[2000] KEHC 342 (KLR)
The court held that section 228 of the Companies Act is clear that once a winding-up order has been made or an interim liquidator appointed, no action or proceedings can be commenced or continued against the company except by leave of the court. Since the plaintiff commenced the proceedings without obtaining such...
Source-derived case information.
- Citation
- [2000] KEHC 342 (KLR)
- Parties
- Plaintiff: Henry Njoroge; Defendant: Rural Urban Credit Finance Co. Ltd
- Court
- High Court
- Court Station
- High Court at Nairobi (Milimani Law Courts)
- Jurisdiction
- Kenya
- Case Number
- ? 1973 of 1986
- Procedural Posture
- Civil Case / Ruling on Notice of Motion
- Outcome
- suit struck out with costs to the respondent/defendant
- Judges
- JL Osiemo
- Legal Topics
- Company Liquidation, Leave of Court, Winding Up Orders
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Henry Njoroge
Plaintiff
Rural Urban Credit Finance Co. Ltd
Defendant
Procedural Posture
Civil Case / Ruling on Notice of Motion
Legal Issues
- 1 Whether the plaintiff could proceed with the suit against the 1st defendant company in liquidation without obtaining leave of the court as required by section 228 of the Companies Act.
- 2 Whether proceedings commenced without such leave are invalid.
Ratio Decidendi
The court held that section 228 of the Companies Act is clear that once a winding-up order has been made or an interim liquidator appointed, no action or proceedings can be commenced or continued against the company except by leave of the court. Since the plaintiff commenced the proceedings without obtaining such leave, the suit was in contravention of the Companies Act and therefore invalid. The court struck out the suit with costs to the respondent/defendant.
Court Disposition
suit struck out with costs to the respondent/defendant
Orders
- The suit is struck out with costs to the respondent/defendant.
Full Case Text
Judgment text and source record
13 paragraphs
IN THE HIGH COURT OF KENYA AT NAIROBI
H.C.CIVIL CASE NO.1508 OF 1994
HENRY NJOROGE …………………………………………. PLAINTIFF
VERSUS
RURAL URBAN CREDIT FINANCE CO.)
LTD & ANOTHER ………………………………………. DEFENDANTS
RULING
This application by way of notice of motion brought under section 241(I)(a)(b) and (c) section 228 of the companies Act and order LR 1 of the CPR seeks orders that the Plaintiff be at liberty to continue with the proceedings instituted herein against the 1st defendant Rural Urban Credit Finance Company (in liquidation) notwithstanding that an interim liquidation and official receiver has been appointed, and that the official receiver and interim liquidator do defend the proceedings herein in the name and on behalf of the 1st defendant. The application is opposed by the respondent/defendant on the grounds that no leave was obtained by the Plaintiff prior to commencement of this suit in compliance with section 228 of the Companies Act Cap 486, which provides as follows:-
When a winding-up order has been made or an interim liquidator has been appointed under section 235, no action or proceedings shall be proceeded with or commenced against the company except by leave of the court and subject to such terms as the court may impose. These proceedings were commenced without leave of the court in contravention of the provisions of the Companies Act and therefore are invalid.
The order sought that the Plaintiff be at liberty to proceed with the proceedings instituted herein against and the suit is hereby struck out with costs to the respondent/defendant. Orders accordingly.
Dated and delivered at Nairobi this 27th day of July, 2000
J.LA. OSIEMO
JUDGE