Joseph Mbwilo vs N.B.C and Others (Civil Appeal No. 23 of 1998) [1999] TZHC 66 (8 December 1999)

IN THE HIGH COURT . OF TANZANIA AT SONGEA I CIVIL APPEAL NO. 23 OF 1998 ORIGINAL IRINGA DISTRICT COURT CIVIL CASE NO, 106 OF 1996 JOSEPH NBWILO ............... APP3LLMTT VERSUS:

1. The N.B.C. 2 • SETI 11010 t/a f z)••,• EPc AUCTION KRT )
2. BiiN PEREIRA ) J U 1) GN E N T Pj JCL. In the District Court of Iringa at Iringa Joseph Mbwilo, the prant appl1art1 •- 1ie reandents the Seti Moto t/a M5jembe Auction Mart and 3en Preira. It was established in the trial Court that the appellant Joseph Mbwilo got .a loan from the first respondent The ?Tiial Bank of Commerce. The loan was Sh5. 6 1 000 1 000/=. As collateral for the loan, the appellant deposited his title deed for a house situated on Plot G. 336 Towhship. The appellant defaulted when he hd an - -- .ing amount of Shs. 3,200,0007= to pay out of the total loan. This led to the auctioning of the house under mortgage at Sha. 4,600,000/=. house was auctioned i th r-,r,, 'ho is an auctioneer and C;ourt Broker. The third respondent bought the house at u the appellant contended that there was collusion L ;ween the Court broker and the buyer of the house and this led to the hou 3 being sold at a lower price then the valuation Report price. The ial Court discounted

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-3- The essence of the Preliminary and final Decrees in suit for foreclosur and sale is to give time to the mortgagee to redeem the inortage after default. The time for redemption is six months as shown under 0, 32 Iie 2(c) but the Court is given leeway to extend the time for payment of mortagage money under the Proviso to Order 32 iule 3 (2). It is only after the mortgagor fails to discharge the mortgage jxi the period between the Preliminary and Final Decrees that the mortgagee loses title to his property. The proedirtgB of the -original suit in thu Dis-trict - Ccrt. o Iringa, and the argument of counsel LUirins the haring of this appeal, did not a&Lr.ess the question Qf procadur. oLf descharging mortgaiw.er 0, 32 of the C±ri1 Proedure Code, Instead eviience was led in the trIal Coiurt, aI argwnts were made in the appellate Court, that there was fraud in the sale. Before there can be a sale in a suit based on a moitgag, the correct prQaedure must be seen to have been followed. The trial Court record does not show that the mortgagee i.e. the National Bank of Commerce either foreclosed or applied for sale under der 32. This made the whole proceedings in the trial Court a nullity. The judgment and decree of the trial Court are hereby set aside and the purported sale declered a nullity. The first respondent should follow the procedure set out under O 32 in discharging of the mortagage. The appeal therefore succeeds. As for costs the second and third respondents are innocent by standers in a wrong process initiated by the first respondent so they cannot be condemned to pay costs. The first respondent will therefore be the person to beer the costs of this appeal. Dated this 7th Decemver, 1 999.

W. S0-Mndia PRM. EXI JURISDICTION I

• 1 8/12/99 Coram: Mandia 1 PIN, Ext. Jurisdiction For Appellsnt: Absent, For Respondents: Absent. Order: Judnent read in the absence of the parties this 8th December1999. Pies should be supplied with copies of the jè ..• / I I ' I \ \ / \ lI.S9.-Mndia '- JURISDICTION. WSM/PJL.