Manohar Lal Aggarwal vs Tanganyika Land Agency Ltd and Others (Misc. Civil Application No. 32 of 1997) [1998] TZHC 2173 (29 December 1998)

. IN THE HIGH COURT OF TANZANIA (DSM DISTRICT REGISTRY) MISC; CIVIL APPLICATION NO. 32 OF 1997 MANOHAR LAL AGGARWAfJ ............... :· ...... APPLICANT VERSUS TANGANYIKA LAND AGF.NCV L'fD & 8 OTHERS ..... RESPONDENTS R U T., t __ N .. G This ruling is in respect of an application for leave to appeal to the Co11rt of Appeal against the decision of this court (Chipeta, J.) contained in the following order, "( i.) 'T'he respondents shall cal 1 for and ho1d genetA1 meetings of the companies named in this application within seven (7) days from the date of delivery of this Ruling or as soon thereafter as the chairman shr111 direr::t.. () 'T'he RRi<l generRl meetings of the companies shall he 1mc'ler the chairmanship of a senior officer from the Office of the Regi.strar of Cpmpanies to be nominated by the Registrar of Compahies. (3) The District Registrar, the High Cot1rt of Tanzania, Kilimanjro Zone, shall act AR secretary of lhe general meetings of the said companies. (4) The expenses of the holding of such genera] meetings of the said companj.es as well as allowahces for the chairman and secretary and any other necessary staff shall be paid by the compani.es aforeRai.d. Such allowances shall be at the rates to be determined by thA chairman of those general meetings. (5) The respondents shall pay costs of this application. (6) Each of the respondents shaii. pay a fine of shs. 500/=. It is RO ordered and directed". l

I The above decision resulted ftorn an application by Hanohar tal Aggarwal (Respondent in this application). gainst Tanganyika Land Agency Ltd (TLA), Kamal Kumar Vohora, Ashni Kumnar Vohora, Sosheila Devi Vohora, Shaira Vohora, Dev Nath Kapoor, Snehlata Kapoor, Satisha Nand and Aruna Nanda, now Applicants. The application sought ior two main reliefs, that is, a directioh for the calling of the a General meeting of a companies in the hame and style of Kararnu Coffee Estates Ltd, Kilirnani Coffee Estate Ltd, Kongoni Estate Ltd and Kiran Estate limited within 7 days ot , the date of the courts order or as soon as the court deems fit, ;:inn, a rlinc:tioh t".hAt. t·.he sr;1i11 meP.t.ing he r.onducted under the ch.::d.rm,1nshi.p,. s11petvision, rlirP.r:t:ion ;rnd gnidance of ,rn offic:er of the offir.e of the Registrar of Companies)and,a suitable officAr he appointe<l by the court. lo he the secretary of the sai.d GenerRl meeting which teliefs were gtanted as alteady indicaied. Tn this application, the aplicants contend thnt they have fi.ve firm grounds of appeal fit-. to be decided upon by the Court of appeal,. and they portlay them as follows:- "1. 'T'he Hon. Judge erred .in l'°1w in holding that "imp).ead_iflg_the ___ companies in an application such g§.... t_Jte present orte does not arise at all". 2. The Hoh. ,Tudge ought to have held that an applicaUon under section 112(3) of the Companies Ordinance, Cap 212 could on 1. y be brought against a Company and i. ts defaulting Directors ;rncl "no one else". 3. 'T'he Hon. ,Judge erred in orderina J<ar.amu Coffee F,i:;1·.nte T.imit-.P-d, Ki.ran r:offeA EstRte T.,i.,;d.terl, K.il.imani Coffee Rstate Ll.mited and Kongoni Coffee Rst.ate Limiled lo hold a meetina withi.n seven f7\ davs wheh the said fotit comp;ln i.es. we_re _"hot: __ pa rl·.y _"to J.hft__j)_t_pceP:._dJpgB, _ !. ------------ . 4. 'J'hP. Hon. Judge etred in not appteci;:d·.ing the facts suhmi. t ted hy t.he or j gin al RP.spondehts that several Respondents ~ere neither DIRRCTORS not SHARRHOLDERS of any of the four companies against whom the original applicants lo<lged the complaint of not holdina Annual General Meet in_g .

