Court name
Commercial Court of Uganda
Judgment date
5 June 2005

Pipal Ltd v Dharmendra Data & 2 oers (Miscellaneous Application-2005/335) [2005] UGCommC 26 (05 June 2005);

Cite this case
[2005] UGCommC 26
Short summary:

Civil Procedure

THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF UGANDA AT KAMPALA
(COMMERCIAL DIVISION)

MISC. APPLICATION NO. 335 OF 2005
(Arising from HCCS No. 279/2005)
PIPAL LIMITED :::::::::::::::::::::::::::::::::::::::::::::::::::::: PLAINTIFF/RESPONDENT
VERSUS

1. DHARMENDRA DATTA
2. RAMESH DATTA
3. SANJAY DATTA
T/A RAMILK LTD ::::::::::::::::::::::::::::::::::::::::::::: DEFENDANTS/APPLICANTS

BEFORE: THE HONOURABLE MR. JUSTICE YOROKAMU BAMWINE
RULING:

 

This is an application by Notice of Motion under 0.33 r 4, 0.48 rr 1, 2 and 3 of the Civil Procedure Rules and S. 98 of the Civil Procedure Act. It is for orders that unconditional leave to appear and defend the suit be granted to the Applicants and that the costs of the application be provided for. The application is supported by the affidavit of Dharmandra Datta, the 1st Applicant.
When the application came up for hearing, Mr. Alex Rezida for the Respondent raised a short point of law. He stated that the main suit was filed against the three Defendants jointly and severally. That each of the Defendants was individually served with summons in summary suit on plaint. That on 21/4/2005 the instant application was filed supported as it were, by Dharmandra Datta’s affidavit. In this affidavit, the deponent does not state or even claim that he is making it on his own and on behalf of his co-Defendants or that he has their authority to do so. Since according to him time within which to file individual affidavits has lapsed, this Court should enter Judgment in favour of the Plaintiff against Mr. Dharmandra’s co-Defendants. Counsel did not make any suggestion as to the fate of Dharmandra’s own application, since the stated weakness in the affidavit does not extend to his application as well. It is possible that he hoped for yet another chance to address Court on the merit or lack of it of the said application, depending on the fate of the preliminary point of law.
The point of law was opposed by Mr. Niwagaba, counsel for the Applicants. According to him, the Plaintiff’s claim is against the three Defendants. He invited me to study Mr. Dharmandra’ s affidavit and come to the conclusion that Mr. Dharmandra Datta is not defending himself alone in the affidavit but the co-Defendants as well. In his view, the grounds being common to all the Defendants and the suit being against them jointly and severally, it was not necessary for each to swear an affidavit that would repeat what the other had already deponed to. In the alternative, counsel invited me to consider the dictates of justice that require substantive justice to be administered without undue regard to technicalities. That the error, if any, would have been committed by counsel and not his clients who should not be unduly penalised. I have very carefully addressed my mind to the able arguments of both counsels.
Briefly, the Plaintiff’s claim in the main suit is for payment of a liquidated sum of US
$120,259.40 and Dollars 27,311.59 plus costs of the suit. The Plaintiff claims in the main suit
that the Defendants used to order for various equipment through the Plaintiff company which
Plaintiff would then place orders to various manufacturers of the equipment for and on behalf of Ra Milk Ltd. That in 2000, the 3 Defendants executed deeds of guarantee undertaking to pay and satisfy all money due and owing to the Plaintiff on account of such orders.
The Plaintiff’s claim is based on those alleged guarantees. Ra Milk Ltd has since been would up.
From the pleadings, the application is grounded on an affidavit sworn by Dharmandra Datta, the 1st Applicant. While each of the Defendants is being sued on his/her alleged guarantee, Mr. Dharmandra does not state in his affidavit that he has sworn it for and on behalf of his colleagues. No power of Attorney is exhibited to raise inference of authority from them. This is an inexcusable omission. I therefore agree with Mr. Rezida that the affidavit is competent in respect of the 1st Applicant but incompetent in respect of his co-Applicants. This Court can sever the incompetent part from the competent one. I do so. This leaves the Notice of Motion naked as it lacks any affidavit to support it in as far as the 2nd and 3rd Defendants are concerned. I’m fortified in so holding by the authority of this Court in Makerere University —Vs- St. Mark Educational Institute Ltd & Others HCCS No. 378/93 reproduced in 1994 V KARL 26 per Lugayizi J. There is no cause for me to depart from that authority. This in effect leaves me with only the Applicant’s application to consider. In accordance with S.4 (2) (a) and (b), of the Judicature (Amendment) Act (Act 3/2002) and S.98 of the Civil Procedure Act, I will proceed to determine the way forward.
