs Equity Bank Tanzania Limited & Another (Civil Application No. 1563 of 2024) [2025] TZCA 997 (25 September 2025)

IN THE COURT OF APPEAL OF TANZANIA AT DODOMA CIVIL APPLICATION NO. 1563 OF 2024 Z.A.S INVESTMENT COMPANY LIMITED ................................ 1 st APPLICANT AMIT BABUBHAI LADWA ............................. . ....................... 2 nd APPLICANT MUZOALIFAT MOHAMED ALI ................................................ 3 rd APPLICANT JAMAL ALI ISLAM................................................ ................. 4™ APPLICANT MASASI CONSTRUCTION COMPANY LIMITED ...................... 5 th APPLICANT BAHARI APARTMENTS LIMITED .......................................... 6™ APPLICANT VERSUS EQUITY BANK TANZANIA LIMITED....................................1 st RESPONDENT EQUITY BANK KENYA LIMITED ......................................... 2 nd RESPONDENT (Application for stay of execution of the judgment and decree of the High Court of Tanzania, Commercial Division) (Philip, 3 .^ dated the 23rd day of July, 2024 in Commercial Case No. 103 of 2022 RULING 14th August & 25th September, 2025 KENTE. J.A.: This is an application for stay of execution of the decree of the High Court (Commercial Division) in Commercial Case No. 103 of 2022. It is supported by two affidavits sworn respectively by Mr. Robert Rutaihwa, being one of the applicants' legal counsel and another by Mr. Amit B. Ladwa who is the second applicant. Briefly the factual background giving rise to this application is that, initially, the 1s t applicant instituted Commercial Case No. 103 of 2022 in l

Commercial Division of the High Court of Tanzania (the Commercial Court) seeking for a declaratory order that the banking facilities which the 1s t respondent had undertaken to advance her had not been advanced and therefore the loan agreement between them was null and void. On its part, the 1s t respondent counter-claimed for a declaration that the 1s t applicant was in breach of the said agreement and thus claimed a total of USD 5,433,053.99 being the outstanding loan amount as at the time of filing the counter claim while the 2n d respondent counter-claimed against the same applicants for among other things, the sum of USD 2,631,753.88 similarly being the outstanding loan amount at the time of lodging the counter claim. After hearing the parties, the High Court dismissed the main suit for lack of merit. However, the counter-claims were sustained and the 1s t applicant was subsequently ordered to pay a total of USD 8,064,807.87 while the 2n d to 6th applicants as guarantors were ordered to pay the respondents the amount guaranteed to the tune of USD 7,623,127.99. The 1s t applicant was further ordered to pay interest on the decretal sum at the compound rate of 8% from the date of filing the suit to the date of judgment and interest at the court's rate of 7% from the date of judgment to the date of full payment. 2

Aggrieved with that decision, on 30thJuly 2024 the applicants lodged a Notice of Appeal to this Court and requested for certified copies of judgment, decree and proceedings for purposes of appeal. Up to the time of lodgement of this application, the pending appeal (No. 1321 of 2024) is yet to be determined. This application was prompted by an advertisement in the Mwananchi Newspaper dated 18th December 2024 wherein, the respondents through their appointed Receiver Managers, advertised to sell by way of public auction the applicants' mortgaged properties. Apart from the averments regarding the imminent threat to execute the decree if no order for stay of execution is issued, the applicants' advocate has likewise stated in paragraph 8 of the accompanying affidavit, among other things that; i. The advertisement for the intended safe was for only two days within which members o f the public were required to present their bids for the property worth muitibiHions. ii. The respondents are looking to gain an unfair advantage despite the pending appeal which will be rendered nugatory and redundant, if an order for stay o f execution is not issued. H i. The properties sought to be sold belong to the 1s t , 9h and &h applicants and form the basis o f the business o f the company including where each maintains its office. 3

iv. Some o f the said properties are occupied by tenants. I f the properties are sold the buyer wiii immediately move in rendering the tenants homeiess and or resulting in to breach o fpeace and harmony. v . That, from the business, conducted in the property advertised for sale which is a property constituted under lease agreement No. 608/2004 site plan No. 862/2007 Comps. No. 3554, Kiwengwa Northern Region o f Unguja in Zanzibar which is a hotelier, there is a likelihood o f causing inconveniences to the occupants should the property be sold in the manner intended. On the date of hearing of this application which was by way of a video link, Mr. Robert Rutaihwa, learned advocate, represented the applicants, whereas, the respondents enjoyed the services of Mr. Tlmon Vital is, also a learned advocate. After adopting the material contents of the affidavits in support of the application, Mr. Rutaihwa submitted that, the applicants have complied with all the legal requirements for issuance of the stay order including, showing that the applicants will suffer an irreparable ioss if the intended execution is not halted, the filing of the application within 14 days from the date of advertisement and undertaking to furnish security for the due performance of the decree as may finally be binding upon them. He further contended that, the execution of decrees of the trial court need not be through court processes. That, so long as the decree 4