5. Had the Hon. Judge appreciated the true facts then he would have seen the genuine necessity of making the defaulting companies as Respondents to enable them to ahswer the allegations of uNOT ROT.,DING ANNUAt GRNRRAL MRRTTGS. The said four companies have been CONORMNtm WTTHOU'f' 'RF.ING HF.ARD" clearly a denial of f tmd;imen tF1 l. "rj gh t 11 • Mr. Ng;ilo, Advocate, teptesented the app]icnts (original Respondents) whjle Dr. Mvungi., Advoc,;1te, repr.esent.ed the Respnndirnt;s (or..i.gi.nr1l Applicants). Facts ler1ding tn this str1te of r1ffairs r1nd whih are not disputed by either l)art:y are sirnpl.P .:rnd r.;-1r1 briefly he sti3t.ed as follows - the 1st Applicant is limited Jibility Compr1ny incorporated under Cap. 212 of our J.aws and the 2nd - 9th applicants are its' shareholders and Directors. For reasons which are hot clear the 1st Applir.Rnt hecnme the chairmRn, Director and Sec:ret:Rry of thP. fnllr coffee F.i:.t;it·.As al rendy Am11netat:P.d r:1bove. Upon attainment of i=;uch posH.ion, for over a dec;Hle how, notwithstr:1nding varjous requests by shareholders, and directions by the Regi.strr1t of Cnmpr:1nies., no AnnllJl General meeting has ever hP.P.n r.nnvenPd. 'T'he 'Respondents r:1re shareholders i.n the fotir Cnf f P.e F.st.r1t:P.s. 'J'he l Aa r necl r.011 h se l pn:Hrnn t:ed the i r ,·=1rg11nir:rn t.s h y w,1 y of wri.t.t.en s11hmiRsi.nns. 'T'he ,:1pplici:ints bri.efly submitted t.hr1t. in s11r.h ·m.::il:.tets ]P.r1ve t.n t.he co11rt. of .:lpper1l is just .:l for111r1liJ.y. Expounding on the proposed grounds of appeal Already quotecl ;:ihove., they insist thr1t. if there is any Ci:lllRe -'lt. r1ll ag-,inst The Tang<'inyikr.1 Land Agency it should haVf~ come Under the Ci.vil Procedure Code and not under s. 112 of the Companies Ord. as they (Respondents) ar~ not shareholders or Directors of TLA. 3

In reply, the Respondent's Counsel disclosed (hat the Appliants' Counsel was reopening the issue of whether leave to appe;:il to court. of rtppeal js just. a matt.er of fotmi'!lity as it was raised Rnd nAgatively answerAd in Misc. ivi.l Application No. 17 of. 1997 (Aru:=iha Registty, unreported); Urnt, the 1.st. Applicant, frr111<i11l.l=!ntly, 11sing·loopho.les in 1:hf ➔ Articlf?R of Association deliberately created by themelves for that purpose, suhrogated the Roard of the 4 Coffee Est . .:=tt.e Compani.es thus becoming their chairman, Directot and Sectetary. He ihsisted that. the registered offices of the 4 companies are within the Regi.stered offices of the 1st Appl.j_cant and that the Respondents and other share holders who are not of Vohora family have been denied access to the Rstat.es. RP.ganli ng the proposed gro11ncis of AppP.al, the Rl=!sporio8nt.s' r.oimsAl _. responrling serir1f-:im rirgt1Rs U1,1f·. 1 ovAr ;:i der.,3de t1ow, s·incA thP. rluhious ;:ippni.ntmAnt of t.hR 1st. Appl ic,3nt·. as chairm,3n 1 nirector ana SecrP.tary of the 4 Est.ates ho general meeting has Aver heen called nor returns fi.Jed wit.h the Regi.strrlt and a call by Ag g., r w a 1 sh.'! re ho l cl et' s i n f-. he four f. s t·. ri !·.es h ,3 s l Fl n d e d on rJ e ,3 f ei:lrs; thr!t as the 1 sl- Appl i.cani-. is the r.hr1 i nnan of t.he Roan1 of Directors, Managjng Director and Secretary of the 4 coffee Rstale Companies in which Respondents are shareholders the latter could properly make the relevant application, and finally that the Respondents have no claim as such on Tanganyika T.i'lnd Agency ltd ('T'LA) but in its capacity as the Chairman, 'birect.o:r and Secretary of the four Estates the request is for the convP.nihg of a Annul. nenP.ral Meet.ing. Other, :=rnhmissions i.ncl11ding the one thnt-. one of t-. he App l i can t s , ha v i n g been r.1 n Act i ng j 11 d g e , h n s de c la r,- Ad h i ms e .l f to hP. the •ijttnici;:ir.y' 1 , decLn.ing t.o reduce thA Colltt.s int.o "an urnwen terrain of inj11st.ice" arP. hot relevant. 4

