Tanzania Commercial Bank plc & 2 others vs Mrs Shakila Parves & Another, Civil Appeal no 280 of 2020.

In 2013, it came to the knowledge of the 1st respondent that, without her knowledge and consent, her husband, that is, the 2nd 

respondent, had applied for and obtained a loan from Twiga Bancorp Limited now Tanzania Commercial Bank PLC (the 1st appellant) and further that their matrimonial home, that is, the Mortgaged House, had 

been mortgaged for that purpose. For reasons that will be apparent in the course of this judgment, the above stated mortgage will, preferably, be referred to as “the Second Mortgage”. 

The 1st respondent also realised that upon default by the 2nd respondent, the 1st appellant instructed Tambaza Auction Mart (the 2nd appellant) to sell the Mortgaged House by public auction and that the same was thus sold to Thomas Barnabas Mmbando (the 3rd appellant).

Believing that the Second Mortgage and the sale of the Mortgaged House were a nullity for want of her consent, the 1st respondent 

instituted a suit in the High Court, that is, Land Case No. 46 of 2015, against the 2nd respondent jointly and together with the appellants. In that suit, the 1st respondent prayed for the judgment and decree for:

(a) A declaration that any alienation o f the house situated on Plot

No. 80 Block “L Nkrumah Mwanza City is voidable by the plaintiff for lack o f her consent.

(b) An order annulling the mortgage made without the plaintiff’s

consent

The court had this to say:

From what we have endeavoured to demonstrate above, it is clear that the 3rd appellant purchased the Mortgaged House in good faith without notice of any defect in title of the seller, it be actual or constructive. He had no reason to suspect any irregularity in the sale exercise. The 3rd appellant was thus a bona fide purchaser for value without notice and the High Court ought to have taken that fact into consideration before invalidating the sale of the Mortgaged House which had an effect of depriving the 3rd appellant of his title and rights over the Mortgaged House.

Because the 3rd appellant is a bona fide purchaser for value without notice, as demonstrated above, and there being no evidence of fraud or misrepresentation, his rights over the Mortgaged House is legally protected under section 135 (1), (2) and (3) of the Land Act, which provides that:

“135 (1) This section applies to;

(a) A person who purchases mortgaged

land from the mortgagee or receiver,

excluding a case where the mortgagee is the purchaser.

(c) is not obliged to inquire whether there has been a default by the mortgagor or whether any notice required to be given in connection with the exercise o f the power o f sale has been duly given or whether the sale is otherwise necessary, proper or

regular.

(3) A person to whom this section applies is protected even If at any time before the completion o f the sale has actual notice that there has been a default by the mortgagor, that a notice has not been duly served or that the sale is in some way unnecessary, improper or irregular, except in the case o f fraud, misrepresentation or

other dishonest conduct on the part o f the mortgagee of which that person has actual or constructive notice

The position of the law, that a bona fide purchaser for value without notice is protected is settled.

 In the case of Peter Adam Mboweto v. Abdallah Kulala and Another [1981] T.L.R. 335, a court decree was executed by sale of the judgment debtor’s coconut shamba. On appeal, though the decree was reversed, the sale of the shamba to the bona fide purchaser was not invalidated. Apart from  holding that the bona fide purchaser is protected even where the decree  is reversed, This Court stated the rationale behind the protection of a bona fide purchaser for value, thus:

“In the case o f bona fide purchaser, the rufe is that the saie wiii be upheld notwithstanding the reversal o f the decree, because otherwise there will be less inducement to intending purchaser to buy at an auction saie and consequently less

chance o f the property fetching a proper value at such sales. Another reason is that a purchaser cannot be expected to go behind the judgment to inquire into the irregularities in the suit”.

See also – Juma Jaffer Juma v. Manager of the Peoples’ Bank of zanzibar Ltd and Two Others [2004] T.L.R. 332, Omari Yusuph v.

Rahma Ahmed Abdulkadir [1987] T.L.R. 169 and Godebertha Lukanga v. CRDB Bank Ltd and Others, Civil Appeal No. 25 of 2017 (un reported). Guided by the above stated position of the law, we find that under  the circumstances of this case where the Mortgaged House was lawfully sold to the 3rd appellant as a bona fide purchaser for value without notice, the invalidation of the mortgage for want of spousal consent 

could not have necessarily rendered the sale of the Mortgaged House invalid. 

The invalidation of the sale had the effect of affecting the 3rd appellant, a bona fide purchaser, whose title to the Mortgaged House is protected under the law. The High Court did thus err in invalidating the sale of the Mortgaged House.Having found that the sale of the Mortgaged House cannot be declared invalid despite the invalidation of the mortgage, the question that arises is what remedy is the 1st respondent entitled to. The 1st  respondent who undoubtedly, is prejudiced by the validation of the sale 

of the Mortgaged House has a remedy under section 134 (4) of the Land 

Act which provides that:

“A person prejudiced by an unauthorized,

improper or irregular exercise o f the power of safe shall have a remedy in damages against the person exercising that power”.

Given the above stated position of the law, the 1st respondent has  a remedy in damages, and in the instance case, it is against the 1st appellant and 2nd respondent who, as we have found above, equally 

contributed to the ailment of the mortgage and to the resultant sale of  the Mortgaged House, Since, in the instant case, we have no sufficient material evidence upon which we can base an award for damages in 

favour of the 1st respondent, we leave it to the 1st respondent who is at liberty to institute a fresh suit for damages, if she so wishes, against the said 1st appellant and 2nd respondent. It is in that suit where the 1st respondent will be able to prove the damages she has suffered and where the court will properly assess the quantum of damages the 1st respondent is entitled to.