RULING
Striking out creditor’s petition
1.Before this Court is the debtor/applicant’s notice of motion dated 11.3.2025 seeking an order to strike out the creditor’s petition dated 29.8.2024 and the costs of the application.
2.The application is made under Section 17 (3) of the Insolvency Act and Regulation 10 of the Insolvency Regulations. It is supported by the debtor’s affidavit sworn on 11.3.2025 and written submissions dated 15.4.2025.
3.The creditor opposed the application through replying affidavits sworn by its Chief Executive Officer, Mbaabu Muchiri on 9.4.2025 and its advocate Purity K. Mbabu on 23.10.2025, primary and supplementary written submissions dated 25.6.2025 and 22.10.2025.
The applicant’s case
4.The applicant’s case is that the debt claimed of Kshs. 37,352,331,83 is denied. He submitted that the creditor served him with a statutory demand on 31.7.2024 and that the petition was filed before the lapse of the 21-day statutory window for him to challenge the statutory demand.
5.From the background, the applicant’s gravamen is that the petition was filed while there were pending proceedings in HC IN E152 of 2024 seeking to set aside the statutory demand.
6.The applicant submitted that the filing of an application to set aside the statutory demand freezes the 21-day period under Section 17(3) until the application is heard and determined. He also submitted that because the set-aside application was subsisting and undetermined at the time the petition was filed, the petition is premature and should be struck out.
Response
8.The creditor submitted that the debt of Kshs. 37,352,331.83 arises from a judgment delivered on 11.5.2023 in Ngong Civil Suit No. 192 of 2018- Progressive Credit Limited v Daniel Kuria Njuguna & 6 Others.
9.The creditor highlighted that the set-aside application in IN E152 of 2024 was dismissed on 7.10.2025. It further highlighted that it filed the liquidation petition on 7.10.2024, two months after lapse of the 21-days statutory window. It also submitted that it had not been served with the set-aside application before it filed the liquidation petition and that it was only served on 25.11.2024.
7.The creditor relied on ECO Bank Kenya Limited v Francis Tole Mwakidedi [2020] KEHC] 9366 (KLR) to argue that the debtor’s failure to respond to the demand or settle the debt or lack of notice of the set-aside application justified its reasonable conclusion that the debtor was unable to pay the debt.
8.The creditor also relied on Ecobank Kenya Limited v Mwalyo (Insolvency Petition E043 of 2022 [2024] KEHC 14386 to argue that it was at liberty to lodge the liquidation petition since the statutory demand was neither heeded to nor set aside at the time of filing.
Analysis and Determination
9.The statutory demand dated 30.7.2024 was issued to the debtor on 31.7.2024. The 21-day statutory window lapsed on 21.8.2024.
10.The liquidation petition dated 29.8.2024 was filed on 3.10.2024. This was after the lapse of the statutory period given under Section 17 (3) of the Insolvency Act to challenge the statutory demand.
11.The debtor’s claim that the liquidation petition was filed within the 21-statutory window is unfounded and not supported by the record.
12.Therefore, it is my considered view that the creditor was entitled to file the liquidation petition.
13.The debtor’s other argument that its set-aside application in IN E152 of 2024 was pending hearing and determination is moot following the delivery of the ruling on 9.10.2025.
14.With regard to the argument that the debt is denied, the court dismissed the debtor’s setting-aside application upon finding that the debtor did not dispute owing the creditor. The court also found that there was no appeal against Ngong Civil Suit No. 192 of 2018 as Kajiado MISC Application E001 of 2024 was pending determination.
15.The court further rejected the debtor’s contention that the statutory demand ought to have been issued by the creditor itself and not its advocate, P. K. Mbabu & Co. Advocates. In this respect, the court reasoned that section 2 of the Act does not require that the statutory demand be presented by the Creditor in person. It also reasoned that an application to set aside or vacate a statutory notice on the basis of invalidity should be looked at in the light of the full circumstances of the case.
Disposal
16.The upshot is that the debtor’s application dated 11.3.2025 is dismissed with costs for want of merit.
Dated, signed and delivered at Nairobi through Microsoft Teams online application this 12th day February, 2026
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F. Gikonyo M
Judge
In the presence of: -
Kipkorir for Applicant
Muuo for Creditor
CA - Kinyua
Striking out creditor’s petition
1.Before this Court is the debtor/applicant’s notice of motion dated 11.3.2025 seeking an order to strike out the creditor’s petition dated 29.8.2024 and the costs of the application.
