Eastern North Hauliers Limited vs Republic (Misc. Civil Cause No. 18955 of 2025) [2025] TZHC 8627 (19 December 2025)

1 IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA (DAR ES SALAAM SUB REGISTRY) AT DAR ES SALAAM MISC. CIVIL CAUSE NO. 18955 OF 2025 IN THE MATTER OF THE COMPANIES ACT, 2002 (NO. 12 OF 2002) AND IN THE MATTER OF THE PETITION FOR WINDING UP OF EASTERN NORTH HAULIERS LIMITED AND IN THE MATTER OF AN APPLICATION MADE UNDER SECTION 275, 279(1) (a), 280, 281(1) AND 267(1) (b) OF THE COMPANIES ACT CAP 212 R.E 2002 AND RULES 95(1) AND 100 OF THE COMPANIES (INSOLVENCY) RULES, 2005. BY EASTERN NORTH HAULIERS LIMITED.....................................PETITIONER RULING Date of last order: 12/11/2025 Date of ruling: 19/12/2025 A. A. MBAGWA, J. 2 This is a petition for the winding up of the company. The petitioner has moved the Court by way of a petition made under Sections 267(1) (b), 275, 279(1) (a), 280, and 281(1), of the Companies Act, [Cap. 212 R.E 2002], (hereinafter “the Act”) and Rules 95(1) and 100 of the Companies (Insolvency) Rules, 2005, (hereinafter “the Rules”). The petition has been verified by an affidavit sworn by Mr Sereri Peter Nyagita. The petitioner is imploring this Court for the following orders: (a) That, the petitioner be wound up by the Court under the provisions of the Companies Act 2002. (b) A competent person, to be approved by the Court, be appointed as a liquidator of the company, and (c) Such other order as the Court thinks fit. According to the petition and the verifying affidavit, the main ground for the petition is the company's inability to pay debts due to running at a loss for two consecutive years. According to paragraph 7 of the petition, the company is indebted to its employees to the tune of Tanzania shillings Thirteen Million Four Hundred Fifty-Six Thousand Seven Hundred Forty- Eight (TZS 13,456,748). The petitioner stated that the company was ordered to pay the said amount by the Commission for Mediation and 3 Arbitration through a labour dispute. However, it is important to note that the said court order was not attached to the petition, although the petitioner purportedly indicated that it was one of the annexures whose copy was attached to the application. Besides, the petitioner contended that the company is indebted to various creditors, including Tanzania Revenue Authority (TRA), Kesi Investments, Afro Oils, Olimpic Oils, NAS Tyre, Evergreen, Orcadeco, Rangel Logistics, Octis Company Limited, Imperial Haulier and Mansoor Industry. It was thus stated that following the above indebtedness, the company passed a board resolution to wind up the company. Upon filing the petition, this Court ordered the petitioner to publish the summons both in the Government Gazette and newspaper of wide circulation, pursuant to Rule 99(1) and (2) of the Rules. The Court order was duly complied with. Further, the Court ordered the petitioner to serve the petition on the Tanzania Revenue Authority (TRA) and the Business Registration and Licensing Agency (BRELA). The petitioner served the two government authorities, but only TRA filed a notice of appearance, in terms of Rule 104(1) and (2)(a), (b), and (c) of the Companies (Insolvency) Rules 2005. TRA contested the winding up of the petitioner, indicating that the 4 petitioner owes it a tax debt of TZS 4,820,029,844.55. When the matter was called on for a hearing, the petitioner was represented by Mr Sereri Nyagita, learned advocate, whereas the TRA had the services of Ms Zuhura Kerege, learned State Attorney. Submitting in support of the petition, Mr. Nyagita, learned advocate for the petitioner, adopted his affidavit to form part of his submissions. He went on to tell the Court that the petitioner complied with Rule 99(1) and (2) of the Companies Insolvency Rules by advertising the petition in the newspaper, namely Mwananchi dated 26/08/2025, and the Government Gazette dated 29/08/2025. Mr Nyagita clarified that the winding up petition is anchored on two main reasons, namely, one, the company has failed to run its business since January 2023, and two , the company has failed to pay its debts, particularly to statutory creditors, which the petitioner owes. He insisted that the loss stands at TZS 510, 751, 000.00 To bolster his submission, he cited to me the cases of Miniso Tanzania Company Limited (Winding Up Cause 4 of 2021) [2021] TZHCComD 3378 (3 November 2021) and Centre Stage Productions Ltd vs Commissioner General TRA (Winding Up Cause 22 of 2022) [2023] TZHCComD 112 (20 April 2023). 