The Court of Appeal has reversed the High Court’s refusal to grant an injunction, restraining Kenya Commercial Bank Limited from selling a matrimonial house involving Chama Cha Mapinduzi (CCM), Temeke District Chairman Ayub Salehe Chamshama and others.
Dar es Salaam Kariakoo area
Court records show that the house in question is located at prime areas at Kariakoo in Dar es Salaam. Mr Chamshama is alleged to have fraudulently mortgaged the property to obtain a loan of about 500m/- from the bank.
In the decision by the Court of Appeal, Justices Nathalia Kimaro, Salum Massati and William Mandia, reversed the ruling given by High Court Judge Zainabu Mruke on November 28, 2011, following an application filed by businessman, Abdi Ally Salehe, for a temporary injunction against the sale.
Mr Salehe, through his advocate Samson Mbamba, had requested the High Court to restrain the bank, its agents, servants, assignees and whoever works under its instruction from selling the land and buildings on Plot Number 12, Block 1, Kariakoo Area, pending determination of the main suit.
He had argued that there were triable issues, mainly on the legality of the mortgage that he stood to suffer irreparable loss which could not be atoned for by way of damages because he would lose the house and that the balance of convenience was in his favour.
But Judge Mruke dismissed the application, ruling that fraud could not be just pleaded without attaching technical report to support the allegations and the court could not rule on signatures as being forged by mere statement.
The judge said that by looking up on the pleadings, there was no where fraud alleged had been reported to the police or other relevant authorities and that no even loss report of the title deed used as security for the overdraft issued to a company, Asac Care Unit Limited, for which Mr Chamshama is its director. However, the justices of the appeals court faulted the High Court judge, ruling that her finding was a serious misdirection.
“Fraud was the bone of contention in the main suit. By demanding proof of fraud at that stage, the court was placing on (Salehe) a higher standard of establishing prima facie case. “It (High Court) went on to consider extraneous matters, which it should not have, such as failure on the part of the appellant (Salehe) to report the fraud to the police and failure to produce a loss report,” they said.
In their view, the justices said, so long as Asac Care Unit Limited was a body corporate and could not personally commit fraud except through its director, Mr Chamshama, who is alleged to have committed those frauds, a prima facie case was made out and the High Court should have so held.
They further held that the High Court also prematurely considered and concluded on the genuine of the contested documents. By so doing, they noted, the High Court had jumped the gun and went on to conclusively decide the question of fraud, which was the bone of contention between the parties.
“We are satisfied that by prejudging the issue of fraud in the application for temporary injunction, which is also the main contention in the main suit, the High Court improperly exercised its discretion and the resulting order refusing to grant a temporary injunction was erroneous and call for our intervention.
“We accordingly set aside it. We direct the case should now be placed before another judge to proceed with it,” the justices concluded.
By FAUSTINE KAPAMA, Tanzania Daily News
