Tustker Mattresses Limited v Equity Bank Kenya Limited & another [2022] KEHC 161 (KLR)

Tustker Mattresses Limited v Equity Bank Kenya Limited & another (Insolvency Petition E018 of 2020) [2022] KEHC 161 (KLR) (Commercial and Tax) (2 March 2022) (Ruling)

Neutral citation number: [2022] KEHC 161 (KLR)

Republic of Kenya

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

Insolvency Petition E018 of 2020

DAS Majanja, J

March 2, 2022

IN THE MATTER OF THE INSOLVENCY ACT AND IN THE MATTER OF TUSKER MATTRESSES LIMITED

Between

Tustker Mattresses Limited

Applicant

and

Equity Bank Kenya Limited

1st Respondent

Antique Auctions Agencies

2nd Respondent

Ruling

1. The Applicant Company (“the Company”) herein is subject to Insolvency proceedings. One of its properties; LR No. 209/11392 (IR No. 54287) is scheduled for sale by public action today, 2nd March 2022 by the Chargee, Equity Bank (“the Bank”).

2. I have heard the arguments on both sides and I take the following view of the matter. The issues raised by the parties are quite substantial but in deciding whether to grant the injunction I am guided by the objectives of the Insolvency Act, 2015. The court is to ensure that the Company has an opportunity to remain a going concern in order to pay off creditors including the Bank and to achieve a better outcome for the Company’s creditor’s as a whole than would likely be the case if the Company were liquidated. Further, that the court is required to weigh and maintain a fair balance between the interests of the Company and those of its creditors for the efficient and optimal administration and distribution of the Company’s assets for the benefit of its creditors.

3. As the matter is merely interlocutory in nature, the court would rather act with caution to preserve the subject property in order to enable parties resolve the issues at hand rather than allow the sale to proceed.

4. In the interests of justice, I therefore make the following orders:(a)An injunction be and is hereby issued restraining Equity Bank Kenya Limited from selling or otherwise disposing of the property known as LR No. 209/11392 (IR No. 54287) in exercise of its statutory power of sale pending the hearing and determination of the application or further orders of the court. **(b)The parties are now invited to take directions for expeditious disposal of the application**.

DATED AND DELIVERED AT NAIROBI THIS 2ND DAY OF MARCH 2022D. S. MAJANJAJUDGEMr Ogola instructed by O & M Law LLP Advocates for the Applicant.Mr Kimani, SC instructed by Hamilton, Harrison and Mathews Advocates for the Respondents.