Central Purchasing Co Ltd v Hon Col Kahinda Otafire (Bankruptcy Cause No. 23 of 2004) [2004] UGCommC 34 (11 October 2004)

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\fs24\lang2057\langfe2057\cgrid\langnp2057\langfenp2057 \sbasedon0 \snext16 \styrsid1382257 footer;}{\*\cs17 \additive \sbasedon10 \styrsid1382257 page number;}} {\*\latentstyles\lsdstimax156\lsdlockeddef0}{\*\pgptbl {\pgp\ipgp0\itap0\li0\ri0\sb0\sa0}}{\*\rsidtbl \rsid1382257\rsid3225080\rsid3819184\rsid4653983\rsid5660227\rsid7698263\rsid9580028}{\*\generator Microsoft Word 11.0.5604;}{\info {\title THE REPUBLIC OF UGANDA }{\author Administrator}{\operator skivumbi}{\creatim\yr2001\mo1\dy5\hr6\min6}{\revtim\yr2001\mo1\dy5\hr6\min34}{\version3}{\edmins29}{\nofpages8}{\nofwords1827}{\nofchars10417}{\*\company JSI}{\nofcharsws12220}{\vern24689}} \paperw11906\paperh16838 \widowctrl\ftnbj\aenddoc\noxlattoyen\expshrtn\noultrlspc\dntblnsbdb\nospaceforul\formshade\horzdoc\dgmargin\dghspace180\dgvspace180\dghorigin1800\dgvorigin1440\dghshow1\dgvshow1 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{\insrsid1382257 \chftnsepc \par }}\sectd \linex0\headery708\footery708\colsx708\endnhere\sectlinegrid360\sectdefaultcl\sectrsid9580028\sftnbj {\footer \pard\plain \s16\ql \li0\ri0\widctlpar \tqc\tx4153\tqr\tx8306\pvpara\phmrg\posxr\posy0\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid14047022 \fs24\lang2057\langfe2057\cgrid\langnp2057\langfenp2057 {\field{\*\fldinst {\cs17\insrsid1382257 PAGE }}{\fldrslt { \cs17\lang1024\langfe1024\noproof\insrsid3819184 8}}}{\cs17\insrsid1382257 \par }\pard \s16\ql \li0\ri360\widctlpar\tqc\tx4153\tqr\tx8306\aspalpha\aspnum\faauto\adjustright\rin360\lin0\itap0\pararsid1382257 {\insrsid1382257 \par }}{\*\pnseclvl1\pnucrm\pnstart1\pnindent720\pnhang {\pntxta .}}{\*\pnseclvl2\pnucltr\pnstart1\pnindent720\pnhang {\pntxta .}}{\*\pnseclvl3\pndec\pnstart1\pnindent720\pnhang {\pntxta .}}{\*\pnseclvl4\pnlcltr\pnstart1\pnindent720\pnhang {\pntxta )}} {\*\pnseclvl5\pndec\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl6\pnlcltr\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl7\pnlcrm\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl8 \pnlcltr\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl9\pnlcrm\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}\pard\plain \s15\qc \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1 \widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\ipgp1\pararsid1382257 \fs24\lang2057\langfe2057\cgrid\langnp2057\langfenp2057 {\b\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 THE REPUBLIC OF UGANDA \line IN THE HIGH COURT OF UGANDA AT }{\b\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid1382257 KAMPALA}{\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 \line }{\b\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 (COMMERCIAL DIVISION) \line }{\b\lang1033\langfe2057\langnp1033\insrsid5660227 \par }{\b\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 BANKRUPTCY CAUSE NO. 23 OF 2004 \line }{\b\lang1033\langfe2057\langnp1033\insrsid5660227 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\ipgp1\pararsid5660227 {\b\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 CENTRAL PURCHASING CO. LTD \line }{ \b\lang1033\langfe2057\langnp1033\insrsid5660227 :::::::::::::::::::::::: JUDGMENT CREDITOR}{\b\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 \line }{ \b\lang1033\langfe2057\langnp1033\insrsid5660227 \par }\pard \s15\qc \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\ipgp1\pararsid5660227 {\b\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 VERSUS \line }{ \b\lang1033\langfe2057\langnp1033\insrsid5660227 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\ipgp1\pararsid5660227 {\b\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 HON. COL. KAHINDA OTAFIRE}{ \b\lang1033\langfe2057\langnp1033\insrsid5660227 ::::::::::::::::::::::::::: JUDGMENT DEBTOR }{\b\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 \line }{\b\lang1033\langfe2057\langnp1033\insrsid5660227 \par }{\b\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 BEFORE: }{\b\ul\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 THE HON. LADY JUSTICE M. S. ARACH }{\b\ul\lang1033\langfe2057\langnp1033\insrsid5660227 -}{ \b\ul\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 AMOKO \line RULING: }{\b\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 \line }{\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 The Judgment Creditor served the Judgment Debtor with a Bankruptcy Notice on the 12/8/04, requiring payment of Shs.169,456,500- within seven days. This sum was the decretal sum in HCCS No. 627/2003, plus taxed costs and interest. The Notice containe d as the rules demand a statement that: \line }{\lang1033\langfe2057\langnp1033\insrsid5660227 \par }\pard \s15\ql \fi-720\li720\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\ipgp1\pararsid5660227 {\lang1033\langfe2057\langnp1033\insrsid5660227 \tab }{ \i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 \'93You must secure and compound for the said sum to the satisfaction of counsel for the Petitioner (Credito}{\i\lang1033\langfe2057\langnp1033\insrsid5660227 r) or the Court that you have a }{\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 counterclaim, set off or cross demand against the Petitioner (Creditor) which equals or exceeds the sum claimed by the Petitioner (Creditor) and}{ \b\lang1033\langfe2057\langnp1033\insrsid5660227 }{\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 which you could not set up in the action or other proceedings in which the Judgment and decree was obtained.\'94 \line }{ \i\lang1033\langfe2057\langnp1033\insrsid5660227 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\ipgp1\pararsid5660227 {\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 The Notice ended with an Endorsement of Notice clearly stating that: \line }{\lang1033\langfe2057\langnp1033\insrsid5660227 \par }\pard \s15\ql \li720\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\ipgp1\pararsid5660227 {\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 \'93You }{ \i\ul\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 are specifically to note that the consequences of not complying with the requisitions of this Notice are that you will have committed an Act of }{ \i\ul\lang1033\langfe2057\langnp1033\insrsid5660227\charrsid9580028 Bankruptcy}{\i\ul\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 , on which Bankruptcy proceedings may be taken }{ \i\ul\lang1033\langfe2057\langnp1033\insrsid5660227\charrsid9580028 against}{\i\ul\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 you. }{\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 If however you have a counterclaim, setoff or cross demand whic}{\i\lang1033\langfe2057\langnp1033\insrsid4653983 h equals or exceeds the amount cl}{\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 aimed by Central Purchasing Company Limited in respect of the Judgment/Decree obtained and which}{\i\lang1033\langfe2057\langnp1033\insrsid4653983 you could not set up in the High Court Ci}{ \i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 vil suit in which the said Judgment or Decree was obtained }{\i\ul\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 you must within seven (7) days apply to this Court to set aside this NOTICE by filing with the Registrar of the High Court of Uganda at Kampala an affidavit to that effect\'94 }{\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 \line }{ \i\lang1033\langfe2057\langnp1033\insrsid4653983 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\ipgp1\pararsid4653983 {\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 As a response, the Judgment Debtor filed a document entitled \'93NOTICE OF INTENTION TO OPPOSE BANKRUPTCY PETITION\'94 on the 19/8/04; accompanied by an affidavit. \line }{\lang1033\langfe2057\langnp1033\insrsid4653983 \par }{\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 The Registrar set down the application for hearing on 5/10/04. When the advocates appeared before him on that day, he instead directed them to me in chambers. I was unable to entertain the matter on that day due to pressure of work and the short notice, so I adjourned it to 8/10/04 w}{\lang1033\langfe2057\langnp1033\insrsid4653983 ith consent of both counsel. \line }{\b\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid5660227 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\ipgp1\pararsid1382257 {\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 On 8/10/04, however, both the Judgment Debtor and his advocate did not attend Court and no reason was given to me for their none-appearance. Counsel for the Judgment Creditor Mr. Dennis Owor applied and I allowed}{ \lang1033\langfe2057\langnp1033\insrsid4653983 him to present the application }{\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 exparte under Order 9 rule 17 (1) (a) of the CPR. \line }{\lang1033\langfe2057\langnp1033\insrsid4653983

