Azania Bank Limited vs Zilly Enterprises Limited and 2 Others (Civil Appeal No. 408 of 2021) [2024] TZCA 1122 (19 November 2024)

IN THE COURT OF APPEAL OF TANZANIA AT ARUSHA fCORAM: WAMBALI. J.A.. KENTE. J.A. And MGONYA. J.A .^ t CIVIL APPEAL NO. 408 OF 2021 AZANIA BANK LIMITED APPELLANT VERSUS ZILLY ENTERPRISES LIMITED ZILLY BADI MRUMA .............. NICHE CONSULT LIMITED ..... .1 st RESPONDENT 2 nd RESPONDENT 3 rd RESPONDENT (Appeal from the Judgment and Decree of the High Court of Tanzania JUDGMENT OF THE COURT 1st & 19th November, 2024 WAMBALI, J.A.: The appellant, Azania Bank Limited, a financial institution, on 9th April, 2020 filed Commercial Case No. 9 of 2020 before the High Court of Tanzania, Commercial Division at Arusha against Zilly Enterprises Limited, Zilly Badi Mruma and Niche Consult Limited, the first, second and third respondents respectively jointly and severally for payment of TZS. 221,116,046.19 being unpaid up loan plus interest and other at Arusha) (Magoigg, J.) Dated the 12th day of March, 2021 in Commercial Case No. 9 of 2020

charges that accrued thereon which was extended by her to the first respondent. It was pleaded in the plaint that the respective loan was guaranteed by the second respondent who offered as collateral his house situated at Mateves area in Arumeru District, Arusha Region. It was further pleaded that initially, on 30th April, 2013, the first respondent relying on the guarantee of the second respondent through the said house located in Farm No. 2609 under the Certificate of Title No. 27217, applied from the appellant a Business Loan Facility of TZS. 90,000,000.00 which was accordingly granted. Moreover, on 25th February, 2014, the first respondent applied for additional Business Loan Facility of TZS. 150,000.000.00 which was granted on 23r d May, 2014. Prior to the grant and disbursement of the loan, the first respondent liquidated the outstanding balance of TZS. 36,041,073.76. The second respondent thus entered into a Guarantee Agreement in which he pledged to indemnify the appellant in case the first respondent defaulted to repay the loan together with the interest and other accrued charges. It is noteworthy that, according to the pleadings, the said loan was to be repaid within fifteen (15) months. However, the first respondent

defaulted repayment of the loan. Despite several reminders to both the first respondent, (the borrower), and the second respondent, (the guarantor), the outstanding loan stated above was not paid. Therefore, as a recovery measure, the appellant instructed Mangwembe 2011 Company Limited who advertised in Habari Leo newspaper dated 16th November, 2015 the intention to sale the secured house through a public auction. The intended sale of the house prompted the second respondent to lodge Land Application No. 182 of 2015 in the District Land and Housing Tribunal for Arusha at Arusha (the DHLT) in which he challenged the sell, on the contention that the advertised house was not the one pledged by him as security for the loan extended to the first respondent. In the circumstances, the appellant averred in paragraph 14 of the plaint that, the said Land Application made her discover that a Certificate of a Right of Occupancy in respect of the house put up as collateral by the second respondent was not the one regarding the house situated at Mateves offered by him as security for a loan facility extended to the first respondent, rather, a Certificate of Occupancy in respect of Plot No. 2609 which is a bare land.

On the other hand, though the third respondent was sued jointly and severally with the first and second respondents in respect of the unpaid loan plus interest and accrued charges, damages and costs, the appellant also claimed for damages against the third respondent for the alleged fraudulent act or negligence which resulted to the loss on her part. Particularly, the appellant alleged in the plaint that the third respondent being his service provider negligently or with intent to defraud, conducted and issued a valuation report in respect of the second respondent's house while knowing that a Certificate of Title he submitted was not related to the parcel of land containing the house on which the valuation was conducted. All in all, in the said suit, the appellant prayed for judgment and decree against the respondents jointly and severally as follows: a) payment ofTZS. 221,115,046.19; b) payment of interests on the claimed amount at 26% per annum from the date it was due to the date of judgment; c) payment of penal interests of the claimed amount at the contractual rate of 6% per annum from the date it was due to the date of judgment;

d) general damages; e) cost; and f) any other relief the court would have deemed fit and just to grant. In their joint written statement of defence, the first and second respondents totally disputed the claims of the appellant and averred that there was no disbursement of the alleged loan to the first respondent as contended by the appellant. In the end, they urged the trial court not to grant the reliefs outlined in the plaint. Ultimately, they prayed for the dismissal of the suit with costs. For her part, in her amended written statement of defence, the third respondent plainly disputed the appellant's allegations and claims contained in the plaint and similarly prayed for the dismissal of the suit in its entirety with costs. During the trial, the hearing proceeded exparte against the first and second respondents because they did not enter appearance on 3rd March, 2021 when the trial was scheduled to commence. An order was accordingly made by the trial court pursuant to Rule 43 of the High

