[2012] KEHC 2191 (KLR)
The court found that the applicant had demonstrated sufficient cause for the delay in registering the certificate of mortgage. The delay was not due to negligence but arose from procedural circumstances and timing issues. The applicant's inability to access funds due to the unregistered certificate constituted...
Source-derived case information.
- Citation
- [2012] KEHC 2191 (KLR)
- Parties
- Applicant: Wameer Wholesalers and Distributors (1994) Ltd.; Respondent: Mortgage Company
- Court
- High Court
- Court Station
- High Court at Nakuru
- Jurisdiction
- Kenya
- Case Number
- Miscellaneous Civil Application 370 of 2012
- Procedural Posture
- Miscellaneous Civil Application / Ruling on Application for Extension of Time to Register Mortgage
- Outcome
- application allowed
- Judges
- DO Ohungo
- Legal Topics
- Registration of Charges, Extension of Time, Company Mortgages, Procedural Compliance
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
More case intelligence is available
Unlock the full research layer for this judgment.
Parties
Wameer Wholesalers and Distributors (1994) Ltd.
Applicant
Mortgage Company
Respondent
Procedural Posture
Miscellaneous Civil Application / Ruling on Application for Extension of Time to Register Mortgage
Legal Issues
- 1 Whether the applicant has demonstrated sufficient cause for extension of time to register a certificate of mortgage under the Companies Act.
- 2 Whether the omission to register the charge within the statutory period was accidental or due to inadvertence.
- 3 Whether granting the extension would prejudice creditors or shareholders.
Ratio Decidendi
The court found that the applicant had demonstrated sufficient cause for the delay in registering the certificate of mortgage. The delay was not due to negligence but arose from procedural circumstances and timing issues. The applicant's inability to access funds due to the unregistered certificate constituted significant prejudice. The court was satisfied that the omission was not of a nature to prejudice creditors or shareholders and that it was just and equitable to grant the extension. Accordingly, the court exercised its discretion under Section 102 of the Companies Act to extend the period for registration by a further fourteen days from the date of the ruling.
Court Disposition
application allowed
Orders
- The period for registration of the certificate of mortgage is extended by a further fourteen (14) days from the date of this ruling.
Full Case Text
Judgment text and source record
21 paragraphs
REPUBLIC OF KENYA
IN THE HIGH COURT OF KENYA AT NAKURU
MISCELLANEOUS CIVIL APPLICATION 370 OF 2012
WAMEER WHOLESALERS AND DISTRIBUTORS (1994) ……...………….……. APPLICANT
VERSUS
MORTGAGE COMPANY …….........................................................……….……… RESPONDENT
RULING
By a notice of motion dated 18th September 2012 made pursuant to Section 102of the Companies Act, Rule 8of the Companies Rules, Order 51of the Civil Procedure Act, the applicant prays to this court for extension of time for registration of a certificate of registration of mortgage over Title No.Nakuru Municipality Block 9/20 registered in the names of WAMEER WHOLESALERS AND DISTRIBUTORS (1994) LTD.
The application is premised on grounds that:
1. The Companies Registrar returned the certificate of registration of mortgage, unregistered despite the same having been lodged for registration on 17th August 2012.
2. The registration of the certificate of mortgage is necessary so as to grant its validity as is prescribed by section 96 of the Companies Act.
3. The applicant is bound to suffer irreparably if the certificate is not registered.
In the supporting affidavit sworn by the applicants counsel, HAROLD ANDREW MBATI, he deposes that Oriental Commercial Bank instructed him to prepare and register a charge over Title No.Nakuru Municipality Block 9/20 to secure a sum of Kshs.16,325,000/=. The charge was registered on 25th July 2012 and on 17th August 2012, the bank requested for a certificate of Registration of mortgage and he immediately proceeded to the Lands registry and lodged the certificate of registration of mortgage over the said Title but the document was not lodged within the recommended 42 days as required by law; that is why he seeks extension of time.
The applicants are unable to access funds from the bank because of the unregistered certificate.
Section 102of the Companies Act requires that the applicant satisfies this court as regards the omission to register a charge within the time required by the Act or that the omission was accidental or due to inadvertente or to some other sufficient cause, or is not of a nature as to prejudice creditors or shareholders of the company, or on grounds which make it just and equitable to grant relief. Section 96 requires that a registration be done within 42 days from the date of creation of the charge.
The applicant’s counsel has demonstrated the steps he took, and within what period, towards realising the requirements of section 96 of the Companies Act. He has shown from the date stamp that the charge was lodged at the registry on 30/05/2012 but registered on 25th July 2012, so that by the date it was presented to the Lands registry for registration on 17th August 2012, the 42 days had long lapsed. I think that explanation is reasonable and the delay in registration was not as a result of indolence on the applicant’s part – in my view sufficient cause has been demonstrated.
Secondly without this certificate, it becomes impossible for the applicant to access grounds needed for the business, so I find it just and equitable to allow extension of time so as not to expose the applicant to great prejudice. I therefore allow for extension the period of registration by extending the time to a further 14 (fourteen) days, from today’s date.
Delivered and dated this 21st day of September, 2012.
H.A. OMONDI
JUDGE
Mr. Mbatia present for Applicant