National Bank of Commerce vs Ignas Mnyota t/a Mnyota Poultry Farm (Civil Case No. 14 of 1993) [1999] TZHC 498 (20 December 1999)

.. . . .. ?- .... , •• f ·- IN THE HIGH COURT OF TANZANIA AT MBEYA CIVI~ CASE NO. 14 OF 1993 • t .~; • NATIONAL BANK OF· COMMERCE •. • •••••••••••• ~ • •. PLAINTIFF VERSUS · I GNAS MNYOTA t/ a MNYOTA POULTRY FARM aeoo••••o•~ooe•o••••e•o•••••o•e• JUDGEMENT ~ro, J. DEFENDANT At the start of the trial the issues drawn for determination t1ere as follo'Ws:-

1. Whether Ignas Mnyota t/aMnyota Poultry Farm the defend.ant took a loan of Shs.4,470,0oo/= from the plaintiff N.B.c. Karume Branch, Mbeya, if yes, whether the plaintiff has repaid it; if not, what is the amount owed by the defendant to the plaintiff.
2. Whether . the defendant took an overdraft o,f Shs.2, 000, 000/= which was to expire on 26/11/93, if yes, has the overdraft. been repaid; if not.is the defendant liable.to repay it and to what extent?
3. Did the defendant operate a current account Na. P/03096 or any other account at N.B.c. Karume Road Branch? If yes did the defendant owe NeB.c. Shs.45,250,099/10 by 30/6/1996.
4. Did the plaintiff take away from the defendant a tactor vent.TZ 85071 •. If yes, did the plaintiff have a legal right to do so? If not, did the defendant suffer . any dam_ages to the tune of Shs.584, 44o, 000/= as a result? '
5. What reliefs are the parties entitled to get?' The plaintiff N.B.c. Holding Corp. Ltd. who has taken over the .· suit from the .N.BeC• ·by amending the plaint to that effect as ,filed on 16/6/1.998 has brought one witness PW.l Kileo Salama who on' • .-./2

• 2 - cross examination by the learned Mr: Mkumbe Advocate for the defendant prayed to be given more time to'find some documents relating the overdraft ledger card which he testified to have been lost. He was given such time·by adjourning the case. The ·hearing never took off again due · to the non attendance of the plaintiff and his advocate the learned Mr. Ngatunga (Advocate) from Tan.zania Legal Corporation Dar es s~. The court therefore, pro·ceeded without the presence of the plaintiff and his advocate by treating the prosecuion 1 s case as closed from where PW.l ended with cross examination without re examina., .. tion or calling further plaintiff 1 s witness in these words:- 91 1 allow this-witness time to search' further for the lost documents related-to the overdraft facility which he has explained in cross examination that they got lost while shifting from the old NB.C~ Karume Road Branch to the new N.B.c. Investiment Branch. Hearing to continue on 2/4/1999 still in rexamination if he will get the documents and tender them. The learned Mr. Mkumbe, Adv. will be allowed to cross-examine him with leave of court on the newly produced documents if any. 11 So, while the prosecution of the plaint was on 3/12/98 conducted inter-parties the defence of Ignas Mnyota t/a Mnycita Poultry Fa.rm was conducted exparte on 7/12/99 after being allowed on 28/9/1999 to proceed defending ex pa.rte an:d to prosecute his counter-laim ex pa.rte too. The defence and prosecution of the cbunter - claim have been .. ",,· partly . conducted by a.ffid•avits. This judgement in essence is L interparte and partly ex pa.rte as eJqJlaind above. · sworn From the L · testimony of the plaintiffs in court of PW.l Kileo s/o Salama supported by his produced 28 exhibits _P.l - 13, Pol4 (i) - (xi) and P.15 the denial of the defendant that he already settled the orginal loan of Shs.4,470,000/= through being sued in court in c.c.No.67/1990 ooe/3