Court (Commercial Division) Procedure Rules, 2012 as amended together with Order IX Rule 11 of the Civil Procedure Code, Cap 33 (the CPC) in response to the prayer by the appellant's counsel. Consequently, the witness statement of the first and second respondents' witness was struck out. Therefore, the trial proceeded in the presence of the appellant and the third respondent. The appellant's suit was supported by the testimony of one witness, Mr. Evarist Ngayuma Mhogosi (PW1) who lodged a witness statement which was adopted as part of the examination in chief and he tendered ten documentary evidence which were admitted as exhibits PI a-c, P2, P3 a-c, P4, P5a-c, P6a-c, P7, P8, P9 and P10 respectively. PW i was also cross-examined by the counsel for the third respondent. The substance of PW l's evidence was essentially a replica of what he stated in the witness statement in which he emphasized that the respondents were jointly and severally liable for the claimed amount. The third respondent disputed the claim through a single witness, Mr. Frank Aligawesa (DW1) who equally lodged the witness statement and was duly cross-examined by the appellant's counsel. However, he did not tender any documentary evidence.

It is not out of place to point out that, before the trial commenced the following issues were framed by the trial court upon agreement of the parties:

1. Whether the plaintiff advanced credit facility to the first respondent and was guaranteed by the second respondent.
2. I f the issue number 1 is answered in the affirmative whether the first respondent defaulted to repay the loan and to what tune.
3. Whether the second and third respondents' action to present Certificate o f Title No. 27217 and valuation report in respect o f mortgaged property caused damage , loss and inconvenienced the appellant.
4. What reliefs are the parties entitled to. Having heard the parties' witnesses and considered the documentary evidence presented before it, the High Court answered the first issue affirmatively but declined to affirm the second and third issues in favour of the appellant. In the end, it dismissed the suit with costs to the third respondent. It is against the findings and conclusion of the High Court that the appellant approached the Court on appeal to contest both the judgment

and decree. The dissatisfaction of the appellant is expressed by the memorandum of appeal comprising seven grounds and the written submission. However, before the hearing commenced, the appellant's counsel abandoned the fourth, sixth and seventh grounds of appeal. The appellant therefore urged the Court to consider the following four rearranged and renumbered grounds of appeal:

1. That the trial court erred in iaw and in fact for holding that, the first respondent fully paid the outstanding loan amount as per exhibit P10, consequently, discharged the mortgaged property, while there was no any cash deposit made by neither the first and second respondents to liquidate the outstanding loan amount
2. That the trial court erred in law and in fact for holding that, the appellant failed to prove any default on the part o f the first respondent and to what tune.
3. That the trial court erred in law and in fact for failure to properly analyze and evaluate the evidence tendered by the appellant, hence reached into a wrongful decision.
4. That the trial court erred in law and in fact for failure to hold the second and third respondents liable for

misrepresentation occasioned on the valuation report (exhibit Plb ) as regard the property in Certificate o f Title No. 27217 despite the overwhelming evidence tendered in court and admission made by the third respondent during cross- examination. At the hearing of the appeal, Mr. David Kakwaya, learned Principal State Attorney assisted by Ms. Narindwa Sekimanga, learned Senior State Attorney, Mr. Elibariki Happy Maeda and Mr. Martin James Wanyancha, learned advocates appeared for the appellant. On the adversary side, Mr. Pascal Mshanga, learned advocate appeared for the first and second respondents, whereas Mr. Said Amri, learned advocate appeared for the third respondent. Submitting in support of the appeal, Mr. Maeda substantially adopted the written submission lodged earlier on in the Court and explained briefly on the thrust of the appellant's grievances against the judgment and decree of the High Court. We propose to start our deliberations by considering the first and second grounds together as the main issue is whether, based on the available evidence on the record, the appellant proved that the first

