NCBA Bank v Mohan Engineering Works Limited [2023] KEHC 23546 (KLR)

NCBA Bank v Mohan Engineering Works Limited (Insolvency Cause 6 of 2018) [2023] KEHC 23546 (KLR) (Commercial and Tax) (13 October 2023) (Ruling)

Neutral citation: [2023] KEHC 23546 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts)

Commercial and Tax

Insolvency Cause 6 of 2018

RE Aburili, J

October 13, 2023

Between

NCBA Bank

Supporting Creditor

and

Mohan Engineering Works Limited

Debtor

Ruling

Introduction 1. The Creditor herein, NCBA Bank, vide its application dated 3rd July 2023 seeks an order for this court to review and set aside the ruling delivered on 28th February 2023 by Ochieng J in which the court allowed the Debtor’s application dated 27th November 2018 for grant of a receiving order.

2. It is the creditor’s case that the present legal regime governing Insolvency proceedings does not have a provision for the issuance of receiving orders as granted by the court in favour of the debtor and thus the same were granted under non-existent laws.

3. The creditor further averred that the receiving orders issued were erroneous as they were issued under a repealed law, specifically the Bankruptcy Act, Cap 53 (Repealed) and were therefore made per incuriam yet the application was made under the new regime when the Insolvency Act had already been operationalised hence the orders of the court should be reviewed and set aside.

4. In response, the Debtor filed a replying affidavit sworn on the 25th September 2023 by one Mohan Singh Thakar Singh Bamrah one of the directors of the debtor who deponed that they petitioned the court to be placed under receivership in the year 2018 and the court issued the receiving orders on the 28th February 2023.

5. It was deponed that the creditor herein among other creditors participated in the proceedings to their final conclusion and by claiming to have noticed their said position was evident that they were pleading ignorance of the law.

6. The debtor further deponed that for review to be granted, the error alleged must be apparent and not require an elaborate argument and further that another judge would have taken a different view of the matter was not sufficient to grant review.

7. It was further deponed on behalf of the debtor that misconstruing a statute or other provision of the law cannot be a ground for review.

8. Both parties’ counsel argued the application orally by reiterating their positions as per the pleadings and affidavits filed in support of and against the application. The applicant’s counsel urged this court to set aside the erroneous order and substitute it with a proper order in law adding that they had no issue with the proceedings and the judgment but the final order which was based on non-existent law.

9. The respondent’s counsel relied on the detailed affidavit filed in reply to the application adding that the application did not meet the conditions for review and that there was no error apparent on the face of the record. Further, that the applicant should have appealed the decision as the application does not meet the conditions under order 45 of the Civil Procedure Rules on Review.

Analysis & Determination 10. I have considered the application by the applicant and the response thereto. the main issue for determination is whether the application has merit. Section 80 of the Civil Procedure Act Cap 21 provides that:“Any person who considers himself aggrieved—a.by a decree or order from which an appeal is allowed by this Act, but from which no appeal has been preferred; orb.by a decree or order from which no appeal is allowed by this Act, may apply for a review of judgment to the court which passed the decree or made the order, and the court may make such order thereon as it thinks fit.”

11. Order 45 Rule 1 of the Civil Procedure Rules, 2010is the procedural Rule under Section 80 of the Civil Procedure Act and it provides as follows:“1. (1)Any person considering himself aggrieved—a.by a decree or order from which an appeal is allowed, but from which no appeal has been preferred; orb.by a decree or order from which no appeal is hereby allowed, and who from the discovery of new and important matter or evidence which, after the exercise of due diligence, was not within his knowledge or could not be produced by him at the time when the decree was passed or the order made, or on account of some mistake or error apparent on the face of the record, or for any other sufficient reason, desires to obtain a review of the decree or order, may apply for a review of judgment to the court which passed the decree or made the order without unreasonable delay.”

