' Introduction
1. This is the Respondent’s Notice of Motion dated 30th January 2025 seeking to set aside the Statutory Demand dated 28th February 2024 and to strike out the Petition dated 29th November 2024.
2. The Petitioner opposes the application, contending that it is res judicata, time-barred, and that the debt is liquidated and provable.
Background
3. The Petitioner and Respondent are siblings and co-owners of L.R No. 4275/44, a prime rental property situated in Nairobi. Their relationship has been the subject of protracted litigation spanning over a decade. In Milimani ELC No. 738 of 2013, the Court declared that the Petitioner is entitled to one-half of the net rental income derived from the property. The Court further directed that the property be subdivided to enable each party to independently collect rent from their respective portions.
4. Despite this decree by the Court, the subdivision has not been effected. The Respondent continues to collect rent through a property management company, Linked Star Ventures Ltd, while the Petitioner alleges that her share of rental income has not been remitted. This has led to recurrent disputes over accounting, reconciliation of rental accounts, and alleged arrears.
5. On 28th February 2024, the Petitioner issued a statutory demand against the Respondent for Kshs. 27,300,146.70, premised on alleged arrears of rent and interest thereon. The Respondent contested the demand, filing an application in the High Court Commercial Case No. E114 of 2024 to set it aside. That application was dismissed, with the Court holding that the demand had not been sufficiently impugned.
6. Subsequently, on 29th November 2024, the Petitioner filed the present bankruptcy petition, claiming Kshs. 4,813,123.31 as rent arrears allegedly due and unpaid. The variance between the sum demanded and the sum pleaded in the petition has become a central point of contention.
7. The Respondent maintains that he has already paid a total of Kshs. 32,446,659.50 to the Petitioner in settlement of her share of rental income, including sums arising from the ELC decree and the statutory demand. He further asserts that the Petitioner received Kshs. 900,000 as part payment, referred to as “Indian rent,” which she has not accounted for.
8. The Respondent also pointed out that the rental accounts from July 2023 onward remain under audit, in line with the practice of reconciling income and expenses prior to distribution. He contends that until the audit is finalized, no sum can be said to be due and payable.
9. In addition, the Respondent avers that he is in the process of disposing of his share in the property, valued at Kshs. 160,000,000, which far exceeds the alleged debt. This, he argues, demonstrates solvency and capacity to meet any lawfully ascertained obligations.
10. Against this backdrop, the Respondent filed the present motion, seeking to set aside the statutory demand and strike out the petition.
11. The Petitioner opposed the application, arguing that it is res judicata, time-barred under Regulation 16(1)(a), and that the debt is liquidated and provable.
12. The Application proceeded by way of written submissions. The Respondent filed their submissions dated 23rd June 2025, whereas the Petitioner’s submissions are dated 30th June 2025.
Analysis and Determination
13. Having carefully considered the application, the response thereto, the parties'' submissions and the applicable law, I find that the issues arising for this Court''s determination are: -
i. Whether the application is res judicata
ii. Whether the application is time-barred under Regulation 16(1)(a) of the Insolvency Regulations.
iii. Whether the debt is liquidated, undisputed, and provable under section 17 of the Insolvency Act.
iv. Whether the statutory demand and petition are defective for variance in sums.
v. Whether the Respondent is insolvent within the meaning of the Insolvency Act.
vi. Whether the petition constitutes abuse of process.
Whether the Application is Res Judicata
14. The Petitioner contended that the Respondent’s application is barred by res judicata, citing the dismissal of a similar application in HCCC No. E114 of 2024.
15. The doctrine of res judicata, codified in section 7 of the Civil Procedure Act, bars re-litigation of matters directly and substantially in issue between the same parties, decided by a competent court.
16. Section 7 of the Civil Procedure Act on res judicata, reads as follows;
“No court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided by such court.”
17. In Mahinda v Farah [2023] KECA 116 (KLR), the Court stated as follows on the principal purpose of the doctrine: -
“The provision is on the fundamental doctrine that there should be an end to litigation. The rationale for the doctrine of res judicata exists to protect public interest so that a party should not endlessly be dragged into litigation over the same issue or subject matter that has otherwise been conclusively determined by a court of competent jurisdiction.”
