Michael Obey Daud vs National Microfinance Bank Ltd. (Civil Appeal No. 190 of 2022) [2024] TZCA 1257 (10 December 2024)

IN THE COURT OF APPEAL OF TANZANIA AT MWANZA fCORAM: KOROSSO, J.A.. KENTE. J.A. And MGONYA. J.A.1 CIVIL APPEAL NO. 190 OF 2022 MICHAEL OBEY DAUD............................................................ APPELLANT VERSUS NATIONAL MICROFINANCE BANK LTD ............................. RESPONDENT (Appeal from the Judgment and Decree of the High Court of Tanzania at Mwanza) (Mashauri. 3 .^ dated the 20th day of April, 2021 in Civil Appeal No. 51 of 2020 JUDGMENT OF THE COURT 4th & 10thDecember, 2024 KENTE. J.A.: Up to the time which is contemporaneous with the occurrence of the events leading to the present dispute, the appellant Michael Obey Daud was a customer of the respondent, the National Microfinance Bank Limited. He used to operate a bank account (with No. 3111000883) at the respondent's Kenyatta Road Branch, in Mwanza City. Because of their good business relationship, on 10th April, 2014, the appellant was granted by the respondent a TZS 4,000,000.00 credit facility which was posted into his bank account as a loan. Four days

later, the appellant withdrew TZS. 1,000.000.00 in cash from the respondent's ATM machine. But then, on the same day, another TZS. 1.000.000.00 was withdrawn by an unidentified person from the appellant's bank account through an electronic device and facility called "Pesa Fasta". That is when a seed of misunderstandings and accusations between the appellant and respondent appears to have been sown. The discomfort of having his money fraudulently withdrawn from his bank account by an unidentified person and the series of indifferent attitudes and performances exhibited by the respondent's officials at Mwanza in dealing with his problem, compelled the appellant to move the Resident Magistrate's Court of Mwanza by way of a civil suit claiming for, among other monetary reliefs, payment of TZS. 1,000.000.00 being the amount of money fraudulently and unjustifiably withdrawn from his bank account together with interest at the rate of 25% per annum from the date of judgment until payment in full. For the reasons that will become apparent later in this judgment, we will not delve into the evidence led in support of each of the parties' case. Suffice it to say that, having heard accounts from the witnesses called by the parties, the trial Magistrate believed the appellant and sustained his claim. The appellant was accordingly awarded TZS. 1.000.000.00 being the amount of money fraudulently withdrawn from

his account together with general damages amounting to TZS. 5,000.000.00 plus interest. Unhappy with the decision handed down by the trial court, the respondent appealed to the High Court particularly complaining that:

1. The trial magistrate erred in iaw by concluding that the appellant was negligent by not disclosing the necessary information to its customer thus causing a loss o f Tshs. 1,000.000/=.
2. The trial magistrate erred in iaw and fact by ignoring the evidence o f DW1 to the effect that PESA-FASTA and M-PESA collection are operated by using ATM-PIN NUMBER (Password) which are always a secret to the customer.
3. The trial magistrate erred in law by awarding shs. 5,000,000/= as general damages while the said amount was not proved to the required standard.
4. The trial magistrate erred in iaw by concluding that Tshs. 1,000,000/= which was withdrawn from the respondent's account through Pesa - Fasta and M- Pesa collection and partly paid back to the respondent by the appellant while it was not proved whether the appellant was responsible for withdrawal. In his judgment delivered on 16th January 2019, the learned Judge of the first appellate court appeared at first to have been convinced by the appellant's argument. He accordingly went on holding at page 93 of the record of appeal that, on a balance of probabilities, the respondent

(now the present appellant) was more credible than the appellant (the present respondent) whose story was nothing but bare denials. But then, towards the end of his judgment and in an unexpected turn of events, the learned trial Judge turned around holding in consequence that, there was a failure by the trial court to frame the issue of negligence and that the lapse was because of the failure to specifically address the pertinent question as to whether or not the phone - number used in perpetration of the alleged fraud was the very phone - number which was pleaded by the present appellant. Without determining on merit the appeal before him or nullifying the proceedings of the trial court, and setting aside its judgment and decree so as to pave the way for a retrial as is ordinarily the norm, the learned Judge then went on reasoning and finally rendering his decision, thus: "On dose consideration o f the case, I am of the settled view that in order to conclusively, resolve the appeal, in terms of Order XXXIX Rule 25 of the Civil Procedure Code, I will frame the following issues for the determination o f the court below. I am aware that this may take parties by surprise. Nevertheless, since the parties have addressed the issue extensively in their submissions, I believe the cause o f action I am taking will serve the justice o f the case. After

all this was the enquiry which parties anticipated the bank would do. The following issues are accordingly hereby framed:

1. Who was the owner o f the phone number 0788657430 at the time of the alleged fraud.
2. Whether it is true that the money in dispute was fraudulently credited into the phone.
3. I f the two issues are answered in the negative, what is the responsibility, of the parties. The trial court shall try the issue and decide the case on the strength of the evidence on the issue". Pursuant to the above direction of the High Court, the matter was remitted to the trial court where a retrial was conducted culminating into the sustaining of the appellant's claim once again. Dissatisfied with what now appears to be the second decision of the trial court as it had already rendered its first decision which was never quashed or set aside by the High Court on appeal, the respondent successfully appealed to the High Court sitting at Mwanza. In his decision rendered on 20th April 2021, Hon. Mashauri, J. (as he then was) took the view that the appellant had not proved the respondent's responsibility on a balance of probabilities as it appeared to him that, the disputed amount of money was withdrawn from the appellant's

account by someone else who seemed to have come across the appellant's lost ATM card and happened to know his numerical code or personal identification number as it is commonly called. The appellant was unhappy with the position taken by the High Court and therefore, he launched the present appeal to this Court. He fashioned his grounds of appeal in the following manner, thus:

