[1990] KEHC 5 (KLR)
The court found that the respondent company had issued three post-dated cheques to the petitioner as payment for rent, all of which were returned unpaid with the remarks 'Refer to drawer and Account closed.' Despite a formal demand for payment, the company failed to settle the debt. The court was satisfied that the...
Source-derived case information.
- Citation
- [1990] KEHC 5 (KLR)
- Parties
- Petitioner: Kenya Bankers Co-operative Savings and Credit Society Limited; Respondent: Busia Fish Industries (Kenya) Limited
- Court
- High Court
- Court Station
- High Court at Nairobi (Milimani Law Courts)
- Jurisdiction
- Kenya
- Case Number
- Winding Up Cause 46 of 1986
- Procedural Posture
- Winding Up Cause / Ruling
- Outcome
- petition granted; company ordered to be wound up
- Legal Topics
- Company Winding Up, Insolvency, Debt Recovery
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Kenya Bankers Co-operative Savings and Credit Society Limited
Petitioner
Busia Fish Industries (Kenya) Limited
Respondent
Procedural Posture
Winding Up Cause / Ruling
Legal Issues
- 1 Whether the respondent company is unable to pay its debts as required under the Companies Act.
- 2 Whether the petitioner is entitled to an order for winding up of the respondent company.
Ratio Decidendi
The court found that the respondent company had issued three post-dated cheques to the petitioner as payment for rent, all of which were returned unpaid with the remarks 'Refer to drawer and Account closed.' Despite a formal demand for payment, the company failed to settle the debt. The court was satisfied that the company was unable to pay its debts within the meaning of the Companies Act. As all procedural requirements for a winding-up petition had been met and the respondent failed to contest the petition, the court granted the order for winding up and directed that the Official Receiver wind up the affairs of the company, with costs to be paid out of the company assets in priority.
Court Disposition
petition granted; company ordered to be wound up
Orders
- The Official Receiver is ordered to wind up the affairs of Busia Fish Industries (Kenya) Limited.
- Costs of the petition to be paid out of the company assets in priority.
Full Case Text
Judgment text and source record
12 paragraphs
REPUBLIC OF KENYA IN THE HIGH COURT OF KENYA AT NAIROBI (NAIROBI LAW COURTS)
Winding Up Cause 46 of 1986
In the Matter of Busia Fish Industries (K) Ltd and In The Matter of Companies Act
Ruling.
Kenya Bankers Co-operative Savings and Credit Society Limited has petitioned this court for an order winding-up Busia Fish Industries (Kenya) Limited on the ground that:-
“the company is indebted to your petitioner in the sum of Shs 30,000/- being the amount due for 3 unpaid cheques issued by the company to the petitioner.”
This sum of money was demanded from the company as far back as 8th of May, 1987. According to the demand letter the amount was to be received within three weeks. The amount was never received hence the filing of this petition against the company on the 16th day of September, 1987.
All the provisions of winding-up rules have been complied with by the petitioner. Despite being served the company never replied or in any way wished to be heard during the proceedings.
The Petitioner’s case merely being that the company had issued them with three post-dated cheques. Upon presenting the cheques on the due dates they were all returned to the petitioner unpaid and marked ‘Refer to drawer and Account closed.” All the cheques had been issued in lieu of payment for rent for the premises occupied by the company. Despite the letter of demand the company has not made any effort to pay back the money. The obvious fact being that the company is unable to pay its debts. I am satisfied that this is the case.
I see no ground upon which to refuse the petitioner’s request. I hereby grant the petitione and order that the Official Receiver do Wind-up the affairs of the company and that costs of this petition be paid out of the company assets if any in priority. Order accordingly.
February 2, 1990.
Owuor J.