18. Similarly, the Court in Independent Electoral and Boundaries Commission v Maina Kiai & 5 others [2017] eKLR, stated that;
“[F] or the bar of res judicata to be effectively raised and upheld on account of a former suit, the following elements must be satisfied, as they are rendered not in disjunctive but conjunctive terms;
a. The suit or issue was directly and substantially in issue in the former suit.
b. That former suit was between the same parties or parties under whom they or any of them claim.
c. Those parties were litigating under the same title.
d. The issue was heard and finally determined in the former suit.
e. The court that formerly heard and determined the issue was competent to try the subsequent suit or the suit in which the issue is raised.
19. The court went on to state the role of the doctrine as follows:
“The rule or doctrine of res judicata serves the salutary aim of bringing finality to litigation and affords parties closure and respite from the spectre of being vexed, haunted and hounded by issues and suits that have already been determined by a competent court. It is designed as a pragmatic and commonsensical protection against wastage of time and resources in an endless round of litigation at the behest of intrepid pleaders hoping, by a multiplicity of suits and fora, to obtain at last, outcomes favourable to themselves. Without it, there would be no end to litigation, and the judicial process would be rendered a noisome nuisance and brought to disrepute or calumny. The foundations of res judicata thus rest in the public interest for swift, sure and certain justice.”
20. In the present case, the Respondent’s motion raises fresh grounds not canvassed in the earlier application, notably the variance between the statutory demand and the petitioned sum, and the demonstrated solvency of the Respondent. In Uhuru Highway Development Ltd v Central Bank of Kenya [1999] eKLR, the Court of Appeal held that res judicata does not apply where the cause of action or issues are materially different.
21. Accordingly, while the earlier dismissal is noted, the present application cannot be struck out solely on res judicata.
Whether the application is time-barred under Regulation 16(1)(a) of the Insolvency Regulations.
22. Regulation 16(1)(a) of the Insolvency Regulations – Legal Notice 47 of 2016, requires a debtor to apply to set aside a statutory demand within 21 days of service. The Regulations state that:-
“The debtor may, apply to the Court for an order to set aside the statutory demand—(a)within twenty-one days from the date of the service on the debtor of the statutory demand; or(b)if the demand has been advertised in a newspaper, from the date of the advertisement''s appearance or its first appearance, whichever is the earlier.”
23. The provision is couched in mandatory terms. In Re A Debtor (No. 1 of 1987) [1989] 1 WLR 271 (UK Ch), the English Court emphasized strict compliance with statutory timelines in insolvency practice.
24. Kenyan courts have similarly insisted on adherence to statutory deadlines, as seen in Kenya Commercial Bank Ltd v Benjoh Amalgamated Ltd [2017] eKLR, where delay in invoking statutory remedies was fatal.
25. It is evident from the record that in this case, the Respondent filed his application more than a year after service. On this ground alone, the application would ordinarily fail. However, insolvency law also recognizes that defective demands or petitions may be struck out ex debito justitiae, notwithstanding procedural delay.
Whether the debt is liquidated, undisputed, and provable under section 17 of the Insolvency Act.
26. Section 17 of the Insolvency Act permits a bankruptcy petition only where the debt is liquidated, undisputed, and provable. The provision states in part that:
“17. Creditor may apply for bankruptcy order in respect of a debtor
(1) One or more creditors of a debtor may make an application to the Court for a bankruptcy order to be made in respect of the debtor in relation to a debt or debts owed by the debtor to the creditor or creditors.
(2) Such an application may be made in relation to a debt or debts owed by the debtor only if, at the time the application is made—(a)the amount of the debt, or the aggregate amount of the debts, is equal to or exceeds the prescribed bankruptcy level;(b)the debt, or each of the debts, is for a liquidated amount payable to the applicant creditor, or one or more of the applicant creditors, either immediately or at some certain, future time, and is unsecured;(c)the debt, or each of the debts, is a debt that the debtor appears either to be unable to pay or to have no reasonable prospect of being able to pay; and(d)there is no outstanding application to set aside a statutory demand in respect of the debt or any of the debts.
(3) For the purposes of subsection (2)(c), a debtor appears to be unable to pay a debt if, but only if, the debt is payable immediately and either—(a)the applicant creditor to whom the debt is owed has served on the debtor a demand requiring the debtor to pay the debt or to secure or compound for it to the satisfaction of the creditor, at least twenty-one days have elapsed since the demand was served, and the demand has been neither complied with nor set aside in accordance with the insolvency regulations; or(b)execution or other process issued in respect of the debt on a judgment or order of any court in favour of the applicant, or one or more of the applicants to whom the debt is owed, has been returned unsatisfied either wholly or in part.
