https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/5347

 **REPUBLIC OF KENYA** **IN THE ENVIRONMENT AND LAND COURT OF KENYA AT NYERI** **ELC NO. 566 OF 2014** **NG'ANG'A MATHENGE.................................................................PLAINTIFF** **-VERSUS-** **JOHN NDIRANGU MAINA................................................1ST DEFENDANT** **MUHOTETU FARMERS CO. LTD....................................2ND DEFENDANT** **RULING** 1. Several issues require determination in this matter. The initial concern is a preliminary objection (PO) dated 6th November 2024, filed by the 2nd Defendant, challenging the Notice of Motion dated 3rd January 2003 on the following grounds: 2. **THAT** **the suit filed herein is contrary to and offends the provisions of Section 432(2) of the Insolvency Act, 2015.** 3. **THAT the Plaintiff's suit is fatally defective, since when a company has been placed under liquidation, legal proceedings against the company may be commenced or continued only with the approval of the Court and subject to such conditions as the Court considers appropriate.** 4. **THAT there has been inordinate delay on the part of the Plaintiff and the suit herein offends Section 4 of the Limitation of Actions Act and is statute-barred.** 5. **THAT the suit herein is an abuse of the court's process.** 6. There is an application by the Plaintiff under Notice of Motion dated 9th February 2024, which was never heard, seeking an order that the Court allow the joining of the official receiver/liquidator for Muhotetu Farmers Co. Ltd to continue the proceedings herein on behalf of the 2nd defendant, who is in liquidation. 7. The application is supported by the affidavit of Karweru Muchemi Charles, Advocate for the Plaintiff. 8. Counsel deposed that on 9th December 2025, this Honourable Court gave directions that an application be filed to enjoin the official receiver of the second Defendant. 9. The 2nd Defendant was placed in voluntary liquidation by gazette notice, as per the copy annexed to his supporting affidavit. 10. It is also noted that the proceedings herein were instituted in 1996, well before the company was placed in liquidation. 11. The Applicant argues that it is imperative that the Official Receiver be enjoined in these proceedings and that continuity of the suit be granted. **The Plaintiff’s written submissions** 12. The Applicant submitted that he instituted this suit against the Respondent by a plaint dated 12/4/1996, in which he sought the recovery of land totalling over 15 acres from the two defendants, alleging fraudulent transfer and allocation. 13. The 1st Respondent in this application then filed a defence and counter-claim dated 14th November 1996, averring that the 2nd respondent had allocated him the land. The 2nd defendant filed a statement of defence, denied any wrongdoing, and averred that it had correctly transferred the land to the 1st defendant. After the preliminaries were concluded before the Court, the parties, by consent, referred the matter to the Ngarua Land Disputes Tribunal under Order 45 of the Civil Procedure Rules. The Land Disputes Tribunal returned a verdict in favour of the Applicant herein. The award was filed before the lower Court, which adopted it as the Court's judgment vide a ruling dated 21st July 2000. 14. The applicant herein then filed an application dated 3rd January 2003 for recall of the award from the lower Court, seeking its adoption by the High Court under Order 45 of the Civil Procedure Act. The 1st defendant then died, and this Court ruled that the suit had abated. The applicant herein appealed, and the Court of Appeal, vide **Nyeri Civil Appeal No. 110 of 2019**, held that the suit had been wrongly dismissed. 15. However, unbeknownst to the Plaintiff, the 2nd Defendant applied for voluntary liquidation on 5 October 2018, and the official receiver was appointed vide Gazette Notice No. 10681 of 9th October 2018. 16. According to the Plaintiff/Applicant, the same was under liquidation by the Court, and that the liquidation, as set out in the legal notice annexed to the application, was voluntary. 17. The Applicant submits that the application is merited, as it only seeks to formally on-board the official liquidator in the proceedings, which have been ongoing well before his appointment in voluntary liquidation. The Applicant prays that the same be allowed as prayed and that the Preliminary Objection be dismissed with costs. **The Official Receiver’s written submissions** 1. The Official Receiver in charge of the 2nd Defendant herein also addressed the issues herein. It is their submission that Muhotetu Farmers Company Limited, the 2nd Defendant herein, was placed under liquidation by an order of court on 5th October 2018, and that the Official Receiver was appointed as Liquidator. 