./ ., In reply, the Applicants declared as baReess the last submission, and reiterated the question of .impleading. Having carefully considered the arguments and the facts -and decision on which they are hase<l T have but to dismiss the application for the following reasons. First, T should categorically state that the Applicants' r.1rg11m,rnt that. t.hP. gr,9nting of ler1ve t.o Appe;:il. t.o t.he Court of AppP.al i.i=: aut·.omr1t.ir. is. 11nt·.P.nr1hlA ·in 1.::iw. T ;,u.-;socinl:e myself fully wit.h the c1er.ision of t.hii=; r.011rt (Nr.ha1ln_. .1) in Mii:;r.. Civil App 1 i r. A t. i o n No . 1 7 n f 1 9{l7 .. 1' r1 n g r1 n y i k ;i r, ;rn cl A g e n c y T. UJ a n rl 8 Othets vs M,rnohot L:-il .l\ggr1wr1l (Ar11shn Registry, 1.1nnport·.ed) where ; t. st.r?t.en .. ";:in appl ir.;:il·.ion for le,1v~ 1.o r1ppAr1l AnvirrngAs i1 rlAt·.Armi1·1F11'.ion of t-.hA rlppl icr1tin11 on lllflt"its by t-.hf.} court:. 'J'hA co11rl'. does not: tnfHAly grant P.vAry nl" Finy application made to it for leave to Rppeal lo lhe .Cqurt of AppeJ, even i.f the application has no metit. Tf the legal position wetP. t.o the contrary, then t.he law wou lcl h,we been rendered r1bs11tci for mr1ldng provision for application for leave. Tnstead aggrieved Parties in all sit.uati.orn:; woul<l just Rppeal without leave. Alt.Arnat.ively, the 1;:iw wn11lrl ha.Ve provided in specific, r.le;ir r1nd 11namhi.go11R urrnR t·h;:it. the High Court 011ght. to grant leave whenever ;i party applied for it, wit.hn11t. r.onsi.deri.ng whether the r.1pplication h;id mer ·it or not.", er.ondly, T fincl no illRrit.R in t·.he Ro r.;il]ed propo::.ed gro11nrls of ;:i pp e ;:i l . 'T' h e .I\ pp l 1 r. ;rn t s h rl v e a 1 1 a 1 on g n o t. d i. s p II t e d t h a t. t. h e 1. s t. Applir.r?nt. was appointe rhairman of the Rn;:ird of nirer.loR, Ma n r1 g i n g n i n~ ~ t. n r a n n • s e r. t e i· a r y n f t. h P. f o u r r. o f f e e F. s i-. ;i t. e , C:omp,rnies. Neit.her has it heP.n r.hrlllenge<i i.hrli: t-he Respnnrhrnt-. is sh;:ireholr!er of the 4 F.st.r1t.e r.nrnpr?nieR . .l\t-. the sameti.me, [although the Appl i.cant.s in t:he propoRerl gro11no four m.::JKP. new ;il legr1.i-. inns that ~~ft~Yer..!.!J Rei:=-por1nents ( now Applicants) were nAi.t.her OTRP.CTORS nor SHARF.HOLDF.:R!i of ;rny of U1e four r.omp;rnieR] it: waR r1vP-rre<1 .. . 5

I ,1 unchallengedly by the Respondent., ( original ApplicanL), that the Applicants are Directors 'of the 4 Companies. This Court (Chipeta, J.) found thr3t. averment unchal lf:rnged as per the relevant ruling, •iurprisingly,. the nspondAnf-.s rn,;de no effort. at a] l t.o cha.l.1 enge these averment". The said averments wete inclusive of the ahove as well RS he one rel.Ating t.o t:.he wi.1f11l ;,ind nrrngAnt n:ifusnl h:, convene the Ann11r1l Genera 1. meet "i.ng. Tf t.he Appl icAntR were not Dinct.ors of the four F.stAt.A r:ompAniP.s U11w r.0111<1 not-. h.:ivP. kept. sil.f-rnt-. ,1s indir:"11·.ecl. That ;ipart:,. RVP.n U1P. worcling in IJ1e 4t.h propn::rnd grollnn of AppeAl. (., cJ.e(lrly ~ t.he Oirect.orship - it rRfers "tb several Respondents'',. meaning that othrs are not objected to. Thi.s h0wever should hAVP. hP.e11 t.i'!ken ilp rlur i ng the heating of the appJ.icAtion l.er1ding to t.hi.s kinrJ of si.t11ation, for .. An r1ppUcr1t.ion r.011ld hr1vH bP.An made t.o dtnp U1A Ro r,,illP.<1 unconcA rnAd "1=rnvA r ;:i J i, l P-rlV i. ng on 1 y I·. h0sA who r1 rA rA 1. ev an f·. . This w;:is not done. Ts this new mr1tter to hR tr1ken up before the Court of Appeal AR i.f H. w,3s r1 c:011rt. of nriginnl j11risdjction? 'T'hA Answet iR r1 r.lAAr no. Tn r1ny r.r1RP., is it ;,i ser.rP.t? Why not. d·isc:lorn t-.heix nr1mP.R if t.tt1P.? n. is not. of ihsigni.fir.rtnce t:.hat. All WfH'A cl11ly fihAd unrler s. 11.?.(?.) of f'.Ap. :7.1.2 for faUiir.A to convene ;:i gener;:il meAting, and ;:ill pr1irl the fine yet therA is no onP. in pr1rt.i.c11l;ir r.h;il.lenging t.his! A glimpse of the relationship hetween Applicants and thA four F.st.at.AR c,rn he hacl from onA of thP. dor:umAnt.R r1tt.achAd t.o the submissi.on to this appl ir.:a_t: i.on, whose contents, Dr. Mvungi .. inRist.R,. r1gain unchrtl.iP.ngeclly_. th,,t·. they an applicable aR well to t.hA other tAmainihg three F.st.at:As_. r1nci which r-ims as· undP.t, "To. All shr1rAholdtns of Knngoni Est.r1t.e t.t.rJ n~: RAq11est.. for r.nnven i ng of r1n Annual G1:rnera 1. !'1flfl.J:i.!:!g _ _( A.<}~.) 6