(4) For the purposes of subsection (2)(c), a debtor appears to have no reasonable prospect of being able to pay a debt if, but only if, the debt is not immediately payable and—(a)the applicant to whom it is owed has served on the debtor a demand requiring the debtor to establish to the satisfaction of the creditor that there is a reasonable prospect that the debtor will be able to pay the debt when it falls due;(b)at least twenty-one days have elapsed since the demand was served; and(c)the demand has been neither complied with nor set aside in accordance with the insolvency regulations.”
27. In The Kenya Power & Lighting Co Ltd V Matic General Contractors Ltd [2000] KHC 479 (KLR), the Court held that insolvency proceedings are not a substitute for debt collection where liability is disputed. Mbaluto J (as he then was) stated that:
“Accordingly, having carefully considered the circumstances of this case, I can see no justification for the Winding Up Notice. In my view, there was a sinister motive in the giving of the Winding Up Notice. Firstly, there is a pending suit between the parties relating to the same debt which said suit was filed by the defendant. Instead of prosecuting that suit, the defendant has threatened to commence Winding Up proceedings against the plaintiff. As if that were not bad enough, the defendant has for no good reason told virtually everyone who matters in this country that the plaintiff is insolvent. Considering that the plaintiff is one of the biggest companies in this country with assets running into billions and that there has been no real evidence of insolvency, I have no doubt that the issuance of the Winding Up Notice was attended with malice for the purpose of scandalizing the plaintiff and thereby forcing it to pay a disputed debt. The action of the defendant was therefore oppressive and should not be allowed to continue. For those reasons, the application is granted as prayed in the application. The defendant will bear the plaintiff’s costs of the application.”
28. In the present case, the judgment in ELC No. 738 of 2013 declared entitlement to half of rental income but did not quantify sums payable beyond June 2023. The arrears claimed (Kshs. 4.8M) are subject to audit and reconciliation. It therefore follows that the debt claimed is neither liquidated nor undisputed, and cannot sustain a bankruptcy petition.
29. Moreover, the statutory demand was for Kshs. 27.3M, while the petition is for Kshs. 4.8M. This variance, to the extent that the sum demanded is materially different from the petitioned debt, is my view, fatal. The Insolvency Act envisages that the petition must be grounded on the debt demanded. A mismatch undermines jurisdiction and renders the petition incompetent.
30. Given the draconian consequences of bankruptcy, it is trite law that strict compliance with the statutory demand procedure is essential.
31. In any event, the grant or refusal of an order of bankruptcy is an equitable jurisdiction. Section 25 of the Insolvency Act empowers the Court to refuse a bankruptcy order if the debtor is able to pay debts or if it is just and equitable. The provision states that:
“(1) The Court may make a bankruptcy order in respect of the debtor if the creditor has complied with section 7.
(2) The Court may refuse to adjudge a debtor bankrupt if—(a)the applicant creditor has not satisfied the requirements specified in section 17;(b)the debtor is able to pay the debtor''s debts; or(c)it is just and equitable that the Court should not make a bankruptcy order.”
32. In The Kenya Power & Lighting Co Ltd V Matic General Contractors Ltd [2000] KHC 479 (KLR), the Court refused to adjudge bankruptcy where the debtor had substantial assets.
33. In this case, the Respondent demonstrated payments of Kshs. 32M and disposal of property worth Kshs. 160M. This evidences solvency. The Debtor is, therefore, in my view, able to pay his debts. The petition appears designed to coerce payment of disputed sums rather than resolve genuine insolvency.
34. Further, equity demands clean hands. The Petitioner’s failure to facilitate the subdivision of the property frustrates clarity of entitlements. As noted in Esther Nugari Gachomo v Equity Bank Limited [2019] KEHC 7891 (KLR), equity will not assist a party who has contributed to the confusion.
Conclusion
35. The application to set aside the statutory demand is time-barred under Regulation 16(1)(a). However, the petition is fatally defective for variance in sums and is grounded on a disputed debt. The Respondent is demonstrably solvent. It would be unjust and inequitable to adjudge him bankrupt.
36. Accordingly, the petition dated 29th November 2024 is struck out. The statutory demand dated 28th February 2024 is set aside.
37. Each party to bear their own costs.
38. It is so ordered.
SIGNED, DATED, and DELIVERED IN VIRTUAL COURT THIS
27TH NOVEMBER 2025
ADO MOSES
JUDGE
In the presence of: -
C/A – Moses
Kamau…………..for the Petitioner
N/A……….…..... for the Respondent
'
1. This is the Respondent’s Notice of Motion dated 30th January 2025 seeking to set aside the Statutory Demand dated 28th February 2024 and to strike out the Petition dated 29th November 2024.