2. The Official Receiver thereafter published the requisite notices of appointment and of the Company’s placement under Liquidation in the Standard Newspaper on 10th October 2018 and in the Kenya Gazette on 19th October 2018. The Official Receiver notified members of the general public with claims against the Company to complete and submit proof of debt forms to the liquidator. 3. While quoting Section 432(2) of the Insolvency Act, the Official Receiver submits that leave to institute or continue these proceedings was not sought as required by that provision. On this point, they relied on the authorities in **Alex Ngugi Mwaura & Another v Gikumba Investments Limited & 3 Others [2021] eKLR**; **Parsaurei (suing as personal representative of Masare Ole Alaseso Mapi alias Alasejo Mapi (Deceased)) v Arm Cement Limited (In Liquidation) [2024] КЕНС 1020 (KLR);** and **Paul t/a Kibet Rop & Company Advocates v Invesco Assurance Co. Ltd [2025] КЕНС 15071 (KLR).** 4. It is also their submission that the requirement for leave under the Insolvency Act applies to all forms of liquidation, regardless of the process of commencement, provided the company is in liquidation. 5. On the second point of the official receiver’s submissions, Section 4(4) of the Limitation of Actions Act, Cap. 22, was quoted. It is submitted that the Plaintiff seeks to enforce an arbitral award dated about 1999, which was to be forwarded to the High Court in 2001. The Judgment which the Plaintiff seeks to have adopted and enforced has surpassed the twelve-year mark, and should therefore have been executed on or before 2013. 6. They contend that, as a person who has been allegedly wronged, the Plaintiff should have acted promptly to preserve their rights. It is therefore their submission that the Plaintiff is guilty of laches, an untoward delay in litigation with the presumed intention of ensnaring the 2nd Defendant in unending litigation. On this point, they relied on the Court of Appeal case of **Chief Land Registrar & 5 Others v Koech & 3 Others [2018] KECA 27 (KLR**), as well as **Gathoni vs Kenya Cooperative Creameries Limited (Civil Application No. 122 of 1981)** and **Bosire Ogero v Royal Media Services [2015] eKLR**. 7. It is the Official Receiver’s submission that the Applicant's claim is extinguished by statute and cannot be resuscitated by an application, that what the legislature has declared dead by the passage of time, and that this Court should dismiss the suit and applications herein with costs to the Official Receiver. **Analysis and Determination** 1. The first issue that requires to be addressed is the preliminary objection raised by the Official Receiver in charge of the 2nd Defendant herein. According to Black's Law Dictionary, a Preliminary Objection is defined as being: ***“In case before the tribunal, an objection that if upheld, would render further proceeding before the tribunal impossible or unnecessary…….”*** 1. The aforementioned legal proposition has been firmly established in the renowned case of **Mukisa Biscuit Manufacturing Co. Ltd versus West End Distributors Ltd. [1969] E.A. 696**, wherein the Court declared that: ***“So far as I am aware, a preliminary objection consists of a point of law which has been pleaded, or which arises by clear implication out of pleadings, and which if argued as a preliminary point may dispose of the suit.”*** 1. The initial argument of the preliminary objection is that the continuity of this matter contravenes the stipulations set out in Section 432(2) of the Insolvency Act, 2015. The relevant provision reads as follows: ***“When a liquidation order has been made or a provisional liquidator has been appointed, legal proceedings against the company may be begun or*** ***continued only with the approval of the Court and subject to such conditions as the Court considers appropriate.”*** 1. It must be noted that the Court referred to above in this case is the High Court, Insolvency Division. Section 2 of the Act defines the Court contemplated under the Act as follows: ***“the “court” means the High Court and if there is an insolvency division of that court, means that division.”*** 1. On this point, citing an ELC decision, Eboso J found, in the case of **Bernard Kamau Mbugua v Reandani Njoroge Wa Ndaani Francis Mwangi Kariuki Daniel Muthii Karimi (Being Trustees of Ruiru River Neighbourhood Society Limited & 2 others [2021] KEELC 3040 (KLR))**, as follows: ***“Were every court across the country to have jurisdiction to grant leave, the process of orderly consolidation of assets and orderly settlement of liabilities of companies, and indeed, the entire process of orderly liquidation of companies, would be compromised. Indeed, there would be the possibility of leave being granted in relation to companies whose liquidation processes have already been finalized and are completely wound up.