i . );._ ... ·1ooks quite plausi-bleo The .. ;?CJ>lanation given by PW.,l Kile'.) Salema is that tI:,e loan of Shso 4, 470 1 QOO/= was for buying a tractor valmet with its spare parts of plough harrow discs etc. for paddy farming as well as for poultry farming ... By 1990 he said they sued him in court 13th for the debt which existed up toLSeptember 1990 of Shsoll7,500/= only All the loan dealings in exhibits Pl, P2, P3, P4 and Exhibit P.14(i) ~ (xi) the cheques relate the loan of Shso4,470 1 000/= for which the civil case was filed against the defendant exparte under sunm1ary :procedure and the execution was done through the foreclose of the mrtgaged secur.i ty of the loan in form of a house on P.Lot Noo · 3 Blo_ck D Mbalizi Urban Area, Mbeya by its saleo The defence raised by the defendant in respect of this loan that the case was heard and finalized and executed and bill of cost taxed and eecuted against. the said mortgaged house Plot Noo 3 Block.D Mbalizi Urban Area Mbeya Muncipality has been· establish, to the satisfication of this courto This suit in respect of this loan amount is therefore b ·ound by r.es-judicata., · The first issue draym therefore I hold thn.t Ignas Mnyota t/a Mnyota P;;ultry Farm the defendant took a loan of Shso4, 470, 000/= from the plaintiff N.B.C., Karume fully . i990 he failed toLrepay ito Dranch Mbeya after ,:hich in betwee'n 1987 and The plaintiff as. a :cesult foreclosed the mortgaged house Plot 3 Block D Mbali7~-t Urban Arec:. Mbeya and thereby terminating their relationship in respect of this loano The defendant therefore owes not.bing more to the. plaintiff,, !he..t is why the plaintiff of doesn't even want· to reveal what sale priceLthe ati;ached house sold and what remained thereof from the proceeds of saleo j'f the 'sold house had not satisfied the loan debt plus its taxed co._sts et.co the plaintiff should have· continued to find other assets of the defenda."'1t for • attachment.and sale to satisfy the.adjudged debt anct taxed costs. The talks . about fact that the plaintiff L nothing I the proceed.s of the sold house the 1- sold.is means thatLfull price value of the houseLconsonant wit,h the judgement , o o,/4

4 - even debt and truced costs and possiblyLmore than that which met the court brokers fees etc. The 2nd issue drawn was whether the defendant t.ook an over- draft facility of Shs.2,000,000/= which was to expire on 26/1/1993• The plaintiff in the 6th and 7th para of the Amended plaint filed on 16/6/98 with leave of the court covers this claim. The testimony on this claim was covered by PW.l Kileo Salema in his testimony in court as well as in exhibit P.6 letter dated 2/6/90 of the defendant to the bank, P.7 letter dated 28/11/90 of the defendant and affidavit Exhibit P.8. The defendant has denied totally to have taken this credit facility by way of Bank Overdraft. In his defence evidence by affidavit in para 4 (a) (b) and (c) he has contended that if he had taken this overdraft facility then he should have included his claim in the Civil Case No. 67/1990 in the amended plaint which was filed / • in that Co Case 67/90 on 23/2/92. He further argued that · . the letter of offer of Shs.2,000,000/:: as per Exhibit P.15 was not actually granted to him in the end. the From the testimony of PWl there is truth_ hatfefendant enjoyed another bank facility from NoBoC Karume Branch by way of the over- draft and even more. In exhibits P.6, P.7 and P8 and in exhibit P.15 the defendant definitely enjoyed the following bank facilities: By 8/8/1988 he was given an overdraft facilii:y of Shscl,000,000/= as per annexture to the amended plaint of 16/6/1993 with . an interest of 28% p.,ao The defendant counter-signed.this letter saying . siimature 11 nashukuru sana" ( thank you very much) which b13re·: che auth~ntic Lf Ignas Mnyota as·compared and seen by me with other undisputed documents of the defendant under Section 75 (1) of the Evidence Act, 1967. Then on 11/12/88 he got another overdraft facility of Shs.2 1 000,000/= the subject of this suit as shown in Exhibit P.15. That exhibit proved that he got the overdraft facilitye In Exhibits P.6 the defendant agreed on 2/5/90 to have another Bank facility in respect •• ,./5

