1. The application dated 14.2.24 is filed by the two applicants herein . The 1st Applicant is KHETIA DRAPERS LIMITED and the 2nd Applicant is PRIME BANK LIMITED.
2. By this application , the Applicants seek the order of the Court to extend the time for registration of the charge dated 11th December, 2024 created by the 1st Applicant in favor of the 2nd Applicant charging all that parcel of land described in the said charge and being title Number, KISII MUNICIPALITY/BLOCK III/143 at the companies’ registry by a further 30 days.
3. The application is made under Section 888 of the Companies Act, 2015. Section 888 of the Companies Act state:
“888. (1) A company or interested person who claims that a failure to register a charge before the deadline for registration, or an omission or misstatement of a particular with respect to any such charge or in a memorandum of satisfaction or release-
(a) was accidental or due to inadvertence or to some other reasonable cause; or
(b) is not of a nature to prejudice the position of creditors or members of the company, may apply to the Court for an order under subsection (2).
(2) If, on the hearing of an application made under subsection (1), the Court is satisfied-
(a) that the failure, or the omission or misstatement-
(i) was accidental or due to inadvertence or to some other reasonable cause; or
(ii) is not of a nature to prejudice the position of creditors or members of the company; or
(b) that on other grounds it is just and equitable to grant relief, the Court may, subject to such conditions (if any) as it considers fair and reasonable, order the deadline for registration to be extended, or the omission or misstatement to be corrected.”
4. The Application is supported by an Affidavit of Mr Aggrey Lucas Kidiavai , the advocate for both Applicants. He deposed that his firm was instructed by the 2nd Applicant to prepare and register a charge over a property known as KISII MUNICIPALITY/BLOCK III/143 to secure an aggregate sum of money Kshs. 137,000,000 being the banking facility advanced by the 2nd Applicant to the 1st Applicant; that Pursuant to aforesaid instruction a charge dated 11th December, 2024 was prepared by the firm and executed by the Applicants.
5. He averred further that the charge instrument was presented for registration in compliance with the land registration general regulations, 2017 at the Kisii land Registry, 29th April, 2024 and they were issued with a receipt.
6. The Learned Counsel decried that after presentation of the charge instrument at the land registry for registration, it took land registrar about 9 months to sign the same for no apparent reason notwithstanding their numerous complaints directed to him and also through his superiors; that delay was occasioned by the inordinate delay by the land registrar to sign charge and consequently obtaining the requisite letter of consent to charge for purposes of registering the charge documents in favour of the parties hereto. He also averred that it was not until, 4th February, 2025 that the land registrar signed the charge instruments as evidenced by the certificate of the official search.
7. He pleaded that since the companies Act requires that the charge instrument lodged at the land registry be presented before the company registry for registration within 30 days from the date of the charge ; and that the said time has lapsed as a result of the inordinate delay occasioned land registrar; it was just and equitable that this court extends time for registration of the charge in favour of the 2nd Applicant to enable it secure its right as a chargee secured by the registration of the charge at the registry of the companies Act and for the 1st Applicant to continue to benefit from the loan facility by the 2nd Applicant.
8. Having the above depositions in mind and the documentary evidence produced by the Applicants, in support of their application, I do find that the failure to register charge within the required time was not intentional and there is no evidence that the granting of the prayers sought will in any way prejudice the creditors or members of the 1st Applicant company.
9. In the end therefore, I find that the applicants have established sufficient cause for the delay. It is thus just and equitable that the application and allowed . I proceed to grant the following orders:
a) An order is hereby granted extending the time within which to register the charge dated 11th December July 2024 by the KHETIA DRAPERS LIMITED in favour of the PRIME BANK LIMITED charging all that parcel of land described in the said charge and being title Number, KISII MUNICIPALITY/BLOCK III/143 with the Registrar of companies for 30 days from the date of this order.
b) Once the charge is so registered that charge shall be deemed to have been properly filed with Registrar of companies in compliance of the Companies Act 2015.
c) The applicants will bear the costs of this application.
