The Petition dated 23.02.2022 is filed by a creditor. It seeks liquidation of the Company on the ground that it is unable to pay its debts. The Petitioner states that on 11.11.2021 it advanced the Company Kshs. 20,778,435.41 which has not been paid. It thereafter issued and served on the Company a statutory demand dated 21.12.2021 which has not been complied with leading it to file this petition.
The Petition was advertised on 10.12.2021 in the Daily Newspapers. The petition has not been opposed by any other creditor. The Company filed an Answer to the Petition dated 25.05.2021 in which it admits the loan but states that the amount claimed is inordinate and unexplained. It states that it offered securities which were recovered and ought to have discharged the loan and that the Petition sued a company related to the Company hence there is no reason to file these proceedings. In response, the Petitioner avers that the loan is admitted and that the Company is raising issues concerning third parties which are not relevant. Further, it adds that the efforts to recover any money from guarantors has been unsuccessful.
This matter came up for hearing today, 20th December 2022 and despite being served neither the Company nor its advocates appeared in court. I have however considered all the material on record and I hold that the loan advanced by the Petitioner to the Company is not disputed and neither is default. I agree with the Petitioner that the issues raised concerning related entities are irrelevant and, as it points out, are the subject of different and independent transactions. I hold that failure to comply with a statutory demand issued under section 384 of the Insolvency Act is prima facie evidence of inability to pay debt. The burden then is on the debtor to show that it is solvent or disputes the debt on substantial grounds. The Petitioner has shown how the debt is made up as the loan agreement provides for interest. I find that the Petitioner has proved that the Company is unable to pay its debts.
The petition is allowed on the terms as follows:
1. A Liquidation Order be and is hereby issued against the Company, SADIKI GROWERS LIMITED.
2. The Official Receiver is appointed as interim Liquidator of the company.
3. The costs of the petition shall be costs in the liquidation.
DATED and DELIVERED at NAIROBI this 20th day of DECEMBER 2022
D. S. MAJANJA
JUDGE