., 5 - of his Mnyota Auto §age Ltd. loan Shse3, 170, 641/85. In the affidavit of 28/11/90 the defendant swore as follows:- 91 1i> That I am the Managing Director of Mnyota · Poultry Farm Ltd. and Mnyota Auto Garage Limited both with registered offices in Mbeya. 2. That both companies owe N.B.c. a total of Shsel7,023,983/8o arising out from loans, overdraft bank interest and other charges as of November i990. Mnyota Auto Garage owes Shso3,688,602/85, Mny_ota Poultry Farin Ltd. Shs.10,442,550/= and an overdraft account of Shs.2,892,631/95• 3* o o o o o o o o o o o o o o o o e o .. 4. That I declar,..e that both companies•will start paying the debt money commencin Decemberi 1990. The last instalment will be P!il~ by August, 1993 and by_then the sum due to the bank will be Shs.19,800,000/= as shown in \ the attached letters c3:t page .2 and 3.il The last para 4 quoted·above answers the argument in the Submission of the defendant that if.he had other bank debts to the plaintiff they should have included them in the amended plaint of the plaintiff in c.c. 67/19900 The plaintiff could not have done so from be'cause the bank facilities were different, the amount of Term loan of '- held above 4, 470, 000/= which was covered in the previous case which I have L to (for.it was have been coveed by res judicata in this case. L secured with a mortgage of the house.later o•foreclosed in the previous case No. 67/90 and sold)• These other facilities of Bank drafts were not secured by any mortgage etc. ,And they were to expire by August, 1993 beyond the date of amnded plain't filed on 23/2/92 From this quoted affidavit of the defendant of 1990 he was confesf?ing to having a bank overdraft facility enjoyed by him which stood at an ••• /6

6

overdrawn account of Shs.2,892,63)/95. The basi'c, overdraft was definitely Shs.2,00?,000/= covered in this case's.amended plaint of 16/6/1998 in the 6 para. The defendant: in his affidavit in defence testimony has argued in para (e) that the bank statement, ledgers, cheques or loan agreement not wereLtendered in court as exhibits. There was no .need to produre them as they were lost and that is why PW.l requested to try another last chance to trace them. He gave the reason for the loss as being the shifting of the Bank branch from the' old building to the new Investment house they are currently housed. This is a sound reason for documents to be misplaced or lost. But, this lacuna is filled up by the defendant himself in the produced Exhibit P.8 in which on oath while trying t~ woo the Bank to give him more time to pay the overdraft and other loanshe confessed to be having those that have other bank facilities. I holdLhe indeed did L other bank facilities inciuding the overdraft of Shs.2,000,000/= which is now claimed to have borne other charges and interests amounting to a purported total of have I am only at a loss in respect of the bank charges which should borne L such a staggering super.gain of Shse45,250,099/10 from only an overdraft account of Shs.2,000,000/= by 26th November, 1988 up to 30/6/96. PW.l'did not help the court much for he only mentioned the 9ank interest of 28% for an overdraft p.a. In his oath testimony in court PW.l Kileo Salema testified as . follows, after his advoc~te the learned Mr. Ngatunga (Adv.) asked for the court to permit PW.l to refresh his memories and he did so and testified with such refreshed memory thus:- 111. Term loan was Shs.4,470,042/= with interest at 28% p.a. So the interest on this loan was'Shso 3,804,490/30 from the date of the loan until 30/6/96 • ••• /?

.. ,_ 7 - 2.a ·The project account's main loan facility was Shso 16,310,310/50. This facility goes together with the term loan interest of 28% for the same · perfod which reached Shs.6,957 1 687/20 by 30/6/96. 3o Overdraft facility main loan was Shs.6,961,881/95 frpm 6/11/92 up to 30/6/96 while interest" rat"e was 28% p.a.~ accumulating up to a total of Shs.6, 951,.687/20. Total of the ntire loan debt comes to Shs.45,250,079/10." From this testimony we get how the total figure of .Shs. 45,250,079./lO'was reached as coverd in the amended plts claims in the paras 6, 7, 8, 10 and reliefs para (a) • . In this· claim the plaintiff has lumped three types of bank facilities in one para 7 of the amended plaint. The:. e facilities were the Term loan facility of 4,470,000/=• This amount with.its calculated.interest standing at 3,804,490/05 by 30/6/96 was tied up : ' with the res judicata p.rinciple in c.c. Noe 67/1990. It can't be revived again for ever. I hold. that this .claim is unfounded and is. ·" dismissed.,· . The other claim ;is in respect of the project account facility of Shs.16,310,310/50 which attracted the 28% p.a. interest by 30./6/96-o The interest had reached Shs.6,957',687/20 as on 30/6/960 This is a vague and omnibus claim which ia embarrasing to the·defendant ·because it has not been covered in te pleadings at alla In the 3rd para of the amended plaint there was a general claim of Shso 4.5, 250, 099/10 from_ account Noe P/0'3096· at -Karume N.D.C• covering interest, charges on a curent account~ No mention was made of a project account at all. .. Para 6 talked of o-vrdrai't account of Shs.2,000,000/=• Para? covered a loan, cverdraft and interests onl,y. In the entire Amended .plaitt? menticm of Ml p'roj~~t aceeunt at all.1, . rt· was mentioned by PW.l for the firs,t -time lj,n court when tcetifYing .••• /8