respondent defaulted in repayment of the loan and what was the outstanding amount by the time the suit was lodged before the High Court. It was firmly argued by the appellant's counsel in respect of the first ground that according to the evidence on the record, PW1 categorically demonstrated that the first respondent utilized the loan of TZS. 150,000,000.00 issued to her by the appellant. However, he stated, she did not repay the entire amount within fifteen months as agreed despite several reminders issued on 16th April, 2015 (exhibit P6a), 15th June, 2015 (exhibit P6b), and as a result, the appellant issued a default notice on 3rd August, 2015 which was duly received by the first respondent (the borrower) and the second respondent, (the guarantor). It was however submitted that the only repayment made since disbursement and restructuring of the loan facility was cash deposit on 24th July, 2017 of TZS. 3,000,000.00 as per exhibit P10. To this end, the learned counsel seriously contested the finding of the trial judge that the entire amount was paid and thus the mortgaged house was discharged.

Regarding the second ground of appeal, the appellant counsel submitted that, according to the contract schedule (exhibit P4), the first respondent was supposed to deposit TZS. 11,762,635.05 per month as a monthly loan repayment. Nevertheless, he added, according to exhibit P10 from 6th June, 2014, when the loan was disbursed up to 30th December, 2014, there was no single loan repayment instalment deposited by the first respondent or any other person. In his view, default was fully proved. On the other hand, it was explained in the written submissions that, on 3rd December, 2014 the first respondent requested to restructure the loan which was accepted by the appellant. Therefore, taking into consideration that by that time, the principal sum plus interest for late payment stood at TZS. 169, 164,745.74, the said amount was booked as New Loan Commitment (restructured amount) to the first respondent, the appellant's counsel emphasized. More importantly, the learned counsel submitted that, the repayment period was extended to 24 months on the terms and conditions stipulated in the letter of offer (exhibit P3A) which was signed by the parties on 17th May, 2014 in which the interest rate was 26% per year and 6% in case of default. li

The appellant counsel therefore, blamed the trial judge for allegedly not recording the above piece of evidence from PW i who had the detailed explanation and knowledgeable on the contents of the bank statement (exhibit P10). Finally, the appellant's counsel stated that, given the overwhelming evidence on the record, the trial judge failed to find that the appellant proved that up to December, 2016 the unpaid loan stood atTZS. 221,116,046.19 as pleaded in the plaint. In response, the first and second respondent's counsel, both in the written and oral submissions, outrightly supported the trial court's findings and conclusion against the complaints of the appellant in the first and second grounds of appeal. He emphasized that, according to exhibit P10 by 31s t December, 2014 the entire amount had been settled as there is nothing shown with regard to the claimed amount in the plaint to be outstanding loan. He submitted that, the appellant being the claimant and the custodian of banking documents regarding the transaction of its customers, was duty bound to produce impeccable oral and documentary evidence before the trial court to substantiate her claim.

Unfortunately, he argued, nothing was presented as even exhibit P10 did not show anywhere that by December, 2016 the loan of TZS. 221,116,046.19 which included the principal sum plus interests and penalty was outstanding as submitted by the appellant's counsel. He maintained that in terms of section 115 of the Evidence Act, Cap 6 (the Evidence Act) as the appellant was essentially the one who had the knowledge of the facts concerning the outstanding loan, which was denounced by the respondents, she had the burden to prove the claim. In the end, he prayed that the first and second grounds be dismissed. The third respondent's counsel equally maintained that the appellant failed to prove that the first and second respondents had defaulted repayment of the advanced loan. Basically, Mr. Amri adopted the written submission lodged earlier in the Court in opposing the appeal. He briefly argued that, PW1 utterly failed to explain both in his witness statement, oral testimony during cross- examination and documentary evidence on how the claim of TZS. 221,116,046.19 was arrived at and to substantiate the allegation that the said amount remained unpaid by the time the suit was lodged before the High Court by the appellant. He submitted further that exhibit P10 which is heavily

relied upon by the appellant to criticize the trial court's finding does not particularly show the alleged outstanding balance claimed in the plaint apart from showing a negative balance of TZS 4.00 and TZS. 1,215,200.20 as of 1s t August, 2015 and 1st November, 2018 respectively. In his submission, the trial judge correctly held that the outstanding amount of the loan had been fully paid as the appellant did not properly keep records of loan, interest and charges that the first respondent had serviced up to the period the suit was instituted at the trial court. Mr. Amri stated therefore that, the allegation by the appellant that in December 2014 there was restructuring of the loan facility in favour of the first respondent to the tune of TZS. 169,164,745.74 being the principal sum plus interests and penalties is not supported by the evidence in the record as there is no copy of the agreement to that effect. He maintained that, it was wrong for the appellant to blame the trial judge for not recording the said piece of evidence by PW1 which was not produced at the trial at all.