12. In Republic v Public Procurement Administrative Review Board & 2 others [2018] eKLR it was held: -“Section 80 gives the power of review and Order 45 sets out the rules. The rules restrict the grounds for review. The rules lay down the jurisdiction and scope of review limiting it to the following grounds; (a) discovery of new and important matter or evidence which after the exercise of due diligence, was not within the knowledge of the applicant or could not be produced by him at the time when the decree was passed or the order made or; (b) on account of some mistake or error apparent on the face of the record, or (c) for any other sufficient reason and whatever the ground there is a requirement that the application has to be made without unreasonable delay.”

13. In Pancras T. Swai v Kenya Breweries Limited [2014] eKLR the Court of Appeal held that:“Order 44 rule 1 (now Order 45 rule 1 in the 2010 Civil Procedure Rules) gave the trial Court discretionary power to allow review on the three limps therein stated or “for any sufficient reason...”

14. In Republic v Advocates Disciplinary Tribunal Ex parte Apollo Mboya [2019] eKLR Mativo J (as he then was) culled out the following principles from a number of authorities:i.A court can review its decision on either of the grounds enumerated in Order 45 Rule 1 and not otherwise.ii.The expression "any other sufficient reason" appearing in Order 45 Rule 1 has to be interpreted in the light of other specified grounds.iii.An error which is not self-evident and which can be discovered by a long process of reasoning cannot be treated as an error apparent on the face of record justifying exercise of power under Section 80. iv.An erroneous order/decision cannot be corrected in the guise of exercise of power of review.v.A decision/order cannot be reviewed under Section 80 on the basis of subsequent decision/judgment of a coordinate or larger Bench of the tribunal or of a superior court.vi.While considering an application for review, the court must confine its adjudication with reference to material, which was available at the time of initial decision. The happening of some subsequent event or development cannot be taken note of for declaring the initial order/decision as vitiated by an error apparent.vii.Mere discovery of new or important matter or evidence is not sufficient ground for review. The party seeking review has also to show that such matter or evidence was not within its knowledge and even after the exercise of due diligence, the same could not be produced before the court/tribunal earlier.viii.A mistake or an error apparent on the face of the record means a mistake or an error, which is prima-facie visible and does not require any detail examination. In the present case the petitioner has not been able to point out any error apparent on the face of the record.ix.Section 80 of the Civil Procedure Code provides for a substantive power of review by a civil court and consequently by the appellate courts. The words occurring in Section 80 mean subject to such conditions and limitations as may be prescribed thereof and for the said purpose, the procedural conditions contained in Order 45 Rule 1 must be taken into consideration. Section 80 of the Civil Procedure Code does not prescribe any limitation on the power of the court, but such limitations have been provided for in Order 45 Rule 1. x.The power of a civil court to review its judgment/decision is traceable in Section 80 CPC. The grounds on which review can be sought are enumerated in Order 45 Rule 1.

15. The commencement point is that a review may be granted whenever the court considers that it is necessary to correct an apparent error or omission on the part of the court. The error or omission must be self-evident and should not require an elaborate argument to be established. It will not be a sufficient ground for review that another Judge could have taken a different view of the matter. Nor can it be a ground for review that the court proceeded on an incorrect exposition of the law and reached an erroneous conclusion of law. Misconstruing a statute or other provision of law cannot be a ground for review. See National Bank of Kenya Ltd v Ndungu Njau, [1996] KLR 469

16. The Court in Nyamogo & Nyamogo v Kogo 2001 EA 170, discussed what constitutes an error on the face of the record as follows:“An error apparent on the face of the record cannot be defined precisely or exhaustively, there being an element of un definitiveness inherent in its very nature and it must be determined judicially on the facts of each case. There is a real distinction between a mere erroneous decision and an error apparent on the face of the record. Where an error on a substantial point of law stares one in the face and there could reasonably be no two opinions, a clear case of error apparent on the face of the record would be made out. An error which has to be established by a long drawn process of reasoning on points where there may conceivably be two opinions can hardly be said to be an error apparent on the face of the record. Again, if a view adopted by the court in the original record is a possible one, it cannot be an error apparent on the face of the record even though another view was possible. Mere error or wrong view is certainly no ground for review though it may be one for appeal.”

