Mukhisa Kituyi faces bankruptcy over Sh35m debt
Former Cabinet Minister Dr Mukhisa Kituyi. He is fighting bankruptcy proceedings.
Former Cabinet Minister Dr Mukhisa Kituyi is fighting bankruptcy proceedings over a long-running debt of Sh35 million he owes fellow politician Patrick Musimba.
An attempt by the former United Nations Secretary-General for Trade and Development to block the insolvency suit has been rejected by High Court judge Alfred Mabeya. He declined to set aside the statutory demand.
“In view of the fact that Dr Kituyi’s application to stay the decree was dismissed by the Court of Appeal, there is no justifiable reason to set aside the statutory demand,” ruled Justice Mabeya.
The two politicians have been embroiled in a dispute that started in 2013 when Mr Musimba, the former Kibwezi West MP, allegedly gave Dr Kituyi Sh35 million through a bank transfer.
After Mr Musimba lodged the insolvency suit, Dr Kituyi said he was not served with the statutory demand as required by the law as the notice was received by his son.
However, justice Mabeya said Mr Musimba correctly submitted that what was paramount “is not personal service on the debtor, but rather to ensure that the debtor had knowledge or possession of the served document.”
“To the court, service was proper and effective. In any case, Dr Kituyi confirmed that his son gave him the statutory notice, meaning he was aware of the demand. In other words, he (Dr Kituyi) had knowledge and possession of the served document,” noted Justice Mabeya.
Court documents indicate the money in dispute was sent through a bank transfer but Mr Musimba claims that Dr Kituyi refused to repay the lump sum, forcing him to move to court seeking a refund plus interest.
Dr Kituyi denied the allegations saying the money advanced to him was in respect of a deposit for the purchase of his property L.R No. 194/34 in Karen by Mr Musimba.
The court heard that after Mr Musimba failed to complete the transfer transaction, the said deposit was forfeited.
At the High Court proceedings, Justice Wilfrida Okwany, ruled in favour of Mr Musimba and found that the issue of whether the payment was in respect of a loan or for purchase of land “does not take away the fact that Mr Musimba parted with Sh35 million.”
She ordered Dr Kituyi to repay the money. Aggrieved, the former long-serving Kimilili MP moved to the Court of Appeal but again his application seeking to stay the High Court judgement was dismissed.
A three-judge bench comprising justices Roselyne Nambuye, Hannah Okwengu and Jamilla Mohammed said Dr Kituyi had failed to demonstrate how the appeal would be defeated “if the execution of the order is denied and the appeal succeeds.”
“Dr Kituyi has not established, let alone made any allegations Mr Musimba would not be able to refund the amount in the event that the appeal succeeds. In other words, there is nothing to suggest that Mr Musimba is impecunious,” ruled the judges.
Even before the substantive appeal was heard and determined, Mr Musimba lodged the insolvency proceedings which Dr Kituyi is challenging on grounds that he was not personally served with the statutory demand.
He claimed that the demand was brought to his attention by his son on July 14, last year after it was dropped in his (son’s) house. He said the service was improper because he resides in Thigiri Ridge, Gigiri, while his son lives in a separate house in Mountain View.
Dr Kituyi maintained that from the onset, the service was improper and therefore null and void.
Mr Musimba said he served Dr Kituyi with the demand to pay back Sh35 million plus interest of 663,610.
He further argued that the statutory demand was served at Dr Kituyi’s last known home address at Mountain View Estate.
And although Dr Kituyi was not in, his son allegedly called him and proceeded to inform the court process server that he could leave the demand with him, as he was to meet with his father later and would hand over the notice to him.
The judge said the service of the statutory demand was effective and there was no justifiable reason to set it aside.
“Therefore, application is without merit and is hereby dismissed with costs,” ruled Justice Mabeya.
