Anyingisye Sikwejala and 2 Others vs Ibilunku Primary Cooperative Society (DC Civil Appeal No. 36 of 1997) [1998] TZHC 2414 (21 August 1998)

t j 1 OSHI, Jo 'IN THE HIGH COURT OF NZANIA. ·· AT MBEYA ... • (DC) CIVIL APPEAL NO. 36 OF 1997 . (From the decision of the Distr:i,ct Cour.t:of . ' Mbeya at Mbeya in Civil Case No 38 ·of 1995 Before:· S .. M. Rumanyika - Resident Magsrte)

1. ANYINGISYE SIKWEJA.IA)
2. FRANCO OSIAH ) ••••••••• APPELLANTS 3 • WILSON MWAf1BAKILA. . :.·-- ) . Versus .112,!LUNKU PRIMARY COOPERATIVE SOCIET'f - RESP JUDGMENT The basis of the action before,, the. Resit Magistrat-ee• Court -of M, ·as I shall demonstrate in the course of this judgment, was not clear. It allegedly centred on negligence. It :rnvolv~ two cheques •. One was No. • J 02841680 for shs.3,500,_940/= drawn on 1103.95 in .favour. of ·Marti..11 Mwasomola '(Ext P 1 )·, an_d the other was No~ J 02841695 for shs.2,187,810/== drawn on 16.3.95 ;· in favour of Benadi Mpila (Ext P2). They made a total sum of shs5,688,750/=. In this appeal, Mr. Mkumbe, learned advocate, represented the three ·.appella.?1:t;, whereas the respondent Soci"Ety was represetttd by Mr. Mwangole, learned adv.ocate. Mr. Mwangole had also .represented· the responent at the trial, whereas Mr. Mkumbe had represented the'.f:irs't appellant~= The yu Branch of. the. l4en National Bank of Commerce, wh:cr were found not liable in negligence, were the !..O defendant at the trial, and their learned- advocate was Mr o 1wakilasa .• At all material times, the first appellant, Anyi.ngisye Sik:uejla, was the respondenti s s·ecretacy General while the second and third appeilants, ... , .. Franco Osiah and Wilson Mwambakila, were Committee Memberso 'rhe respondent had a Bank Account with the fourth defendant. The three appellants were its signatories and their specimen s~gnature card (Ext D1.) as with the fourth defendant. For expe9-itOl;\S purposes, blank cheques·were at times being . . I •••eo• ••o, 2 ... . .. . ·.• .. .. .,

= 2 ... followed by the respondent on account ;f 'that the signatories were not eoyees of the respondent. The two relevant cheques (Exts.P1 and P2) were- thus signed by the -second and third appellants -0n their· fa.ees, and they- bore three signatures r-esembl:i.ng thosa ◊f the appellants at their back sid Much argument centred on who as between the first appellant and his assistant, Christopher. Mwangonda (PW6), kept .the chequet books and tp.e keys to the safe or cash boxe But it was more likely than not that the custodian was the Assist;mt Sec'I"9'1;a,ry General (PW6},. For instanco, the respondent's Chairman, Isakwisa Njole (PW1), told tha trial court that the.first appellam; ha:-dnot been entrusted :with the keys .. A C0operativg Offic<>r,, Donald Kasunga (PW5), said the keys were k~pt by PW6. And tho second appellant said the first. appellant used to keep the cheque books only in the absence of PW6e That pid6 . ' was the custodian would, as 1 shall later demonstrate, account for the fact that PW6, but not the first. appellant, was charged in a criminal case . involving the same two chequeso However, according to a Councillor at Isaka. Nkunga Ward who called a general meeting to ,::,discuss the matter, Hassan Masika (PW2), the .cheque.s were not stolen. On 1-4.3.95, and on 1.7.3.95, respectively, the payees of the two chequea (Exts P1 and P2) presented them to the fourth defendant's Teller at the Bank, Paulina w/o Mgeni (Cw), for payment. Paulina w/o Mgeni was a Court \litness (CW). She compared the signatures on the cheques with those on the specimen signatures card (Ext D1)• They were a perfect match. In this she found support in the testimony of the Legal Officer of the fourth defendant, Martha d/o Kisyombe (DW4) 1 who saw the signatur98 and said they were a perfect match. The payees then signod against entries made by CW in the Register which was received by the trial ~~~!trate for that which he termed reference and recording purposes. Thereaft-er the. payee.a sign.ad behind the cheques and CW effected payment to them. I ~ ~ o'-e ~ • 0 • • o • o/ ;J J

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• The Cooperative Office.r:- (?W5) th<?u&ht t~t the -ts w& undeserving. He termed them thefts eff.ected tllr?-ugh th.e names. of the payees. in his inspection report (Ext P3)o He did not elaborate. The police were notified, arid D/Sgt Nuhu (PW4)_. of 'Tukuyu police station prefen,ed Tukuyu District Court Criminal Case No. 178/95;. Neither the appellants nor the payees were accused persons in that case. Two other persons and PW6 were the accused persons. I was told in this appeal that the second and third appellants were prosecution witnesses in that case and tnat the accused persons were acquitted. Almost parallel to the criminal case was this suit whicll th() respondent, through Mr. Mwangole, deemed. it ·moot ta prefa-r -again.st the appellants an·d the fourth defendant, which was for::