2. The Petitioner opposes the application, contending that it is res judicata, time-barred, and that the debt is liquidated and provable.
Background
3. The Petitioner and Respondent are siblings and co-owners of L.R No. 4275/44, a prime rental property situated in Nairobi. Their relationship has been the subject of protracted litigation spanning over a decade. In Milimani ELC No. 738 of 2013, the Court declared that the Petitioner is entitled to one-half of the net rental income derived from the property. The Court further directed that the property be subdivided to enable each party to independently collect rent from their respective portions.
4. Despite this decree by the Court, the subdivision has not been effected. The Respondent continues to collect rent through a property management company, Linked Star Ventures Ltd, while the Petitioner alleges that her share of rental income has not been remitted. This has led to recurrent disputes over accounting, reconciliation of rental accounts, and alleged arrears.
5. On 28th February 2024, the Petitioner issued a statutory demand against the Respondent for Kshs. 27,300,146.70, premised on alleged arrears of rent and interest thereon. The Respondent contested the demand, filing an application in the High Court Commercial Case No. E114 of 2024 to set it aside. That application was dismissed, with the Court holding that the demand had not been sufficiently impugned.
6. Subsequently, on 29th November 2024, the Petitioner filed the present bankruptcy petition, claiming Kshs. 4,813,123.31 as rent arrears allegedly due and unpaid. The variance between the sum demanded and the sum pleaded in the petition has become a central point of contention.
7. The Respondent maintains that he has already paid a total of Kshs. 32,446,659.50 to the Petitioner in settlement of her share of rental income, including sums arising from the ELC decree and the statutory demand. He further asserts that the Petitioner received Kshs. 900,000 as part payment, referred to as “Indian rent,” which she has not accounted for.
8. The Respondent also pointed out that the rental accounts from July 2023 onward remain under audit, in line with the practice of reconciling income and expenses prior to distribution. He contends that until the audit is finalized, no sum can be said to be due and payable.
9. In addition, the Respondent avers that he is in the process of disposing of his share in the property, valued at Kshs. 160,000,000, which far exceeds the alleged debt. This, he argues, demonstrates solvency and capacity to meet any lawfully ascertained obligations.
10. Against this backdrop, the Respondent filed the present motion, seeking to set aside the statutory demand and strike out the petition.
11. The Petitioner opposed the application, arguing that it is res judicata, time-barred under Regulation 16(1)(a), and that the debt is liquidated and provable.
12. The Application proceeded by way of written submissions. The Respondent filed their submissions dated 23rd June 2025, whereas the Petitioner’s submissions are dated 30th June 2025.
Analysis and Determination
13. Having carefully considered the application, the response thereto, the parties'' submissions and the applicable law, I find that the issues arising for this Court''s determination are: -
i. Whether the application is res judicata
ii. Whether the application is time-barred under Regulation 16(1)(a) of the Insolvency Regulations.
iii. Whether the debt is liquidated, undisputed, and provable under section 17 of the Insolvency Act.
iv. Whether the statutory demand and petition are defective for variance in sums.
v. Whether the Respondent is insolvent within the meaning of the Insolvency Act.
vi. Whether the petition constitutes abuse of process.
Whether the Application is Res Judicata
14. The Petitioner contended that the Respondent’s application is barred by res judicata, citing the dismissal of a similar application in HCCC No. E114 of 2024.
15. The doctrine of res judicata, codified in section 7 of the Civil Procedure Act, bars re-litigation of matters directly and substantially in issue between the same parties, decided by a competent court.
16. Section 7 of the Civil Procedure Act on res judicata, reads as follows;
“No court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided by such court.”
17. In Mahinda v Farah [2023] KECA 116 (KLR), the Court stated as follows on the principal purpose of the doctrine: -
“The provision is on the fundamental doctrine that there should be an end to litigation. The rationale for the doctrine of res judicata exists to protect public interest so that a party should not endlessly be dragged into litigation over the same issue or subject matter that has otherwise been conclusively determined by a court of competent jurisdiction.”
