Swedish Motor Corporation v Suchak and Sons Company Ltd (Commercial Case No. 40 of 2000) [2000] TZHC 694 (2 November 2000)

300 TANZANIA LAW REPORTS [2002]T.L.R. a SWEDISH MOTOR CORPORATION v. SUCHAK AND SONS COMPANY LTD HIGH COURT OF TANZANIA B AT DARES SALAAM (Nsekela, J.) c COMMERCIAL CASE No. 40 OF 2000 Civil Practice and Procedure - Admission - Notice of admission of debt - Judgment on admission - Order XII, rule 4 of the Civil Procedure Code 1966. D Civil Practice and Procedure - Decretal amount — Interest on decretal amount - Whether payment of decretal amount in instalments is ground for waiver of interest - Order XX, rule 11(1) of the Civil Procedure Code 1966. E The plaintiff and the defendant entered into three similar agreements whereby the ■defendant purchased Volvo trucks from the plaintiff and paid for them by instalments according to a schedule of payments contained in each agreement. When the defendant defaulted the plaintiff sued to recover the outstanding sums. The defendant filed a p notice of admission in which it undertook to pay the money by monthly instalments of US$10 000 and proposed a waiver of interest on the ground that the instalment were substantial and that the defendant did not want to prolong the suit. On 26 September 2000 judgment on admission was entered for the principal sum and the parties were p directed to negotiate the question of interest. On the day set to report back the advocate for the defendant did not show up and no agreement as to interest had been reached. Held: (i) The payment of substantial instalments and the desire not to prolong litigation are not good reasons for denying the plaintiff the right to recover interest on the jj principal sum. (ii ) The mere fact that a debtor is hard pressed or is unable to pay in full at once is not sufficient reason for granting instalments and ordinarily the debtor should be required to show his bona fides by arranging payment of a proportion of the debt. 1 Order accordingly

SWEDISH MOTOR CORPORATION v. SUCHAK AND ______________________________ SONS COMPANY LTD __________________________ AH Cases referred to:

1. Sawatram Ramprasad v. Imperial Bank of India AR 1933 Nagpur 330
2. Kwashavji Jethabhai and Bros. Limited v. Saleh Abdulla [1959] EA 260
3. A Rajabali Alidina v. Remtulla Alidina and another [1991] EA 565 Statutory provisions referred to:

1. Civil Procedure Code 1966, Order XII, rule 4, Order XX, rule 11(1), Mr Ishengoma, for the Plaintiff Mr RC Kesaria, for the Defendant JUDGMENT (Deliverd 2 November 2000) Nsekela, J.: The plaintiff, Swedish Motor Corporation Limited, is a limited liability company incorporated in Tanzania, and so is the defendant, Suchak and Sons Company Ltd the plaintiff and the defendant entered into three (3) Instalment Sale Agreements dated 1 May 1999; 1 June 1999 and 1 December 1999. In these agreements the plaintiff agreed to supply to the defendant, and the latter to buy three Volvo trucks on the terms and conditions therein contained. Apparently, the defendant has defaulted in effecting payments according to an agreed schedule and as » result of this default, the plaintiff instituted this suit on the 25 August 2000. On the 26 September 2000 when the suit came before me Mr RC Kesaria, learned advocate, represented the defendant and Mr Ishengoma, learned advocate represented the plaintiff. Mr Kesaria informed the court that document headed “ Notice of Admission Under Order XII and Order XX, rule 11(1) of the Civil Procedure Code 1966 ” had been filed in court in which the defendant seek to settle the suit by paying monthly instalments of USD 10 000 with effect from 1 November 2000 but without interest and