From the pleadings, the Plaintiff transacted business with Ra Milk Ltd. The transactions were through Ra Milk Ltd’s directors, the three Defendants. In the same vein, the Plaintiff transacted its business through its director Bipinchandra Jamnadas Kantaria. It is not indicated whether by
2000 Ra Milk Ltd had already been wound up or whether by the time it was wound up the claim herein had already accrued to the Plaintiff. I’m saying so because ordinarily, a guarantor’s liability does not begin until the principal debtor is in default. In our case, the principal debtor was Ra Milk Ltd.
In the instant case, the 1st Defendant has denied execution of the purported guarantee. He claims that the signature attributed to him is a forgery. This raises the issue as to whether or not the purported guarantee is valid.
It is also claimed by the 1st Defendant that the last transaction between Plaintiff and Ra Milk Ltd was in 1997 to raise the inference that by 2004 when the suit was filed, the claim was already stale. To determine this issue, evidence would be required.
The 1st Defendant has also challenged the jurisdiction of this Court. Jurisdiction is a matter of law. No Court can confer jurisdiction upon itself. This too is therefore a triable issue.
Finally on this point, I have looked at a letter dated 26/7/2004, annexture F to the plaint. It is from M/S Nangwala, Rezida & Co. Advocates, counsel for the Plaintiff herein. It is claimed in that letter that the Defendants guaranteed a total of US $39,039 on account and behalf of Ra Milk Ltd. The purported deeds of guarantee make no mention of any figure. Moreover, the amount claimed in the plaint was not at all stated in the Notice of the intended suit. In effect, the terms of the purported contract and accuracy of the Plaintiffs figures are clearly in issue. The pleadings as they are raise a triable issue as to whether the l Defendant owes any money to the Plaintiff, and if so, how much. In these circumstances, there is no reasonable ground for the Plaintiff to believe that there can be no defence to its claim. In fact, if I may say so, this was not a proper suit to be filed under 0.33.
It is settled law that before leave to appear and defend is granted, the Defendant must show by affidavit or otherwise that there is a bonafide triable issue of fact or law. When there is a reasonable ground of defence to the claim, the Plaintiff is not entitled to summary Judgment:
Maluku Interglobal Trade Agency Ltd —Vs- Bank of Uganda [19851 HCB 65.
It is trite that a defence on the merits does not mean a defence that must succeed. It means an issue which raises a prima facie defence and which should go for trial and adjudication. See:
Patel —Vs- E.A. Cargo Handling Services Ltd [1974] EA 75 at P. 76. In view of what I have said above regarding the triable issues involved in this case, I would hesitate to enter Judgment in favour of the Plaintiff as prayed. The defence raised by the 1st Applicant raises triable issues on the liability not only of the 1st Defendant but his co- Applicants as well. Those issues should go for trial and adjudication. Having observed that this was not an appropriate suit to be filed under 0.33, I have also considered the undesirable possible scenario of the 2nd and 3rd Defendants being shut out of the proceedings on a technicality, Judgment is entered for the Plaintiff against them and upon trial of the issues on merits, the 1st Defendant’s defence succeeds. I doubt that this Court would in such circumstances be credited to have administered justice to the parties. I would also agree with the proposal that if anybody is to blame for the unsatisfactory state of affairs herein, it is counsel for 2nd and 3rd Defendants to blame, not the Defendants themselves. In all these circumstances, I have found merit in the objection raised by Mr. Rezida in respect of the 1st Applicant’s affidavit. The objection is sustained and the incompetent part is severed from the competent one. However, for reasons which I have already stated above, especially in view of my finding that the 1st Applicant’s application raises a reasonable ground for a defence and that therefore the Plaintiff is not entitled to summary Judgment, I invoke this Court’s inherent powers under S.98 of the Civil Procedure Act to grant all the Applicants/Defendants unconditional leave to defend the suit. The intended defences shall be filed within 14 days from the date of this Ruling. Thereafter, the case shall go for mediation.
Costs shall abide the outcome of the main suit. I so order.

 

Yorokamu Bamwine
JUDGE
06/06/2005