• 8 - as PW.l. And yet he promised to bring the lost documents if found which were never found. So, ttis claim in his refreshed memory of a project account ot Shs.16,310,310/50 with an accumulated interest i& Shs.6,957,65?/20 is extraneous L to this suit and outside the realm of the amended plaint. It is dismissed. We remain wih the overdraft. By 26/ll/88 it stood at She. l, 000; 000/= as• exp;I.ained above. By 4/12/88 it rose up to Shae . . ' 2,000,000/= as per exhibit P.15. By the day of 28/11/90 it had reached Shs. 2,892 1 631/95 as per Exhibit P.8. By 6/11/92 up to 30/6/96 it had reached Shs.6,961 1 88)/95 main overdraft with an interest about., equal in accumulation. to about Shs.6,951,687/20. The . t total overdraft deqt omain overdraft withdrawal was at Shs.6,961,881/95 as testified on oath by PW.l which attracted an ·accumulated interest of Shs.6,961,881/95 ~ testified on oath by PW.l, I hereby hold as. having been so established by the plaintiff against the defendant. Its debt in.total is Shs.13,013,568/15 only (6,961,881/95 + 6,951,687/20). So, to answer the 2nd issue drawn I hold that the defendant Ignas Mnyota t/a Mnyota Poultry Farm took an overdraft of .phs.2,000, 000/= which was to expire on 26/11/93 and which was not repaid at all and actually upon which he continued to overdraw some additional fwids which totalled Sbs.13,013,568/15 by 30/6/1996 when the amendea plaint . hereby held was finally filed in this c9urt. The defendant i~liable to pay this amount to the same extend f"f Shs.13, 013, 568/13 to NBC (holding) Corp. (plaintiff). The 3rd issue drawn was whether the defendant operated a current ' . account No. P/03096 or any other account at N.B.c. Karume Ltd. Branch. If yes did the defendant owe N.B.c. Shs. 45,250,099/10 by 30/6/1996. answer To L this issue I start with a clarification that the Shs. 45,250,099/10 was not solely based or depended on the mentioned account No. P/03096: but on three types of accounts of term loan account, ••• /9

• ·9 - .,.verctraft. account and prp-jec-t account. As to account No. P/o:;<)96 it has not bee~ specifically proved what that account was for. It is likely that he had such an account because the defendant mentioned yet another account in,.the attached declaration to the affidavit in exhibit P.8 to the effect that he owed N.B.c. Shs.3,.568,920/= which he undertook to pay through the Bankers order No. r/03548. This is another bank account the defendant had with the plaintiff at the is very relevant time when this dispute arose. So,itLpossible he had such another account No. P/03096. Novetheless,whatever other accounts the defendant operated including the total conf€ssed debt of Shs.19,800 1 000/= by August, 1993 the . in ;_4th para of his affidavit in Exhibit P.8 as quoted above,cannot be adjudicated·upon in this case because the plaint has been vague on them and at variance with the sworn testimony of PW.l also,as qu,ted above. The 4th issue drawn was: did the plaintiff take aJAay from the de- .fendant a tractor valmet TZ 850?1? If yes was 'it so lawfully done? f . ' If not,did the defendant suffer any damage to the tune of Shs. ,584,44o,OOO/= as a result? From the pleadings it is clear that this issue ar~es out of the counter claim of the defendant in paras 18 and 19 for iost earnings through uncultivated. paddy of 79.9 hectars per year with a loss •f earning of Shs.10,000/= per bag adding up to Shs.59,930,000/= lost eight (8) earnings per year which add up to Shs. 479, 44o·, 000/= in the lastLyea:rs. He has also claimed for lost Shs.J0,000,000/= from the non-hire f!f the· tractor to other· farmers who needed their farms ploughed by the tractor. He' further claimed for Shs.50,000 9 000/= for general damages for the sufference and inconvenience caused to him due to the non-use of the tractor. The tractor was seized in October• 1990. The plaintiff had raised a no cause of action preliminary point of law. The court did not have an advantage of hearing the arguments ee e/10