We have carefully considered the contending submissions of the parties in respect of the complaints in the first and second grounds of appeal. It is not doubted that according to the impugned judgment, the trial judge found that the first respondent under the guarantee of the second respondent was advanced a loan facility of TZS. 150,000,000.00 on 31s t December, 2014 as reflected in the bank statement exhibit P10. Though the first and second respondents contested the fact in their joint written statement of defence and did not appear during the trial to defend the claim, the findings and conclusion of the trial court on this issue has not been contested as there is no cross appeal. The main issue however, is whether the appellant proved that the claimed outstanding amount was not fully paid up to time the suit was instituted at the trial court as pleaded in the plaint. We are aware that the epicenter of the appellant's complaints in the two grounds is derived from the following reasoning and findings of the trial court which emanated from the consideration of the evidence in the record. For purpose of clarity, we reproduce the relevant part of the judgment thus: "... what I gathered from both the plaint and witness statement is a blanket claim o f TZS. 221,116,046.19 15

without any explanation what is the principle (sic) sum and interest at least to give the courtjustification that indeed, the plaintiff has specifically and strictly proved the said amount The bank statement o f the 1st defendant which is exhibit P10 shows a negative balance o f Tshs. 1,215,200.00 as o f 31st August, 2020 (sic) which is not claimed by the plaintiff. The plaintiff witness utterly failed to explain in his written statement on how he arrived at the figure o f TZS. 221,116,046.19 both in the plaint, in the witness statement and nor in the documentary evidence tendered. In my respective view, the bank who had the duty to keep the records o f every client were bound to bring in evidence the dear records o f the loan o f the 1st defendant showing all the details o f the loan, interest and other charges to assist the court to do justice in this case. A mere schedule o f payment was not enough. Not only that but according to exhibit P10 (record o f the bank) by 30th August, 2015 the Bank Account o f statement o f the 1st defendant was reading negative 4.00 which shows by then, the whole loan had been paid up in full. The plaintiff's own exhibit 10 shows the balance o f the account statements reads at negative Tshs. 1,215,200 and not Tshs. 221,116,046.19 claimed throughout the proceedings. No other documentary evidence was

tendered at least with dose related figure to prove the amount claimed in the plaint. In the absence o f such evidence , the case for the plaintiff mercilessly crumbles down. In totality o f the foregoing, I am inclined to answer issue number two in the negative that the plaintiff has utterly failed to prove any default on the part o f 1st defendant and to what tune..." We further note that the trial judge proceeded and made the following observation as an alternative, which has seriously attracted the appellant's criticism regarding his interpretation of exhibit P10. He stated: "Even if I were to go by the contents o f exhibit P10 in considering the amount o f Tshs. 169,164,745.72 that was deposited into the account o f the first defendant on 31st December, 2014 the same seems to have offset the entire loan amount and the balance reads negative Tshs. 3.46. One would expect the statement to show the unpaid outstanding balance o f the principal claimed plus interest. According to the entry records o f the 1st defendant it shows that the balance went on increasing by cents until when it was activated on I4 h September, 2016 and later the cash deposit o f Tshs. 3,000,000.00 on 27th July, 2017. AH

these are exhibits that were tendered by the plaintiff but utterly failed to assist and advance her case. Even both demand notices exhibit 6a-b did not show the amount claimed. While exhibit P6a shows the amount o f Tshs. 9,208,113.53exhibit P6b did not mention any amount due. Exhibit P6a was written in April, 2015 showing a balance o f Tshs. 9,208,113.63 and according to the plaint and witness statement no further loan was advanced to the 1st defendant But how Tshs. 9,208,113.63 raised to Tshs. 221,116,064.19 is not explained to this court. No documentary evidence was tendered to show and proof the claim o f Tshs. 221,116,064.19 at all. The witness statement was a replica o f the plaint without any further prove o f the money claimed. The Bank as custodian o f all records o f 1st defendant was obliged to bring forth all records to support their claim but have unfortunately failed to do so." It is our view that, though the complaint of the appellant is that the trial Judge in his observation wrongly misinterpreted exhibit P10 with regard to the amount of TZS. 169,164,745.72 having offset the loan advanced to the first respondent, the appellant's counsel did not state how the stated amount was reached and its increase to the claimed amount in the plaint. In this regard, the main issue still remains

