I N THE COURT OF APPEAL OF TANZANIA

AT DAR ES SALAAM

(CORAM: RAMADHANI, J.A., MSOFFE, J.A. and KAJI, J.A.)

CIVIL APPEAL NO. 30 OF 2004

THE ATTORNEY GENERAL APPELLANT

VERSUS

S I S I ENTERPRISES LTD .....RESPONDENT

(Appeal from the judgment of the High Court of

Tanzania at Dar es Salaam)

( I h e m a , J.)

dated the 16 th day of October, 2003

in
Civil Case No. 47 of 2 0 0 1

JUDGMENT OF THE COURT

MSOFFE, J.A:

In Civil Case No. 47/2001 of the High Court of Tanzania at Dar

es Salaam the respondent herein sought, inter alia, a declaratory

order that the acquisition of all that piece of land comprised in

certificate of title No. 16395 measuring 21.3 acres and popularly

known as Drive in Cinema, was unlawful.

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The respondent's case was that it was the holder of the land in

issue since 18/6/1966 in a 99 years lease. That, consequent upon

being granted the lease it developed the land by building the

complex known as Drive in Cinema. On 5/6/1999 it signed a letter of

intent with the Department of State of the Government of the United

States of America to enter into an exclusive option to purchase the

land at a consideration of USD 3,000,000/=. However, before the

intent could materialize it received a letter from the Commissioner for

Lands informing it that the Government of Tanzania intended to

acquire the land under S. 4 of the Land Acquisition Act, 1967.

Inspite of its strong objections to the intended acquisition, the

Government went ahead to acquire the land and eventually offered it

to the Embassy of the United States of America. In return, the

Government offered to compensate it a sum of Tshs.602,363,000/=.

The respondent declined to accept the above sum of money for being

inadequate and accordingly proceeded to file the above mentioned

suit.

On the other hand, the case for the appellant herein was that

the acquisition of the land was lawful under the Land Acquisition Act,

1967. That on 16/7/1999 the President vide General Notice No. 469
acquired the land essentially because the respondent had ceased to

operate the Drive in Cinema, and the land was required for a public

purpose. And that, at any rate, the President's intention to acquire

the land was published in the aforesaid Government Gazette on

16/7/1999.

The trial court framed the following issues:-

(a) Whether there was proper and

sufficient notice for acquiring the
suit land under the Land Acquisition
Act 1967.

(b) Whether the purpose in which the

land was purportedly acquired is a
public purpose under section 4 of
the Land Acquisition Act 1967.

(c) Whether the proposed compensation

offered by the government is
adequate having regard to all the
circumstances of the case.

After a full trial the High Court, Ihema, J. answered the

issues in the negative. In essence the High Court decided that

the acquisition was not in public interest and no reasonable

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notice was given before the said acquisition. Henceforth, the

»

said court ordered compensation of USD 3,000,000 with

interest at market rate under Section 3 (1) (g) (vii) of the Land

Act No. 4/99.

This is an appeal against the above decision of the High

Court. There-are four grounds of appeai which read as

follows: -

1. That the trial court erred in law and in

fact in its finding that there was no
proper and sufficient notice in acquiring
the suit land under the Land Acquisition
Act, 1967.

2. That the trial court erred in law and in

fact in its finding that the acquisition
was not for public purpose as provided
for under Section 4 of the Land
Acquisition Act, 1967.

3. That the trial court erred in law and in

fact in finding that the compensation of
the suit land be pegged at USD
3,000,000 or its equivalent in Tanzania
shillings for it is on the high side.
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4. That the trial court erred in law in its

»
finding and granting interest at the
current commercial rate as provided for
under Section 3 (g) of the Land Act No.
4/99 for at the time of filing the suit this
law was not operative.

At the hearing of the appeal the parties were represented

by the-same advocates who appeared on their behalf at the

trial. Mr. Ngwembe, learned Senior State Attorney, appeared

for the appellant. On the other hand Mr. Bomani, learned

advocate, appeared and resisted the appeal on behalf of the

respondent.

We propose to begin with the second ground of appeal.