·- 10 of the learned counsels in this case for it was ultimately tried partly ex pa.rte without the plaintiff. Although this point was not preliminarily dealt with by the parties it has no merit because the'plaintiff has gone on to admit in the ?th para of the Written Statement of Defence to the counter claim that the plaintiff indeed seized this tractor but lawfully after the plaintiff had ~ailed ·to repay the loans advanced to him by the pl$tif!, ' ' The plaintiff further' contended that the t:ractor was bought from funds loaned to the defendant. The defendant in his affidavit in proof of this claim has conceded that the tractor was partl:y bought from th0 plaintiff 1 s advanced n•y of Shs.l,381,200/=. The defendant has contended'that the seizure of the tractor was unlawful because it was seized when the defendant owed \ , no money to the plaintiff. I have already held above that the defendant for Shs.13 1 013,568/15 per · • ·was indebted Lto the plaintiff. Alsoz:the defendant's own confession in the unproved his affidavit Exhibit P.8, he owed N.B.c. by 28/11/90 L Shs. 17,023,983/00 from the. different bank facilities he anjoyed from the 'plain ti ff o So, by the time the plaintiff seized this tractor no doubt he was justified to do so. That was in October, 1990 when the tractor was seized. The developments which followed thereafter included the following:• • By 19/11/90 the_defendant wrote the said sworn declaration to the plaintiff: part of which reads: "That on 9/11/90 the Bank seized my tractor which I strongly,depend o in .agricultural activities. The seizure of the tractor is going to negatively affect '·production in the Co. such t!J,at I may fail to pay the promised instalment. 6. That for the foregoing reasons I pray with the Bank authorities to release my tractor to enable me carry on ••• /11

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• 11 - my agriultural activities and I further pray the Bank to accept my proposed shedule of paying the loan and inbere:o-t: as shown in appendix •A."' In the said appendix "A" the defendant p.a. from Decer.1ber, 1990 up to July, 1991., repay repay suggested toLShs.150, 000/ = . Thereafter,he would continue to L at Shs,.180, 000/= August with a lump sum payment of. Shs. 250, 000/= in July 91 ( after harvesting the seasonal crops)• Later· ,n, he could pe:y Shs.200,000/= per mnth with one lumpsum payment of in August, 1992 (seasonal crops-sales). The.same total Shs. debt with interest would have been completely disbursed at Shs.7,101,373 by June, 1993. The pla_intiff, did. not respond to this request and according to PW.l they still kept the tractor for themselves somewhere in the Bank uf to now 9 years later doing nothing, parked! At the time the · in 1990 plaintiff filed a suit in courtLagainst the defendant for the.other the loan of . loan • why didn' t they includeL this tractor. By 1992 when filing the amended plaint still they did not include the amounts which lend to the seizure of this tractor. By keeping the tractor without selling· jeopardy it they put the defendant at double financial L- of non-use of the tractor while having the l._aned account ccumulate by bank interests and charges while the tractor was rotting in their own hands. This is and willy ridiculoly_unreasonableconomics, frivolous abuse of the loaners right of lien over the tractor for its funds invested into it and arbitrary misuse of the tractor by keeping it lying dormant and depreciating and unproductive. For failure by the Bank to use reaso- nable businessmanship and care in detaining the tractor indefinitely. They had exceeded their right of lien and infringed upon the contracted of defendans own right Luse of the tractor as per their loan agreement to have the defendant use the tractor while paying off its debts. At worst the plaintiff should have then sold the tractor or hired it elsewhere with- someone who would J:1ave used it better to generate funds • ••• /12