18. Similarly, the Court in Independent Electoral and Boundaries Commission v Maina Kiai & 5 others [2017] eKLR, stated that;
“[F] or the bar of res judicata to be effectively raised and upheld on account of a former suit, the following elements must be satisfied, as they are rendered not in disjunctive but conjunctive terms;
a. The suit or issue was directly and substantially in issue in the former suit.
b. That former suit was between the same parties or parties under whom they or any of them claim.
c. Those parties were litigating under the same title.
d. The issue was heard and finally determined in the former suit.
e. The court that formerly heard and determined the issue was competent to try the subsequent suit or the suit in which the issue is raised.
19. The court went on to state the role of the doctrine as follows:
“The rule or doctrine of res judicata serves the salutary aim of bringing finality to litigation and affords parties closure and respite from the spectre of being vexed, haunted and hounded by issues and suits that have already been determined by a competent court. It is designed as a pragmatic and commonsensical protection against wastage of time and resources in an endless round of litigation at the behest of intrepid pleaders hoping, by a multiplicity of suits and fora, to obtain at last, outcomes favourable to themselves. Without it, there would be no end to litigation, and the judicial process would be rendered a noisome nuisance and brought to disrepute or calumny. The foundations of res judicata thus rest in the public interest for swift, sure and certain justice.”
20. In the present case, the Respondent’s motion raises fresh grounds not canvassed in the earlier application, notably the variance between the statutory demand and the petitioned sum, and the demonstrated solvency of the Respondent. In Uhuru Highway Development Ltd v Central Bank of Kenya [1999] eKLR, the Court of Appeal held that res judicata does not apply where the cause of action or issues are materially different.
21. Accordingly, while the earlier dismissal is noted, the present application cannot be struck out solely on res judicata.
Whether the application is time-barred under Regulation 16(1)(a) of the Insolvency Regulations.
22. Regulation 16(1)(a) of the Insolvency Regulations – Legal Notice 47 of 2016, requires a debtor to apply to set aside a statutory demand within 21 days of service. The Regulations state that:-
“The debtor may, apply to the Court for an order to set aside the statutory demand—(a)within twenty-one days from the date of the service on the debtor of the statutory demand; or(b)if the demand has been advertised in a newspaper, from the date of the advertisement''s appearance or its first appearance, whichever is the earlier.”
23. The provision is couched in mandatory terms. In Re A Debtor (No. 1 of 1987) [1989] 1 WLR 271 (UK Ch), the English Court emphasized strict compliance with statutory timelines in insolvency practice.
24. Kenyan courts have similarly insisted on adherence to statutory deadlines, as seen in Kenya Commercial Bank Ltd v Benjoh Amalgamated Ltd [2017] eKLR, where delay in invoking statutory remedies was fatal.
25. It is evident from the record that in this case, the Respondent filed his application more than a year after service. On this ground alone, the application would ordinarily fail. However, insolvency law also recognizes that defective demands or petitions may be struck out ex debito justitiae, notwithstanding procedural delay.
Whether the debt is liquidated, undisputed, and provable under section 17 of the Insolvency Act.
26. Section 17 of the Insolvency Act permits a bankruptcy petition only where the debt is liquidated, undisputed, and provable. The provision states in part that:
“17. Creditor may apply for bankruptcy order in respect of a debtor
(1) One or more creditors of a debtor may make an application to the Court for a bankruptcy order to be made in respect of the debtor in relation to a debt or debts owed by the debtor to the creditor or creditors.
(2) Such an application may be made in relation to a debt or debts owed by the debtor only if, at the time the application is made—(a)the amount of the debt, or the aggregate amount of the debts, is equal to or exceeds the prescribed bankruptcy level;(b)the debt, or each of the debts, is for a liquidated amount payable to the applicant creditor, or one or more of the applicant creditors, either immediately or at some certain, future time, and is unsecured;(c)the debt, or each of the debts, is a debt that the debtor appears either to be unable to pay or to have no reasonable prospect of being able to pay; and(d)there is no outstanding application to set aside a statutory demand in respect of the debt or any of the debts.
(3) For the purposes of subsection (2)(c), a debtor appears to be unable to pay a debt if, but only if, the debt is payable immediately and either—(a)the applicant creditor to whom the debt is owed has served on the debtor a demand requiring the debtor to pay the debt or to secure or compound for it to the satisfaction of the creditor, at least twenty-one days have elapsed since the demand was served, and the demand has been neither complied with nor set aside in accordance with the insolvency regulations; or(b)execution or other process issued in respect of the debt on a judgment or order of any court in favour of the applicant, or one or more of the applicants to whom the debt is owed, has been returned unsatisfied either wholly or in part.