The crucial Issue here is whether the acquisition for purposes of

the American embassy was in public interest. In his oral

submission on the point, Mr. Ngwembe essentially repeated his

earlier submission at the trial:- That the general public was to

benefit from services offered by the American embassy at the

acquired piece of land. With respect, we do not agree with him

that the acquisition was in public interest. We say so for

reasons which will emerge hereunder.

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The starting point is the definition of "public interest/' or "public

purpose" as it is sometimes called. In Stroud's Judicial Dictionary

\ Fifth Edition, Vol. 4 a matter of public interest:

"is that in which a class of the community

ha.ve a pecuniary interest, or some interest
by which their legal rights or liabilities are
affected."

In Black's Law Dictionary, Seventh Edition by Bryan A. Garner,

"public interest" means:-

- " 1 . The general welfare of the public that

warrants recognition and protection.

2. Something in which the public as a

whole has a stake; esp. an interest
that justifies governmental regulation."

Black's Law Dictionary also defines "public purpose" as:-

"An action by or at the direction of a

government for the benefit of the
Community as a whole."
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In Ellis V. Home Office (1953) 2 QB 135, Morris LJ. stated:-

*

"One feature of the public interest is that

\ justice should always be done and should
be seen to be done."

To come back home, we have the case of Agro Industries Ltd

Versus Attorney General 1994 TLR 43 where this Court cited a

head note in B.P. Bhatt and Another Versus Habib Rajani 1958

EA 536 that to be in the "public interest":-

"it is not sufficient that public interest may

benefit indirectly or incidentally, if the
primary purpose of the application is to
benefit the landlord's interest and not that
of the public."

In Bhatt's case, Law J. relied on the Indian case of Hawabai

Franjee Petit Versus Secretary of State for India 1915 39 BOM

279 where in defining "public purpose" it was stated:-

" the phrase, whatever else it

may mean, must include a purpose, that is
to say an aim or object, in which the
general interest of the community, as
opposed to the particular interest of
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individuals, is directly and vitally

concerned."

\ In Agro's case (supra) this court then concluded:-

"So what do we understand by an action

being in the public interest? We think it is
so when looked at objectively with impartial
eyes, the action is primarily and not
incidentally in the interest of the public . . ."

In the light of the above definitions, it is clear to us that "public

interest" or "public purpose" must include a purpose, that is to say an

aim or object in which the general interest of the community is

concerned or involved, as opposed to the particular interest of

individuals or institutions.

I n the instant case, the .acquisition was made under Section 4

( 1 ) of the Land Acquisition Act, 1967 which reads:-

"4 (1) Land shall be deemed to be required

for a public purpose where it is required for
any of the following purposes:

(a) for exclusive Government use, for

general public use, for any
Government scheme, for the
development of agricultural land or
 for the provision of sites for
industrial, agricultural or commercial
development, social services or
housing;

(b) for or in connection with sanitary

improvement of any kind, including
reclamations;

(c) for or in connection with the laying

out of any new city, municipality,
township or minor settlement or the
extension or improvement of any
existing city, municipality, township
or minor settlement;

(d) for or in connection with the

development of any airfield, port or
harbour;

(e) for or in connection with mining of

minerals or oil;

(f) for use by the community or

corporation within the community;

(g) for use by any person or group of

persons who, in the opinion of the
President, should be granted such
land for agricultural development.
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The crucial question here is whether the acquisition and the

»

subsequent grant to the US Embassy was within the ambit of the

N above sub-section. In our respectful opinion, the answer is in the

negative. The acquisition did not fit in any of the situations

mentioned in the above sub-section. Indeed, the spirit of the above

Act was, and indeed still is, to acquire land for public purpose and

not for any other use. Therefore, the validity of any acquisition

under the Act depends on whether the land is required for a public

purpose. In the instant matter, the acquisition for purposes of the

foreign embassy was not in line with the ''public purpose" or "public

interest" envisaged under the Act. We will, therefore, find nothing to

fault the trial Judge in his findings and conclusions on the point in

issue.