• Tn re:=:;ponse to a recent written request. by some shareho]derR for the convening of n AGM of the Comoanv Jam writina to advise all concerned that thi will he done i~ the duP. cour:=:;e when the·accourits of the Company for the year ended 30 June, 1995 have been·finalised and audited. Sgd: Ch;J i rmi'ln (St.amped:·- 'J';rngany:i.ka T.r1hc1 Agenr,y Ltd)". Nnw, wit-.h t·he ;ihovP., what is i'.hP.re t·h;it_ is fit. t.n be r.leterminP.(l hy Ute C'.0111'1' nf AppP.;11? ::::. 117. (1) nf 1-.hr-'! r.nmpanir-'!s Ordinanc·P. m.=ikes H. 111r1n<'!r1tory that nn incorpor;it·.ed Comp;:iny shn11lrl ho'ld r1 general meeting at ler1st rinr.e ;i year. The Applir.nnts AR r.hai.rman ;i nil n i_ r P. <~ t. n r s n f t. h R f n 11 r f. s t. A t· e r. nm p ;:i n i e s h A v e n n t. co n v P. n e d A n y meP.t. i ng for over Fl ner.r1de notwi t.hst;nid i ng the nq11est.s by shanhnl<1en~ .. ;incl <liter.f-.inns of t-.he Regist·rrtl· nf r.nrnp;inies. ThP. Appl ic~;:inh:.; ;re t.he nnP.s who ;:ir·e s11ppnsed 1·0 st·r1hitot·i ly cnnvr-H1P the sni<l tTifet.ing. As m11r:h ;:is thP.y cr1n pP.rsnnrtlly he proc:RP.0e<1 agninst in tP.rms of s. 112(2) of Cap. 212 AR wr1s t.he CnSR herR, whP.rAhy thRy enr.h paid n finR of RhR. 00/=, RO also r.nn Any memhP.r of the cnmpriny pRtit-.i.01, Rg,:1ini:1t t-.hP.111 for t.he r.onv,n:ing nf t h e g P. n A ni l m R P. t i n g ; s Ui P. R e s p n n d e n t·. o i d . 'rl-1 P. r e ·i s n n q, 1 A s U o n of implRading at nl.1: lhe acti.on is against. the vRry penplP. r.ha.rged wi t.h Fl d11t.y to convp,ne t.hP. relRvnnt. tnRRf'i ng. On t·hR whole t'.hRnfore,. minrling -.hat·. al: this st.agR T nlll not: r.;illerl upon t.n ner.iclA t.hA mRrH.R of the nppRril as that. i:=; thP. ('111t.y nf t·.hP. cn11rt-.'nf appRnl_. T hrivP. limH.Rcl myi:-P.lf f-c:,, i'l11<1 r. ;i r A f t t 1 1 y r, n n s i rl e r· e <1 i· h R 111 ;:i t. t·. R r ·j n 1 i g h t·. n f t. h i?. n n 1 y qi I R :d i o n :

• "whethAr t.hR i nt·.P.m]Arl nppR;:il haR any groiincls t-o Rl:nnd on" ( t·o hotrnw thR Applicants 4 words 11sRd in lhR lAst paragt;:iph of thair 7

a. submission which is"U - turn as agr.1inst. their earlier submission that leave is just a question of formality), and I have respectifully concluded that there is 11onA. The applicr1tion for le.:ive t.o appe.::il to thA Co11rt: of Apperl] is r1cr:ordingly di Rmi SRP.Cl. nel i.vAt'fHl IT.. R. Kr1lP.gP.yr1) :11Jn(m 8