2.The application is made under Section 17 (3) of the Insolvency Act and Regulation 10 of the Insolvency Regulations. It is supported by the debtor’s affidavit sworn on 11.3.2025 and written submissions dated 15.4.2025.
3.The creditor opposed the application through replying affidavits sworn by its Chief Executive Officer, Mbaabu Muchiri on 9.4.2025 and its advocate Purity K. Mbabu on 23.10.2025, primary and supplementary written submissions dated 25.6.2025 and 22.10.2025.
The applicant’s case
4.The applicant’s case is that the debt claimed of Kshs. 37,352,331,83 is denied. He submitted that the creditor served him with a statutory demand on 31.7.2024 and that the petition was filed before the lapse of the 21-day statutory window for him to challenge the statutory demand.
5.From the background, the applicant’s gravamen is that the petition was filed while there were pending proceedings in HC IN E152 of 2024 seeking to set aside the statutory demand.
6.The applicant submitted that the filing of an application to set aside the statutory demand freezes the 21-day period under Section 17(3) until the application is heard and determined. He also submitted that because the set-aside application was subsisting and undetermined at the time the petition was filed, the petition is premature and should be struck out.
Response
8.The creditor submitted that the debt of Kshs. 37,352,331.83 arises from a judgment delivered on 11.5.2023 in Ngong Civil Suit No. 192 of 2018- Progressive Credit Limited v Daniel Kuria Njuguna & 6 Others.
9.The creditor highlighted that the set-aside application in IN E152 of 2024 was dismissed on 7.10.2025. It further highlighted that it filed the liquidation petition on 7.10.2024, two months after lapse of the 21-days statutory window. It also submitted that it had not been served with the set-aside application before it filed the liquidation petition and that it was only served on 25.11.2024.
7.The creditor relied on ECO Bank Kenya Limited v Francis Tole Mwakidedi [2020] KEHC] 9366 (KLR) to argue that the debtor’s failure to respond to the demand or settle the debt or lack of notice of the set-aside application justified its reasonable conclusion that the debtor was unable to pay the debt.
8.The creditor also relied on Ecobank Kenya Limited v Mwalyo (Insolvency Petition E043 of 2022 [2024] KEHC 14386 to argue that it was at liberty to lodge the liquidation petition since the statutory demand was neither heeded to nor set aside at the time of filing.
Analysis and Determination
9.The statutory demand dated 30.7.2024 was issued to the debtor on 31.7.2024. The 21-day statutory window lapsed on 21.8.2024.
10.The liquidation petition dated 29.8.2024 was filed on 3.10.2024. This was after the lapse of the statutory period given under Section 17 (3) of the Insolvency Act to challenge the statutory demand.
11.The debtor’s claim that the liquidation petition was filed within the 21-statutory window is unfounded and not supported by the record.
12.Therefore, it is my considered view that the creditor was entitled to file the liquidation petition.
13.The debtor’s other argument that its set-aside application in IN E152 of 2024 was pending hearing and determination is moot following the delivery of the ruling on 9.10.2025.
14.With regard to the argument that the debt is denied, the court dismissed the debtor’s setting-aside application upon finding that the debtor did not dispute owing the creditor. The court also found that there was no appeal against Ngong Civil Suit No. 192 of 2018 as Kajiado MISC Application E001 of 2024 was pending determination.
15.The court further rejected the debtor’s contention that the statutory demand ought to have been issued by the creditor itself and not its advocate, P. K. Mbabu & Co. Advocates. In this respect, the court reasoned that section 2 of the Act does not require that the statutory demand be presented by the Creditor in person. It also reasoned that an application to set aside or vacate a statutory notice on the basis of invalidity should be looked at in the light of the full circumstances of the case.
Disposal
16.The upshot is that the debtor’s application dated 11.3.2025 is dismissed with costs for want of merit.
Dated, signed and delivered at Nairobi through Microsoft Teams online application this 12th day February, 2026
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F. Gikonyo M
Judge
In the presence of: -
Kipkorir for Applicant
Muuo for Creditor
CA - Kinyua