[2021] KEHC 1331 (KLR)
The court found that the petitioner, Benjamin Midiwo Orwa, was unable to pay his debts as his liabilities far exceeded his assets, with debts surpassing Kshs 15,000,000 against assets valued at Kshs 220,000. The court considered the evidence, including the petitioner's financial statements, the circumstances leading...
Source-derived case information.
- Citation
- [2021] KEHC 1331 (KLR)
- Parties
- Applicant: Benjamin Midiwo Orwa; Respondent: Eco Bank Kenya Limited
- Court
- High Court
- Court Station
- High Court at Kisumu
- Jurisdiction
- Kenya
- Case Number
- Insolvency Cause E001 of 2015
- Procedural Posture
- Insolvency Cause / Judgment
- Outcome
- bankruptcy order granted against the estate of the petitioner
- Legal Topics
- Bankruptcy Petition, Insolvency Proceedings, Debtor Inability to Pay, Appointment of Trustee
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Benjamin Midiwo Orwa
Applicant
Eco Bank Kenya Limited
Respondent
Procedural Posture
Insolvency Cause / Judgment
Legal Issues
- 1 Whether the petitioner is unable to pay his debts as required under the Insolvency Act.
- 2 Whether a bankruptcy order should be issued against the estate of the petitioner.
- 3 Whether the Official Receiver should be appointed as trustee of the debtor's property.
Ratio Decidendi
The court found that the petitioner, Benjamin Midiwo Orwa, was unable to pay his debts as his liabilities far exceeded his assets, with debts surpassing Kshs 15,000,000 against assets valued at Kshs 220,000. The court considered the evidence, including the petitioner's financial statements, the circumstances leading to his indebtedness, and the respondent's initial objections. The respondent's position softened after the petitioner provided further evidence and challenged the investigation report. The court exercised its discretion under the Insolvency Act and determined that the statutory requirements for a bankruptcy order were met. Consequently, the court granted the reliefs sought,...
Court Disposition
bankruptcy order granted against the estate of the petitioner
Orders
- A bankruptcy order shall issue forthwith against the estate of the petitioner.
- The Official Receiver is appointed as the Bankruptcy Trustee in respect of the debtor's property.
Full Case Text
Judgment text and source record
30 paragraphs
REPUBLIC OF KENYA
IN THE HIGH COURT OF KENYA
AT KISUMU
IN THE MATTER OF INSOLVENCY ACT NO. 18 OF 2015
INSOLVENCY CAUSE NO. E001 OF 2020
BENJAMIN MIDIWO ORWA...................................................................DEBTOR
JUDGMENT
On 1st December 2020 BENJAMIN MUDIMO ORWAlodged a Debtor’s Petition in Court, asking that a Bankruptcy Order be made in respect of his estate.
1. The basis of his said petition was that he was unable to pay his debts.
2. In his supporting affidavit the Petitioner explained that whereas the estimated net realizable value of his assets was Kshs 220,000/=, his liabilities were in excess of Kshs 15,000,000/=.
3. His financial difficulties can be traced to the time when the Petitioner borrowed Kshs 2,660,000/= from the ECO BANK KENYA LIMITED. The loan was used to purchase a lorry Registration KBL 150E.
4. The lorry was used by the Petitioner for commercial transport. However, the lorry was involved in an accident and had to stay at a garage for a considerable period, for purposes of repairs.
5. Whilst the lorry was off the road, the Petitioner was unable to remit payment of the monthly instalments of Kshs 93,900/= each. Therefore, he fell into arrears.
6. After the lorry was repaired it was repossessed by ECO BANK KENYA LIMITED.
7. Notwithstanding the sale of the lorry, the bank was still owed a considerable amount of money. Therefore, the bank sued the Petitioner to recover the outstanding balance.
8. The Chief Magistrate’s Court at Kisumu granted judgment in favour of the bank in CMCC NO. 410 OF 2014. The Decree in favour of the bank was for Kshs 2,880,082. 83 with interest thereon at 5% per annum from 28th April 2014; plus a further sum of Kshs 119,054/= with interest at court rates from 30th June 2014.
9. After the Petition was filed, the bank raised grounds of objection to it. The bank was of the view that the petition was simply a ploy by the Petitioner, to try and avoid settling the decree.
10. An Investigator who was engaged by the bank carried out private investigations and filed a report indicating that the Petitioner was a man of considerable means.
11. It is because of the said Investigation Report that the bank was convinced that the Petitioner was simply trying to evade his obligation to settle the decretal amount.
12. However, after the Petitioner filed a Supplementary Affidavit, poking holes into the Investigation Report, the bank appears to have been convinced that the Petitioner definitely lacked the means which he could use to settle the decretal amount.
13. Furthermore, the Petitioner had also retired from his job at the Ministry of Public Service and Administration, Kakamega County.
14. In the face of the further evidence which was provided by the Petitioner, the bank’s advocate told the Court to exercise its discretion in the matter.
15. I have given due consideration to all the evidence before me, and I am satisfied that the Petitioner is unable to pay his debts.
16. And because the Petitioner’s debts exceed his assets by a sum in excess of Kshs 15. 0 Million, I now grant the reliefs sought in the Petition.
17. A bankruptcy order shall issue forthwith against the estate of the Petitioner.
18. And the Official Receiver is hereby appointed as the Bankruptcy Trustee in respect of the Debtor’s Property.
19. Costs of the Petition shall be borne out of the Debtor’s property.
DATED, SIGNED AND DELIVERED AT KISUMU THIS 10TH DAY OF NOVEMBER, 2021
FRED A. OCHIENG
JUDGE