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Nilsson v Inertia (MISCELLANEOUS CIVIL CAUSE 64 OF 2003)  TZHC 12 (13 July 2007)
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IN THE HIGH COURT OF TANZANIA
AT DAR ES SALAAM
MISCELLANEOUS CIVIL CAUSE 64 OF 2003
ULF NILSSON APPLICANT
INERTIA LIMITED RESPONDENT
Date of last order - 2/7/2007
Date of Winding up Order - 13/7/2007
WINDING UP ORDER
This is a petition for compulsory winding up of INERTIA LTD. It has been brought under SS 167 (b), (e) and (f), 168 and 170 of the Companies Act [Cap 212 R.E. 2002]. The Petitioner ULF NILSSON is one of the Shareholders of INERTIA LTD hereinafter to be referred to as the Company.
The grounds upon which this petition is based are listed at paragraph 7 of the Petition. They are eleven in number.
For the purposes of this petition, I will mention just a few hereinbelow.
One, that the Company is running at
Two, that the Directors of the Company are unable to convene a shareholders' or Board meeting because of their differences.
Three, that the Company is heavily in debts.
Four, that the Company is unable to pay its taxes in time.
Five, that Bjarne Ailing who is one of the Company's Directors has been misusing the Company's funds.
Six, that the Management of the Company has defaulted in delivering the statutory report to the Registrar and in holding the Statutory meeting.
The petition is supported by affidavit of One DAVID ULF NILSSON who is an Attorney of the Petitioner. The said person stated at paragraph 2 of his affidavit composed of two paragraphs only that all the statements in the petition are true to the best of his own personal knowledge which he gained while working with ULF NILSSON (Petitioner) in his various businesses.
Following this petition. One Josephrous Mataluma, who is one of the shareholders, filed a counter - affidavit in opposition to the Petition. In his Counter- affidavit, he stated that the Company was incorporated in 2000 and that it has been filing annual returns. He said that it is not true as alleged by the petitioner that the Company has been running at a loss and that the Company's Directors have developed misunderstandings. He also said that it is not true that one of the Directors Bjarne Ailing has been misusing the company's properties and that the company is heavily indebted.
Furthermore, Josephrous Mataluma did state in his counter affidavit particularly at paragraph 7 that the company filed Civil Case No. 290 of 2002 against the petitioner which is pending in the High Court (Dar es Salaam Registry) wherein the Company is claiming from the petitioner a sum of 5115.22,800,000/= and asking the Court to order him to return the Company's documents.
On 18th September, 2006, Counsel for the petitioner prayed this court to proceed exparte and to prove this matter by affidavit. I granted the prayer and one Aloyce Kazimbaya swore an affidavit to that effect. In his affidavit, Aloyce Kazimbaya stated that he is a Personal Assistant and Business Manager of the petitioner and re-stated the grounds upon which this petition is based.
On my part, I think that this petition is well founded. First of all, it has not substantially been opposed by Josephrous Mataluma who filed an affidavit in opposition to this petition that the Company is running at a loss. He did not state in his affidavit as to how much profits have been realized by the Company from the date when it was incorporated in 2000 to the date of filing this petition. Secondly, Josephrous Mataluma merely opposed the fact that the Directors of the Company have not been able to convene the shareholders' meeting due to their differences. He did not state in his affidavit as to how many meetings have ever been convened by the Directors of the Company from the date when it was incorporated to the date of filing this petition.
Thirdly, apart from merely denying that the Company is not in debts, it was not stated by Josephrous Mataluma that the Company is not indebted to anybody and that it is capable of paying its debts. This would have been done by annexing a Certificate to his affidavit showing that the Company is free from debts and that it is in the course of making big profits to the extent that it is capable of paying its debts.
Fourthly, Josephrous Mataluma merely denied that the Company has not failed to pay taxes but he did not show the amount of taxes that has ever been paid from its taxable income to Tanzania Revenue Authority since when it was incorporated in 2000 to the date of filing this petition.
Fifhly, from Josephrous Mataluma's affidavit, it appears that the Directors of the Company including the petitioner have been misusing the Company's funds and properties which is detrimental to the shareholders' dividends.
Sixthly, Josephrous Mataluma did not attach to his affidavit a copy of the Statutory Report or a copy of the minutes of the statutory meeting in order to contradict the petitioner's allegation that the Management of the Company defaulted in delivering the statutory report to the Registrar or in holding the Statutory meeting.
In my opinion as this Company INERTIA LTD is running at a loss to the extent that it cannot pay its creditors' debts and taxes in time; and as its Directors are at logger- heads to the extent that they are not in a position to convene a shareholders' meeting or to hold the statutory meeting; and as its funds are being misused by its Directors; and as its Directors have defaulted to deliver the Statutory report to the Registrar, I hereby wind it up under S. 167 of the Companies Act [Cap 212 R.E. 2002]. It is so ordered.
Consequently, I hereby appoint MRS C. Rwechungura and Miss Kirethi, Advocates to be the Liquidators of this Company. I do so under S. 182 of the Companies Act [Cap. 212 R.E. 2002]
The District Registrar is hereby assigned to inform both liquidators about their appointment. This information should reach them within a week from today.
A. SHANGWA JUDGE 13.7.2007
Court: Delivered this 13th day of July, 2007.