We now move forward to consider the third and fourth grounds

of appeal which were argued together by Mr. Ngwembe. The

complaint here is threefold:- One, that it was wrong to invoke the

Land Act, 1999 in determining compensation and interest. Mr.

Ngwembe maintained that sub-sections 1 and 2 of Section 12 of

the Land Acquisition Act, 1967 were relevant for purposes of

determining compensation and interest. Two, that the decreed sum

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of USD 3,000,000 was on the high side. Three, that it was wrong to

enter the judgment in foreign currency in the light of the decision in

^Continental Agencies Versus A. C. Berrillo Co. Ltd (1971) EA

205, Mustafa, J.A., that a Tanzanian court can only enter judgment in

Tanzania shillings.

On the other hand, Mr. Bomani was of the general view that

both the Land Acquisition Act, 1967 and the Land Act, 1999 did not

apply for purposes of determining compensation. He urged that the

point should be determined on the basis of the prevailing market

value where the criterion should be "willing buyer willing seller" basis.

Hence, in his view, the price agreed by the parties in the letter of

intent would be appropriate compensation in the circumstances. As

for interest, he at first contended that a rate of 3 1 % was pleaded at

the trial. On reflection, he submitted that the respondent would be

satisfied with an award of interest prevailing at the time the

judgment was given.

In considering the third and fourth grounds of appeal we think

it is necessary to introduce the subject by making the following

observations. One, since the acquisition was unlawful as we have

tried to demonstrate in the second ground of appeal, de jure the

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respondent remains the lawful owner of the suit premises. De

»

facto, however, the embassy of the United States of America has

been offered the land and a new chancery built on it. In the

premises, the only realistic and prudent option for the respondent is

to be granted viable and adequate compensation for unexhausted

improvements. Two, in the light of the position we have taken on

the second ground of appeal, it will follow that since the acquisition

was not made under the provisions of the Land Acquisition Act, 1967,

then that Act would not apply in determining compensation.

Likewise, the Land Act 1999 would not be relevant because the

acquisition took place before the Act came into force. The

acquisition was made on 16/7/1999 and the said Act came into effect

on 1/5/2001 by virtue of G.N. 485/2001.

Pursuant to the above introductory observations, it will now be

clear that market value will be the determining factor. We have

considered the rival positions given by Messrs. Ngwembe and Bomani

on the matter. In the end, we are inclined to go along with the value

given by the Government valuer. We do so not out of disrespect to

the valuation report given by the private valuer, PW2 Titus Kalokola.

On the contrary, much as we respect the report, we are of the view

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that justice will demand that we trust more the value given by the

Government valuer than that of the private valuer. In this context,

the value of Tshs.998,467,000/= given by the Government valuer,

DW2 Deodatus Kalyanda, will be fair and adequate compensation to

the respondent We further think that this will be fair compensation

given the_factJthat the unexhausted improvements were on a prime

area of the city.

A word about a judgment entered in foreign currency. Mr.

Ngwembe's"contention that a Tanzanian court cannot enter judgment

in foreign currency in view of the decision in Continental Agencies

is, with respect, no longer good law. The current position is as

stated by this court in Transport Equipment Versus Valambhia

and another 1993 TLR 91 where it was held, inter alia, that

following the enactment of the Foreign Exchange Act No. 1 of 1992

which came into force on 16/3/1992 as per G.N. 37/92, the principle

of law propounded in Continental Agencies no longer applies in

this country.

In view of the position we have taken on the second, third and

fourth grounds of appeal we find no need of discussing the first

ground of appeal.
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In the end result, and for the above reasons, we dismiss the

appeal on ground two. As for grounds three and four, we allow it to

\ the following extent:- One, the amount of money due and payable

to the respondent as compensation for unexhausted improvements is

Tshs.998,467,000/=. Two, the above sum of money will attract

interest at the commercial rate prevailing at the date of this

judgment. Three, since we have dismissed and partly allowed the

appeal, it will be fair that each party bears its own costs here and the

court below.

We so order accordingly.

DATED at DAR ES SALAAM this 15th day of June, 2005.

I certify that this is a true copy of the original.

S.A.N. WAMBURA
SENIOR DEPUTY REGISTRAR