PROCEDURE OF ADJUDICATION

1. The Petition

As noted earlier bankruptcy proceedings are begun by the presentation of a petition by the debtor himself or by a creditor against the debtor.  This is in accordance with the provisions of Section 5 of the BA.

Petition of Debtor against himself:

Under Section 8(1) of the Bankruptcy Act and Bankruptcy Rules 105 a debtor may present his own petition.

1. The filing of which is deemed to be an act of bankruptcy.
2. The petition must state that the debtor is unable to pay his debt and must request that a receiving order or an adjudication order be made.
3.  A receiving order is made at once without any hearing in accordance with BR 125.  An adjudication order may also be made at once.
4.  The debtor must file with the official receiver a statement of affairs prepared in accordance with the provisions of Section 16 of the BA.
5.  The petition must further comply with the provisions of BR 106 to 108.   A debtor’s petition shall not after presentation be withdrawn without leave of the court.

Creditor’s Petition

Any person entitled to enforce payment of a debt at law or equity may be a petitioning creditor.  A creditor may petition if the following conditions are satisfied:

1.            Pursuant to Section 106 Bankruptcy Act and Bankruptcy Rules 110

(a)                  The amount owed is not less than 50 pounds or Kshs. 1000 as fixed under the English Bankruptcy Act of 1914;

(b)                  The debt is a liquidated sum payable either immediately or at some certain future time;

(c)                  The act of bankruptcy on which the petition is grounded has occurred within 3 months before the presentation of the petition;

(d)                  The debtor is domiciled in Kenya or within a year before the date of the presentation of the petition has ordinarily resided or had a dwelling house or a place of business in Kenya or has carried on business in Kenya personally or by means of an agent or manager or is or within that period has been a member of a firm or partnership of persons which has carried on business in Kenya by means of a partner or partners or an agent or manager. 

The debt due to the petitioning creditor must have existed as a liquidated sum i.e. a fixed sum or one capable of being computed with certainty at the date of the act of bankruptcy.  It is not sufficient that the debt should have become liquidated at the date of presentation of the petition if it had in fact been un-liquidated at the earlier date.  Refer to Re Debtors [1927] 1. Ch. 19 and Mohammed V. Lobo [1953] EACA 117.