whether the appellant successfully proved on a balance of probabilities the claim of TZS 221,116,046.19 being outstanding loan. We are live to the fact that, this being a first appeal, the Court has power to re-appraise the evidence on the record and draw inferences of facts and where applicable come to its own conclusion or otherwise as provided under rule 36 (1) (a) of the Tanzania Court of Appeal Rules, 2009. For this stance, see also the decisions of the Court in Jamal A. Tamim v. Felix Francis Mkosamali & Another (Civil Appeal No. 110 of 2012) [2013] TZCA 342 (3 May 2013, TANZLII) and Domina Kagaruki v. Farida F. Mbarak & Others (Civil Appeal No. 60 of 2016) [2017] TZCA 160 (19 June 2017, TANZLII). Our thorough evaluation of evidence on the record reveals that apart from the appellant's averment in paragraph 5 of the plaint and the witness statement of PW1 which formed the evidence in chief and during cross examination concerning the claimed amount, there is no dispute that there is no evidence to show how the so-called restructured loan facility came into existence on 31s t December, 2014. We only find in exhibit P10 the so called "NEW LOAN/COMMITEMNT OFFSET/LEASE" and further on the side of credit a figure of TZS 169,164,745.74 followed

by a balance of -3.46 on the debit side. More importantly, according to the same exhibit P10, the same term NEW LOAN/COMMITMENT OFFSET/ LEASE is reflected on 6th June, 2014 in which the amount on the credit side is shown as TZS. 150,000,000.00. This amount is supported by the pleadings and PW l's evidence as the one advanced on that date and also the payment schedule exhibit P4 for a payment period of 15 months. We thus respectfully hold the view that, the written and oral submission by the learned counsel for the appellant that there was restructuring of the loan facility and extension of the period of repayment to 24 months from 15 months after the appellant failed to repay the amount is not backed by the pleadings and the evidence of the appellant on the record. We say so because, though the first remainder letter (exhibit P6a) dated 16th April, 2015 indicated that the first respondent had failed to pay the first installment of TZS. 9,208,113.63 which was due on 15th March, 2015 after the alleged restructuring agreement, there is no clarity or reference to any other documentary evidence or oral agreement on the agreed terms and conditions with respect to the schedule of payment and the monthly

amount to be paid. What remains in the record is exhibit P4 of which the appellant maintained that the agreed terms and conditions remained the same. However, this document is not supported by a restructuring document which the appellant counsel conceded at the hearing that it is not in the record of appeal. In this regard, the submission of the learned counsel for the appellant that after the restructuring, the first respondent was supposed to pay a monthly instalment of TZS. 11,762,635.05 instead of the earlier agreed figure of TZS. 9,208,113.63 is also not supported by the evidence on the record and therefore, equally misplaced. Moreover, even though the second reminder letter (exhibit P6b) made reference to the rescheduling of the loan facility, apart from not showing the amount, nothing is shown on whether the said rescheduling was agreed on 31st December, 2014. More importantly, it is not shown whether the rescheduling was a result of the first respondent default to repay the advanced amount for the period of almost six months after the date of disbursement on 6th June, 2014 or otherwise. There is also no any statement of the respective agreement as the same would have assisted in showing how the restructuring was done and the agreement

reached thereon. It is in this regard that, throughout the pleadings and the evidence of PW1, a period of 15 months' repayment schedule of the loan is maintained. It is no wonder that even the default notice issued on 3r d August, 2015 stated nothing with regard to the extent of the outstanding amount which had to be paid within sixty days. In the circumstances, we entirely agree with the counsel for the first and second respondents that the default notice (exhibit P6c) was issued in contravention of section 127 of the Land Act, Cap 113. For clarity, the section provides: "127 (1) Where there is a default in the payment o f any interest or any other payment or any part thereof or in the fulfillment o f any condition secured by any mortgage or in the performance or observation o f any covenant express or implied, in any mortgage, the mortgagee shall serve, a mortgagor a notice in writing o f such default; (2) The notice required by subsection (1) shall adequately inform the recipient o f the following matters: (a) the nature and extent o f the default; (b) that mortgagee may proceed to exercise his remedies against the mortgaged land; and

