kati General Enterprises Limited vs Equity Bank of Tanzania Limited & Another, civil case no 22 of 2018.

In this matter the Court is moved by the 3rd party to dismiss with costs the whole suit for being incompetent basing on the three points of preliminary objection raised by him going thus:

(a)The suit is unmaintainable for being filed without appending the Company’s Board Resolution to the plaint as required under section 147(l)(a) and (b) of the Companies Act, No. 12, [Cap. 212 R.E 2002].

(b)The whole suit is bad in law for contravening the provisions of Order

VI Rule 15(3) of the Civil Procedure Code, [Cap. 33 R.E 2019], for being improperly verified by a stranger (non Director) to the 

Plaintiff’s company names Eden Samwel Katininda which is contrary to an extract annexed as Annexture MBA-A to the plaint.

(c)That the Plaintiff’s Company was fraundulently registered by the Registrar of Companies on 13th day of December, 2002 without disclosing that one among the first Director of the Plaintiff’s Company namely Felician Eden Katininda was a Minor being bornon 03rd date of anuary, 1997.

Briefly the plaintiff in this case a Limited Liability Company duly incorporated under the Companies Act, [Cap. 202 R.E 2002] is suing the Defendant also a registered Company running financial business as a Bank for unlawful

diversion of her funds which were expected to be credited into Plaintiff’s account from Pyrethrum Processing Company of Kenya by unlawfully opening account No. 300211237025 in plaintiff’s name at Kariakoo Branch, crediting the said money and allowing its withdrawal without the plaintiff’s

authority. 

The plaintiff is thus claiming a total amount of Kenya Shillings 8,982,184/= (equivalent to Tshs. 198,481,533.65) and Tanzanian Shillings 100,000,000/= allegedly deposited in the said account plus interest of the claimed amount at the rate of 26% as well as damages arising from embarrassment, loss of Goodwill to their bankers and disruption of their account system and budget resulted from defendant’s act and the costs of

the suit. 

When served with the plaint the defendant denied any liability thus filed a third party notice joining the third party as the person responsible for opening the account and withdrawal of the alleged monies. In his written statement of defence the third party squarely resisted the claims against him

while raising a Notice of Preliminary points of objection advancing the three above cited grounds.

The court had this to say:

As regard to the point raised by Mwenda that the first ground does not qualify to be objection on point of law for requiring evidence to prove that the meeting was held by the board, the agenda under discussion and the resolutions reached, I do not find merit on it. As stated above consent of the directors is mandatory before institution of the suit, equally importantly it is the requirement of the law that, minutes of board of directors’ resolutions must be pleaded and annexed to the plaint so as to establish to the court’s satisfaction at the earliest possible time as well as the defendant that, consent of the board of directors was obtained before institution of the suit.

In that regard it does not require evidence to prove whether the board of directors authorised institution of the suit or not as that fact can be established by perusing the plaint and not otherwise. My views find support

in the position taken by my sister Maghimbi , in the case of Evarist Steven Swai and Another (supra) when faced with similar situation where she had

this say:

“From the foregoing, throughout their pleadings, the plaintiff have not indicated anywhere that the said Board Resolution was passed to authorise institution ofthe suit. Therefore in my view, the fact that there is a board resolution authorizing institution of proceedings should be reflected as one of the clauses of the plaint with the proof attached as an annexure to the plaint.

Hence the issue of board resolution does not require arguments basing on evidence to be adduced during trial; instead it should be availed clearly on the plaint that the company has authorised institution of certain proceedings…” (Emphasis supplied)

In view of the above deliberation I find the first ground objection has merit and therefore uphold it as the plaintiff ought to have complied with the requirement section 147(l)(a) and (b) of the Companies Act, No. 12, [Cap. 212 R.E 2002] by annexing to the plaint company board of directors’

resolution authorizing institution of the suit and appointment of the advocate to prosecute the suit, but she failed to so do. As this ground has the effect of disposing of the matter I see no pressing issue to move me to the next ground.