4. The Receiving Order:

Section 9 of the BA as read with BR 138 to 148.
If the court does not dismiss or stay the petition, it will make a receiving order.  Upon the making of the receiving order the official receiver becomes receiver of the debtor’s property.  Thereafter no legal proceedings may be brought or the debt provable in the bankruptcy except by leave of the court.  Once the official receiver steps in no proceedings can be brought against the debtor except with the leave of the court.  This however does not prejudice a secured creditor’s rights to deal with his security according to Section 9(2) as read with Section 6(2) BA.

The receiving order does not make the debtor bankrupt nor does it deprive him of the ownership of his property.  It is only the possession and control of his property that are taken away from him.  Thus any transactions subsequently entered into by the debtor are prima facie invalid whether or not the other party to the transaction has notice of the receiving order.

The notice of the receiving order stating the name address and description of the debtor, the date of the order, the courts by which the order was made and the date of the petition must be published in the Kenya Gazette and one of the local daily papers.  Section 13 of the BA as read BR 145.  The production of a copy of the Gazette containing any notice of the receiving order is conclusive evidence that the order was duly made on the stated date.  Even after the making of the receiving order the debtor may apply for its rescission in accordance with BR 147 to 148.


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