(c) actions that must be taken by the debtor to cure the default; and (d) that, after the expiry o f sixty days following receipt o f the notice o f by the mortgagor, the entire amount o f the claim will become due and payable and the mortgagee may exercise the right to sell the mortgaged land." We have closely examined exhibit P6c. We are satisfied that there was no compliance with the provisions of section of 127 (2) of the Land Act, regarding the nature and extent of the default. Besides, while exhibit P6c stated that the default was from January, 2015, the first reminder letter (exhibit P6a) indicated that the default was in respect of the first installment on the indicated amount of T7S. 9,208,113.63 which was due on 31s t March, 2015. Basically, there is no connection between the contents of the demand notice and the default notice. In Joseph Kahungwa v. Agricultural Input Trust Fund and Two Others (Civil Appeal No. 373 of 2019) [2021] TZCA 325 (23 July 2017, TANZLII), the Court stated as follows with regard to the provisions of section 127 (2) of the Land Act:

"... The law does not only require the mortgagee to notify the mortgagor o f the default but also requires the mortgagee to adequately inform the mortgagor a number o f issues spelt in section 127 (2) o f the land Act/' For further emphasis, see also the decisions of the Court in Godebertha Rukanga v. CRDB Bank Ltd & 3 Others [2019] T.L.R. 33 and Ibrahim Twahili Kasundwa and Another v. CRDB Bank PLC and Three Others (Civil Appeal No. 194 of 2021) [2024] TZCA 7 (19 January 2024, TANZLII). In this regard, with respect, we are surprised by the appellant's counsel written submission in support of the appeal in which, apart from not showing how the claim in the plaint was proved, he has strongly maintained that as of 31st December, 2014, the amount claimed by the appellant was TZS 169,164,749.20 which included the principal sum, interest and other charges while the said amount does not feature in the plaint and the witness statement of PW1. We are equally surprised by his criticism against the trial judge that he internationally did not record the appellant's only witness (PW1) testimony who had an opportunity and knowledge to explain in detail what really transpired on 31s t

December, 2014 in relation to exhibit P10. We hold this respectful view because; firstly, nothing was said in the plaint and the evidence of PW1 with regard to the substance and context of exhibit PlO's contents and the so-called restructuring of the loan facility in which PW1 could have further explained. Secondly, PW1 lodged a witness statement which was duly adopted by the trial court as part of the examination in chief. PW1 was also cross examined by the counsel for the third respondent. Thus, in any case the explanation could not have been given during cross examination as it depended on whether the person who cross examined would raise the matter. More so, there is no indication that he was cross examined on that point. Besides, PW1 could not be cross examined on what he had not stated in the witness statement. It is stressed that parties are bound by the pleadings before the court. In this regard, the counsel's criticism which did not only touch on the trial judge but also on the authenticity of the trial court's record is unfortunate as the counsel did not provide sufficient explanation to confirm the allegation. As correctly submitted by the counsel for the respondents, the record of the court is always

taken to be authentic and cannot be easily impeached, see Halfan Sudi v. Abieza Chichili (1998) T.L.R. 527. In the circumstances, the substance of the submission of the learned counsel remains arguments from the Bar as written submissions are not a substitute for credible evidence. This is not allowed in law as categorically stated in the Registered Trustees of the Archdiocese of Dar es Salaam v. The Chairman of Bunju Village Government and Others, Civil Appeal No. 147 of 2006 (unreported). In this event, as the amount of TZS. 169,164,745.20 shown in exhibit P10 was not pleaded and supported by the testimony of PW1, the appellant cannot be justified to criticize the trial judge for failing to concluded in her favour while the claimed amount in the plaint is TZS. 221,116,046.19 which she failed to substantiate even under exhibit P10 because the stated figure is not shown anywhere. At this juncture, we wish to emphasis the importance of adhering to the requirement stated in section 110 of the Evidence Act, that a person who allege the existence of a fact must prove it. In Sarkar Law of Evidence, 18th Edition, M. C. Sarkar, S. C. Sarkar and P.C. Sarkar,

published by Lexis Nexis at page 1896, the following statement is made thus: "... the burden o f proving a fact rest on the party who substantially asserts the affirmative o f the issue and not upon the party who denies it; for negative is usually incapable o f proof. It is an ancient rule founded on a consideration o f good sense and should not be departed from without strong reason..., until such burden is discharged the other party is not required to be called upon to prove his case. The court has to examine as to whether the person upon whom the burden lies has been able to discharge his burden until he arrives at such conclusionhe cannot proceed on the basis o f weakness o f the other party...." To this end, in Paulina Ndawavya v. Theresia Thomas Madaha (Civil Appeal No. 43 of 2017) [2019] TZCA 453 (11 December 2019, TANZLII), the Court stated: "It is trite law and indeed elementary that he who alleges has a burden o f proof as per section 110 o f the Evidence Act, Cap 6 [R. E. 2002]. It is equally elementary that since the dispute was in civil case, the standard of proof was on a balance o f probabilities which simply means that the

