Francis Gikonyo v Thindigua Company Limited [2015] KEHC 8322 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

MILIMANI LAW COURTS

COMMERCIAL & ADMIRALTY DIVISION

WINDING UP CAUSE NO. 10 OF 2010

AND

IN THE MATTER OF THINDIGUA COMPANY LTD

IN THE MATTER OF COMPANIES ACT CAP 486 LAWS OF KENYA

FRANCIS GIKONYO :::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: PETITIONER/RESPONDENT

VERSUS

THINDIGUA COMPANY LIMITED ::::::::::::::::::::::::::::::::::::::::: RESPONDENT/APPLICANT

R U L I N G

INTRODUCTION

The Preliminary Objection before the court filed on 2nd December 2011 is in objection to the Petition filed herein on 28th April 2010.

In the Petition, the Petitioner seeks the orders winding up the company known as Thindigua Company Limited on the grounds that the said company is insolvent and unable to pay its debts. The company is allegedly indebted to the Petitioner in the sum of Kshs.337,331/=.

On 26th August 2010, the parties to the Petition rescinded a consent in the terms which compromised the Petition, and the Respondent ordered to pay Kshs.287,331/= to mark the matter settled.  The said consent was later set aside by Justice L. Njagi on 28th July 2011, hence reviving the Petition.

On 17th October 2011 another creditor by the Name Samuel Mubea Gathogo filed his Notice of Intention to appear and support the Winding Up Petitioner, claiming Kshs.241,580/= from the company.

The Respondent filed the Preliminary Objection herein, raising up the following issues:-

That the Petition offends Rule 10 and Rule 25 of the Companies (Winding Up) Rules and should be struck out.

That the Petition offends the Companies (Winding Up) Rules.

That the Petition is invalid and should be struck out.

That the Petition is an abuse of the court process and the same should be struck out with costs.

It is the law that once a Preliminary point of law has been raised, the court should inquire into the objection, and make a decision before proceeding with the matter.  The court directed parties to file submissions. The Respondent did that on 29th June 2015, which the Petitioners chose to orally submit. I have considered the Preliminary Objection. The issue for determination is whether or not the Petition offends the law as alleged by the Respondent.

In response to the grounds raised in the Preliminary Objection, the Petitioner submitted that in view of Justice Njagi’s ruling on 28th July 2011, and in view of a consent dated 6th September 2010, the Preliminary Objection should fail.

I do not understand the import of the Petitioner’s submission.  The said consent dated 6th September 2010 which purported to settle the dispute, is what was set aside by Justice L. Njagi on 28th July 2011, setting stage for the Peition to proceed. I do not see how those two events affect the current Preliminary Objection proceedings.

Rule 10 of the Companies (Winding Up) Rules requires that;

“All orders, summons, petitions, warrants, or other documents of any kind or any proceedings and certified copies thereof shall be sealed.”

The petitioner’s petition was not sealed and it therefore fails on that note. In Re The Matter of Nyuki Limited [2006] eKLR,the learned judge in dismissing a petition that was not sealed noted that breaching this condition was one of the grounds for the failure of the petition. Further and most importantly, Rule 25 of the Companies (Winding Up) Rules requires that;

“Every petition shall be verified by an affidavit, which shall be sworn and filed by the petitioner, or by one of the petitioners if more than one, or where the petition is presented by a corporation by a director, secretary or other principal officer thereof, and shall be sworn and filed within four days after the petition presented, and such affidavit shall be prima facie evidence of the contents of the petition.”

The affidavit verifying the Petition was sworn on 23rd April 2010 while the petition was filed on 26th April 2010. This makes the petition fatally defective and hence should be struck off. The rationale of this rule is to make sure the petitioner verifies a petition that is filed. The drafters of the statute used a mandatory term “shall” to ensure compliance of the same since a party stands to be prejudiced. In Re the Matter of Bactlab Limited [2013] eKLR, the learned judge dismissed a petition on grounds that the petitioner had not complied with Rules 10 and 25 of Companies (Winding Up) Rules. The court raised the ground sui motto and noted that it cannot aid and abet in flouting the law once the same has come into its attention or become apparent to it.

In the upshot, I find that the Preliminary Objection is merited and I uphold the same.  In effect, the Petition herein is herewith struck out with costs to the Respondent.

Orders accordingly.

READ, DELIVERED AND DATED AT NAIROBI THIS 23RD DAY OF OCTOBER 2015

E. K. O. OGOLA

JUDGE

PRESENT:

Mr. Ohenga holing brief for Njugi for thePetitioner/Respondent

No appearance for theRespondent/Applicant

Teresia – Court Clerk