Summons

IN THE HIGH COURT OF KENYA AT NAIROBI

(MILIMANI COMMERCIAL COURTS)

CIVIL SUIT NO. …..OF 2001 (O.S.)

IN THE MATTER OF THE SALE  OF  L. R. NO. tttttt AND  L. R. NO. tttttt/38 PURSUANT TO  A DEBENTURE  DATED 18^th JULY, 1996   AND  A  SUPPLEMENTAL AND  VARIATION  OF  DEBENTURE  DATED 29^TH  OCTOBER, 1998

 

TTTTTT BANK OF KENYA

LIMITED ..    …        ..          ..          ..          ..          ..          ..          ..PLAINTIFF

AND 

TTTTTT LIMITED (IN RECEIVERSHIP) ..        ..          ..          .DEFENDANT

ORIGINATING  SUMMONS

(Under Order XXXVI Rule 3A and Rule 7, section 3A of the Civil Procedure Act, and all other enabling provisions of the law)

LET  TTTTTT  LIMITED ( IN RECEIVERSHIP)  of Box tttttt Nakuru  within…….            days after service of this summons on it enter an appearance to this summons which is issued on the application of  FIRST  TTTTTT  OF  KENYA  LIMITED  WHO  CLAIM to  be secured Debenture  Holders  for the determination of  the  following  questions:-

1.      THAT  this  Honourable  Court  do  order  that the properties known as L.R. Nos tttttt and tttttt/38, respectively, charged to the Plaintiff by the Defendant under a Debenture dated  18^th July, 1996  and  a  Supplemental  and  Variation of  Debenture dated  29^th October, 1996  be sold so as to recover the sum of K.Shs. 7,022,735.43 currently due and owing from the Defendant  to  the Plaintiff as at 13^th  July, 2001.

2.      THAT the  Receivers  and  Managers  appointed   herein   on 16^th February, 1999  pursuant to  clause  14  of  the Debenture dated  18^th July, 1996 be  granted and   vested  with  full power and authority to  sell  for and on behalf of  the Defendant, the properties  known  as  L. R. Nos. tttttt  and  tttttt/38, respectively,  with  a  view  to  repaying ,   fully  or  in part, the sum of  Kshs. 7,022,735.43 currently  due  and  owing  from the Defendant  to the Plaintiff  as  at  13^th  July, 2001

3.      THAT  the  costs  of  this  suit be awarded  to the Plaintiff.

 ON THE GROUNDS THAT:-

1.      By  an  Agreement entered  into  between the Plaintiff  and  the Defendant in or  about   7^th May, 1996, (“the  said Agreement”) upon the Defendant’s  request,  the Plaintiff  agreed  to  make  available  to the Defendant, a credit overdraft and  other  banking  and  financial  accommodation in  a  sum not  exceeding K.Shs. 50,000,000.00. In consideration thereof,   the Defendant  executed  in  favour  of  the Plaintiff, inter  alia,  a  Debenture  dated 18^th  July, 1996  to secure  payment of  the  facility  aforesaid together  with  interest  thereon.

2.      Subsequent  thereto,  upon the Defendant’s  request,  the Plaintiff agreed  to  make  available  to the Defendant,   further  financial   accommodation  in  a   sum  not exceeding Kshs. 30,000,000.00. In  consideration thereof,   the Defendant  agreed  to  execute  in  favour  of  the Plaintiff a  Supplemental  and  Variation of  Debenture dated 29^th October, 1998 to secure  payment of  the  said facility  together  with  interest  thereon.

3.      Accordingly,  a total  sum of Kshs. 80,000,000.00 was secured  by the aforesaid Debenture  and Supplemental  and  Variation of  Debenture,  respectively,  (“the Debentures”).

4.      The   following  were  inter  alia the  terms  and  conditions   set  out  in the  said Debentures:-

  a)       Clause 4 (i) of the Debenture dated 18^th July 1996 ,  : -

“The Company (read  the Defendant)  as beneficial owner and as a continuing security for the payment and discharge of all monies and liabilities hereby agreed to be paid or discharged or intended to be hereby secured (including all expenses and charges arising out of or in connection with any of the acts authorized by this Debenture) hereby charges in favour of the Lender (read  the Plaintiff)  all right, title, estate and other interests of the Company in all immovable property now or in future registered in the name of the Company whether under leasehold or freehold title.”

b)         Clause 6 (a) of the Debenture dated 18^th July 1996 ,  : -

“Forthwith upon the execution of this Debenture the Defendant agrees to execute and deliver or cause to be executed and delivered to the Lender a first legal Charge over the immovable property described in the schedule hereto as well as first legal Mortgages or Charges as the Lender may require over all other immovable properties now held by the Company upon any freehold or leasehold title or otherwise howsoever.”

c)         Clause 6(b) of the Debenture dated 18^th July 1996 ,  : -

“Forthwith upon acquisition by the Company of any further such immovable

property the Company shall for the same purpose execute and deliver to the

Lender the like first legal Mortgages or Charges thereover.”

5.      By  virtue  of  the  clauses, the Plaintiff  became  entitled  to,  inter  alia, register a Charge over all immovable property  then  registered in the name  of Defendant and  set  out  in the  schedules  annexed to the said  Debentures   together with all such property as would subsequently  be acquired by the Defendant.