1. The Honorable Judge erred in law in holding that, the disputed withdrawn money from the appellant's bank account was withdrawn by use o f the ATM card which was issued to the appellant;
2. The Honorable Judge erred in law in shifting the onus of proof regarding the owner o f the telephone number that perpetrated the fraud onto the appellant; and
3. The Honorable Judge erred in law for failure to consider the grounds which were proffered by the present appellant in resisting the appeal before the High Court. Before us, the appellant who was present in person was also represented by M r. Deya Paul Outa, learned Advocate while the respondent was ably represented by Advocate David Kaijanabo Muzahura. For the reasons that will soon become apparent, we will not look into the three grounds of appeal raised by the appellant. Instead, we intend to dispose of this matter by probing into an apparent

procedural mistake committed by the first appellate Court in Civil Appeal No. 84 of 2016 which we find rather disquieting. As stated before and as it will be noted at once, in his judgment, the learned High Court Judge in the first appeal, made an order for a retrial to be conducted without in the first place, nullifying the proceedings, quashing and setting aside the judgment and decree of the trial court. As one would have expected, in this way, the High Court order on being implemented, resulted into a state of a single case having two judgments and decrees of the trial court something which does not commonly occur in common Law Jurisdictions like ours. What is more, in the particular circumstances of the present matter, is the glaring fact that, whereas in the first appeal before Hon. Matupa J (as he then was), the odds appeared to tilt in the appellant's favour, when the matter went on another appeal before Mashauri J, (as he then was) in Civil Appeal No. 51 of 2020 after the respondent bank was aggrieved by the outcome of the retrial, the learned Judge took the view that, it was the appellant and not the respondent who was to blame for the negligence leading to the fraudulent withdrawal of money from his account. When we drew the attention of M r. Outa and M r. Muzahura to the above-stated procedural anomaly in that, Matupa J did not specifically

nullify the proceedings and set aside the judgment and decree of the trial court before he went on to make an order for a retrial on issues framed by him, the two learned counsel were at one that, the omission was fatal to the status and propriety of the retrial and the resultant judgments and decrees both in Civil Case No. 68 of 2015 before the Resident Magistrate's Court and High Court Civil Appeal No. 51 of 2020 which gave rise the present appeal. They accordingly submitted that, as long as the proceedings, judgment and decree of the trial court remained intact as they were not respectively nullified, quashed and set aside by the High Court, the subsequent retrial was quite irregular and of no longer effect. Upon this premise, we were urged to invoke our revisional powers and nullify the proceedings of the second trial and the first appellate court, quash and set aside the resultant judgments and decrees and subsequently order for a retrial starting from the stage when the pleadings were complete. Having given due consideration to the submissions made by M r. Outa and M r. Mazahura, we entirely agree with them. Upon objectively considering the order issued by the first appellate Judge in Civil Appeal No. 84 of 2016 directing for a retrial to be conducted, it is our decided opinion that, where there is no specific order expressed in clearly stated terms by an appellate court nullifying the proceedings of the lower

court, quashing and setting aside the resultant orders or decision as it happened in the present case, an order for a retrial becomes a nullity. In other words, for an order for retrial to be legally effective it must be preceded by another order of the appellate court nullifying the proceedings, quashing and setting aside the decision of the lower court. For the reasons given above, we agree with M r. Outa and Muzahula learned counsel that, since Matupa J, never made any order nullifying the proceedings and quashing and setting aside the judgment and decree of the Resident Magistrate's Court of Mwanza in Civil Case No. 68 of 2015, the entire proceedings, judgment and decree of the High Court in Civil Appeal No. 51 of 2020 which emanated from an irregular retrial were a nullity. The same are hereby quashed and set aside. Likewise, the retrial proceedings, judgment and decree in again Civil Case No. 68 of 2015 before the Resident Magistrate's Court of Mwanza which as stated above, gave rise to Civil Appeal No. 51 of 2020 before the High Court, are declared a nullity and consequently quashed and set aside. Moreover, the proceedings, judgment and decree of the High Court in Civil Appeal No. 84 of 2016 which, as it turned out, did not decisively determine the appeal on merit, are hereby respectively nullified, quashed and set aside.

In the ultimate event, the High Court of Tanzania at Mwanza is directed to hear and determine on merit the above - mention appeal which challenges the judgment and decree of the Resident Magistrate's Court of Mwanza (Hon. Kiama - RM) dated 7th September, 2016 with all possible expedition. Taking into account the circumstances leading to this decision of the Court, we order for each party to this appeal to bear its own costs. It is so ordered. DATED at MWANZA this 6th day of December, 2024. W. B. KOROSSO JUSTICE OF APPEAL P. M. KENTE JUSTICE OF APPEAL L. E. MGONYA JUSTICE OF APPEAL The Judgment delivered this 10th day of December, 2024 in the presence of M r. Galati Mwantembe, learned counsel for the Respondent and also took brief for M r. Deya Paul Outa, learned counsel for the Appellant; is hereby certified as a true copy of the original. ]|j A. L. KALEGEYA / / v /dEPUTY REGISTRAR '4J/ COURT OF APPEAL