• 12 - By selling the tractor the proceeds thereof would have been used t• repay the loan of the defendant., That wa.s an unlawful act for·. detaining the tra,ctor 6 months after seizure and without returning it to the defendant either. Worst still, the seizure was done in November, 90 _at the start of the farming season. - The seizure could .. ·even amount to being wanton. and unwittingly having the effect o:( ·3 . punishing the defendant by depriving him o·f his only tool of trade to, carry out his farming of paddy etc. and make a living. The seizure of the tract6r though lawful at first to awaken the defendant in his responsibility to repay his loan later on became recklessly unlawful in its continued detention indefinitely., The plaintiff should have had even the costless ettiquette of replying to the defendant's request to keep and use the tractor while he continued to repay the loan. No doubt the plaintiff was reckless and negligent. Did the defendant suffer damages. He did to some extent not up to the wild claims he has made in his counter-claim. hectares His estimate of being able to cultivate all tha 79 L and •·• getting a sale price of Shsal0 1 000/= per bag of paddy with 5,993 bags totalling Shs.59,9:30,000/= is totally unreasonable for him .to have produced that much. If sc, he should have been able to raise such produce prior to the seizure and would have been able to repay the loan for the farm in a matter of a few years. He didn't repay much of the loan meaning the production of the farms was not that much lucrative apart from the investment costs which are quite substantive in cultivating 79 hectares. I allow an estimated net profit of about Shs.;2 1 000 1 000/= per year from 1991 season to 1996 when this suit was filed a total of 6 years is Shs.12,000,000/=. 18 Fer hiring the tractor to others whichC° bit more lucrative since the hir.e ;price is immediate, during the non. farming season I hold an estimate profit of Shsol,000 1 000/= per year for 6 years which comes to another bb.s.6,000,000/=. The claim on para 8 (b) for buying a new tractor is baseless for the defendant,had no monetary power to buy a new tractor from his own ·sources. Otherwise, he should have done so long time ago • •• • /13

J The claim for general damages for inconvenience was caused by his own default in paying instalments t<;:> neighbouring c"o-villagers or co-warders in the area/Ward members. I grant a mere ·token of Shs.500~ 000/= for the __ entire period ·of 6 years he· ·has been kept embarrassed for his non-use of the tractor. The prayer of interest is / granted at 1(1}6 p.a. on the entered claims of Shs.18,500,000/::: from 1991 to 1996 when the suit was filed and then at the court rate for the suit 7% from the timeLwas filed until today and the final satisfaction of the decretal debt. I -also..~ntered judgement for the plaintiff for Shs.13,013,568/95 • . The same shall carry the court rate of 7% from the time the suit was in · filed on amended plaintL1996 until now and thereafter to the same rate until the judgement debt is paid. I allow the two side$ to set each off againstLothers' decretal amount entered against and in his favour with the effect that the defendant shall be deemed to have already been paid off by the plaintiff's own entered judgement credit thereby retaining his own balance of Shs.,5,486,432/= (Shs.18,500,000/= - 13,013,568/=) in his favour. The plaintiff shall retain the tractor for good and may sell it to mitigate its entered judgement debt to the defendant of Shs • . 5,486, 432/=e The 10'/4 and 7% interests entered in favour of the defendant shall be calculated on the Shs•5,486,432/= only from 1991 to 1996 and thereafter 7% interest p.a. until its final satisfaction. plaintiff's claims The L . are allowed with costs as explained above. defendant counter-claim is allowed with costs as above. .. E. L. K. MWIPOPO JUDGE 20/12/1998 •••• /14 The

.. 14 - 2o/12/99 Mwipopo 1 J. Plaintiff: N.B.C. Holding Corp. -·Absent For ?lain ti.££:. J,h-,. Ngatunga,_ , Advocate from T.L. c. - Absent • Defendant: 'Ignas Mcyota - Present in pereon For Defendant: Mr. Mkum.be (Adv.)...;_ Absent not .arrived as yet. B/C. Mrs. Kasubiri COURT: Judgement delivered in the absence of the plaintiff. /JJM Di..strfot ,ltegistrer to in!orm him accordingly. Right of Appe{ll e.Jq)lained. E. L •. K. MWIPOPO JUDGE ' ,.