Tanzania Development Finance Co. Ltd vs Calico Textile Industries Ltd & Another [1992] TZHC 27 (3 September 1992)

Reported

Kyando J: In this application Tanzania Development Finance Co Ltd, the applicant, G applies for the following reliefs against the respondents:
   `(a)   An order that in both companies Form No 9, being particulars of a charge created by the first respondent to secure a loan from TDFL misstated the amount to Shs 16 626 500/= and a Certificate of Registration of Charge issued by the second respondent in respect thereof be H rectified so as to properly record the amount secured as being US$904 000 on grounds that the misstatement of the sum secured was due to inadvertence or alternatively, that on grounds stated in the supporting affidavit it is just and equitable to grant the relief. I
   (b)   Costs of this application.'

The deponent of the affidavit in support of the application is Rugambwa Cyril John A Pesha, the Company Secretary of the applicant, and in his affidavit it is shown, inter alia, that the objects for which the applicant was established are, amongst others, to lend money with or without security. `As such lender,' he states in para 3 of his affidavit, `the B applicant was to serve as a conduct for channeling external assistance to economically feasible and financially attractive projects in the country so as to effectively utilise the country's development potential. Shortly after its incorporation it commenced to carry on and has since carried on the business in pursuance of the said objects.' C
The above therefore are the functions of the applicant. Needless to say, both the applicant and the first respondent, Calico Textile Industries Ltd, are companies registered under the Companies Ordinance, Cap 212. The second respondent is the registrar of companies in terms of the provisions of the Companies Ordinance. D
In para 4 of the affidavit in support of the application it is stated that pursuant to the objective for the applicant's establishment the Government of the United Republic of Tanzania in 1978 permitted the applicant to borrow funds from the International Bank for E Reconstruction and Development (`The World Bank') for lending to projects in Tanzania. In para 5, it is stated,
   `5. That on 27 April 1979; the applicant agreed to provide Calico Textile Industries Limited, the first Respondent herein, with Shs2,500,00/= by way of Income Notes and US $904,000 (or the equivalent F in other convertible currencies) by way of a foreign currency loan.'
The respondents do not dispute that this loan was advanced-as stated by the applicant. It (the loan) was provided under a Loan Agreement entered into between the applicant G and the first respondent dated 8 December 1985 (exh `C' annexed to the affidavit of Mr Pesha). It was then secured by a debenture created and issued by the first respondent. The debenture, in terms of s 79 of the Companies Ordinance, was then registered by the second respondent.
On the top cover of the debenture it is stated in the form of a title or subject as follows: H
   `Single Debenture for US $904,000 (or the equivalent thereto in other convertible currencies) being approximately Shs16,626,500/=.' I
In registering the debenture the second respondent entered in the

Certificate of Registration of a charge (form C2) (exh `F' to Mr Pesha's affidavit) that the A debenture was to secure the sum of shillings sixteen million six twenty six thousand five hundred (T Shs 16 626 500/=) only. The form for the particulars of a mortgage or charge created by a company registered in Tanzania, pursuant to s 79 (supra) (form No 9) (exh `E' to Mr Pesha's affidavit (the second respondent says the correct form No 9 is B annex (i) to his counter affidavit, and I think this is so) had been presented to the second respondent and it was on the basis of it that he issued form C2.
This year the first respondent sent to the second respondent a `Memorandum of C Satisfaction of Mortgage or Charge', dated 6 May 1992. The memorandum is as follows:
   `CAP 212
   MEMORANDUM OF SATISFACTION D
   OF MORTGAGE OR CHARGE
   CALICO TEXTILE INDUSTRIES LIMITED P.O. BOX 9021, DAR ES SALAAM,
   HEREBY gives notice that the registered Charge being DEBENTURE DATED DECEMBER, 1985, TO SECURE THE SUM OF SHILLINGS SIXTEEN MILLION SIX HUNDRED TWENTY SIX THOUSAND FIVE E HUNDRED (T.SHS.16,626,500/= ONLY IN FAVOUR OF TANGANYIKA/TANZANIA DEVELOPMENT FINANCE COMPANY LIMITED of which particulars were registered with the Registrar of Companies on the TWENTIETH day of DECEMBER 1985, was satisfied on the TWENTY THIRD day of F DECEMBER 1988 to the extent of T.SHS. SEVENTEEN MILLION FOUR HUNDRED THIRTY EIGHT AND CENTS THIRTY FIVE (T.SHS.17,418,438/35) ONLY.
   In witness whereof the common seal of the company was hereunder affixed the SIXTH day of MAY 1992.' G
A `Declaration Verifying Memorandum of Satisfaction of Mortgage or Charge' in terms s 84 (exh G) was duly issued and the memorandum was annexed to it. On the basis of the memorandum and exh `G' to Mr Pesha's affidavit, the second respondent issued a H certificate (exh `H'). Certifying that the charge created on 18 December 1985 by the first respondent in favour of the applicant `to secure the sum of Shs sixteen million six twenty six thousand five hundred (Shs 16,625,500/=) only has been discharged'. I
The certificate is dated 7 May 1992 and is signed by the second respondent.

