Tanzania: NMB Downs Manji in 65bn/ - Case

THE High Court's Commercial Division has rejected a request by prominent businessman, Yusuf Manji and six other defendants to dismiss the commercial suit lodged by NMB Bank Limited against them, demanding over 65bn/- as loan repayments.

Judge Deo Nangela ruled in favour of the Bank, as plaintiff, after dismissing a ground of objection lodged by the defendants, challenging legality of a witness statement by a bank official, which was filed in court during hearing of the suit.

He ordered the defence hearing the suit to continue from the stage it had reached.

Other defendants in the matter including Mr Kaniz Manji as well as five Quality Group of companies, Quality Group Engineering Ltd, Quality Logistic Co. Ltd, Quality Group Plant & Equipment Ltd and Quality Group Ltd Quality Motors Ltd.

The judge noted that the witness statement of Mr Stephen Chuwalo was challenged at a time when the plaintiff had already presented his case and the witness discharged from his oath, which was put on him when he appeared before the Court. At that time the court had ordered the defence case to commence.

Therefore, he had to determine whether the witness statement was indeed defective as alleged by counsel for the defendants and that whether the defendants were entitled to raise such objection after the plaintiff had closed his case and the statement complained of already received evidence.

In his ruling delivered recently, Judge Nangela agreed with submissions made by plaintiff's counsel that, the witness statement having been adopted by the witness as his testimony in-chief, it became part of the record of the Court as per Order XIII rule 7 of the Civil Procedure Code and could not be impeached.

He said, "It is my considered view that, act of filing of the objection impugning the witness statement after the Plaintiff's case had been closed and after the witness statement, and all exhibited had been made part of the record of this Court, is an act done in too late an hour to catch the train."

According to him, the defendants missed the "boat" and were barred from raising the objection at such time and the objection was, therefore, an afterthought and any defectiveness of the witness statement will remain unchallengeable.

The judge referred to several decided cases of the Court of Appeal with effect that the defendants were stopped from challenging the statement in question since it was not impeached at the time when the witness adopted it as his testimony-in-chief and was cross-examined on the basis of it.

Judge Nangela concluded that the defendants waived their right to object to the admissibility of the statement and that is why the counsel went ahead to cross-examine the witness on the basis of the same statement filed in the Court.

On diverse dates, that is, May 19, 2015, March 9, 2016 and May 16, 2017, the plaintiff made available to Quality Motors LTD, as the Borrower, Term Loans and Overdraft, totaling 15.2 million US dollars and 34bn/-. Each term facility was payable within a period of 60 months from the first day of drawdown.

The overdraft facilities were payable within 12 months subject to renewal. In terms of security, all facilities were secured by personal guarantees of Mr Yusuf Manji and Mr Kaniz Manji, as well as corporate guarantees of other four Quality group of companies.

These are Quality Group Engineering Ltd, Quality Logistic Co. Ltd, Quality Group Plant &Equipment Ltd and Quality Group Ltd. An additional security was provided in a form of legal mortgage over a landed property along Nyerere Road, registered in the name of the Quality Group Ltd.

From May 19, 2015 onwards, the borrower accessed and enjoyed the loan facilities. The unfortunate part, however, is that the borrower is alleged to have breached the terms and conditions of the facilities.

Despite several demand notices, the defendants are alleged to have failed to honour their obligations under the facilities' arrangements, hence, forcing the plaintiff to knock at the doors of the Court to enforce its rights.

In the suit, the plaintiff bank seeks for, among others, a declaratory order that, the defendants are in breach of loan facilities and payment of the sum of 25,090,117,083/64 and a total of 17,697,729.54 US dollars, being the outstanding principal under the loan facilities as of September 6, 2017.

The hearing of the plaintiff's case went on smoothly and his side came to its closure to pave way for the defence case to open. The defence case was adjourned due to a number of reasons till July 28, 2020. Before the defence case opened, the Court was faced with the preliminary objection by defendants.

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