' RULING
1. This Ruling pertains to the Applicants’ exparte Notice of Motion dated 8th October, 2025, brought pursuant to Sections 878, 880, 882, 885 and 888(1) and (2) Companies Act, No. 17, Rule 8(b) of the Companies (High Court) Rules, Section 3A of the Civil Procedure Act, Order 51 of the Civil Procedure Rules , and all enabling provisions of law), Through the said application, the Applicants have moved this Court seeking the following reliefs:
(i) Spent.
(ii) THAT the Honourable Court be pleased to extend the time for registration of the Further Fixed and Floating Debenture dated 4th September, 2025 between CADS Motors Limited and I& M Bank Limited at the Company Registry, for a period of 30 days.
2. This Application was supported by the sworn affidavit of Sharon Jemutai , an Advocate of the High Court of Kenya, dated the same day as the Application. Ms. Jemutai practices in the firm of M/s Namasaka & Kariuki Advocates , who have conduct of this matter on behalf of the Applicants.
Issues For Determination
3. The Court has carefully considered the Motion, the statutory provisions cited, the Supporting Affidavit, and the annexures thereto. Upon such consideration, the Court is of the view that only one issue arises for determination:
(a) Whether leave should be granted to the Applicant to register the Further Fixed and Floating Debenture dated 4th September, 2025 between CADS Motors Limited and I& M Bank Limited at the Companies Registry out of time.
Analysis
4. Pursuant to Section 884 of the Companies Act , the Registrar of Companies is mandated to maintain a register of charges and debentures, register such charges, issue certificates of registration thereof, and authenticate the same with the Registrar’s Official Seal. Under Section 885 of the Act, the statutory timeline for registration of a charge and debenture is thirty (30) days from the date of its creation. In the event of non-compliance, Section 888(1) of the Companies Act empowers any interested party or the company itself to apply to the Court for an extension of the prescribed period for registration. Section 2 of the Companies Act defines a debenture as;
“debenture", in relation to a company, includes debenture stock, bonds and any other securities of a company (whether or not constituting a charge on the assets of the company);
5. Further, when considering an extension under Section 888 , the Court examines whether the delay was accidental or reasonably explained, whether it prejudiced creditors or members, whether granting the extension is just and fair, and whether the omission is rectifiable. This requirement that such a charge must be registered with the Registrar of Companies within thirty (30) days from the date of its creation is statutory and not discretionary. It is evident that the parties have complied with all the necessary legal requirements in the creation of the Further Fixed and Floating Debenture dated 4th September, 2025, save for the registration, which was delayed due to reasons sufficiently explained and which were beyond their control.
6. In her affidavit, Counsel for the Applicant deponed that she was aware that the Applicant granted the Chargor a fresh overdraft facility which was to be secured by a Further Fixed and Floating Debenture from the borrower. The said Further Fixed and Floating Debenture was to secure a sum of Kshs.35,000,000/= as a fresh overdraft in favour of the Chargor.
7. Counsel averred that, while they were able to prepare the Further Fixed and Floating Debenture dated 4th September, 2025, have it assessed for stamp duty and the stamp duty paid on 4th September, 2025. The document was thereafter lodged for franking at the Nairobi Lands Central Registry on the same date. Thereafter it became misplaced while at the lands Registry and was not traced until 7th October, 2025. This delay led to the Applicants’ inability to register the documents at the Companies Registry on time. This is because the statutory period for such registration had already lapsed during the period taken to assess, stamp, and register the Further Fixed and Floating Debenture at the Lands Office. Pursuant to Section 885 of the Companies Act, No. 17 of 2015, the Company was required to register the Further Fixed and Floating Debenture with the Registrar of Companies within thirty (30) days from the date of its creation. The delay in presenting the Further Fixed and Floating Debenture for registration at the Companies Registry was occasioned by delays in the documents being misplaced at the Lands Registry, at no fault of the Applicants. This led to delays beyond the statutory timelines, which delay was unintentional and beyond the control of both the Applicants.
