' 1. The Petitioner, Victoria Commercial Bank Limited, has moved this Court by way of a creditor’s petition dated 23rd August 2022 seeking that a bankruptcy order be made against the estate of the debtor, Mr. Harish Bhagwanda Kanabar, pursuant to the provisions of the Insolvency Act, 2015.
2. The petition is supported by a verifying affidavit sworn by Mr. Yogesh Kanji Damji Pattni, a director of the Petitioner, and is accompanied by annexures including a decree of the High Court in Commercial Civil Suit No. 7 of 2020, a statutory demand dated 27th June 2022, an affidavit of service sworn by a licensed process server, and proof of debt.
3. The debt arises from a personal guarantee executed by the debtor in favour of the Petitioner. In Commercial Civil Suit No. 7 of 2020: Victoria Commercial Bank Limited v The Othaya Villas Limited & 4 Others, judgment in default of appearance was entered against the debtor on 12th November 2021 for the sum of KShs. 517,926,465.10 together with interest at 11% per annum from 1st January 2021 until payment in full. A decree in respect thereof was subsequently issued on 15th November 2021.
4. The Petitioner avers that it holds no security over the debtor’s estate for the payment of the debt.
5. On 27th June 2022, the Petitioner served a statutory demand upon the debtor pursuant to Section 17 of the Insolvency Act and Regulation 15(1) of the Insolvency Regulations, 2016.
6. The debtor has neither complied with nor applied to set aside the statutory demand.
Analysis and Determination
7. Having carefully considered the Petition, the verifying affidavit, and the evidence tendered herein by the Petitioner’s witness, I find that the sole issue for determination is whether the Petition is merited.
8. Section 17 of the Insolvency Act provides that a debtor is deemed unable to pay his debts if he fails to comply with a statutory demand served upon him for a liquidated sum exceeding the prescribed threshold.
9. The evidence before the Court demonstrates that the debt is founded upon a valid decree of the High Court. The decree is final, and execution has not been stayed. The debt is liquidated, exceeds the statutory minimum, and is not secured.
10. The statutory demand dated 27th June 2022 was duly served by registered post, as evidenced by the affidavit of service sworn by Mr. Denis Guto Masese. Twenty-one (21) days have elapsed since service, and the debtor has neither paid nor secured the debt, nor raised any counterclaim or cross-demand.
11. The debtor has not filed any notice disputing the petition or raising a counterclaim. In Re A Debtor [1989] 1 WLR 271 (Ch D), the English Court held that failure to comply with a statutory demand is prima facie evidence of inability to pay debts. Kenyan courts have adopted similar reasoning, recognising the statutory demand as a gateway to insolvency proceedings.
12. In In the Matter of Tusker Mattresses Ltd [2020] eKLR, the Court emphasized that insolvency proceedings are not a substitute for debt collection but are triggered where a debtor is demonstrably unable to pay. The present petition satisfies that threshold.
13. The debtor’s silence in the face of a valid decree and statutory demand underscores inability or lack of reasonable prospect of payment.
14. On the appointment of a trustee, Section 32 of the Insolvency Act empowers the Court to appoint the Official Receiver as trustee of the debtor’s estate. The Petitioner has prayed for such appointment. The Court finds merit in this request, noting that the Official Receiver is the statutory custodian of bankrupt estates and ensures impartial administration.
15. Accordingly, the Court makes the following orders:
i. Mr. Harish Bhagwanda Kanabar is hereby adjudged bankrupt under the provisions of the Insolvency Act, 2015.
ii. The Official Receiver of the Republic of Kenya is appointed trustee of the debtor’s estate.
16. The costs of this petition shall be borne by the debtor.
17. It is so ordered.
SIGNED, DATED, AND DELIVERED AT NAIROBI THIS
27TH NOVEMBER 2025
ADO MOSES
JUDGE
In the presence of: -
C/A – Moses
…………..for the Petitioner
………….…..... for the Respondent
'
2. The petition is supported by a verifying affidavit sworn by Mr. Yogesh Kanji Damji Pattni, a director of the Petitioner, and is accompanied by annexures including a decree of the High Court in Commercial Civil Suit No. 7 of 2020, a statutory demand dated 27th June 2022, an affidavit of service sworn by a licensed process server, and proof of debt.
3. The debt arises from a personal guarantee executed by the debtor in favour of the Petitioner. In Commercial Civil Suit No. 7 of 2020: Victoria Commercial Bank Limited v The Othaya Villas Limited & 4 Others, judgment in default of appearance was entered against the debtor on 12th November 2021 for the sum of KShs. 517,926,465.10 together with interest at 11% per annum from 1st January 2021 until payment in full. A decree in respect thereof was subsequently issued on 15th November 2021.
4. The Petitioner avers that it holds no security over the debtor’s estate for the payment of the debt.
5. On 27th June 2022, the Petitioner served a statutory demand upon the debtor pursuant to Section 17 of the Insolvency Act and Regulation 15(1) of the Insolvency Regulations, 2016.
6. The debtor has neither complied with nor applied to set aside the statutory demand.
Analysis and Determination
7. Having carefully considered the Petition, the verifying affidavit, and the evidence tendered herein by the Petitioner’s witness, I find that the sole issue for determination is whether the Petition is merited.
8. Section 17 of the Insolvency Act provides that a debtor is deemed unable to pay his debts if he fails to comply with a statutory demand served upon him for a liquidated sum exceeding the prescribed threshold.
9. The evidence before the Court demonstrates that the debt is founded upon a valid decree of the High Court. The decree is final, and execution has not been stayed. The debt is liquidated, exceeds the statutory minimum, and is not secured.
10. The statutory demand dated 27th June 2022 was duly served by registered post, as evidenced by the affidavit of service sworn by Mr. Denis Guto Masese. Twenty-one (21) days have elapsed since service, and the debtor has neither paid nor secured the debt, nor raised any counterclaim or cross-demand.
11. The debtor has not filed any notice disputing the petition or raising a counterclaim. In Re A Debtor [1989] 1 WLR 271 (Ch D), the English Court held that failure to comply with a statutory demand is prima facie evidence of inability to pay debts. Kenyan courts have adopted similar reasoning, recognising the statutory demand as a gateway to insolvency proceedings.
12. In In the Matter of Tusker Mattresses Ltd [2020] eKLR, the Court emphasized that insolvency proceedings are not a substitute for debt collection but are triggered where a debtor is demonstrably unable to pay. The present petition satisfies that threshold.
13. The debtor’s silence in the face of a valid decree and statutory demand underscores inability or lack of reasonable prospect of payment.
14. On the appointment of a trustee, Section 32 of the Insolvency Act empowers the Court to appoint the Official Receiver as trustee of the debtor’s estate. The Petitioner has prayed for such appointment. The Court finds merit in this request, noting that the Official Receiver is the statutory custodian of bankrupt estates and ensures impartial administration.
15. Accordingly, the Court makes the following orders:
i. Mr. Harish Bhagwanda Kanabar is hereby adjudged bankrupt under the provisions of the Insolvency Act, 2015.
ii. The Official Receiver of the Republic of Kenya is appointed trustee of the debtor’s estate.
16. The costs of this petition shall be borne by the debtor.
17. It is so ordered.
SIGNED, DATED, AND DELIVERED AT NAIROBI THIS
27TH NOVEMBER 2025
ADO MOSES
JUDGE
In the presence of: -
C/A – Moses
…………..for the Petitioner
………….…..... for the Respondent
'