302 TANZANIA LAW REPORTS [2002] T.L.R. A with the usual default clause. Mr Ishengoma on his part noted the admission made by defendant but he submitted that the transaction was a commercial one and should therefore attract payment of interest on the decretal amount. Consequent upon these submissions by the B learned advocates, I made the following order: Judgment is hereby ordered on the principal sum claimed in the plaint under paragraph 12(1). The said amount to be paid in monthly instalments of USD 10 000 with effect from 1 November 2000 until full payment of G the same. Costs are awarded to the plaintiff. (v) The parties to negotiate the question of payment of interest on the principal sum and report the outcome of such negotiations to the court. Mention on 11 October 2000. D The suit has since then come before me on the 11 October 2000 and 18 October 2000. On each occasion Mr D Kesaria was absent. On the 18 October 2000- Mr Ishengoma undertook to get in touch E with Mr Kesaria in order to finalize the matter. On the 26 October 2000 the suit again came before me. This time it was Mr Magai, learned advocate who appeared for the plaintiff Mr Kesaria did not enter an appearance. Mr Magai stated that his client has not acceded to the request to waive payment of interest on the decretal amount. The reasons advanced on the 26 September 2000 by Mr RC Kesaria in seeking a waiver of payment of interest were first, the fact that the defendant was offering to pay substantial instalments subject to the usual default clause and secondly, the fact that the defendant G had sought not to prolong litigation over the matter. As stated before, on the 26 September 2000 1 entered judgment on admission in favour of the plaintiff under Order XII, rule 4 of the Civil Procedure Code as regards the principal amount stated in paragraph 12(1) of the plaint H to be paid over a period of time. The question of interest payment was deferred in the pious expectation that the parties would sort it out. Order XX, rule II (1) of the Civil Procedure Code provides: Where and in so far as a decree is for the payment of money, the court may for any sufficient reason at the time of passing the decree order

SWEDISH MOTOR CORPORATION v. SUCHAKAND SONS COMPANY LTD 303 that payment of the amount decreed shall be postponed or shall be made by installments with or without interest notwithstanding anything contained in the contract under which the money is payable [Emphasis Supplied]. When the proposal was made, Mr Ishengoma readily accepted the deal but insisted that payment of interest cannot be waived. The defendant proposed the quantum of the instalments and the plaintiff in an act of magnanimity duly accepted them without demur. Under the circumstances, the court duly exercised its discretion to stagger the payments in the manner proposed. But the defendant has gone further in seeking that the plaintiff should forego payment of interest. It has been stated that the mere fact that the debtor is hard pressed or is unable to pay in full at once is not sufficient reason for granting instalments and that ordinarily the debtor should be required to show his bona fides by arranging prompt payment of a fair proportion of the debt (See: Sawatram Ramprasad v. Imperial Bank of India (1); Kwashavji Jethabhai and Bros. Limited v. Saleh Abdulla (2); A Rajabali Alidina v. Remtulla Alidina and another (3)) In Alidina ’ s case, this Court (Law, J.) adopted a passage in “ Woodroffe and Amir AH ’ s Civil Procedure in British India ((2 ed) at page 869) at to what matters should be considered by a court in deciding whether or not “ Sufficient reason" exists. These are: (i) the circumstances under which the debt was contracted; (ii) the conduct of the debtor; (iii) his financial position; and (iv) his bona-fides iB offering to pay a fair proportion of the debt at once. I have already mentioned the reasons that have been advanced by the defendant, namely an offer to pay substantial installments and that there will be no protracted litigation in the matter. I do not wish to lose sight of the fact that the interests of the plaintiff as the creditor have to be protected as well. The court having agreed that the decretal amount be settled by payment of installments is I think

304 TANZANIA LAW REPORTS [2002]T.L.R. A sufficient indulgence. The plaintiffs ’ rights should be seriously taken into account. Having considered all the circumstances in this case, I do hereby order the defendant to pay interest on the decretal amount. It is accordingly ordered. B TANZANIA VENTURE CAPITAL FUND LIMITED v. c IGONGA FARM LIMITED HIGH COURT OF TANZANIA AT DARES SALAAM (Nsekela, J.) COMMERCIAL CASE No. 14 OF 2000 E Civil Practice and Procedure - Applications - Application for leave to withdraw suit with liberty to file a fresh suit in respect of the abandoned suit - Order XXIII Rule 1(2). F Civil Practice and Procedure - Written submissions by order of Court - Governed by practice. On 20 April 2000 the plaintiff applied for and was granted leave to withdraw its suit with no order for costs by amicable consent of the parties. Subsequently it filed the G suit afresh. In its written statement of defence the defendant raised a preliminary legal point that the suit was not properly before the court on the ground that the plaintiff had instituted a suit similar to the present one and the same was withdrawn without leave to refile it. H The parties were ordered by the court to make written submissions on the preliminary legal point. The defendant made its written submission in contravention of the court order in that it presented the written submission long after the date set by the court. In the reply to the submission of the defendant the plaintiff raised a preliminary objection I that the defendant ’ s written submission be struck out since they were filed out of time