Nancy Njoki Mwangi v Synergy Industrial Credit Ltd

Show Cause why Execution should not issue in respect to the matters in the Thika and Milimani Courts. The Petition was subsequently advertise in the Star Newspaper of 24th February, 2024. 4. In response, the Creditor/Respondent, Synergy Industrial Credit Ltd opposed the application by filing a Notice of Preliminary Objection dated 29th October, 2024 in which he challenged the Debtor’s Petition for failing to comply with the mandatory provision of Section 32(4) of the Insolvency Act as read together with Regulation 18(3) and (4) of the Insolvency Regulations 2016:a. The Petitioner failing to disclose crucial material facts. b. Court lacks jurisdiction to hear and determine the matter. 5. During hearing on 2nd October, 2024, the Petitioner testified that she does not work and takes care of her mother who is 100 years old and bed ridden. She told court that she is assisted by her children. According to the Petitioner, her late husband had debts with a company known as Synergy and she knows that there were ongoing court cases in Thika and Milimani where she was a party to the one filed in Milimani as Director. She holds that it was her late husband who was running the business and since she was not working, she is unable to offset the debts and thus would wish for the court to adjudge her bankrupt. 6. The Petitioner’s Counsel urged the court to adjudge the Petitioner bankrupt and appoint an Official Receiver as a Trustee of the property of the Petitioner in accordance to Section 33 of the Insolvency Act. Analysis and Determination 7. 8. Having read through the pleadings and oral submissions by the parties, this Court finds the issue of determination herein being:a. Whether the Petitioner should be adjudge bankrupt. b. An Official Receiver ought to be appointed as a Trustee of the property of the Petitioner. On the issue of adjudging the Petitioner bankrupt, the law that governs Debtor’s Petition is found under Section 32(1) of the Insolvency Act, 2015, which provides that:1. 9. Section 15 of the Insolvency Act provides that:(15) 10. “A Debtor may make an application to the court for an order adjudging the debtor bankrupt only on the grounds that the Debtor is unable to pay the debtor’s debts.” “Access of foreign creditors to a proceeding relating to insolvency 1. Subject to Subparagraph (2), foreign creditors have the same rights regarding the commencement of, and participation in, a proceeding under this Act or any other written law relating to insolvency, as creditors in Kenya. 2. Subparagraph (1) does not affect the ranking of claims in a proceeding under this Act or the exclusion of foreign tax and social security claims from such a proceeding. Section 16 thereof goes on to provide that:(16) “ Notification to foreign creditors of a proceeding relating to insolvency 1. Whenever, in a proceeding under this Act, notification is to be given to creditors in Kenya, the notification is also to be given to the known creditors that do not have addresses in Kenya. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19305/eng@2025-04-10 2

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2. The Court may, in accordance with subparagraph (1), order that appropriate steps be taken with a view to notifying any creditor whose address is not yet known. 3. The person ordered to give the notification shall ensure that it is given to the foreign creditors individually, unless the Court considers that, under the circumstances, some other form of notification would be more appropriate— a. indicates a reasonable time period for lodging claims and specify the place for their lodgement; b. indicates whether secured creditors need to make their claims; c. includes any other information required to be included in such a notification to creditors under the law of Kenya and in accordance with orders of the Court; and d. is advertised in a local newspaper with wide national circulation. 11. It is trite that a debtor is entitled to apply to be adjudged bankrupt on the grounds that he or she is unable to pay his or her debts. And this is gauged on the Applicant’s capital ability to pay debt and total value of assets as against the liabilities. To In this case, the Petitioner attached her statement of affairs which indicates that shows that her assets which include her cash on hand, furniture, personal effects which amount to Kshs. 220,000/= while the aggregate debt due to the Creditor, Synergy Industrial Credit Limited amounts to Kshs. 4,193, 966.00 as indicated in the Warrants of Execution attached in the Petition. From the analysis of the assets and liabilities, it is clear therefore that the Debtor is unable to satisfy or pay the debt as her liability far exceeds any assets she may have. 12. The court is therefore satisfied that that the Petitioner is unable to pay her debts. The court therefore finds that the Petition dated 26th April, 2022 has merits and it is allowed in the following terms:a. Nancy Njoki Mwangi and is hereby adjudged bankrupt and a bankruptcy order is made against his estate. b. The Official Receiver is hereby appointed to be the Bankruptcy Trustee in respect of the Debtors Property. c. Cost of the petition shall be borne out of the Debtor’s estate. It is so ordered. RULING DELIVERED VIRTUALLY, DATED AND SIGNED AT KIAMBU THIS 10TH DAY OF APRIL , 2025. D. O. CHEPKWONY JUDGE In the presence of: Mr. Meme counsel for the Creditor Court Assistant – Martin/Sakina https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19305/eng@2025-04-10 3

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