\par }{\ul\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 The Law: }{\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 \line It is necessary for the purpose of this Ruling to remind ourselves of the proc edure allowed by a Bankruptcy Notice. Section 2 of the Bankruptcy Act Cap 67 of the Laws of Uganda (R}{\lang1033\langfe2057\langnp1033\insrsid4653983 evised) begins with the words. \'93}{\i\lang1033\langfe2057\langnp1033\insrsid4653983 A}{ \lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 }{\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 debtor commits an act of bankruptcy in each of the following case }{\lang1033\langfe2057\langnp1033\insrsid4653983 \endash \'94 }{\lang1033\langfe2057\langnp1033\insrsid4653983\charrsid9580028 and}{\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 then follow a number of cases which in the view o f the Legislature result in the conclusion that the debtor must be made liable. In sub }{\lang1033\langfe2057\langnp1033\insrsid4653983 -}{\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 section 1 (g) we find the part material to this case which provides: \line }{\lang1033\langfe2057\langnp1033\insrsid4653983 \par }\pard \s15\ql \li720\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\ipgp1\pararsid4653983 {\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 \'93 (g) if a Creditor has obtained a final decree or final order against him or her (that}{\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid4653983 }{\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid4653983 i}{ \i\lang1033\langfe2057\langnp1033\insrsid4653983 s}{\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid4653983 }{\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 the debt or) for any amount and execution on the final decree or final order not having been stayed, has served on him or her a bankruptcy notice under }{\i\lang1033\langfe2057\langnp1033\insrsid4653983\charrsid9580028 this}{ \i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 Act, }{\i\ul\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 and he or she does not within seven days after service of the notice, is affected }{ \lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 ......... }{\i\ul\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 either comply with the req}{\i\ul\lang1033\langfe2057\langnp1033\insrsid4653983 uirements of the notice or satis }{\i\ul\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 fy the Court that he or she had a counterclaim, set off or demand which equals or exceeds the amount of the decree }{\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 and which he or she could not set up in the action in which the decree was obtained or the proceedings in which the order was obtained. For the purpose of this paragraph, and section 3, any person who is for the time being entitled to enforce a final decree or final order shall be deemed to be a creditor who has obtained a final decree or final order\'94 \line }{\i\lang1033\langfe2057\langnp1033\insrsid4653983 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\ipgp1\pararsid4653983 {\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 Under S.2 (1) (g) therefore, non compliance with the Bankruptcy Notice is an act of bankruptcy on which a bankruptcy petition can be founded. \line }{\lang1033\langfe2057\langnp1033\insrsid4653983 \par }{\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 Section 3 of the Act lays down conditions to be attended to in a Bankruptcy Notice. Section 3 (1) provides that: \line }{\lang1033\langfe2057\langnp1033\insrsid4653983 \par }\pard \s15\ql \li720\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\ipgp1\pararsid4653983 {\i\lang1033\langfe2057\langnp1033\insrsid4653983 \'931}{ \i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 . A bankruptcy notice under this Act shall be in the prescribed form and shall require the debtor to pay the amount in the decree or sum ordered to be paid in accordance with the terms of the decree or order or to secure or compound for it to t he satisfaction of the Creditor or the Court, and shall state the consequences of non-compliance with the notice, and shall be served in a prescribed manner.\'94 \line }{\i\lang1033\langfe2057\langnp1033\insrsid4653983 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\ipgp1\pararsid4653983 {\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 The Bankruptcy Rules 1915, (U. K.) still regulate bankruptcy proceedings in Uganda by virtue of S.162 of the Act:}{\lang1033\langfe2057\langnp1033\insrsid4653983 - \par The }{\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 form for Bankruptcy Notices on Judgments or Orders}{\lang1033\langfe2057\langnp1033\insrsid4653983 of the High Court is found in }{ \lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 Form No. 6 of the Appendix of Forms. \line }{\lang1033\langfe2057\langnp1033\insrsid4653983 \par }{\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 Rule 140 (2) says: \line \par }\pard \s15\ql \li720\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\ipgp1\pararsid4653983 {\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 \lquote There shall be indorsed on }{ \i\lang1033\langfe2057\langnp1033\insrsid4653983\charrsid9580028 every}{\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 bankruptcy notice an intimation to the debtor that if he has a counter claim, set off or cross demand which equals or exceeds the amount of the Judgment debt, and which he could not have set up in the action in which the Judgment debt, or order was obtained, }{ \i\ul\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 he must within the time specified in the notice file an affidavit to that effect with the }{\i\ul\lang1033\langfe2057\langnp1033\insrsid4653983\charrsid9580028 Registrar}{ \i\ul\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 .