It is now the case for the applicant in this application that the sum of Shs 16 625 500/= A which is indicated in form No 9 and the Certificate of Registration of Charge (form C2) (exhs `E' and `F' respectively) was a misstatement and that it ought to have been mentioned in them that the sum which was secured by the debenture was US $904,00 B only ie without stating the Shs 16 626 500/= as now stated therein. Hence the request that:
   `The register of charges be rectified by deleting therefrom reference to T.Shs.16,626,500/= (both in words and figures) so as to reflect the amount secured by the debenture as being US $904,000 only.' C
It is contended by the applicant that by the terms of the loan agreement and the debenture, the money loaned, and secured, was US $904 000 (or the equivalent in other convertible currencies) by way of a foreign currency loan. In para 6 of his affidavit, Mr D Pesha states that the repayment of the loan was to be made in shillings at the National Bank of Commerce selling rate on the date of payment for the foreign currency. Finally, in para 15, he states that the only reference to Shs 16 625 500/= in the loan documents was, as shown already, on the cover of the debenture, and that the reference thereon, E
   `was solely meant to state the Tanzania shilling equivalent of the foreign currency loan at the date thereof for the purposes of calculation of stamp duty which was payable in Tanzania shillings. To the extent that T.Shs were referred to in the loan agreement and the debenture it was solely for the F purposes of providing for the manner of payment of the foreign currency loan and not for defining the currency in which the loan was to be secured.'
It is finally the applicant's case that the declaration of satisfaction and the memorandum G of satisfaction of a charge or mortgage (supra) are false and the certificate issued by the second respondent certifying the discharge of the charge is void ab initio.
I have already stated that the respondents do not dispute that the loan was advanced as H asserted by the applicant. Looking through their counter affidavits and written submissions (I required counsel for both sides to file written submission), they do not, too, seem to dispute that the loan advanced was US $904 000 (or the equivalent in other convertible currencies) by way of a foreign currency loan. They did not, in other words, I contend that what was agreed between the parties to be loaned, and what was actually loaned, was

Shs 16 626 500/=. Their contention appears to me to be that even if the agreed loan was A US $904 000 (or the equivalent in other convertible currencies) by way of a foreign currency loan, such amount in the documents of registration of charges Form 9 and C2 (supra) could only have been expressed in Tanzania currency and that amount at the relevant time was equivalent to Shs 16 626 500/=. They make this point in passionate B terms, the first respondent's counsel Mr Ismail submitting, for instance as follows:
   `My learned friend has dealt at great length on the loan agreement and the admissions, but suffice it C so may it is the debenture that is important in the application at hand.
   The amount secured by the debenture in equivalent to the foreign currency loan ie as at 1985 $904,000 was equivalent to Shillings 16,626,500/=. Indeed it would have been impossible to inset a figure other than Shs.16,626,500/= as at that time that was the value of $904,000. My learned friend is D seeking to insert a foreign currency in the charge! It is my respectful submission that the suggestion is preposterous. The Companies Ordinance like all other legislation in this country is meant to provide for situations in this country. The Bank of Tanzania Act 1966 specifically states in Section 1, of Part III-that "the unit of currency in Tanzania shall be the shilling, each shilling shall be E divided into one hundred cents".
   Section 26 of the same Act states--"the bank shall have the sole right to issue bank notes and coins for Tanzania and subject to Section 33, only bank notes and coins issued by the Bank shall be legal tender in Tanzania" (Section 33 is only a transitory section). F
   Indeed it would be unlawful for any government department to accept or quantify any documents in a currency other than the Tanzanian shilling. It should always be remembered that currency, like a flag, national anthem etc, are the ingredients of sovereignty and one should not treat such issues lightly. It G would amount to Tanzania subjecting her sovereignty to that of the United States if my learned friends' submissions were accepted. And one can imagine the chaos and mess it would bring. What would be the position if a loan were pegged to the Japanese Yen, Australian dollar, Saudi Arabia's rial, Oman's rial, Dubai's dirham etc etc? Indeed it is a well known fact that institutions and our own H government received aid/loans/grants from various foreign donors-but that it is a matter of international trade and not within the precincts of our courts.
   The evidence on record, and even my learned friend admits that the figure of Shs.16 626,500/= was recorded in form 9 as against that of sus. $904,000 without malice. He however submits that it was I done inadvertently. In my respectful submission that that is the understatement of the year. All parties were aware that the debenture was

