[2022] KEHC 10626 (KLR)
The court determined that it would be improper to proceed to deliver judgment on the insolvency petition while an application seeking to set aside previous orders and dispose of a key asset is pending. Delivering judgment and declaring the petitioner bankrupt before hearing the application could have serious effects...
Source-derived case information.
- Citation
- [2022] KEHC 10626 (KLR)
- Parties
- Petitioner: Joseph Maina Kioi t/a B. O/S.I.O/L.O; Applicant: Juhudi Kilimo Company Limited
- Court
- High Court
- Court Station
- High Court at Eldoret
- Jurisdiction
- Kenya
- Case Number
- Insolvency Cause E02 of 2021
- Procedural Posture
- Insolvency Cause / Interlocutory Application Pending Judgment
- Outcome
- Hearing of the Notice of Motion dated 6/5/2022 to proceed before judgment on the petition.
- Judges
- EKO Ogola
- Legal Topics
- Insolvency Proceedings, Bankruptcy Petition, Preservation of Estate
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Joseph Maina Kioi t/a B. O/S.I.O/L.O
Petitioner
Juhudi Kilimo Company Limited
Applicant
Procedural Posture
Insolvency Cause / Interlocutory Application Pending Judgment
Legal Issues
- 1 Whether the court should proceed to deliver judgment on the insolvency petition before hearing the pending application dated 6/5/2022.
- 2 Whether granting the insolvency order prior to determination of the application would prejudice the applicant or constitute an abuse of insolvency proceedings.
Ratio Decidendi
The court determined that it would be improper to proceed to deliver judgment on the insolvency petition while an application seeking to set aside previous orders and dispose of a key asset is pending. Delivering judgment and declaring the petitioner bankrupt before hearing the application could have serious effects on the applicant's rights and may inadvertently assist the debtor in evading creditors, contrary to the purpose of insolvency law. Therefore, the court must first hear and determine the application dated 6/5/2022 before proceeding to judgment on the main petition.
Court Disposition
Hearing of the Notice of Motion dated 6/5/2022 to proceed before judgment on the petition.
Orders
- The Notice of Motion dated 6/5/2022 shall be heard as scheduled on 21/6/2022 before Court No.2.
- Judgment on the insolvency petition is deferred until determination of the application dated 6/5/2022.
Full Case Text
Judgment text and source record
17 paragraphs
In re Joseph Maina Kioi t/a B. O/S.I.O/L.O (Insolvency Cause E02 of 2021) [2022] KEHC 10626 (KLR) (26 May 2022) (Ruling)
Neutral citation: [2022] KEHC 10626 (KLR)
Republic of Kenya
In the High Court at Eldoret
Insolvency Cause E02 of 2021
EKO Ogola, J
May 26, 2022
Ruling
1. The Judgment in the Petition herein was on 8/3/2022 reserved for delivery on 29/3/2022, and the file kept by the Judge. The said Judgment is yet to be delivered, the delay being due to busy schedule/Diary of the court.
2. However, while the file was with the Judge, an application was made in the same file, and being unable to locate the file, the registry opened a skeleton file for that application. In the skeleton file was application by way of Notice of Motion dated 6/5/2022 seeking the following orders:a.That due to the urgency involved herein, service of this application be and is hereby dispensed in the 1st instance.b.That the orders granted on the 5th August 2021 and 15th February 2022 by this Honourable Court be and are hereby set aside and the applicant, Juhudi Kilimo Company Limited be allowed to dispose of the motor vehicle registration number KCD 106A, an Isuzu Lorry.c.That cost of this application be provided for.
3. That application was allocated a date for hearing interpartes being on 21/6/2022.
4. On 17/5/2022 a notice was brought to the Court’s attention of a letter of inquiry by M/s Juhudi Kilimo enquiring about the delay in hearing the said application. It then dawned on the Court that there was another file – the skeleton file - where there was an application.
5. I have looked at the nature of the said application dated 6/5/2022 in contrast with the judgment to be written on the Petition herein. The Petition seeks orders of insolvency. The Petitioner seeks to be declared bankrupt and an order of preservation of his estate.
6. This Court now having knowledge of the application dated 6/5/2022 declines to proceed to write judgment on the Petition until such a time as the application dated 6/5/2022 is heard and determined. This is so for the obvious reason that should the Court declare the Petitioner bankrupt, this will have serious effect on the application dated 6/5/2022. The other unintended effect would be that this Court would be aiding the debtor to escape his creditors. Such would be a mis-use of insolvency laws and proceedings.
7. It seems to me best therefore, to hear the said application first. After that then the Court shall proceed and write Judgment in the petition.
8. The Notice of Motion dated 6/5/2022 shall be heard as scheduled on 21/6/2022 before Court No.2. Orders accordingly.
DATED, SIGNED AND DELIVERED ON 26TH MAY 2022. E. K. OGOLAJUDGE