Loan payment

Tanzania: Indian bank lost call on 600m / – Default of loan

THE Bank of India (Tanzania) Limited lost the appeal challenging the refusal of the Commercial Division of the High Court to order its three clients to pay interest for default on a loan of over $ 600 million. euros.

This followed the decision of the Court of Appeal to strike the appeal under which the Bank, the appellant, had filed against the three clients, YP Road Haulage Limited, Lalit Ratilal Kanabar and Kiran Lalit Kanabar, the respondents, failing to serve them with a copy of the notice of appeal in time.

Judges Augustine Mwarija, Mary Levira and Abraham Mwampashi ruled against the appellant after allowing a ground of objection raised by the respondents as to the jurisdiction of the appeal in question, for failure to comply with rule 84 (1 ) of the Rules of the Court of Appeal.

“Based on the foregoing, we are satisfied that the failure to comply with Rule 84 (1) of the Rules rendered the appeal without jurisdiction. In the event that the appeal is hereby struck out with costs”, have they declared.

On the ground of the opposition, the respondents had argued that the appeal was incompetent and irremediably flawed for failure to comply with the mandatory provisions of Rule 84 (1) of the Rules of the Court of Appeal, 2009 concerning the service of the notice of appeal.

In determining such a ground of appeal, the judges noted that it was clear from the wording of rule 84 (1) of the Rules that the appellant was required to serve a copy of a notice of appeal on respondents before or within 14 days of his accommodation.

“Failure to (serve a notice of appeal on the respondent within the prescribed time) is tantamount to a failure on his part to take essential steps in the appeal and, therefore, under rule 89 (2) of the Regulations, such a defect warrants striking out the remark, ”they said.

In this case, the appellant sued the respondent claiming a total amount of US $ 616,479,447 / 22 and US $ 5,984.83. The claim arose out of a loan agreement under which, on several dates between July 4, 2008 and January 23, 2010, YP Road Haulage Limited was granted overdraft facilities.

The Tanzanian shillings and US dollar loans were secured by the other two respondents, the Kanabar sponsors, and secured by a mortgage on the company’s fleet of motor vehicles, including Scania trucks and trailers.

It was stated that the Respondents failed to repay the loan and that as a result, as of June 15, 2015, the outstanding amount as well as interest and penalties amounted to $ 616,479,447 / 22 and $ 5,984.83 Americans. The appellant also claimed damages and the costs of the lawsuit.

The request was contested by the respondents. They argued that all loan amounts to the company had been paid.

These respondents further alleged that, without any semblance of right, the appellant forcibly took the company’s trucks and trailers and sold them, thereby preventing him from deriving any income from these motor vehicles.

In its decision, the High Court held that the appellant was entitled to be paid by respondents US $ 616,479,447 / 22 and US $ 386,000 as outstanding loans. She further found that the appellant was entitled to costs.

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