NSK Oil and Gas Limited and Another vs National Microfinance Bank Plc (Civil Application No. 732/02 of 2024) [2024] TZCA 968 (9 October 2024)

IN THE COURT OF APPEAL OF TANZANIA AT PAR ES SALAAM CIVIL APPLICATION NO. 732/02 OF 2024 NSK OIL AND GAS LIM ITED ........................ . ......... . .......... 1 st APPLICANT MAHESH INDERPALL BURDHRAM AGGARW AL ............. . 2 nd APPLICANT VERSUS NATIONAL MICROFINACE BANK P L C ............. . ................... RESPONDENT (Application to vary conditions given by the Court in Civil Application No. 148/02 of 2024 for stay of Execution of the Decree of the High Court at Arusha) (Tiganga, J.) dated the 29th day of May, 2023 in Land Case No. 03 of 2020 RULING 30th September & 9th October, 2024 RUMANYIKA, J.A.: The application is by way of Notice of Motion in terms of rule 4(2) (a) and (b) of the Tanzania Court of Appeal Rules, 2009 ("the Rules"). NSK Oil and Gas Limited and Mahesh Inderpall Burdhram Aggarwal ("the 1s t and 2n d applicants"), respectively, are seeking indulgence of the Court to vary the conditions of the stay order dated 4th September, 2024. The stay order was conditional upon the applicants presenting a bank's guarantee for TZS. 21,059,360,581.00, as security for the due performance of the decree of the High Court dated 29/05/2023 pending determination of appeal. The condition sought to be varied is for the i

substitution of a previously ordered bank's guarantee for two developed landed property. They are Plot Nos. 1100C, CT Nos. 18608080/32 and 4662 located at Chang'ombe Industrial Area, Dar es Salaam and Themi Industrial Area in Arusha Region, respectively. The application is supported by an affidavit sworn by Kamaljeet M. Aggarwal who is the Managing Director of the first applicant. The respondent contested the application although she did not file affidavit in reply. The ground for seeking variation of the said condition is the predicament faced by the applicants, that their efforts to procure a bank's guarantee bore no fruit. The reason for the failure is the stringent conditions allegedly given by the banks, as deposed under paragraphs 5

• 8 of the affidavit. At the scheduled hearing of the application, Mr. Gwakisa Sambo, learned counsel appeared for the applicants whereas the respondent had the services of Messrs. Kester Lyaruu and Moses Mmbando, learned counsel. At the very outset, I invited the learned counsel to address the Court on one legal point which is whether, as a Single Justice, the Court is not functus officio hence the matter being res judicata, given my ruling dated 4th September, 2024.

Mr. Sambo asserted that, in fact the Court is not functus officio. To show that the Court has the power to entertain the instant application, he cited Registered Trustees of Vignan Educational Foundation & Others v. National Development Corporation (Civil Application 469 of 2019) [2021] TZCA 573 (30 September 2021; TanzLII). As is in the present situation, Mr. Sambo argued, in that application the full Court was asked to substitute a bank's guarantee for landed property as security, much as currently, a Single Justice of the Court has the powers. He added that, in the circumstances the applicants had no options of appealing the decision, applying for reference or review because they were happy with the stay order, save for the aggrieving type and form of security. Secondly, Mr. Gwakisa contended that, the security sought to be given in place of a bank's guarantee is valid and reliable for two main reasons; one, it is not subject of the impugned decree and it had been accepted by the respondent as collateral which she sought to attach and sell realizing the alleged defaulted bank loan and two, the property is in the custody of the respondent thus, incapable of being alienated by the applicant. To press for a bank's security, he added, it is tantamount to giving double security which is absurd. He cited the Court's decision in

Tanzania Potland Cement Company Limited v. Khadija Kuziwa, Civil Application No. 854/01 of 2023 (unreported) to reinforce the point. He wound up his submission reiterating for an order to vary the security condition. In reply, and referring to the Black's Law Dictionary 8th Edition, Mr. Lyaruu began by giving a definition of the term "varying". That it is a deference or disparity. He contended that the Court is infact functus officio since it had heard the parties on the aspect of security and determined the matter. In his view, the present application is a material replica of the substantive application which had been already decided in the applicant's favour demonstrating the situation, Mr. Lyaruu compared the facts deposed under paragraphs 14, 16 and 17 of the substantive supporting affidavit with the averment under paragraph 9 of the current affidavit. That, in arriving at the stay order, the Court had also taken the said landed property on board but eventually went for a bank's guarantee as security which some banks had allegedly declined to issue. Thirdly, that under paragraph 16 of the substantive application, the applicant had also undertaken to give any security other than the landed property should the Court deem just so to order, which it did. Mr. Lyaruu therefore, urged the Court to dismiss the matter for being a