1. Shs.5,688,750/= being total sum of the two cheques. 2.. Interest at 4(1}{, per annum on the decreta.l amount from:.; the date of filing the suit to date of judgment.
2. Interest on decretal amount at court rate from date of judgment to full paymento
3. Costs of the suito 5o Any other or further reliefs the court deemed fit and just. The trial court found the three appellants, but not the fourth defendant., liablo in damages for negligence, and granted claims one, two, three and four ·-- ... - ------ ----- as pra1ed. The appellants felt aggrieved, hence this appeal in which Nro Mkumbe' s first point of 000 -itt,-m-ion was tliat the trial court l.i.cked jurisdicti~ to ntertain te suit pursuant to Rule 23 of the Cooperative Societies Rules 1991, GN 408 of 1991, mado under section 123 of the Cooperative Societies Act Noo 15 of 19910 This same point had.been Mro Mkumbe 1 s preliminary point of objection at the trial which was, however, overruled. Mro Mwangole resisted the contention and submitted.that the trial court had jurisdiction. I would, with respect, take sides with Mr. Mwangoleo The trial court was competent to hear the case. If_~t'.!-1., Rule 23(1) (2). and (3) provides. for administrative mechanism for resolving disputes by the Registrar concerning . the business_- of a cooperative society between the members of the society or . ~ .... . .. '• ,.. . .

. , 4 pereon.e- cl..a:irning thl'ough t~ 'l ~ oet....een ,; member ~ -p.eroons so claiming and the com.ittee or any officer, or between one society and another with an appeal to the Minister.. This a<lmin.istrativ-e mechanism was in suppliment to, but not in replacement of, the courts ef law particularly when, as here, fraud and theft were suspected. _SJC..?.,Il_d}-,L, the fourth defendant was. certainly not a member of the society. A member is defined under section 2 of the Act as including a person a registered socety joining in the application for the registration of a society, and a person or a registered society admitted to membership after r-egistration · in accordance with the by-laws and rules. And .!.his~lz, nowhere in the Act or in the Rules is the involvement of .courts f law specifically excludedo In fact, a court is defined under Rul 2 in its recognition as a district court or a court of a resident magistrate having jurisdiction over the area in which the headquarters of the society are situated. Cou.rt.s are charged with the exercise of judicial power. Under Article 13(3) of the Constitution of the United Republic of Tanzania, competent court& _?,f law are charged with the protection and determination of Civil rights, obligations and interests of every person a..11.d of the society. Courts of law are, and they must be, jealous of tl?,e:4' powers, .al',l.d. any instrument which . purports to oust their jurisdic_tion must do so in specific and certain tenns.. , •·· I said at the outset that the basis f the claim was not clear. A plaint must specify particular tort alleged. The tort of negligence was what was · alleged here. But the particulars relating to Exts P1 and P2 did not dislose or allege negligence, and the evidence adduced did not astablish negligence. The :particulars were: ~~-~tlz, that the appellants together and jr,intly drew Ext P2 in their favour ~itho.ut instructions from the respondento ~?.9'!]Il<f}.-:I,., that the appellants together and jointly drBW Ext P1 without an:y instructions from the respondnt. I

• 5 - .Tu~; that the fourth de.fenruuit :ur breach of contract and of its duty to the respondent as its banker unlawfully or without proper care authorised payment to be made to the three appellants -00ntrary to, and against, ba.n.king regulations. As it can plainly be seen, there was nothing negligent in what was .. alleged. aga.:i:nst the appellants. Ext P2 was ·not drawn in their favouro They. ~re net the payees of Exts P1 and P2. The payees of the two cheques were known and around. That was what the chairman (PW1) told the trial court. The · payees were seen and paid by Paulina ( Cl,'1). The cheques were not stolen. e -equ ther-efore, were drawn in the ordinary course of business. This wouid account for the fact that the payees, though r-.11ow and availahle, were neither charged nor sued. They were not ·even made witnesses.· It was· neither e>stablished nor elaborated_how these particular two cheques, and not the other many cheques which were being drawn, were drawn without instructions fm the respondent. The nature and the type of the instructions required from the respondent was not given. What was clear was that the appellants as eheque signatories were discharging their ordinary duties for, and on behalf ef, the respondent., It could reasonably be inferred from the evidence and the eircumstan.ces that what was in fact being alleged against the appellants was that they had by deceit stolen the money carried on the two cheques. But that would have been a matter for theft, tb.{t not negligence. I am satisfied that the trial court erred in holding the appellants liable in damages.for negligence which was not established. As for the fourth defendant, I am satisfied that the two cheques were, as already demonstrated, properly drawn according to the mandate held by the fourth defendant and that Paulina (CW) had taken the requisitG precautionary· steps before effecting the payments. In the event, I allow the appeal, quash the trial court's decision, set aside the awards, and hereby make an order for the dismissal of the suit. The appellants to have their costs here and in the court belew. 0 0 Gi C O fl O O -C 0/ 6

. ,,, .... ~ :. '·:- .1·,-r, . .. •·"Y • .. ; ~ AT MBEYAo 21 Au$Ust 1998 .• ·For Appellants: For Respondent: • 6 BoPo MOSHI JUDJEo , l M:r-o Mkumbe 9 advocateo Mr,, Mwang~le; advocateo