[2010] KEHC 2567 (KLR)
The court found that the petitioner had demonstrated inability to pay the debt arising from a personal guarantee to Transnational Bank Ltd., as evidenced by his lack of income, assets, and employment. However, before making a final order of bankruptcy, the court exercised its discretion to require the petitioner to...
Source-derived case information.
- Citation
- [2010] KEHC 2567 (KLR)
- Parties
- Applicant: Mihir Kumar Tilvawala; Respondent: Transnational Bank Ltd.
- Court
- High Court
- Court Station
- High Court at Nairobi (Milimani Law Courts)
- Jurisdiction
- Kenya
- Case Number
- Bankruptcy Cause 58 of 2001
- Procedural Posture
- Bankruptcy Cause / Ruling on Public Examination and Directions for Settlement Scheme
- Outcome
- Interim order; petitioner to submit scheme of settlement within 30 days before final adjudication of bankruptcy.
- Judges
- FI Koome
- Legal Topics
- Personal Guarantee Liability, Bankruptcy Petition, Creditor Rights
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Mihir Kumar Tilvawala
Applicant
Transnational Bank Ltd.
Respondent
Procedural Posture
Bankruptcy Cause / Ruling on Public Examination and Directions for Settlement Scheme
Legal Issues
- 1 Whether the petitioner should be adjudged bankrupt given his inability to pay the personal guarantee debt to the creditor.
- 2 Whether the petitioner should be required to submit a composition or scheme for settling the disclosed debt before final adjudication.
Ratio Decidendi
The court found that the petitioner had demonstrated inability to pay the debt arising from a personal guarantee to Transnational Bank Ltd., as evidenced by his lack of income, assets, and employment. However, before making a final order of bankruptcy, the court exercised its discretion to require the petitioner to submit a composition or scheme for settling the disclosed debt. The rationale was that the petitioner is now working and may be able to propose a feasible settlement plan. The court thus deferred final adjudication of bankruptcy, granting the petitioner thirty days to submit a proposed scheme for consideration, in line with the provisions of the Bankrupt Act.
Court Disposition
Interim order; petitioner to submit scheme of settlement within 30 days before final adjudication of bankruptcy.
Orders
- The petitioner is given thirty (30) days to submit a proposed scheme of settlement for the disclosed debt.
- Final orders on adjudication of bankruptcy are deferred pending consideration of the proposed scheme.
Full Case Text
Judgment text and source record
16 paragraphs
REPUBLIC OF KENYA
IN THE HIGH COURT OF KENYA
AT NAIROBI (NAIROBI LAW COURTS)
Bankruptcy Cause 58 of 2001
IN THE MATTER OF THE BANKRUPT ACT CHAPTER 53
OF THE LAWS OFKENYA
AND
IN THE MATTER OF MIHIR KUMAR TILVAWALA
RULING
1. The Petitioner petitioned to be adjudged bankrupt and a receiving order was issued28 September 2010, placing his estate upon the official receiver for its management.The matter came up for public examination of the petitioner. He gave evidence on26th November 2009and on11th February 2010, of how he used to be a director of a business called Solid Owned Limited for which he provided a personal guarantee for a sum of Kshs.6,773,461 to Transnational Bank Ltd., the company made loses and eventually closed down.
2. The Petitioner was not able to pay for the personal guarantee to the Creditor since he had no income.The Petitioner testified that he lives in his brother’s house and works for the brother in a construction site. He produced a copy of the certificate of lease of the property known as Nakuru/Municipality Block 7/283 registered in the name of Tilvawala Manaswini Chaitanykumar.The Petitioner is married with two daughters who are currently residing out of the country.His wife is however not in gainful employment.The Petitioner earns a living by working with his brother who is a contractor although he has no bank account.
3. The creditors did not attend the public examination of the Petitioner.The record of proceedings do not show whether there was a meeting of creditors.The only creditor disclosed by the petition is a personal guarantee issued by the Petitioner to Transnational Bank Ltd for a sum of Kshs.6,773,461. 00.
4. Accordingly I will make an order that the Petitioner do provide a composition or scheme of how he intends to satisfy this debt since it became clear from his evidence that he is now working with his brother in a construction firm.The Petitioner is given thirty (30) days within which to submit the proposed scheme of settlement for consideration by this court before making the final orders on whether or not to adjudge the Petitioner bankrupt.
RULING READ AND SIGNED ON23RD APRIL 2010ATNAIROBI.
M. K. KOOME
JUDGE