[2019] KEHC 12267 (KLR)
The court found that the debtor, Paul Kimani, had failed to pay the outstanding balance of Kshs. 511,660 owed to the creditor, Caleb Kapten, despite a consent order and ample time to settle the debt. The outstanding amount met the statutory minimum for bankruptcy under Regulation 19 of the Insolvency Regulation. The...
Source-derived case information.
- Citation
- [2019] KEHC 12267 (KLR)
- Parties
- Applicant: Caleb Kapten; Respondent: Paul Kimani
- Court
- High Court
- Court Station
- High Court at Nairobi (Milimani Commercial Courts)
- Jurisdiction
- Kenya
- Case Number
- Civil Case 15 of 2014
- Procedural Posture
- Bankruptcy Cause / Ruling on Creditor's Petition for Bankruptcy Order
- Outcome
- bankruptcy order issued against the estate of Paul Kimani
- Judges
- MM Kasango
- Legal Topics
- Bankruptcy Petition, Insolvency Proceedings, Creditor Rights
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Caleb Kapten
Applicant
Paul Kimani
Respondent
Procedural Posture
Bankruptcy Cause / Ruling on Creditor's Petition for Bankruptcy Order
Legal Issues
- 1 Whether the debtor is unable to pay the debt owed to the creditor as per the decree in CMCC No. 4416 of 2011.
- 2 Whether the outstanding debt meets the prescribed minimum value for a bankruptcy order under the Insolvency Act and Regulations.
- 3 Whether a bankruptcy order should be issued against the estate of Paul Kimani.
Ratio Decidendi
The court found that the debtor, Paul Kimani, had failed to pay the outstanding balance of Kshs. 511,660 owed to the creditor, Caleb Kapten, despite a consent order and ample time to settle the debt. The outstanding amount met the statutory minimum for bankruptcy under Regulation 19 of the Insolvency Regulation. The debtor's prolonged failure to pay was deemed clear evidence of inability to pay. Consequently, the court determined that the legal requirements for issuing a bankruptcy order had been satisfied and directed that a bankruptcy order be issued against the estate of Paul Kimani, with notification to the Official Receiver for appointment of a Bankruptcy Trustee.
Court Disposition
bankruptcy order issued against the estate of Paul Kimani
Orders
- A bankruptcy order is issued in respect of the estate of Paul Kimani.
- The Official Receiver shall be notified by the Deputy Registrar for the purpose of appointing a Bankruptcy Trustee.
Full Case Text
Judgment text and source record
20 paragraphs
REPUBLIC OF KENYA
IN THE HIGH COURT OF KENYA AT NAIROBI
COMMERCIAL AND TAX DIVISION
BANKRUPTCY CAUSE NO. 15 OF 2014
IN THE MATTER OF THE BANKRUPTCY ACT (REPEALED)
IN THE MATTER OF PAUL KIMANI
R U L I N G
1. Before me is a Creditor’s petition filed by Caleb Kapten seeking a Bankruptcy Order be made in respect of the Estate of Paul Kimani. The Petition was filed under the Bankruptcy Act, now repealed. The applicable law is now the Insolvency Act No. 18 of 2015.
2. At the time the Petition was filed on 21st May 2015 the Creditor was owed, by the Debtor, Kshs. 1,420,000. This was in respect to a decree in CMCC No. 4416 of 2011. On 8th September 2016 a consent was recorded before Court when the Debtor undertook to settle the principal sum then due by installments.
3. The Creditor, when this Petition came before me for hearing, stated that the Debtor had paid Kshs. 1,420,000. There was however a balance due and payable of Kshs. 511,660. The Debtor failed to attend the hearing even though he had been informed by his Learned Advocate who was present in Court.
4. The debt owed to the Creditor is within prescribed minimum value of bankruptcy set out in Regulation 19 of the Insolvency Regulation. The debt has been outstanding since Judgment was entered against the Debtor, in September 2014. The length of time it has taken and the Debtor has failed to clear the debt is a clear indication of inability to pay the debt.
5. In view of the forgoing, I do direct that a Bankruptcy Order do issue in respect of the Estate of Paul Kimani. The Official Receiver shall be notified by the Deputy Registrar for the purpose of appointing Bankruptcy Trustee.
6. This bankruptcy order is issued on 9th May 2019 at 9. 00 am.
DATED, SIGNED and DELIVERED at NAIROBI this9THday of MAY,2019.
MARY KASANGO
JUDGE
Ruling ReadandDeliveredinOpen Courtin the presence of:
Sophie.................................... COURT ASSISTANT
............................................... FOR THE CREDITOR
................................................FOR THE DEBTOR