court will sustain such evidence which is more credible than the other on a particular fact to be proved. ... it is again trite that the burden o f proof never shifts to the adverse party until the party on whom onus lies discharges his and that the burden o f proof is not diluted on account o f the weakness o f the opposite party's case." Reverting to the case at hand, considering our appraisal of the evidence on the record, we are satisfied that, though the first and second respondents did not tender evidence at the trial save for lodging the joint written statement of defence, the trial judge properly came to the conclusion that the appellant did not substantiate that there was a default to deserve the outstanding balance of TZS. 221,116,046.19 as claimed in the plaint. Indeed, it is not known why the appellant claimed the said amount for all the respondents jointly and severally, while the third respondent was not a borrower or a guarantor but according to the plaint, he was joined for the alleged negligence or intention to defraud. In the circumstances, we dismiss the first and second grounds of appeal.

Next for consideration is the complaint in the third ground that the trial court failed to analyze the evidence on the record properly and as a result it came to a wrong decision. We note that the submission of the appellant on this ground is essentially a replica of the complaint on the failure by the trial judge to analyze the evidence of PW1 and the exhibits tendered, more particularly exhibit P10. The trial judge is blamed for concluding in the alternative that, basing on exhibit P10 the amount of TZS 169,164,745.74 offset the loan advanced to the first respondent. Indeed, the appellant has explained in passing the content and context of exhibit P10 to show that the first and second respondents paid nothing except TZS. 3,000,000.00 on 24th July, 2017. We must however state that, the attempted explanation is not supported by the pleadings and PW l's evidence in chief. On the adversary side, both counsel for the respondents submitted that the trial judge properly considered exhibit P10 and was satisfied that the appellant failed to prove the claim, and thus in the absence of other evidence on the record, he was justified to conclude as he did. For our part, having carefully appraised the entire evidence on the record, we respectfully disagree with appellant that the trial judge

improperly analyzed the evidence when he found that the appellant did not prove the claim on a balance of probabilities. We have demonstrated above that, apart from exhibit P10 lacking explanation in the pleadings and the testimony of PW1, the gaps in others pieces of evidence including the demand and default notices, lack of evidence regarding the restructured loan facility and non-indication of the claimed amount in exhibit P10, could not have led the trial judge to conclude that there was default on the part of the first and second respondents as the claimed amount was not established based on the evidence on the record. We thus equally dismiss the third ground of appeal. Lastly, in the fourth ground the appellant complains that the trial judge wrongly failed to hold the second and third respondents liable for misrepresentation regarding the valuation report (exhibit Plb) on the property with Certificate of Title No. 27217 despite the overwhelming evidence tendered and the admission of the third respondent during cross examination. The learned counsel for the appellant submitted that the second respondent, the Managing Director of the first respondent, knew that the mortgaged property, that is, Farm No. 2609 was a bare

land while the intended house to be mortgaged was in Farm No. 2608 and that was done with ill intention to defraud. It was argued that the appellant suffered loss. He thus concluded that the appellant discharged the burden of proving that there was misrepresentation on the part of the second and third respondents. The first and second respondents disputed the appellant's complaint that the trial Judge failed to hold that there was proof of misrepresentation and fraud. The respondent's learned counsel fully supported the trial judge's findings on the issue. He briefly emphasized that, going by the record of appeal, the appellant did not put forward the credible evidence to substantiate misrepresentation and fraud on the part of the second and third respondents. He thus urged the Court to dismiss the complaint on this ground. The third respondent's counsel similarly supported the finding of the trial judge on the issue of misrepresentation and fraud. He submitted that the evaluation was done properly in respect of the house that had to besecured as a mortgage. He added that even PW1 admitted that hewas among the persons who visited the site and was satisfied that the visit was properly done on the house in Farm 2609