8. The omission in the present case pertains solely to the failure to register the Further Fixed and Floating Debenture at the Companies Registry within the statutory period prescribed under Section 885 of the Companies Act . Notwithstanding this procedural lapse, the Further Fixed and Floating Debenture was duly executed, assessed for stamp duty, duly franked, and registered at the Lands Registry. The omission is therefore procedural in nature and, in the Court’s view, clearly rectifiable. While it is acknowledged that non-registration at the Companies Registry may affect the enforceability of the Further Fixed and Floating Debenture as against third parties, the failure to comply with the prescribed timeline was neither willful nor negligent. In the circumstances, the delay should not defeat an otherwise valid security instrument. This approach aligns with the provisions of Article 159(2)(d) of the Constitution , which enjoins Courts to administer justice without undue regard to procedural technicalities, and with the general principles of the Companies Act, which favour the promotion of substantive rights and commercial certainty.
9. There is no evidence on record to suggest that the delay in registration has occasioned any prejudice to the company’s creditors or members. On the contrary, the regularisation of the registration will enhance the protection of the lender’s interest and promote commercial transparency. The affidavit and annexures confirm that all substantive steps in the creation of the Further Fixed and Floating Debenture, execution, stamping, and registration at the Lands Registry, were duly undertaken in a timely manner, save for the Companies Registry filing. Accordingly, the Court is satisfied that the Applicants have provided a reasonable explanation for the delay, that the omission is capable of remedy, and that no prejudice has been occasioned to any party. The Court therefore finds it just and equitable to exercise its discretion under Section 888(1) of the Companies Act . In the result, the prayers sought in the Notice of Motion dated 8th October, 2025 are hereby granted.
Determination
10. The Applicants’ application by way of a Notice of Motion dated 8th October, 2025 is allowed as follows;
a) THAT the Honourable Court HEREBY extends the time for registration of the Further Fixed and Floating Debenture dated 4th September, 2025 between CADS Motors Limited and I& M Bank Limited at the Company Registry, for a period of 30 days.
b) Given the nature of the application, there shall be no order as to costs.
11. It is so ordered.
12. The file is hereby closed.
DATED, SIGNED AND DELIVERED AT MILIMANI THIS 16TH DAY OF October, 2025.
NJOROGE BENJAMIN K.
JUDGE
In the presence of;
N/A for the Applicant.
Mr. Peter Wabwire - Court Assistant
'
1. This Ruling pertains to the Applicants’ exparte Notice of Motion dated 8th October, 2025, brought pursuant to Sections 878, 880, 882, 885 and 888(1) and (2) Companies Act, No. 17, Rule 8(b) of the Companies (High Court) Rules, Section 3A of the Civil Procedure Act, Order 51 of the Civil Procedure Rules , and all enabling provisions of law), Through the said application, the Applicants have moved this Court seeking the following reliefs:
(i) Spent.
(ii) THAT the Honourable Court be pleased to extend the time for registration of the Further Fixed and Floating Debenture dated 4th September, 2025 between CADS Motors Limited and I& M Bank Limited at the Company Registry, for a period of 30 days.
2. This Application was supported by the sworn affidavit of Sharon Jemutai , an Advocate of the High Court of Kenya, dated the same day as the Application. Ms. Jemutai practices in the firm of M/s Namasaka & Kariuki Advocates , who have conduct of this matter on behalf of the Applicants.
Issues For Determination
3. The Court has carefully considered the Motion, the statutory provisions cited, the Supporting Affidavit, and the annexures thereto. Upon such consideration, the Court is of the view that only one issue arises for determination:
(a) Whether leave should be granted to the Applicant to register the Further Fixed and Floating Debenture dated 4th September, 2025 between CADS Motors Limited and I& M Bank Limited at the Companies Registry out of time.
Analysis
4. Pursuant to Section 884 of the Companies Act , the Registrar of Companies is mandated to maintain a register of charges and debentures, register such charges, issue certificates of registration thereof, and authenticate the same with the Registrar’s Official Seal. Under Section 885 of the Act, the statutory timeline for registration of a charge and debenture is thirty (30) days from the date of its creation. In the event of non-compliance, Section 888(1) of the Companies Act empowers any interested party or the company itself to apply to the Court for an extension of the prescribed period for registration. Section 2 of the Companies Act defines a debenture as;
“debenture", in relation to a company, includes debenture stock, bonds and any other securities of a company (whether or not constituting a charge on the assets of the company);
5. Further, when considering an extension under Section 888 , the Court examines whether the delay was accidental or reasonably explained, whether it prejudiced creditors or members, whether granting the extension is just and fair, and whether the omission is rectifiable. This requirement that such a charge must be registered with the Registrar of Companies within thirty (30) days from the date of its creation is statutory and not discretionary. It is evident that the parties have complied with all the necessary legal requirements in the creation of the Further Fixed and Floating Debenture dated 4th September, 2025, save for the registration, which was delayed due to reasons sufficiently explained and which were beyond their control.