*** ***In light of the foregoing, it is my finding that this court is not the court contemplated to grant leave under Section 432(2) of the Insolvency Act, 2015. It is my further finding that the court contemplated to grant leave under Section 432 (2) of the Act is the court exercising liquidation jurisdiction under the Insolvency Act. That court is the High Court.”*** 1. While I acknowledge that the suit predates the 2nd Defendant's entry into liquidation, Section 432(2) provides that proceedings of this nature against a company under liquidation may be continued only with the approval of the Court. As previously noted, the Environment and Land Court lacks the jurisdiction to grant such approval or leave. Consequently, I am of the considered view that the Official Receiver’s preliminary point number one is substantiated, and that these proceedings cannot proceed without the requisite approval of the Insolvency Court. It matters not that the commencement of the liquidation process was voluntary. This also addresses the Plaintiff/Applicant’s instant application dated 9th February 2024, seeking an order to continue the proceedings herein on behalf of the 2nd Defendant. This Court has no jurisdiction to grant the said order, and I think that this renders the application incompetent. 2. The other preliminary point that the Official Receiver has raised is that there has been inordinate delay on the part of the Plaintiff and the suit herein offends Section 4 of the Limitation of Actions Act and is statute-barred. They relied on section 4(4) of the Limitation of Actions Act CAP 22, which provides that: ***“An action may not be brought upon a judgment after the end of twelve years from the date on which the judgment was delivered, or (where the judgment or a subsequent order directs any payment of money or the delivery of any property to be made at a certain date or at recurring periods) the date of the default in making the payment or delivery in question, and no arrears of interest in respect of a judgment debt may be recovered after the expiration of six years from the date on which the interest became due.”*** 1. The basis of this preliminary point of objection is that the Plaintiff seeks to enforce an arbitral award dated around 1999, which was to be forwarded to the High Court in 2001. The Judgment which the Plaintiff seeks to have adopted and enforced has surpassed the twelve-year mark and should therefore have been executed on or before 2013. 2. I note that this matter was instituted on 3rd April 1997 and was referred to the now-defunct Land Disputes Tribunal for hearing and determination. The Tribunal gave its decision in favour of awarding the suit land to the Plaintiff herein. The said Award was adopted as an order of the Court on the 21st of July 2000, now 26 years ago. 3. On 23rd February 2001, Resident Magistrate W.K. Korir (now a Court of Appeal Judge) ruled that the matters properly lay with the High Court, not the Lower Court. Consequently, the award was ordered to be retrieved from the said file and forwarded to the High Court. The issue has been pending for a long time and remains unresolved. 4. On 9 April 2003, the Court was informed that the 1st Defendant was deceased, and the matter was stood over generally by consent of the parties. On 22 March 2007, the suit was dismissed for want of prosecution. The Plaintiff filed an application dated 27 September 2010, which the Court dismissed on 7 October 2016. The Plaintiff appealed against this ruling, and the Court of Appeal, through Civil Appeal No. 110 of 2019, allowed the appeal and reinstated this matter to the hearing stage by judgment delivered on 12 April 2024. 5. In my view, while the suit against the 1st Defendant abated one year after his death, the suit against the 2nd Defendant was still subsisting, and the Plaintiff should have taken steps to enforce the Court's Decree against the 2nd Defendant. It is my view that the award of the Land Disputes Tribunal, which was adopted as an order of the Court, is now time-barred. 6. Further, I note that the Court of Appeal expressly reinstated the suit for hearing, ordering that the case be heard on a priority basis in view of the length of time it has remained pending before the Court. Thus, this preliminary point does not render the suit struck out by order of the Superior Court. 7. In summary, it is my finding that the first two preliminary points of objection raised by the 2nd Defendant are germane. However, in light of precedents, instead of striking out the suit, this Court pauses the proceedings until the Insolvency Court grants leave to proceed with this matter. 8. The PO succeeds to that extent. Costs in the cause. **Dated, signed, and delivered virtually at Nyeri on this 19th day of August 2026.** **E. K. MAKORI** **JUDGE** **In the Presence of:** **Mr. Karweru for the Plaintiff/Applicant** **Ms.Githungo for the 2nd and 3rd Defendants/Respondents** **Denis: Court Assistant**