located at Mateves Arusha Municipality. Besides, he stated that PW1 conceded that the site visit was done before the loan was advanced to the first respondent. He added that another officer from the appellant Sadiki Shishiri was at the site and signed the report together with PW1. He submitted that, when PW3 was cross examined by the third respondent's counsel, he stated that the features in the site visit are the same as those in the valuation report and thus the appellant cannot be heard to contend that there was misrepresentation or intention to defraud. On the other hand, the learned counsel argued that the statement by DW1 during cross examination that the first respondent might had malice to defraud the bank by tempering with documents cannot be taken as an admission of misrepresentation or fraud on the part of the second and third respondents. In determining the issue of misrepresentation and fraud, the trial judge reasoned and concluded thus: "... the plaintiff alone could not prove a case o f misrepresentation to surveyed landed property. More so, since no proof o f default no way the

plaintiff can claim loss, leave alone that the said loss was not proved. To cull from the foregoing ; the alleged misrepresentationfraud and negligence raised by the plaintiff are not proved at all. In my view, the plaintiff was to prove, first default and then goes further to prove all other claims. In the absence o f default, the whole transaction, even if was tainted, becomes absolute in the circumstances." We have carefully considered the contending submissions of the parties amid the evidence on the record. We are aware that apart from the contention that the appellant discovered the existence of two plots; one a barelandand another with a house through Land Application No. 182 of2015 DLHT involving the second respondent, on one side and the appellant and Magwembe 2001 Company Limited (the Auctioneer) on the other, who was appointed to auction the house on allegation of default by the first and second respondent, there is no any other proof on the record to substantiate negligence, misrepresentation and fraud. Besides, we are of the settled view that the ruling of the DLHT could not be taken as a proof of misrepresentation, negligence and fraud in the case at hand. This is because, the ruling did not determine the rights of 33

the parties as it ended in sustaining the preliminary objection raised by the second respondent, expunged the appellant's defence and the counter claim and ordered the application to proceed exparte against the appellant. We do not therefore, according to the record of appeal, know what was the outcome of the Application at the DHLT after it was heard and determined on merit. All in all, the decision cannot be of any assistance. Moreover, there is no dispute that the officers of the appellant, namely, PW1 and Sadiki Shishiri were present during the site visit, signed the report and did not raise any anomaly or misrepresentation on the part of the second and third respondents concerning the valuation report. Indeed, it is on the record of appeal that PW1 admitted that the loan was advanced after the site visit. Thus, apart from failure of the plaintiff to prove default, she cannot be justified to allege misrepresentation which she did not prove. On the other hand, the statement made by DW1 during cross examination by the appellant's counsel on the issue of misrepresentation and tempering of the documents on the part of the first respondent cannot be conclusive evidence on this matter. Having closely analysed the said statement, we hold that it was a mere opinion of DW1 and did

not conclusively prove the allegation of the appellant on a balance of probabilities. More importantly, allegation of fraud was not strictly proved as required by law. It is noteworthy that apart from the mere allegation of fraud in paragraphs 15 and 16 of the plaint against the secondand third respondents respectively, no sufficient particulars are stated. The same anomaly is evident in the evidence of PW1 and the documentary evidence. It is settled law that allegation of fraud must be strictly proved. In City Coffee Limited v. Registered Trustee of Ilolo Coffee Group (Civil Appeal No. 94 of 2018) [2019] TZCA 645 (1 November 2019, TANZLII), the Court stated: "... it is dear that regarding allegations o f fraud in civil cases, the particulars o f fraud being a very serious allegation, must be specifically pleaded and the burden o f proof thereof, although not that which is required in criminal cases; o f proving beyond reasonable doubt, it is heavier than a balance o f probabilities generally applied in civil cases." In the case at hand, having reviewed the evidence on the record, we are satisfied that the appellant did not discharge the burden to the

required standard of proof. We do not therefore find any justification to fault the conclusion of the trial judge against the appellant's complaint in the fourth ground of appeal. In the event, we dismiss the fourth ground of appeal. In the final analysis, we find that the appeal has no merit. We dismiss it with costs to the respondents. DATED at DAR ES SALAAM this 19thday of November, 2024 The Judgment delivered this 19th day of November, 2024 via video conference from High Court of Arusha in the presence of Mr. Elibariki Maeda, learned counsel for the Appellant Mr. Paschal Mshanga, learned counsel for the 1s t and 2n d Respondents and Mr. Said Amri, learned counsel for the 3rd Respondent is hereby certified as a true copy of the F. L. K. WAMBALI JUSTICE OF APPEAL P. M. KENTE JUSTICE OF APPEAL L. E. MGONYA JUSTICE OF APPEAL