6.      Subsequent to the execution of the said Debentures by both the Plaintiff and the Defendant, the  Defendant acquired title/right over  other  immovable  property,  the  same  being, L.R. Nos. tttttt and tttttt/38, respectively (“the said  properties”)  which properties were not previously set out in the respective Schedules to the said Debentures.

7.      By virtue   of the provisions  of  the said   Debentures, the Plaintiff  became  entitled  to register a Charge over  the  said  properties  to  secure  any  amounts  due  and  owing from the Defendant  to the Plaintiff.

8.      To date,  no  Charge  over the said properties  has  ever  been   executed  and  delivered  by the  Defendant  to the Plaintiff.

9.      To the  contrary, despite  demand  being  made  by the Plaintiff to the  Defendant’s  directors to  confirm whether  they  will  execute and  deliver  Charges   in  favour of the Plaintiff  in respect of  the said  properties, the said  Directors   have  failed,  refused  and/or  otherwise neglected   to  execute    and  deliver   the said Charges .

10.  Further,  despite  demand  being made  by  the Plaintiff, the Defendant  has failed, refused  and/or otherwise neglected  to  service the  aforesaid  financial facilities as  a consequence  whereof  the amount  outstanding  from the Plaintiff  to the Defendant as  at   13^th July, 2001  stood  at  Kshs. 7,022,735.43. 

11.  It  is  in  view  of the Defendant’s  said  default,  that the Plaintiff on 16^th February, 1999, pursuant  to  clause 14 of the  said Debenture  dated 18^th July,1996, appointed  Messrs.  Andrew  Gregory and Abdul Zahir Sheikh as  Receivers  and  Managers  of  all  the Defendant’s  assets  and  liabilities  with  a bid  to  recover the sum  outstanding to the Plaintiff    which  then stood  at  Kshs. 129,659,862.85.

12.  Pursuant to clause 15(c) of the said Debenture dated 18^th July, 1996 which inter alia, confers upon the said Receivers and Managers power to sell the property thereby charged, the said Receivers  and  Managers intend to sell the said properties.

13.  In  that regard, the Receivers  and Managers  have  managed  to  procure  a  Purchaser, namely,   Jose  Estates Limited,  for the  said properties  which are  to  be  sold  together  with  four  other  properties, namely,  L. R. Nos. tttttt/30,  tttttt/31, tttttt/32 and tttttt/33, respectively,  which  properties were  charged  by the Defendant  to the Plaintiff  under the  said  Debentures   and   are more  specifically  set  out  in the  Schedules thereto.

14.  Accordingly, a Sale Agreement   has  already  been  executed between the Plaintiff  as  Vendor,  having  a  Chargee’s interest,  and  the aforesaid Purchaser   for  the  sale  of  the said  properties  inclusive  of  the  four  properties  aforesaid(‘hereinafter  referred  to as  “the  six  properties”) and the  completion   date  thereof  set  for   14^th August, 2001.  Stamp duty  on the  Sale  Agreement has  been  duly  paid  to the Collector  of  Stamp Duties.

15.  Further a purchase price in the sum of  Kshs. 24,000,000.00  for  the six  properties  has already been  agreed  upon  and  the Purchaser’s Advocates, Messrs. Tttttt  and  Tttttt, have  duly deposited  with the Plaintiff’s  Advocates,  Messrs. Tttttt &  Company, the sum of  Kshs. 2,400,000.00 being 10%  of  the  agreed  purchase  price  on  account and  as security for  the  due  performance  of  the Purchaser’s  obligations under  the Sale  Agreement.

16.  It  would  therefore  occasion  grave  prejudice  to   all the parties involved  if  this  Originating  Summons is   not  heard  on  a most  urgent  basis   and  in  any  event  well  before the aforesaid  scheduled  completion  date  of  14^th August, 2001 and  the   Orders  sought  therein  granted  as prayed. 

17.  Save for  the Plaintiff’s claims as  Chargee on the said  properties, there are   no  encumbrances  registered  against  the titles  of  the said  properties  and such  sale  as  may be  ordered  by this Honourable  Court would  therefore not  occasion  any  prejudice  to any  secured  creditor.

18.  In the circumstances of this case it is only fair and just that the Court grants the orders   sought  herein.

AND WHICH APPLICATION is further supported by the annexed Affidavit of TTTTTT , and  on such further grounds to be adduced during the hearing hereof.

DATED at Nairobi this                    day of                                     2001.

                                                                       TTTTTT    TTTTTT &  COMPANY

                                                                       ADVOCATES FOR  THE PLAINTIFF

DRAWN  AND FILED BY:

Tttttt and Company

Advocates

Tttttt

Arboretum Drive                              (Tttttt)

P O Box tttttt    

TO BE SERVED UPON:-

(Through  the Plaintiff’s Advocates' Office)

Tttttt  Limited (In  Receivership)

P. O. Box  tttttt

Nakuru

Appearance  may  be  effected  personally or  by  Advocate

"If any Party served does not enter  appearance within the  time and  at  the place   above-  mentioned  such  Order  may  be made and  proceedings taken  as  the Court  may  think  just  and  expedient.