5 It was thus the counsel's humble prayer that this Court be pleased to issue a winding-up order and appoint a liquidator in accordance with Section 279 (1)(a) and (b) of the Companies Act. In her brief submissions, Ms Zuhura, learned State Attorney for the TRA, adopted the contents of the affidavit deponed by Taragwa Michael, State Attorney. In essence, she contested the winding up of the petitioner on the ground that the petitioner has not failed to run a business but rather is avoiding tax liabilities. She maintained that the petitioner has unsettled tax liabilities to the tune of TZS 4,820,029,844.55. In a brief rejoinder, Mr Sereri Nyagita insisted that the tax liabilities will be accorded priority by the liquidator during the winding-up process. I have gone through the petition and the depositions for and against the petition. I have also given earnest attention to the learned counsel’s rival submissions. The pertinent issue for determination by this Court is one, namely, whether the petitioner has exhibited convincing grounds to warrant issuance of a winding-up order. It is a common cause that, through a special resolution, the directors and shareholders of the company voluntarily resolved to wind up the company on account of its inability to pay debts, having operated at a loss for two consecutive years. 6 The Companies Act provides for the conditions under which a company may be wound up. For clarity, I hereby reproduce the provisions of Section 282(1) (a) and (e) of the Companies Act [Cap . 212 R.E. 2023]. ‘ 282. – (1) A company may be wound up by the court if the- (a) company has by special resolution resolved that the company be wound up by the court; (b) N/A (c)N/A (d) company is unable to pay its debts; (e) Court is of the opinion that it is just and equitable that the company should be wound up. ’ From the above provision, there is no gainsaying that the inability to pay debts is one of the statutory grounds for winding up the company. In the instant petition, the deponent has sufficiently explained the factors that triggered a special resolution for winding up, that is, the inability to pay debts due to operating at a loss for two consecutive years. In addition , the petitioner has also provided financial statements and a financial audit report that exhibit the dwindling of the company's business and the outstanding debts. The petitioner has also attached invoices from various 7 creditors, including Kesi Investments, Olympic Oils, Evergreen, Orca Deco, and Rangel Logistics, which in essence substantiate the petitioner’s debts . In the circumstances, I am of the considered opinion that the petitioner has sufficiently established the company's financial impediment as to warrant the issuing of a winding-up order. In the upshot, I am inclined to find the petition meritorious. I therefore allow the petition for the winding up of the company, Eastern North Hauliers Limited , and consequently order as follows: 1. The petitioner, Eastern North Hauliers Limited, with Certificate of Incorporation No. 138323161, is hereby wound up under the provisions of section 282 (1) (a) and (e) of the Companies Act, [Cap . 212 R.E. 2023]. 2. In terms of Section 297 of the Companies Act, Mr Francis Stolla, advocate with Roll No. 874, is hereby appointed a liquidator of the company under winding up. The liquidator shall discharge his duties within six months from the date of this ruling. 3. The liquidator shall ensure that all preferential debts are paid in priority to all other debts in accordance with S ection 370 of the Companies Act. 8 4. The liquidator, upon discharging his legal duty, shall cause and file in C ourt a report of his accounts for his release in accordance with the law. 5. The winding-up order shall be served on the Registrar of Companies for his necessary actions. No order as to costs. It is so ordered. Dated at Dar es Salaam, this 19 th day of December 202 5. A.A. Mbagwa JUDGE 19/12/2025