   for security of Shs.16,626,500-but the instalments were to be paid at the rate of the dollar to the A shilling at the material time. Indeed the loan agreement was a mere formality, as the money was disbursed to the First Respondent between 1980 to January 1985 (Paragraph 8 of the First Respondent's affidavit)--whereas the debenture and the loan agreement were registered and signed in December 1985.' B
And the second respondent submits:
   `It is not my intention to reply to every submission by the Applicant because most of them involve the C Loan Agreement which is a Contract between the Applicant and the First Respondent and the Second respondent is a stranger to the said contract, thus I will only devote to these submissions that concerns me and I submit as follows:
   (i)   The relief sought by this Application is only one and is clearly stated in paragraph 20 of Mr. D Pesha's Affidavit and with my foremost humble apologies to your Lordship I beg to quote the same as I do hereby quote:
   "   That in the premises it is just and equitable for an order to be made by this Honourable Court that the register of charges be rectified by deleting therefrom reference to Tshs.16,626,500/= E (both in words and figures) so as to reflect the amount received  by the debenture  as being US dollars 904,000 only" I quote. (The emphasis is mine.)
      (a)   In this prayer the Deponent on behalf of the Applicant states that the amount was received by the debenture.
       F    And this is the Content of his prayer of relief. What his statement means is that the amount was received by somebody else or another entity and not by the first respondent. One wonders as to why there should be an application against the first respondent if the Applicant states that the Applicant was not the recipient of the amount. G
      (b)   The Applicant is apparently praying for equity. It is my humble submission that it is a principle of law that equity should follow the law and not vise versa.
      (c)   It is apparent that the Applicant is not applying for an increase or decrease of the amount H but is praying for the substitution, declaration and erasing of the currency Tanzania Shillings and replacement with a foreign currency called US dollars. This prayer is objected to in the strongest terms and intention due to the fact that it is a prayer/application which is totally against the laws of the Sovereign State of United I Republic of Tanzania and the said laws are.

   (i)   The Companies Ordinance A
      Section 2(1) of the Companies Ordinance Cap 212 provides among other things the definition of rules to the Companies Ordinance as follows and I quote:
      "Rules" means rules made under section 285 of this Ordinance and includes forms; B
      I humbly submit that the Certificate of Registration of a charge is a form and is commonly known as form C2 and therefore is part of the rules to the Companies Ordinance and it was so made under the provisions of Section 285 of the said Cap. 212. Annexure marked (ii) to my Affidavit is a photocopy of the said form C2 otherwise known as certificate of registration of a C charge. The greater part of the said form is prepared and only provides some dotted gaps where the Registrar enters the necessary entries eg. dates, name of the creator of the charge, name of the entity for which the charge is created in favour of, the amount secured-etc.
      The said form clearly mentions the currency shillings and leaves no doubt that the currency to D be stated in shillings and no other currency. In Annexure II to my Affidavit I have marked the place where the currency shillings is stated in the form and the marking is in light red colour.
      I humbly request your Lordship to see the said mark and note the stated currency. E
      The Applicant's prayer is that this Honourable Court should order the deletion or erasing of the term (currency) shilling.
      It is my humble submission that if such order was to be issued same would amount to amending form C2 (Certificate of Registration of a Charge) and therefore amending the F rules-which are made under Section 285 of the Companies Ordinance Cap. 212. Section 285 gives the power to make rules to the Minister responsible for Companies Incorporation and with due respect not to the Court.
      I further submit that rules to any state are part and parcel of that statute. An Application to the G Court for an order amounting to an amendment of any rules is an application to the Court to amend the statute in question.
      With all humbleness and due respect I have to inform the Applicant and remind the Applicant's Advocate that courts of law have powers to interpret laws but not to enact nor amend laws. H
   (ii)   The Bank of Tanzania Act No. 12 of 1966
      (a)   Section 24 of Act No. 12 of 1966 provides as follows and I quote "The Unit of currency in I Tanzania shall be the Shilling, each shilling being divided into one hundred cents."