\'94 }{\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 \line }{\i\lang1033\langfe2057\langnp1033\insrsid4653983 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\ipgp1\pararsid4653983 {\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 The format for this application is found in Form No. 9 of the Appendix of Forms to the Rules. If he does so, the filing of such affidavit operates as an application to set aside the bankruptcy notice. Form No. 9 is actually entitled: \line }{ \lang1033\langfe2057\langnp1033\insrsid4653983 \par }\pard \s15\ql \fi720\li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\ipgp1\pararsid4653983 {\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 \'93Affidavit on Applicat}{ \i\lang1033\langfe2057\langnp1033\insrsid4653983 ion to set aside Bankruptcy Noti}{\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 ce.\'94 \line }{\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 There upon the Registrar has to fix a day for hearing the application. What the Court has to hear and determine upon such affidavit is: \line \'93Was there a counterclaim, set off, or cross \emdash demand which equals or exceeds the amount of the Judgment debt? \line }{\lang1033\langfe2057\langnp1033\insrsid3225080 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\ipgp1\pararsid3225080 {\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 Application of the law to the matter before Court gives the following conclusions: \line The Bankruptcy Notice complied with section 3 of the Act and Rule 140 (2) of the \line Bankruptcy Rules. It is based on Form No. 6. \line \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\ipgp1\pararsid1382257 {\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 There is however, no affidavit as required by Rule 140 (2). Instead of filing the affidavit required by rule 140 (2), the Judgment Debtor filed a Notice of Intention }{\lang1033\langfe2057\langnp1033\insrsid3225080\charrsid9580028 to}{ \lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 Oppose Bankruptcy Petition.\'94 \line As Mr. Owor rightly pointed out, this document is misconceived and does not comply with Rule 140 }{\lang1033\langfe2057\langnp1033\insrsid3225080 (2). It is a response to a non -}{\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 existent Petition since there is no Petition filed in Court yet. What was issued by the Registrar and served on the Judgment Debtor is merely a Bankruptcy Notice and not a petition. \line }{\lang1033\langfe2057\langnp1033\insrsid3225080 \par }{\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 Secondly, and I agree with Mr. Owor, although the affidavit filed by the Judgment Debtor accompanying the Notice of Intention To Oppose the non-existent petition relates to the matter before Court, it is definitely n ot the kind of affidavit envisaged by Rule 140 (2) and Form No. 9. As pointed out earlier, the affidavit should on the face of it show a counter claim, set off or cross demand which equals or exceeds the Judgment debt which the debtor could not have set u p in the action in which the Judgment or decree was obtained. The Judgment Creditor is not in Court to declare the Judgment Debtor bankruptcy yet, at this stage. The Judgment Creditor is only trying to show that the Judgment Debtor has committed an act of bankruptcy for which a bankruptcy petition may be brought against him consequently. See: (Re}{\lang1033\langfe2057\langnp1033\insrsid3225080 a Debtor (1935) 1 Ch. 347). \line }{\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 \par Under the law, once an affidavit fails to comply with Rule 140 (2) then the Judgmen}{\lang1033\langfe2057\langnp1033\insrsid3225080 t Debtor is held to have commit}{\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 ted an act of ban kruptcy. In this case, the affidavit filed by the Judgment Debtor states in the material part that: \line }{\lang1033\langfe2057\langnp1033\insrsid3225080 \par }\pard \s15\ql \li720\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\ipgp1\pararsid3225080 {\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 \'93I Kahinda Otafire}{ \i\lang1033\langfe2057\langnp1033\insrsid3225080 \'85}{\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 do solemnly swear and state as \line }{\i\lang1033\langfe2057\langnp1033\insrsid3225080 follows:}{ \i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 }{\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 - \line }{\lang1033\langfe2057\langnp1033\insrsid3225080 \par }{\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 1. }{\i\lang1033\langfe2057\langnp1033\insrsid3225080 \tab \'85}{\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 \line }{\i\lang1033\langfe2057\langnp1033\insrsid3225080