was given by the High Court, the respondents have no right to proceed otherwise than through the court's process in respect of their counter claim. In support of his position, he referred to this Court's decision in the cases of Jitesh Jayantilal Ladwa & Another vs Dhirajilal Walji Ladwa & Others (Civil Appeal 435 of 2020) [2022] TZCA 526 (31 August 2022). He finally prayed for the application to be granted. In response, Mr. Vitalis strongly opposed the application for two reasons; first, that the application was incompetent for faiiure to attach a copy of the notice of the intended execution; and second, the lack of proper undertaking by the applicants to furnish security for due performance of the decree as may ultimately be binding upon them. Elaborating, the learned counsel submitted with regard to the absence of the notice of the intended execution that, the applicants have attached a notice issued by the joint receiver managers which by itself is not a notice issued by the executing court. According to him, a notice of the intended execution envisaged under Rule ll(7)(d) of The Court Rules, is a notice issued by an executing officer or the executing court. He submitted that, in essence there is no notice of execution issued by any executing court, thus rendering the application incompetent. 5

He added that, as the matters stand, this Court cannot stop the respondents' appointed receiver managers from selling the property as the stay order will be certainly directed to the executing court. That, granting stay order in the absence of execution proceedings will amount to granting injunctive orders to the receiver managers which is contrary to the powers of this court as prescribed under Rule 11 of the Rules. With regard to the firm undertaking to furnish security, Mr. Vita Iis submitted that, for a monetary decree like the one at hand, a commitment bond cannot be proper security. He contended that, the proper security should be either a bank guarantee, an insurance bond or a certificate of title. He cited the case of Mountain Hill Nursery and Primary School Limited vs International Commercial Bank (Tanzania) Limited (Civil Application No. 810/16 of 2023) [2024] TZCA 915 (20 September 2024) in support of his argument. Moreover, the learned counsel contended that the application has already been overtaken by events since the properties intended to be protected have already been sold to bonafide purchasers for value, who are not parties to this application. He thus submitted that this application is misconceived and urged that it should be dismissed with costs. 6

Rejoining, Mr. Rutaihwa submitted correctly so in my view that, the law does not say the notice of an intended execution has to come only from the executing court. That, the only requirement is the applicant's awareness of the steps that there is enforcement of the court's decree. He made reference to the case of Shell and BP Tanzania Ltd. Vs. University of Dar es Salaam [2002] TLR 225 [CA]. He stressed that, the moment the applicants became aware of the steps being taken by the respondents, that amounted to a notice as per Rule ll(7)(d) of the Rules. The learned counsel added that, after the respondents had submitted their claims under the court's jurisdiction, the status of the parties changed from that of a mortgagee and mortgagor and as of now, they are respectively the decree holder and judgment debtor and therefore, any payments out of court are not recognised until registered as per Order 21 Rule 1 and 2 of the Civil Procedure Code. With regard to the question as to whether the properties have already been sold or not, Mr. Vitalis Rutaihwa was of the view that the respondents cannot be heard to say so as they have not stated the amount realised from the alleged sale. He concluded by stating, that this Court is clothed with the jurisdiction to grant the orders sought in the notice of motion.

Going by the parties averments, in respect of the present application, two issues arise namely, whether the advertisement in the newspaper by the respondents' joint receiver managers suffices to be a notice of execution as envisaged under the law and two, whether the undertaking by the applicants to provide security, is sufficient. I start from the premise that, in the first place, it is not in dispute that, there is a notice of appeal, as required under Rule 11(3) of the Rules, lodged in the Court seeking to challenge the decree sought to be executed by the respondents, The said appeal (registered as Civil Appeal No. 1321 of 2024) is pending hearing. As stated earlier, Rule 11(7) also provides that an application of this nature, must be accompanied by a copy of the decree sought to be executed, an impugned judgment and the notice of the intended execution. In the instant application, the applicants have attached copies of the notice of appeal, the impugned judgment and decree. The challenge is with regard to the notice of execution filed in the High Court. Notably, up to the time of filing the present application, there was no execution proceedings instituted by the respondents in the High Court intending to execute the decree in Commercial Case No. 103 of 2022 . 8