(4) For the purposes of subsection (2)(c), a debtor appears to have no reasonable prospect of being able to pay a debt if, but only if, the debt is not immediately payable and—(a)the applicant to whom it is owed has served on the debtor a demand requiring the debtor to establish to the satisfaction of the creditor that there is a reasonable prospect that the debtor will be able to pay the debt when it falls due;(b)at least twenty-one days have elapsed since the demand was served; and(c)the demand has been neither complied with nor set aside in accordance with the insolvency regulations.”
27. In The Kenya Power & Lighting Co Ltd V Matic General Contractors Ltd [2000] KHC 479 (KLR), the Court held that insolvency proceedings are not a substitute for debt collection where liability is disputed. Mbaluto J (as he then was) stated that:
“Accordingly, having carefully considered the circumstances of this case, I can see no justification for the Winding Up Notice. In my view, there was a sinister motive in the giving of the Winding Up Notice. Firstly, there is a pending suit between the parties relating to the same debt which said suit was filed by the defendant. Instead of prosecuting that suit, the defendant has threatened to commence Winding Up proceedings against the plaintiff. As if that were not bad enough, the defendant has for no good reason told virtually everyone who matters in this country that the plaintiff is insolvent. Considering that the plaintiff is one of the biggest companies in this country with assets running into billions and that there has been no real evidence of insolvency, I have no doubt that the issuance of the Winding Up Notice was attended with malice for the purpose of scandalizing the plaintiff and thereby forcing it to pay a disputed debt. The action of the defendant was therefore oppressive and should not be allowed to continue. For those reasons, the application is granted as prayed in the application. The defendant will bear the plaintiff’s costs of the application.”
28. In the present case, the judgment in ELC No. 738 of 2013 declared entitlement to half of rental income but did not quantify sums payable beyond June 2023. The arrears claimed (Kshs. 4.8M) are subject to audit and reconciliation. It therefore follows that the debt claimed is neither liquidated nor undisputed, and cannot sustain a bankruptcy petition.
29. Moreover, the statutory demand was for Kshs. 27.3M, while the petition is for Kshs. 4.8M. This variance, to the extent that the sum demanded is materially different from the petitioned debt, is my view, fatal. The Insolvency Act envisages that the petition must be grounded on the debt demanded. A mismatch undermines jurisdiction and renders the petition incompetent.
30. Given the draconian consequences of bankruptcy, it is trite law that strict compliance with the statutory demand procedure is essential.
31. In any event, the grant or refusal of an order of bankruptcy is an equitable jurisdiction. Section 25 of the Insolvency Act empowers the Court to refuse a bankruptcy order if the debtor is able to pay debts or if it is just and equitable. The provision states that:
“(1) The Court may make a bankruptcy order in respect of the debtor if the creditor has complied with section 7.
(2) The Court may refuse to adjudge a debtor bankrupt if—(a)the applicant creditor has not satisfied the requirements specified in section 17;(b)the debtor is able to pay the debtor''s debts; or(c)it is just and equitable that the Court should not make a bankruptcy order.”
32. In The Kenya Power & Lighting Co Ltd V Matic General Contractors Ltd [2000] KHC 479 (KLR), the Court refused to adjudge bankruptcy where the debtor had substantial assets.
33. In this case, the Respondent demonstrated payments of Kshs. 32M and disposal of property worth Kshs. 160M. This evidences solvency. The Debtor is, therefore, in my view, able to pay his debts. The petition appears designed to coerce payment of disputed sums rather than resolve genuine insolvency.
34. Further, equity demands clean hands. The Petitioner’s failure to facilitate the subdivision of the property frustrates clarity of entitlements. As noted in Esther Nugari Gachomo v Equity Bank Limited [2019] KEHC 7891 (KLR), equity will not assist a party who has contributed to the confusion.
Conclusion
35. The application to set aside the statutory demand is time-barred under Regulation 16(1)(a). However, the petition is fatally defective for variance in sums and is grounded on a disputed debt. The Respondent is demonstrably solvent. It would be unjust and inequitable to adjudge him bankrupt.
36. Accordingly, the petition dated 29th November 2024 is struck out. The statutory demand dated 28th February 2024 is set aside.
37. Each party to bear their own costs.
38. It is so ordered.
SIGNED, DATED, and DELIVERED IN VIRTUAL COURT THIS
27TH NOVEMBER 2025
ADO MOSES
JUDGE
In the presence of: -
C/A – Moses
Kamau…………..for the Petitioner
N/A……….…..... for the Respondent
'