1. Application dated 18th March, 2024 and the supporting affidavit of even date have been considered together with various objections by the creditors present at the hearing. The hearing of the application was advertised in the national newspaper and no formal replies were filed at the date of the hearing.
2. The notice of appointment of the administrator is dated 14th February, 2023 and the same is on record.
3. Counsel for the applicant submitted that pursuant to Section 560 of the Insolvency Act a moratorium is in effect upon appointment of the administrator, where appropriate.
4. He submitted, that in the present matter, the applicant faces numerous suits and execution proceedings. In the absence of declaring a moratorium the administration process will not be possible. Counsel therefore sought the prayers to allow the administration to take effect.
5. I have also considered the various objections raised, which were primarily on the basis that some of the creditors have already obtained judgment against the applicant; and because the same creditors were of the view that the applicant is still a going concern, and therefore ought to make payment.
6. I find that the purpose of a moratorium under the Insolvency Act is to enable the company to revive itself or to rescue a business that is in financial distress but has prospects of recovery during the course of administration.
7. In fact, to my mind, the very purpose of the administration process is to protect the company from adverse action from creditors who may seek to liquidate the company or attach and sell off its assets for a limited period of time.
8. In the present matter, the administrator has already been appointed, and I am of the view that the objective of rescuing a company is in the interest of all parties concerned.
9. I find that the prayer seeking to declare a moratorium in effect for a period of 12 months in terms of the prayer sought is appropriate, and I am of the view that the administration which has already commenced ought to be allowed to continue.
10. A declaration in terms of prayer No. 4 is accordingly issued.
11. Costs shall be in the cause.