17. The Indian Supreme CourtIn the case of Aribam Tuleshwar Sharma v Aribam Pishak Sharmal AIR 1979 SC 1047 observed that is it has to be kept in view that an error apparent on the face of record must be such an error, which must strike one on mere looking at the record and would not require any long-drawn process of reasoning on points where there may conceivably be two opinions.[emphasis added].

18. In Attorney General & Others v Boniface Byanyima, HCMA No. 1789 of 2000 the court citing Levi Outa v Uganda Transport Company (1995) HCB 340 held that the expression “mistake or error apparent on the face of record” refers to an evident error which does not require extraneous matter to show its incorrectness. It is an error so manifest and clear that no court would permit such an error to remain on the record. It may be an error of law, but law must be definite and capable of ascertainment.”

19. There is a distinction which is real, though it might not always be capable of exposition, between a mere erroneous decision and a decision which could be characterized as vitiated by 'error apparent'.

20. A review is by no means an appeal in disguise whereby an erroneous decision is reheard and corrected. A review lies only for patent error where without any elaborate argument one could point to the error and say here is a substantial point of law which stares one in the face, and there could reasonably be no two opinions entertained about it, a clear case of error apparent on the face of the record would be made out.

21. Thus, the term "mistake or error apparent" by its very connotation signifies an error which is evident per se from the record of the case and does not require detailed examination, scrutiny and elucidation either of the facts or the legal position. If an error is not self-evident and detection thereof requires long debate and process of reasoning, it cannot be treated as an error apparent on the face of the record for the purpose of Order 45 Rule 1 of the Civil Procedure Rules and Section 80 of the Act.

22. To put it differently an order, decision, or judgment cannot be corrected merely because it is erroneous in law or on the ground that a different view could have been taken by the court/tribunal on a point of fact or law. In any case, while exercising the power of review, the court/tribunal concerned cannot sit in appeal over its judgment/decision.

23. The wisdom flowing from jurisprudence on this subject is that no error can be said to be apparent on the face of the record if it is not manifest or self-evident and requires an examination or argument to establish it.

24. In the instant case, the Notice of motion dated 27th November 2018 sought for a receiving order against the petitioner’s estate for inability to meet its debts and liabilities. That is what the learned Judge granted in his judgment which is sought to be reviewed herein. If that judgment or final order which was in agreement with the petition was erroneous or based on a nonexistent law, the remedy available in law is an appeal and not a review by another judge of concurrent jurisdiction.

25. To do otherwise would be urging this court to sit on appeal of a decision of a judge of concurrent jurisdiction, which jurisdiction this court is bereft of.

26. In the circumstances, therefore, I am not persuaded that there is an error apparent on the face of the record. What the debtor is raising requires examination and argument. He argues that the receiving orders issued by the court were issued under the repealed Bankruptcy Act rather than the Insolvency Act and were thus made per incuriam (mistakenly). The Respondent’s position is different. Its position is that the creditor herein took part in the proceedings and was thus ignorant to allege that it had only seen the alleged mistake at this time.

27. Review is impermissible without a glaring omission, evident mistake or similar ominous error. An error which has to be established by a long-drawn process of reasoning on points where there may conceivably be two opinions can hardly be said to be an error apparent on the face of the record. Where an alleged error is far from self-evident and if it can be established, it has to be established, by lengthy and complicated arguments, such an error cannot be cured by an order or review.

28. The power of review is available only when there is an error apparent on the face of the record. I reiterate that review proceedings are not an appeal. The review must be confined to error apparent on the face of the record and re-appraisal of the entire evidence or how the judge applied or interpreted the law would amount to exercise of Appellate Jurisdiction, which is not permissible

29. Accordingly, it is my finding that the reasons cited by the creditor do not quality to be any of the grounds prescribed in Order 45 Rule 1 of the Civil Procedure Rules and that this is not a proper case for the court to grant the review sought or even to exercise its discretion in favour of the creditor. Accordingly, the applicant’s application dated 3rd July 2023 is dismissed.

30. I make no orders as to costs.

31. This file is closed.

DATED, SIGNED AND DELIVERED AT KISUMU THIS 13TH DAY OF OCTOBER, 2023R.E. ABURILIJUDGE