6. In her affidavit, Counsel for the Applicant deponed that she was aware that the Applicant granted the Chargor a fresh overdraft facility which was to be secured by a Further Fixed and Floating Debenture from the borrower. The said Further Fixed and Floating Debenture was to secure a sum of Kshs.35,000,000/= as a fresh overdraft in favour of the Chargor.
7. Counsel averred that, while they were able to prepare the Further Fixed and Floating Debenture dated 4th September, 2025, have it assessed for stamp duty and the stamp duty paid on 4th September, 2025. The document was thereafter lodged for franking at the Nairobi Lands Central Registry on the same date. Thereafter it became misplaced while at the lands Registry and was not traced until 7th October, 2025. This delay led to the Applicants’ inability to register the documents at the Companies Registry on time. This is because the statutory period for such registration had already lapsed during the period taken to assess, stamp, and register the Further Fixed and Floating Debenture at the Lands Office. Pursuant to Section 885 of the Companies Act, No. 17 of 2015, the Company was required to register the Further Fixed and Floating Debenture with the Registrar of Companies within thirty (30) days from the date of its creation. The delay in presenting the Further Fixed and Floating Debenture for registration at the Companies Registry was occasioned by delays in the documents being misplaced at the Lands Registry, at no fault of the Applicants. This led to delays beyond the statutory timelines, which delay was unintentional and beyond the control of both the Applicants.
8. The omission in the present case pertains solely to the failure to register the Further Fixed and Floating Debenture at the Companies Registry within the statutory period prescribed under Section 885 of the Companies Act . Notwithstanding this procedural lapse, the Further Fixed and Floating Debenture was duly executed, assessed for stamp duty, duly franked, and registered at the Lands Registry. The omission is therefore procedural in nature and, in the Court’s view, clearly rectifiable. While it is acknowledged that non-registration at the Companies Registry may affect the enforceability of the Further Fixed and Floating Debenture as against third parties, the failure to comply with the prescribed timeline was neither willful nor negligent. In the circumstances, the delay should not defeat an otherwise valid security instrument. This approach aligns with the provisions of Article 159(2)(d) of the Constitution , which enjoins Courts to administer justice without undue regard to procedural technicalities, and with the general principles of the Companies Act, which favour the promotion of substantive rights and commercial certainty.
9. There is no evidence on record to suggest that the delay in registration has occasioned any prejudice to the company’s creditors or members. On the contrary, the regularisation of the registration will enhance the protection of the lender’s interest and promote commercial transparency. The affidavit and annexures confirm that all substantive steps in the creation of the Further Fixed and Floating Debenture, execution, stamping, and registration at the Lands Registry, were duly undertaken in a timely manner, save for the Companies Registry filing. Accordingly, the Court is satisfied that the Applicants have provided a reasonable explanation for the delay, that the omission is capable of remedy, and that no prejudice has been occasioned to any party. The Court therefore finds it just and equitable to exercise its discretion under Section 888(1) of the Companies Act . In the result, the prayers sought in the Notice of Motion dated 8th October, 2025 are hereby granted.
Determination
10. The Applicants’ application by way of a Notice of Motion dated 8th October, 2025 is allowed as follows;
a) THAT the Honourable Court HEREBY extends the time for registration of the Further Fixed and Floating Debenture dated 4th September, 2025 between CADS Motors Limited and I& M Bank Limited at the Company Registry, for a period of 30 days.
b) Given the nature of the application, there shall be no order as to costs.
11. It is so ordered.
12. The file is hereby closed.
DATED, SIGNED AND DELIVERED AT MILIMANI THIS 16TH DAY OF October, 2025.
NJOROGE BENJAMIN K.
JUDGE
In the presence of;
N/A for the Applicant.
Mr. Peter Wabwire - Court Assistant
'