[1994] KEHC 51 (KLR)
The court declined to grant the discharge from bankruptcy at this stage because the allegations of obstruction by the bankrupt, made by the secured creditors' advocates, were not supported by affidavit or other evidence on record. Since these allegations, if true, would materially affect the outcome of the...
Source-derived case information.
- Citation
- [1994] KEHC 51 (KLR)
- Parties
- Applicant: Paul Joseph Ngei; Respondent: Official Receiver; Respondent: Continental Credit Finance Ltd; Respondent: Pan African Bank Ltd
- Court
- High Court
- Court Station
- High Court at Nairobi (Milimani Law Courts)
- Jurisdiction
- Kenya
- Case Number
- Bankruptcy Cause 14 of 1989
- Procedural Posture
- Bankruptcy Cause / Application for Discharge From Bankruptcy; Interlocutory Order
- Outcome
- Interlocutory order; application for discharge deferred pending further evidence.
- Legal Topics
- Bankruptcy Discharge, Secured Creditors Rights, Obstruction of Creditor Remedies
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Paul Joseph Ngei
Applicant
Official Receiver
Respondent
Continental Credit Finance Ltd
Respondent
Pan African Bank Ltd
Respondent
Procedural Posture
Bankruptcy Cause / Application for Discharge From Bankruptcy; Interlocutory Order
Legal Issues
- 1 Whether Paul Joseph Ngei should be discharged from bankruptcy at this stage.
- 2 Whether allegations of obstruction by the bankrupt against secured creditors require determination before discharge can be granted.
Ratio Decidendi
The court declined to grant the discharge from bankruptcy at this stage because the allegations of obstruction by the bankrupt, made by the secured creditors' advocates, were not supported by affidavit or other evidence on record. Since these allegations, if true, would materially affect the outcome of the application for discharge, the court found it necessary and just to direct the secured creditors to file affidavits detailing the alleged obstruction. The applicant, Mr. Ngei, is to be given an opportunity to respond. Only after considering the evidence from both sides will the court be in a position to determine whether to grant the discharge from bankruptcy.
Court Disposition
Interlocutory order; application for discharge deferred pending further evidence.
Orders
- Secured creditors to file affidavits detailing allegations of obstruction by Mr. Ngei within 14 days.
- Mr. Ngei to file any reply by 23rd January 1995.
Full Case Text
Judgment text and source record
19 paragraphs
REPUBLIC OF KENYA IN THE HIGH COURT OF KENYA AT NAIROBI (NAIROBI LAW COURTS)
Bankruptcy Cause 14 of 1989
IN THE MATTER OF: - THE BANKRUPTCY ACT, CAP 53 LAWS OF KENYA
AND
IN THE MATTER OF PAUL JOSEPH NGEI
ORDER OF THE COURT
Paul Joseph Ngei who was adjudged bankrupt on the 14th June, 1990 has applied to this court to be discharged from bankruptcy.
The application was heard partly by Shields J who directed the bankrupt to deposit Ksh.1 million.
When the application came for hearing before me, as Shields J had now retired, the counsel for the Official Receiver, Mrs. Gachegu submitted further that out of the money paid, the Official Receiver should be able to pay debts of the unsecured creditors after declaring a small dividend. However, she lamented that there were 2 secured creditors who have not been paid.
The advocates appearing for the said 2 creditors made submissions from the bar which suggested that their clients, Continental Credit Finance Ltd, and Pan African Bank Ltd, who had opted to collect their debts by themselves, have not realized their securities because of obstruction by the bankrupt. As a result, their debts still owing.
I perused the court file, but found no evidence by way of affidavit or otherwise on the allegations of obstructions by Mr.Ngei, apart from the statement by the 2 lawyers.
Since this is a fact which is bound to affect the outcome of the application for discharge, I find that it is only fair and just to direct the two creditors to file affidavits setting out the allegations of obstruction by Mr. Ngei, which has resulted in the secured creditors failure to sell his properties and realize their securities and payoff their debts. Mr. Ngei should in turn have an opportunity to reply to the allegations, which he has not done so far.
I is only after this that the court will be in a position to make a decision whether to discharge Mr. Ngei from bankruptcy or not.
The affidavit should be filed within 14 days from today and the debtor, Mr. Ngei, should file his reply, if any by 23. 1.1995.
The application will then be mentioned on 23. 1.1995, for further orders.
These are orders of the court.
Dated at Nairobi this 20th day of December, 1994
JOYCE ALUOCH (MRS)
PULSNE JUDGE.