18 November 2013

Tanzania: Dar Bank Files Suit Against Blanket Factory for Sh930 Million

DIAMOND Trust Bank Tanzania Limited has applied for attachment and sale of a factory owned by Kilimanjaro Blanket Corporation Limited together with its two directors, Alaudin Gulamali Hilji and Amin Mohammed Gulamali Hilji, to recover a debt of over 930m/-.

Through its advocate Paschal Kamala, the bank filed the application for attachment at the High Court's Commercial Division in Dar es Salaam last week. In the application, the bank seeks the attachment and subsequent sale of the property on Plot Number 96- 102, Gofu Industrial Area, in Tanga Township.

The factory has a Certificate Title Number 16346. The application in question comes after Judge Robert Makaramba on October 8, this year ordered the three defendants to pay to the bank a sum of 890,525,767/82, for failure to settle the loan.

He also directed them to pay interests of the said amount at the rate of 17 per cent per annum pursuant to the clauses of the credit facilities letter from June 1, 2013 to the date of judgment or sooner payment.

Furthermore, the judge ordered the defendants to pay other interest of the amount involved accruing at court rate of seven per cent per annum from the date of judgment until full satisfaction of the amount. The court issued the judgment after the defendants failed to raise their defence against the claims by the bank.

The bank, through Kesaria and Company Advocates, took the matter to court after the defendants failed to honour their commitment to repay the loan in question. It is alleged that on September 21, 2011, Diamond Trust Bank availed credit facilities of 534m/- to Kilimanjaro Blanket Corporation Limited (first defendant) upon terms and subject to the conditions expressly stipulated in the credit facilities letter.

"The first defendant's obligations under the aforesaid credit facilities are guaranteed by the second and third defendants (Alaudin Gulamali Hirji and Amin Mohammed Gulamali Hirji, respectively)," reads part of the plaint of the suit. According to the plaint, the plaintiff bank stated that the first defendant was in breach of its repayment obligation and had defaulted in repaying the credit facilities by their due dates or at all.

Consequently, it was alleged, an event of default occurred as described in the credit facilities letter and the full outstanding amount due to the plaintiff bank become payable. It is claimed further that the amount owed to the plaintiff bank and outstanding as at June 6, 2013 stood at 890,525,767/82, which the Bank jointly and severally claims with interests against the three defendants.

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