According to the advertisement dated 18th December 2024, the respondents' joint receiver managers had expressed their intention to sell the properties of the applicants and the due date for the intending buyers to present bids was on 20th December 2024 at lO.OOhrs, whereas, on the same date at ll.OOhrs bids would be opened. Looking at the said advertisement, it has a specific period within which, unless the applicants acted on time, the said properties were to be sold. This Court in the case of Aarif Yusuf Sharif vs Sabri Mwad ini Haji (Civil Application No. 1623 of 2024) [2025] TZCA 90 (21 February 2025), held that: ... a notice o f intended execution may take different forms. It may be by publication, advertisement, conduct, a letter, verbal, etc. In my view, what matters is evidence o f some sort that it may be construed as a notice o fan intended execution." (See also the case of Tanzania Health Promotion Support vs Commissioner General TRA (Civil Application No. 11 of 2025) [2025] TZCA 751 (25 July 2025). However, the legal point raised by Mr. Vitalis is essentially that, there is nothing to be stayed by this Court. If I understood him which I reckon I did, he meant that there is no application for execution that has 9

been filed by the respondents. I am however aware that, not all steps that are taken seeking to execute a court's decree need the assistance of the court. In some instances, it all depends on the difficulties that are likely to be encountered in executing the decree and the subject matter of the decree. For instance, in a decree for possession of land, it is not always necessary to go through the court processes. In Ibrahim Twahili Kusundwa & Another vs CRDB Bank PLC & Others (Civil Appeal No. 194 of 2021) [2024] TZCA 7 (19 January 2024), we held that; "A decree-ho/der need not seek the assistance o f the court to execute a decree in his favour if he can do so peaceafiy. Put differently, if the decree can be satisfied smoothly without any breach of peace or violence occurring, the decree-hoider can proceed to enforce the decree singly. Depending on the nature of the subject-matter and the disposition o f the judgment-debtor, execution of a decree may not require an order o f the court." It is without doubts that the power to order stay of execution under Rule 11 of the Rules is within the discretion of the Court which ought to be exercised not only within the ambits of the law but also with common sense and according to justice. That is exactly what we stated in the case of Tanzania Electric Supply Company (TANESCO) vs Independent Power Tanzania Ltd (IPTL) &Two Others [2000] TLR 324 (CA). 10

With regard to the question as to whether or not the advertisement in the Newspaper inviting members of the public to bid and purchase the mortgaged properties, amounts to a notice of an intended execution as prescribed under rule ll(7)(d) of the Rules, I respond without hesitation in the positive. I say so because, it appears to me that the respondents who had opted to go back and exercise their right of sale under the mortgagee and mortgagor relationship, did so in total disregard of the applicants' right to challenge the said enforcement of the decree out of the court. The Newspaper advert was served to the applicants as a threat to have properties sold and unless this Court intervenes, even the appeal filed in the Court would be rendered nugatory. In such circumstances, the applicants could not be expected to sit idle awaiting for execution proceedings to commence so as to allow them to apply for staying the execution. Upon the threat created by the advertisement, the proper course would be an application for staying execution of the decree pending hearing of the appeal. Rule ll(5)(a)(b) and (c) of the Rules provides that, an order for stay execution will not be granted unless the cumulative conditions enumerated thereunder exist. TTiose conditions are as follows:- (a) That substantial loss may result to a party applying for stay of 11

execution unless the order is made; (b) That the application has been made without delay; and (c) That security has been given by the applicant for the due performance of such decree or order as may ultimately be binding upon him. As to whether the applicants will suffer substantial toss, the applicants have deposed under Paragraph 8 of the affidavit in support of the Notice of Motion regarding the extent of the loss to be suffered in the event the order to staying execution is not granted. The application has been filed timely, on 20th December 2024, just two days from the date of the advertisement in the newspaper inviting members of the public to bid and purchase the mortgaged properties. As to the question of security, according to Para 9 of the applicants' affidavit, the applicants jointly and severally are ready to give security in a form of Commitment bond and certificate of titles of the properties mortgaged with the respondents. In the alternative, the applicants were ready to give security as shall be directed by the court after looking at the circumstance of the matter and the interest of justice. It is from the same line of submission that I proceed and order staying of execution of the 12

decree of the High Court of Tanzania (Commercial Division) at Dar es Salaam in Commercial Case No. 103 of 2022 pending hearing and determination of the appeal before the Court. The order is subject to the 1s t applicant's providing a bank guarantee to the tune of USD 8,064,807.87 and the remaining 2n d to 6th applicants to deposit a bank guarantee of USD. 7,623,127.99. The said bank guarantees should be deposited within 60 (sixty) days from the date of delivery of this ruling. Costs to be in the cause. It is so ordered. DATED at DODOMA this 24th day of September 2025. P. M. KENTE JUSTICE OF APPEAL The Ruling delivered this 25th day of September, 2025 in the presence of Mr. Theodore Primus, learned counsel for the Applicants and Mr. Timon Vitalis, learned counsel for the Respondents via virtual link from Dar es Salaam and Mr. Eliuter Ngolongolo, Court Clerk; is hereby certified