2. By this application , the Applicants seek the order of the Court to extend the time for registration of the charge dated 11th December, 2024 created by the 1st Applicant in favor of the 2nd Applicant charging all that parcel of land described in the said charge and being title Number, KISII MUNICIPALITY/BLOCK III/143 at the companies’ registry by a further 30 days.
3. The application is made under Section 888 of the Companies Act, 2015. Section 888 of the Companies Act state:
“888. (1) A company or interested person who claims that a failure to register a charge before the deadline for registration, or an omission or misstatement of a particular with respect to any such charge or in a memorandum of satisfaction or release-
(a) was accidental or due to inadvertence or to some other reasonable cause; or
(b) is not of a nature to prejudice the position of creditors or members of the company, may apply to the Court for an order under subsection (2).
(2) If, on the hearing of an application made under subsection (1), the Court is satisfied-
(a) that the failure, or the omission or misstatement-
(i) was accidental or due to inadvertence or to some other reasonable cause; or
(ii) is not of a nature to prejudice the position of creditors or members of the company; or
(b) that on other grounds it is just and equitable to grant relief, the Court may, subject to such conditions (if any) as it considers fair and reasonable, order the deadline for registration to be extended, or the omission or misstatement to be corrected.”
4. The Application is supported by an Affidavit of Mr Aggrey Lucas Kidiavai , the advocate for both Applicants. He deposed that his firm was instructed by the 2nd Applicant to prepare and register a charge over a property known as KISII MUNICIPALITY/BLOCK III/143 to secure an aggregate sum of money Kshs. 137,000,000 being the banking facility advanced by the 2nd Applicant to the 1st Applicant; that Pursuant to aforesaid instruction a charge dated 11th December, 2024 was prepared by the firm and executed by the Applicants.
5. He averred further that the charge instrument was presented for registration in compliance with the land registration general regulations, 2017 at the Kisii land Registry, 29th April, 2024 and they were issued with a receipt.
6. The Learned Counsel decried that after presentation of the charge instrument at the land registry for registration, it took land registrar about 9 months to sign the same for no apparent reason notwithstanding their numerous complaints directed to him and also through his superiors; that delay was occasioned by the inordinate delay by the land registrar to sign charge and consequently obtaining the requisite letter of consent to charge for purposes of registering the charge documents in favour of the parties hereto. He also averred that it was not until, 4th February, 2025 that the land registrar signed the charge instruments as evidenced by the certificate of the official search.
7. He pleaded that since the companies Act requires that the charge instrument lodged at the land registry be presented before the company registry for registration within 30 days from the date of the charge ; and that the said time has lapsed as a result of the inordinate delay occasioned land registrar; it was just and equitable that this court extends time for registration of the charge in favour of the 2nd Applicant to enable it secure its right as a chargee secured by the registration of the charge at the registry of the companies Act and for the 1st Applicant to continue to benefit from the loan facility by the 2nd Applicant.
8. Having the above depositions in mind and the documentary evidence produced by the Applicants, in support of their application, I do find that the failure to register charge within the required time was not intentional and there is no evidence that the granting of the prayers sought will in any way prejudice the creditors or members of the 1st Applicant company.
9. In the end therefore, I find that the applicants have established sufficient cause for the delay. It is thus just and equitable that the application and allowed . I proceed to grant the following orders:
a) An order is hereby granted extending the time within which to register the charge dated 11th December July 2024 by the KHETIA DRAPERS LIMITED in favour of the PRIME BANK LIMITED charging all that parcel of land described in the said charge and being title Number, KISII MUNICIPALITY/BLOCK III/143 with the Registrar of companies for 30 days from the date of this order.
b) Once the charge is so registered that charge shall be deemed to have been properly filed with Registrar of companies in compliance of the Companies Act 2015.
c) The applicants will bear the costs of this application.