      (b)   Section 26 of Act No. 12 of 1966 provides as follows and I quote: A
            "The Bank shall have the sole right to issue bank notes and coins in and for Tanzania and, subject to Section 33, only bank notes and coins issued by the bank shall be legal tender in Tanzania.
      I submit that from the provisions of the above quoted Sections of the bank of Tanzania Act, Act B No. 12 of 1966 it is too obvious that the currency and legal tender of Tanzania is the shilling or to be more specific Tanzania Shilling and no other currency.
      The charge in question is a charge created by a Tanzanian Company in favour of another C Tanzanian Company. It is a charge between two artificial Tanzanians and it is absurd for them to be governed while within Tanzania by a currency and legal tender other than their national currency.
      National currency, are like national flags, anthems and borders, they are the landmarks of D sovereignty and they cannot and should not be taken lightly. We know from our recent history that when Idi Amin took our national borders lightly we went to war against him to defend our sovereignty. National currency shares the same status like the borders and the National anthem and an application that the National currency should be deleted from a government E official document is nothing less than an insult to Tanzania and its sovereignty.
      It is my submission that this prayer should fail because it contravenes an existing statute enacted by the Parliament of Tanzania. Further that if it is allowed it will set a bad precedent F which will cause untold chaos, mess and confusion in the carrying out of the duties of the Registrar of Companies and the registrar of Charges under the custody of the Registrar will end up being a completely un-systematic registrar containing every conceivable currency on G earth depending on what every applicant prefers. Same would include Dutchemarks, Kroners, Rubles, Rials, Rand, Kwachas, Naira etc.
      While I concede that some of the foreign loans are given in foreign currencies, that is a matter of international trade but not within the practice of our Court. Indeed even the national budget H is composed of local resources and foreign resources but the framing of the budget is strictly on the national currency and not any other currency. To allow this prayer to succeed will, to quote the distinguished words of the Honourable Judge Kyanod in the case of Seiff Hamad Shariff v R "will create a bad policy and a wrong policy." I therefore repeat that this prayer and I the whole Application should be dismissed.

He also disputes that there was a misstatement in the forms registering the charge and A on this he submits as follows:
   `To do some justice to the submissions of the applicant I will make the following few submissions/replies.
   (i)   On page two (2) of the submissions of the Learned Advocate of the applicant, the Learned B Advocate states that the first respondent misstated the amount (of money) secured by stating in Form No 9 which is the Applicant's exhibit `E'. This allegation is strongly denied and the true fact is as follows: C
      Form No. 9 is divided into five (5) columns two (2) of the columns in which the amount secured by the Mortgage or charge is stated. I humbly crave to draw your Lordship's attention to my Annexure (i). In the said column two the first respondent or his Advocate stated as follows and I quote "Amount Secured by the Mortgage or Charge as US Dollars 904,500 D being approximately Shs.16,626,600/=. The first respondent did not state that the amount secured is Shs.16,626,500/= being approximately US Dollars 904,000." The statement is exactly in the same manner that the Applicant is submitting to the Court and it is surprising E that the Applicant is disputing it, a situation which amounts to disputing his own submission. I humbly submit that there was no misstatement on the part of the first respondent and this submission by the applicant should not be entertained.
      There having been no misstatement on the part of the first respondent, it is my submission F that the issuance of the Certificate of Registration of the Charge by the second respondent in the manner it was issued was not occasioned nor influenced by any misstatement by the first respondent. G
      The registration and issuance of the certificate was done in accordance with the provisions of the law.
      I further submit that if the Second respondent had registered and issued the certificate in any H other manner e.g. entering the amount secured in US Dollars same would have been illegal because it would have contravened the provisions of the governing law.'
The other important arguments made by the respondents are that there is no longer any charge created by the first respondent in favour of the applicant `due to the fact that the I then existing charge was discharged on 6 May, 1992', and that as no application has