\par }{\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 2. }{\i\lang1033\langfe2057\langnp1033\insrsid3225080 \tab \'85}{\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 \line }{\i\lang1033\langfe2057\langnp1033\insrsid3225080

\par }\pard \s15\ql \fi-720\li1440\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin1440\itap0\ipgp1\pararsid3225080 {\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 3. }{ \i\lang1033\langfe2057\langnp1033\insrsid3225080 \tab }{\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 That when the above decree was entered against me have been negotiating with the lawyers of Central Purchasing as to the mode and schedule of payment of the decretal sum as a way of settling the above debt. \line }{\i\lang1033\langfe2057\langnp1033\insrsid3225080 \par }{\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 4.}{\i\lang1033\langfe2057\langnp1033\insrsid3225080 \tab }{\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 I have obtained through Court Auctioneers an attachment warrant in HCCS No. 365/2000 and identified two plots of the Judgment Debtor on a case I won against him. \line }{\i\lang1033\langfe2057\langnp1033\insrsid3225080 \par }{\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 5. }{\i\lang1033\langfe2057\langnp1033\insrsid3225080 \tab }{\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 That the proceeds from the above cell (sic) shall be remitted to the lawyers of the Judgment Creditors as soon as possible and the decree executed. \line }{\i\lang1033\langfe2057\langnp1033\insrsid3225080 \par }{\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 6. }{\i\lang1033\langfe2057\langnp1033\insrsid3225080 \tab That I have other outstanding cl}{\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 aims against Simon Kibule, Arthu}{\i\lang1033\langfe2057\langnp1033\insrsid3225080 r Bosco G}{\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 id}{\i\lang1033\langfe2057\langnp1033\insrsid3225080 agui and Boniface Kakare which cl}{ \i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 aims are being pursued. \line }{\i\lang1033\langfe2057\langnp1033\insrsid3225080 \par 7. \tab That the above cl}{\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 aims are substantial and when recovered will offset the debt of the Central Purchasing Company Limited. \line }{ \lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 \par }\pard \s15\ql \fi720\li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\ipgp1\pararsid3225080 {\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 8. }{ \i\lang1033\langfe2057\langnp1033\insrsid3225080 \tab }{\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 That I have substantial assets and able to settle the debt. \line }{\i\lang1033\langfe2057\langnp1033\insrsid3225080 \par }{\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 9. }{\i\lang1033\langfe2057\langnp1033\insrsid3225080 \tab }{\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 That it i not true that lam unable to pay the above debt.\'94 \line }{\i\lang1033\langfe2057\langnp1033\insrsid3225080 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\ipgp1\pararsid3225080 {\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 From the foregoing quotation, it is clear that there is no counter claim, set off or cross demand raised by the Judgment Debtor in the said affidavit. Under bankruptcy law, the only grounds that can be entertained in an application to set aside a bankruptcy notice are only those stated in the Act and the Rules aforementioned and no other. In fact the Registrar was wrong in setting this matter for hearing before me in the absence of such aff idavit because in essence, there is no proper application within Rule 141 before this Court for setting aside the bankruptcy notice. See: Re a Debtor (supra). \line }{\lang1033\langfe2057\langnp1033\insrsid3225080 \par }{\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 In re COLE Exparte Attenborough (1898) QB 29 Wright J. observed at page 193 as follows: \line }{\lang1033\langfe2057\langnp1033\insrsid3225080 \par }\pard \s15\ql \li720\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\ipgp1\pararsid3225080 {\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 \'93The pow er to set aside a bankruptcy notice, it seems is confined to the grounds mentioned in the Act and Rules. In }{\i\lang1033\langfe2057\langnp1033\insrsid3225080 case of In re Easton, Exparte Dixon Van}{ \i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 ghherd Willens J. said.