Property Is Ineligible To Serve As Security For The Due Performance Of The Decree.

Previously, in the case of Africhick Hatchers Limited v. CRDB Bank PLC, Civil Application No. 98 of 2016 [2019] 1 T.L.R. 12 [CA] in this case the Court of Appeal gave its decision which was to the effect that,

‘…. a charged property was eligible to serve as security for the due performance of the decree. This was the decision by two Justices of Appeal (majority position)’

However, in the same decision one Justice of Appeal Mwambegele, J.A. gave his dissenting opinion which was as follows: –

"...the 1st applicant deponed in his affidavit that, provision of security is not relevant here because the original Certificate of Title No. 45667 in respect of the property ordered to be sold, which belongs to the 1st applicant, is in the custody of the 1st respondent This Court agrees with the 1st respondent that, even if the original title deed of the said property is in its hands, the applicants ought to furnish other form of security to ensure that, the respondents would not be deprived of the fruits of the decree in the event the appeal ends in disfavor of the applicants. Also, the impugned decree says that the mortgaged property with Certificate of Title No. 45667 should be sold by 1st respondent to realize the outstanding debt. *That means that, the property cannot be security for the applicants because it is the subject of the decretal order. Hence the property is no longer in the hands of the applicant, it cannot, therefore, be used to furnish security for the due performance of the decree..."

Currently the dissenting decision by Mwambegele J.A has found refuge in the decision of the Court of Appeal in the case of Sinani Building Contractors Limited & Others vs CRDB (Civil Application No. 662/16 of 2022) [2024] TZCA 196 (19 March 2024). In this case, the Court while agreeing with the dissenting opinion by Mwambegele, J.A. in Africhick Hatchers Limited (SUPRA) held as follows: –

..the properties sought to be pledged, which are no longer in the hands of the Applicants, are ineligible to constitute security for the due performance of the decree.

The Court of Appeal considered this to be the correct position of the law and held the view that, being a charged property, the assets in question were encumbered and in the control of the Respondent. They cannot double as security for the due performance of the decree. They cannot double as security for the due performance of the decree and the Applicants should, in view thereof, provide a different form of security

KKB ATTORNEYS AT LAW