29 January 2013

Tanzania: CTI Chairman's House Survives the Hammer

THE Confederation of Tanzania Industries (CTI) Chairman, Mr Felix Mosha and two others have reached a compromise with Stanbic Bank Tanzania Limited over payment of 371m/- debt, a development that led to suspension of sale of his house to recover the amount.

Mosha's house was to be sold in a public auction on Sunday, but Counsel for the bank, Paschal Kamala said yesterday: "We have made compromise of suit and judgment debtors have agreed to deposit 100m/-.

The remaining amount of 200m/- will be paid within six months." Apart from Mr Mosha, other judgment debtors are Mrs Anna Mosha and West Kilimanjaro Flower Park Limited. The company had borrowed the amount in question, while Mr and Mrs Mosha guaranteed the company to obtain the loan facility.

Mr Kamala said initially, the three debtors were to pay the 371m/-, but following the concession reached by the parties the amount has been reduced to 300m/- only. "The judgment debtors have already deposited 100m/-. This transaction was made on Thursday," the counsel said, adding that due to such negotiation, all cases pending before the Court of Appeal would be withdrawn.

According to court records, the judgment debtors had lodged two applications, requesting judges of the Court of Appeal to grant orders for stay of execution of the High Court's decree dated January 24, 2008 and extension of time to lodge a notice of appeal against the decision.

The filing of the two applications had come after the High Court on January 8, 2013, issued a proclamation of sale by public auction of the house situated on Plot No. 91, Regent Estate Area, Kinondoni Municipality in Dar es Salaam on Sunday.

Facts of the case show that in 2004, the bank issued a loan of 602,500 US dollars to West Kilimanjaro Flower Park Limited, while Mr and Mrs Mosha executed personal guarantee to secure the repayment of the loan by the company.

It was alleged that the company failed to repay the loan and as of May 18, 2007, the outstanding debt stood at 51,278.43 US dollars and 165,926,667/40. The bank had no other option than filing a suit, through Kesaria and Company Advocates, against the trio on May 21, 2007.

Particulars of the suit indicate that the company was liable to the bank as principal borrower, while Mr and Mrs Mosha were responsible as guarantors for the company for repayment of the loan. On January 24, 2008, the High Court issued judgment in favour of the bank, but the defendants appealed the decision to the Court of Appeal. But in December 2011, the appeal was 'struck out.'

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