Background
1. The petition before this Court is brought by ASTROL PETROLEUM COMPANY LIMITED (the petitioner), seeking to wind up SKYPLUS SOLUTIONS LIMITED, (the respondent company) over a debt of Kshs. 7,036,380.28. The amount is made up of a decretal amount plus costs and interest arising from a judgment entered in favor of the petitioner.
2. Through the supporting affidavit sworn by JAMES MWANGI KAMAU on 16th March 2023, the petitioner contends that judgment was obtained in this case on 22nd July 2021 and that the same continues to accrue interest.
3. The said decree as evidenced by the attached annexures was entered in Astrol Petroleum Company Limited V Skyplus Solutions Limited, CMCC 3097 of 2018. Also attached to the affidavit in support is a Statutory Demand dated 17th February 2023 allegedly issued to the respondent company by the petitioner.
4. This Court notes that no appearance was entered by the respondent despite evidence of service of the petition. The petitioner filed the affidavit of service sworn by ERIC OTIENO JAOKO on 19th May 2023.
5. It is also the petitioner’s case that the respondent was served with the Statutory Demand on 20th February 2023 and that the petition was advertised on 26th April 2023. The respondent was allowed 21 days by this Honourable Court to file its response to the petition which it had failed to do.
Analysis and determination
6. I have carefully considered the petition together with the supporting evidence thereto and the written submissions by the petitioner. It is clear that the respondent company did not file any response to the petition. Be that as it may, it is still incumbent on this Court to consider the veracity of the petition and come to a determination as to whether the same is merited.
7. Section 424(1)(e) of the Insolvency Act (hereinafter the Act), provides that a Company may be liquidated by the Court if it is unable to pay its debts. By dint of section 425(1)(b) a creditor may apply to the Court for such liquidation. Section 427 enumerates the remedies that this Court may grant upon hearing a liquidation petition.
8. In order to determine whether the respondent company is unable to pay its debts for purposes of section 424(1)(e), the Court considers the criteria as laid out in section 384(1) of the Act which states:
“For the purposes of this Part, a company is unable to pay its debts—
(a) if a creditor (by assignment or otherwise) to whom the company is indebted for hundred thousand shillings or more has served on the company, by leaving it at the company's registered office, a written demand requiring the company to pay the debt and the company has for twenty—one days afterwards failed to pay the debt or to secure or compound for it to the reasonable satisfaction of the creditor;
(b) if execution or other process issued on a judgment, decree or order of any court in favour of a creditor of the company is returned unsatisfied in whole or in part; or (emphasis mine)
(c) if it is proved to the satisfaction of the Court that the company is unable to pay its debts as they fall due.”
9. Unfortunately, there is no evidence provided to prove that the statutory demand herein was served on the respondent company on 20th February 2023, besides the averment by the petitioner. I note that none of the affidavits of service relates to the statutory demand. Be that as it may, the evidence on record by way of the signed decree satisfies the alternative for proving inability by the respondent to pay its debts. This is by dint of section 384(1)(b).
10. I am also satisfied that the petition in this case was advertised in the Daily Nation newspaper on April 26, 2023. There is no evidence of opposing responses filed by any other participating creditors. Furthermore, there has been no response from the respondent company, nor any evidence showing that the company's assets exceed its liabilities or that it can repay the debt owed to the petitioner. Given the lack of any other remedy, this Court finds it just and equitable to order the liquidation of the company.
Disposition
11. Accordingly, the petition dated 16th March 2023 is allowed as prayed and consequently a Liquidation Order be and is hereby issued in respect of SKYPLUS SOLUTIONS LIMITED. The Official Receiver is hereby appointed provisional liquidator of the said Company. These orders shall be served upon the Official Receiver forthwith.