CHAMA Cha Mapinduzi (CCM) Dar es Salaam
Region Chairman Ramadhani Madabida and four other appellants have asked
the Court of Appeal to revise the High Court’s Commercial Division
judgment, requiring them to pay 699m/- debt to Stanbic Bank Tanzania
Limited.
Through their advocate, Dennis Msafiri,
the appellants told Justices Steven Bwana, Semistocles Kaijage and
Kipenka Mussa that the trial judge committed errors in ruling in favour
of the bank, by holding that a document titled “Debt Settlement
Agreement” was not an acknowledgment of debt.
The advocate for the appellants also
comprising Salum Shamte, Pharmaceutical Investment Limited, Mpewani
Trading Company Limited and Global Trading Company Limited, submitted
that trial judge also erred in admitting the document and another one
titled “Debt Restructuring Agreement” in evidence.
Giving an example on the Debt Settlement
Agreement, Mr Msafiri submitted that an objection was raised to its
admissibility on grounds that it was unstamped and subjected to stamping
during the trial as such a course was not allowed under the provision
of Section 47 (1) of the Stamp Duty Act.
The counsel further told the justices
that the trial court erred in law in holding that the suit was not
barred by time limitation and wrongly held that the suit was proved
notwithstanding absence and production of primary agreement or
agreements evidencing loan transactions.
However, advocate for the Bank, Mr Dilip
Kesaria, requested the justices of the appeals court to dismiss with
costs the appeal in question. “The judgment sought to be appealed is
good and sound (one) based on the pleaded facts, evidence at trial and
the applicable laws and should be allowed to stand,” he said.
Regarding the “Debt Settlement
Agreement,” the advocate submitted that it was plainly and obviously an
agreement relating to the rescheduling of Pharmaceutical Investment
Limited’s repayment obligation in settlement of its debt and provided
for a new repayment schedule. “It is a debt Settlement Agreement and not
Acknowledgement of Debt as correctly held by the learned trial judge,”
said Mr Kesaria.
He said having so held, the trial judge
followed established legal principles of permitting the Bank to pay the
requisite Stamp Duty before allowing its admission in evidence. The
counsel further submitted that the suit was filed within the time limit
because where there was continuing breach of contract, as was the case
in the matter, a fresh period of limitation accrues every moment of time
during which the breach arises.
“Pursuant to Section 27 (3) of the Law
of Limitation Act, there is a fresh accrual of a right of action on the
date of the acknowledgment of debt in the year 2007, being the same year
in which the suit in the lower court was commenced by the respondent
(Stanbic Bank) herein,” he submitted.
On May 22, 2009, High Court Judge
Frederick Werema ordered the appellants to pay Stanbic Bank a total of
699,860,717/- after he was satisfied that the bank granted credit
facility to Pharmaceutical Investment Limited as principal borrower,
while Madabida and the others executed guarantees.
Judge Werema said there was debt
restructuring agreement, which was signed by Mr Madabida as the Managing
Director for and on behalf of Pharmaceutical Investment Limited.
It was alleged that as of October 31,
2003, the quantum of the debt stood at 1,110,444,611/66. Such amount was
rescheduled by reducing it to 971,861,047/93 and was further scaled
down to 800m/- on May 24, 2004. Due to inability of the company to pay
the debt, a further rescheduling reduced it to 529m/-. The plaintiff had
pleaded in the suit that the quantum of the debt as of August 31, 2007
was 699,807,717/-.
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