Rupa Cotton Mills (EPZ) Ltd v Bank Of Baroda (K) Limited [2019] KECA 769 (KLR)
- Court
- Court of Appeal
- Case number
- 769
- Citation
- [2019] KECA 769 (KLR)
The appeal is allowed. The winding up petition is stayed pending the hearing and determination of HCCC No. 526 of 2011.
Facts
The appellant (Rupa Cotton Mills (EPZ) Ltd) requested various banking facilities from the respondent (Bank of Baroda (K) Limited) and provided necessary documentation. The bank sanctioned the release of sums of money and allowed the company to draw down on approved financial facilities before registration of security documents. The company defaulted on the financial facilities, leading to the bank filing a winding up petition.
Issues
- Requirement of proof of debt in a winding-up petition
- Substantial grounds for disputing the debt
Reasoning
The court found that the bank had complied with the prerequisites of section 220(a) of the Companies Act, but did not determine whether the company's assertion that it disputed the debt on substantial grounds was sustainable.
Outcome
Appeal allowed
Orders
- Winding up petition is stayed pending hearing and determination of HCCC No. 526 of 2011
- HCCC No. 526 of 2011 shall be heard expeditiously within 90 days from the date of this judgment
- Costs of the appeal shall abide the outcome of HCCC No. 526 of 2011
Authorities cited
Legislation (1)
- Companies Act, Cap 486 (now repealed)
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