been made for a declaration that the discharge is null and void the application is A incompetent as there is nothing presently to rectify.
The other argument relates to the legality of the loan agreement of the debenture. It is contended that as execution of the agreement and debenture was made after the B disbursement of the amount of the loan had been made, the loan agreement and the debenture are tainted with illegality.
I propose to consider and deal with all these points seriatim.
The application is made under s 85 of the Companies Ordinance. The section provides: C
   `85. The Court, on being satisfied that the omission to register a charge within the time required by this Ordinance, or that the omission or misstatement of any particular with respect to any such charge or in a memorandum of satisfaction, was altered or due to inadvertence or to some other sufficient D cause or is not of a nature to prejudice the position of creditors or shareholders of the company, or that on other grounds it is just and equitable to grant a relief, may on the application of the company or any person interested, and on such terms and conditions as seem to the court just and expedient, order that the time for registration shall be extended or, as the case may be, that the omission or E misstatement shall be rectified and may make such order as to costs of the alterations it thinks fit.'
Section 82 of the Ordinance provides for the Registrar of Charges to be kept by the Registrar of Companies, the second respondent herein. F
There are three important documents to consider in this application: (1) the loan agreement; (ii) the debenture and (iii) forms 9 and C2. In relation to this, especially to the debenture, in the case of In re Mechanisations (Eaglescliffe) Ltd (1), a case cited by G Capt. Kameja, learned counsel for the applicant, the mortgagee presented to the companies registration form CF (corresponding to form No 9 supra) which had been completed by the solicitors of the company in respect of a charge securing certain sums. The particulars therein were misstated as to the amount secured in that no H reference was made therein to interest and additional money secured by the charge. The companies registrar registered the charge as per submitted particulars and issued a certificate under s 98(2) of the Companies Act 1948 (corresponding to s 82 of the Ordinance).
In a subsequent creditor's voluntary winding up, for the total sum advanced by them I including the excess interest and the additional money not mentioned in the particulars of the charge and the regis-

trar's certificate. The Liquidator sought a declaration that in respect of the excess the A charges were void as against him or any creditor for want of registration, arguing that the effect of s 98(2) aforesaid is to make the registrar's certificate conclusive evidence of due registration of a charge securing such amount as is stated on the face of the certificate. Rejecting the argument, Buckley J stated, at 35: B
   `In order to discover the terms and effect of the charge ... one must look at the document creating the charge and not at the register. It is from that document that one will discover what moneys are secured and what is the total amount secured by the charge.' C
Capt Kameja submits that the instrument creating a charge, `in this case debenture, constitutes primary evidence of the extent of the charge and the amount thereunder'. With respect, I agree. In addition I would add that though the amount stated in a loan D agreement may not necessarily all have to be secured, where, as in this case, it is contended the amount stated in the loan agreement was secured by a charge, the agreement becomes, as I have stated already, an important document too, to look at in order to discover what amount was loaned and then secured. E
Now, according to the loan agreement in this case, the loan advanced by the applicant to the first respondent was US $904 000 (or the equivalent in other convertible currencies by way of a foreign currency loan . Looking at the debenture, apart from the cover as F shown, the amount indicated to be secured by it throughout its (the Debenture's) body is stated to be US $904 000. This is the flow of the statement of amounts in the two documents. According to these two documents, what was the amount which was loaned and secured? Obviously US $904 000. There is no mention of T Shs 16 626 500/= in the loan agreement or the body of the debenture. I agree therefore that the G amount which was advanced by the applicant to the first respondent which was then secured by the debenture created and issued by the first respondent in this application is US $904 000. I have already said that even the respondents in their counter-affidavits and submissions do not appear to dispute this. H
Was it necessary to state the US $904 000 only in form No 9 and C2? (In the column `Amount secured by the Mortgage or Charge (In form No 9 Annex (i) to the second respondent's counter affidavit) it is stated that the amount secured is US $904 000 being approximately Shs 16 626 500/=). This is, as stated already, the crucial point in this I matter. The responding arguments on it have been reproduced above. To them Capt Kameja replies as follows:

   `My Lord, the respondents' submission that the amount secured by the debenture was T Shs A 16,626,500/= because under the laws of Tanzania no charge could be registered in foreign currency is as far fetched as it is fanciful. The respondents' arguments in support of national sovereignty, the national flag, national anthem etc. may be patriotic and, perhaps, good material for a political dissertion but, in my view, certainly not practical. Respondents' have not cited any authority, and I am B not aware of one, to support the proposition that a Tanzania person, individual or corporate, cannot borrow money in foreign currency, secure it as a foreign currency debt and repay it in foreign currency.
   Equally fanciful in the respondents' submission that the applicant, in the words of counsel for the first C respondent, is "seeking to insert a foreign currency in the charge". My Lord, the charge, being the debenture dated 18 December, 1985, speaks for itself and, at the risk of repeating what I stated in the main submission, I refer to condition 1 of the said debenture which clearly provides that "This Debenture is security for principal moneys not exceeding US $904,000 (or the equivalent thereof in Dother  convertible  currencies) in aggregate together with interest thereon." In this regard, I reiterate my arguments at pages 9 and 10 of the main submission and in particular the fact, which the respondents have not disputed, that "the Tanzania Shilling is not and has never at any material time E been a convertible currency". It is too obvious to be seriously disputed that the Tanzania shilling, being a non-convertible currency, was not contemplated by the parties as being the currency of the charge.
   The second respondent also argues that the currency stated in Companies Form C2, i.e. the certificate of registration, is Shillings and that recording the amount secured in any other currency F would amount to amendment of the said form and "therefore amending the  rules  which are made under section 285 of the Companies Ordinance". My Lord, section 285 of the Companies Ordinance only provides for  "General rules and fees for Winding up"  and, for sure, registers of such charges G have nothing to do with section 285 aforesaid.
   At any rate forms are applied as far as is practicable. Substitution of the word "Shillings" by the words "United States Dollars" in the said form would not have offended any law. In the said Form C.2 issued by the second respondent, and which he apparently holds to be sacrosanct, the second H respondent crossed out the word "charge" and substituted therefore the word "Debentures" so as, in our view, to clearly identify the type of charge created. If the second respondent's argument is pursued to its logical conclusion his own act, above, amounted to an amendment of the form and the rules and the second respondent doesn't even suggest he has powers to make such amendments. I How come then that substituting "United States

   Dollars" for "Shillings" on the said form so as to specify the currency of the charge suddenly A becomes an amendment of the rules! That would, in our humble submission, be a classic case of hypocritical double standards.'
With extreme respect, I could not agree more with Capt Kameja in his above B submissions. The immutability except by the Minister's hand, of form C2 has been, as Capt Kameja rightly contends, violated by the second respondent himself. In that form the word `Charge' has been cancelled out by the second respondent and above it the word `Debenture' to accommodate the debenture in this case has been written. If that C form can so easily be changed by the second respondent, why should cancelling the word `Shillings' and writing the words `US Dollars' instead amount to amending the rules, I simply do not comprehend this. As for the other arguments on the point stated earlier on above, Capt Kameja has tackled them all in his reply and all that I can say is D that these arguments of the respondents are to me nothing more than sheer sophistry. I reject them here and hold that the US $904 000 should have been expressed in forms No 9 and C2, including the register of charges, as the amount secured by the debenture created and issued by the first respondent in this case. The loan was a foreign currency E loan, and there was nothing wrong or improper to express it in foreign currencies in form No 9 and C2.
The statement of T Shs 16 626 500/= in relation to US $904 000 in form No 9 and C2 does, in view of the fast falling value of the Tanzania Shilling, to any mind now look F ludicrous. I accept as true the explanation given by the applicant for stating the equivalent of T Shs 16 626 500/= and I think it was because of the purposes stated in that explanation that the amount was stated as a mere approximation of US $904 000. If indeed the amount was intended to be the amount to be secured by the debenture, an G actual amount would have been stated and not a mere approximation.
Concerning the arguments or point that the charge has been discharged, I am of the view that such arguments or points can be valid only if the loan of US $904 000 has been paid or notified. The applicant says it has not and if that is so, the so-called H discharge is no discharge at all. This is because it is based on the erroneous assumption that the loan was for Shs 16 626 500/= whereas it was not, it was for US $904 000. No valid discharge has ever taken place therefore. The one effected by the second respondent on the basis of the first respondent's memorandum and declaration I of correctness of the memorandum is hereby quashed and set aside.

As regards the legality or otherwise of the loan agreement and the debenture, I detect no A illegality in these and I reject the respondents' arguments in relation to this.
The other arguments made by the respondents on the merits of the application do not seem to be worth any consideration here. I find them all without any substance and I reject all of them here. B
They (the respondents) have also raised several preliminary points of objection to the application. One of them is that the application is wrongly made under s 95 of the Civil Procedure Code

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