\rquote \line \'93Where it is a bankruptcy notice, it seems to me the only reasons which can be enter tained by the Registrar are reasons which are mentioned in S. 4, sub S. 1 (g) (equ}{\i\lang1033\langfe2057\langnp1033\insrsid3225080 ivalent to our 5. 2 (1) (g)) viz}{\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 that the debtor has a counter claim, set off or cross demand which he could not set up in the action in which the Judgment was obtained.\'94 \line }{\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\ipgp1\pararsid1382257 {\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 Further, in order to qualify under S.2 (1) (g) of the Act, the counter claim, cross demand or set off must be against the Judgment Creditor not third parties. The claim by the Judgment Debtor against other third parties including Simon Kibule, Arthur Bosc o Gidagui or Boniface Kakare do not qualify for purposes of S. 2 (1) (g) of the Act. \line See: In re A Bankruptcy Notice (1934) Ch. 141 (CA) Mangham L. J observed at page 141 that: \line }{\lang1033\langfe2057\langnp1033\insrsid3225080 \par }\pard \s15\ql \li720\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\ipgp1\pararsid3225080 {\i\lang1033\langfe2057\langnp1033\insrsid3225080 \'93A}{ \i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 nother thing which, in my opinion, is c/ear is, that the words \'93counterclaim, set off, or cross demand which equals or exceeds the amount of the Judgment debt\'94 }{ \i\ul\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 are words which refer to a counterclaim, set off or cross demand against the Creditor }{\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 the statute does not use }{ \i\ul\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 those precise words, but it is }{\i\ul\lang1033\langfe2057\langnp1033\insrsid3225080\charrsid9580028 perfect}{\i\ul\lang1033\langfe2057\langnp1033\insrsid3225080 l}{ \i\ul\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 y obvious that that is }{\i\ul\lang1033\langfe2057\langnp1033\insrsid3225080 intended. }{\i\lang1033\langfe2057\langnp1033\insrsid3225080 \'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85 \'85 \'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85}{\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 \line }{ \i\lang1033\langfe2057\langnp1033\insrsid3225080 \par }{\i\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 For instance it is possible, a/though the question does not arise here, if the Creditor possessed a bag of diamonds belonging to the Debtor of a value exceeding the amount of the Judgment debt, this bankruptcy notice would be set aside.\'94 \line }{ \i\lang1033\langfe2057\langnp1033\insrsid3225080 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\ipgp1\pararsid1382257 {\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 In conclusion an d for the reasons given therefore, it is clear that the Judgment Debtor has not complied with the requisitions of the Bankruptcy Notice served on him on 12/8/04. According to the Court record, the Notice has not been set aside by an affidavit. It still st ands. It was not also complied with by either payment of the amount \line due although the Judgment Debtor has expressed his willingness to do so by affidavit and through correspondences on the Court record. The obvious consequence therefore follows that the Judgment Debtor, Hon. Col. Kahinda Otafire has }{ \lang1033\langfe2057\langnp1033\insrsid3225080\charrsid9580028 committed}{\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 an act of bankruptcy under S. 2 (1) (g) of the Bankruptcy Act. In the circumstances, the Judgment Creditor may file a bankruptcy petition against hi}{\lang1033\langfe2057\langnp1033\insrsid3819184 m if it so wishes. \line \par M. S. Arach -}{\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 Amoko \line }{\b\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 JUDGE \line }{\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 12/10/04 \line }{ \lang1033\langfe2057\langnp1033\insrsid3819184 \par }{\ul\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 Ruling delivered in Court in the presence of: }{\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 \line 1. Mr. Owor Dennis for Judgment Creditor. \line 2. Okuni \emdash Court clerk. \line Absent: Judgment Debtor and counsel. \line }{\lang1033\langfe2057\langnp1033\insrsid3819184 \par }{\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 M. S. Arach \emdash Amoko \line }{\b\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 JUDGE \line }{\lang1033\langfe2057\langnp1033\insrsid3819184 12/10/2004 \line }{ \lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 \par }\pard\plain \ql \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid1382257 \fs24\lang2057\langfe2057\cgrid\langnp2057\langfenp2057 {\lang1033\langfe2057\langnp1033\insrsid7698263\charrsid9580028 \par }}