disguised application for review. He thus, implored the Court to hold that the situations in Vignan case (supra) and the present application are distinguishable because, unlike in the former application where the property was newly introduced, the landed property sought to substitute a bank's guarantee in the present application was previously pleaded as security, He added that, the proposed property is encumbered as is in the hands of the applicant and therefore incapable of making a valid, good and reliable security for the due performance of the decree. To bolster his point, he cited Sinani Building Contractors Limited v. CRDB Bank PLC (Civil Application No. 662/16 of 2022) [2024] TZCA 196 (19 March 2024) and Mountain Hill Nursery Primary School Limited v. International Commercial Bank (Tanzania) Ltd. (Civil Application No. 810/16 of 2023) [2024] TZCA 915 (20 September 2024). Upon hearing the learned counsel's submissions, the issue is whether, if the order for bank's guarantee is substituted for the landed property as security it would not be res judicata to render the Court functus officio. It is recalled that, the Court has reiterated that the principles of res judicata and functus officio aim at barring the courts from entertaining multiplicity of suits or applications for that matter which may cause endless litigation. See - Paniel Lotta v. Gabriel

Tanak and Others [2023] T.L.R. 312. Moreover, it is common knowledge that, for the said two principles to apply, the following essentials have to be established and proved; one, the subject matter in the previous and in the subsequent suit is substantially the same; two, both the suits involve the same litigating parties or privies, three, the court which decided the former suit and the one trying the present one have competent jurisdiction and four, the matter in issue has been decided to its finality. For this application, I note from paragraphs 14, 15, 16 and 17 of the affidavit which supported the substantive Civil Application No. 14 of 2024 that the applicant had firmly undertaken, among others, to give the alleged developed landed property as security. For clarity, they are Plot No. 110C (CT No. 186080/320) located at Chang'ombe Industrial Area in Dar es Salaam Region and another plot located at Themi Industrial Area in Arusha Region (CT No. 4662). Also, the applicant had expressed her willingness to give any other landed property should the Court deem it just so to order. As regards the said proposed security for the due performance of the decree therefore, now it is clear to me that, the previous and current applications are a replica of each other. It is so because the said

previous deposition is substantially a summary of what is averred under paragraph 9 of the affidavit supporting the current application. It reads as follows: " ... on 12th September, 2024 the Board o f Directors of the 1st applicantw f convened meeting and resolved to ask this Honorable Court for the variation o f the condition to issue bank guarantee with the landed properties with its development commonly known to certificate o f Tittle Number 186080/32 Plot Number 110c located at Chang'ombe Industrial Area in Dar es Salaam City and that o f Certificate o f Tittle Number 4662 located at Themi Industrial Area in Arusha Region ..." ^Emphasis added). From the foregoing therefore, it is common ground that, the now landed property pleaded by the applicants as security in place of a bank's guarantee is not now introduced for the first time. It had been pleaded and duly considered in the previous application as demonstrated above, but the Court appropriately went for a bank's guarantee and ordered as such. It is needless to say that, the applicants were satisfied until at a later stage when they failed to procure a bank's guarantee since, allegedly, the banks declined to issue it. In other words, the applicants now venture to re— litigate on the aspect of security which is

contrary to the principles of res judicata just as the Court is functus officio . With respect, Mr. Sambo may wish know that, in the Vignan case (supra) the Court did not mean that its power to vary conditions of security is not so open ended that can be granted wholesale. It is oniy possible, as was the case, where the conditioned property is newly introduced for consideration. Whether or not the landed property is encumbered and that it has been under the respondent's control as collateral for the alleged defaulted bank loan needs not to detain me. It is so because to entertain it further is tantamount to determining the merits of the application pre-maturely, which is risky and improper. The applicant may have been satisfied with the grant of the stay order as appreciated by Mr. Sambo save for the condition to present a bank's guarantee as security. It is my considered view that, the applicant ought to have challenged the order by way of reference instead of coming back through a back door seeking it to be varied. Whether or not the applicants' failure to meet the said condition is not their fault is not material nor does it prevent the matter from being res judicata rendering the presiding single Justice functus officio . It follows, therefore, that in terms of rufe 11(6) of the Rules and in the wake of the 8

Tanzania Court of Appeal (Amendment) Rules, 2024 GN No. 188, powers of a Single Justice of the Court are restricted to granting or refusing to grant a stay order as the case may be. Therefore, to vary the corresponding conditions at a later stage is as good as usurping powers of the full Court, which is not permitted. Put in other words, the present application should not have been preferred and filed in the first place. In conclusion, the application is struck out for being improper and out of place. Costs to abide the outcome of the intended appeal. DATED at DAR ES SALAAM this 4thday of October, 2024. The Ruling delivered this 9th day of October, 2024 in the presence of Mr. Kamaljeet Aggarawal, learned counsel for the 1s t Applicant, Mr. Thomas Kessy holding brief of Mr. Gwakisa Kakusulo Sambo, learned counsel for the 1s t and 2n d Applicants and Mr. Moses Mmbando, learned counsel for the Respondent is hereby certified as a true copy of the S. M. RUMANYIKA JUSTICE OF APPEAL original. M. A. MOYO DEPUTY REGISTRAR COURT OF APPEAL o .