Gulf African Bank Limited v Gargar Construction Company Ltd & 2 others [2022] KEHC 12936 (KLR)

Gulf African Bank Limited v Gargar Construction Company Ltd & 2 others (Civil Suit E260 of 2019) [2022] KEHC 12936 (KLR) (Commercial and Tax) (16 September 2022) (Ruling)

Neutral citation: [2022] KEHC 12936 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)

Commercial and Tax

Civil Suit E260 of 2019

A Mabeya, J

September 16, 2022

Between

Gulf African Bank Limited

Respondent

and

Gargar Construction Company Ltd

1st Applicant

Abdiwahab Ali Abdi

2nd Applicant

Yusuf Abdiwahab Ali

3rd Applicant

Ruling

1. This is a ruling on an application dated August 17, 2021. It was brought under the Judicature Act, the High Court (Practice & Procedure Rules(Part 1 Rule 3), sections 1A, 1B and 3A of the Civil Procedure Act 2010 and order 21 Rule 12 of the Civil Procedure Rules.

2. The application sought stay of execution of the decree and warrants of arrest as well as leave to the applicants to commence payment of the judgment sum by instalments of Kshs. 100,000/= per month from November 2021.

3. The grounds thereof were set out on the face of application and in the supporting affidavit of Yusuf Abdiwahab Ali sworn on August 19, 2021.

4. Judgment was entered in favour of the plaintiff on November 25, 2019and the plaintiff extracted a decree for Kshs. 26,338. 220. 06/=. The applicants contended that they were unable to pay the full amount in lump sum due to financial hardship. Their proposal had been rejected by the plaintiff and they were in the process of securing funds through a charge and debenture.

5. The application was opposed vide the replying affidavit of Lawi Sato sworn on August 31, 2021. It was contended that this court had on 2/09/2021 issued stay of execution on condition that the applicants pay Kshs. 250,000/= within 7 days and Kshs. 300,000/= on September 30, 2021and continue paying the same every last day of the month until the date of the ruling. That the applicants failed to comply and were in contempt of that order. That in the premises the instant application was a waste of judicial time.

6. That the parties had on several occasions engaged on settlement including letter dated January 18, 2021wherein the applicants proposed to pay Kshs. 1,000,000/= per month and failed to do so. In another letter dated June 11, 2021, the applicants proposed to be paying Kshs. 500,000/= per month but failed to comply.

7. It was thus contested that the applicants were frustrating the respondent’s effort to enjoy the fruits of the judgment. That the proposal to pay Kshs. 100,000/= per month was unattainable as it would take 21 years to clear the debt and that to date, the applicants had only made payment of Kshs. 250,000/= in April 2021.

8. Both parties filed their written submissions which this court has considered.

9. Order 21 Rule 12 (2) of the Civil Procedure Rules, 2010 provides that: -“After passing of any such decree, the court may on the application of the judgment-debtor and with the consent of the decree holder or without the consent of the decree holder for sufficient cause shown, order that the payment of the amount decreed be postponed or be made by installments on such terms as to the payment of interest, the attachment of the property of the judgment debtor or the taking of security from him, or otherwise as it thinks fit”.

10. The above provision gives the court a wide discretion as to whether payment of the amount decreed be postponed or settled by way of installments. Such discretion however, must be exercised in a judicial and not an arbitrary manner.

11. In A Rajabali Alidina v Remtulla Alidina & anor(1961) EA 565 Law JA stated: -“All commentators on the Civil Procedure Code agree that the court’s discretion to order payment of the decretal amount in installments is one which must be exercised in a judicial and not an arbitrary manner. The onus is on the defendant to show that he is entitled to indulgence under this rule.”

12. Sufficient reasons would include the circumstances under which the debt was contracted, the conduct of the debtor, his financial position and his bona fidesin offering to pay a fair proportion of the debt at once.

13. In Hildegard Ndalut v Lelkina Dairies Ltd &anor. (2005) eKLR, the court held: -“Both parties have referred to the case of Keshavji Jethabhai & Bothers Limited v Saleh Abdulla[1959] EA 260, which is a case from a High Court of Tanganyika. That case followed the principles laid down in the Indian case of Sawatram Ramprasad v Imperial Bank of India (1933) AIR Nag 33 – that a defendant should be required to show his bona fides by arranging fair payment of the proportion of the debt – in persuading the court to allow payment by way of installments. This, in my view, is the proper test to apply in granting orders for payment of a decretal amount by way of instalments. A judgment creditor is entitled to payment of the decretal amount, which he should receive promptly to reap the fruits of the judgment. The judgment creditor might genuinely be in a difficult position in paying the decretal amount at once. However, he has to show seriousness in paying the amount. In that event he should show his bona fidesby arranging fair payment proposals to liquidate the amount”.

14. This court has considered the special circumstances in this case. To begin with, on 2/09/2021 this court ordered a stay on condition that the applicants pay Kshs. 250,000/= within 7 days, and Kshs. 300,000/= onSeptember 30, 2021and continue paying the same every last day of the month until the date of the ruling.

15. The applicants did not comply with any of those conditions and to date have not made a single payment but for the initial payment of Kshs. 250,000/= made in April 2021. Further, the applicants have been given numerous opportunities to clear the debt on the basis of their own proposals but none of those proposals were ever honored.

16. The above circumstances do not aid the applicants’ case. It appears that the applicants are not serious on the payment of the debt. They are keen on taking the respondent in rounds to further delay the respondent from enjoying the fruits of its judgment. The actions of the applicants do exhibit any good faith on their part.

17. Further, the proposal to pay Kshs. 100,000/= per month is too little. The proposal offered by an applicant ought to be reasonable. The applicants cannot merely plead their inability to pay in full at once, this is not sufficient reason to justify this court to exercise its jurisdiction. The applicants must also show their bona fidesby arranging prompt payment of a fair proportion. See Keshvaji Jethabhai & Bros Limited v Saleh Abdulla (1959) EA 260.

18. In the premises, the application dated August 17, 2021 lacks merit and is dismissed with costs to the respondent.It is so ordered.

DATED AND DELIVERED AT NAIROBI THIS 16TH DAY OF SEPTEMBER, 2022. A. MABEYA. FCIArbJUDGE