Plentifield Marketing Sdn.Bhd. v Affin Bank Berhad (MA-12BNCvC-5-09/2025)

(a) no resolution shall be passed or order made for the winding up of the company;

(b) no steps shall be taken to enforce any charge on or security over the company's property or to repossess any goods in the company's possession under any hire purchase agreement, chattels leasing agreement or retention of title agreement, except with leave of the Court and subject to such terms as the Court may impose; and

(c) no other proceedings and no execution or other legal process shall be commenced or continued and no distress may be levied against the company or its property except with leave of the Court and subject to such terms as the Court may impose." WHETHER A FORMAL APPLICATION FOR A STAY IS REQUIRED [6] Where section 410 is engaged, the restraint it imposes arises by operation of law upon the making of the application for a judicial management order. It neither requires nor depends upon any order of this Court, and it is not a matter of discretion. It follows that the Court will not direct the appellants to file a notice of application for a stay of the appeal. A stay which exists by force of statute is not created by application; and if the statute is not engaged, no such application could create it. [7] Whether section 410 is engaged in respect of this appeal is, however, a distinct and justiciable question. This Court is entitled, and indeed obliged, to satisfy itself of the ambit of its own power to proceed. The determination of that question is not itself the commencement or continuation of proceedings against the appellants or their property; it is the Court ascertaining whether the statutory restraint applies to the proceedings before it. [8] The contention that the judicial management applications may lack bona fides does not displace the statutory restraint merely upon allegation. In CIMB Islamic Bank Bhd v Wellcom Communications (NS) Sdn Bhd & Anor [2019] 4 CLJ 1, the Court of Appeal emphasised the need to guard against abuse of the judicial management process. The assessment of the merits, bona fides and procedural regularity of the applications is, however, properly undertaken by the High Court seised of those applications. On the present record, this Court neither determines those matters nor treats their allegation as sufficient to disapply section 410. This is without prejudice to any procedurally competent party seeking appropriate relief in the judicial management proceedings. WHETHER THE APPEAL IS A PROCEEDING AGAINST THE COMPANY WITHIN SECTION 410(C) [9] The character of an appeal, for the purposes of a statutory moratorium of this kind, is determined by the nature and substance of the original proceedings, and not by the parties' appellate designations or by the identity of the party who filed the notice of appeal. An appeal is not fresh litigation; it is a further stage of the same litigation. Where the original action sought to impose liability upon the company or its property, the proceeding does not cease to be one "against the company" merely because the company, having suffered an adverse decision, becomes the appellant and seeks to reverse it. [10] That approach is settled in materially similar statutory contexts. In An Guang Shipping Pte Ltd (judicial managers appointed) and others v Ocean Tankers (Pte) Ltd (in liquidation) [2022] SGCA 13, the Singapore Court of Appeal considered whether a notice of appeal filed without leave fell within the moratorium in section 133(1) of the Insolvency, Restructuring and Dissolution Act 2018, which restrains actions or proceedings "against the company" in liquidation in language materially similar to section 410(c). The Court of Appeal adopted, at [16]-[17], the reasoning of Richards LJ in Thomas Evan Cook v Mortgage Debenture Ltd [2016] EWCA Civ 103, at [26]: "... in my view, this question is to be judged by reference to the nature of the original application. If the application was a legal proceeding against the company, within the terms of the moratorium, then an appeal against the dismissal of the application would also be a proceeding for which permission was required. Its purpose would remain to obtain relief against the company. If, however, the original application was not a proceeding against the company, an appeal against the dismissal of the application cannot sensibly be regarded as such a proceeding." [11] The Singapore Court of Appeal held, at [17], that the observation of Richards LJ that the question "is to be judged by reference to the nature of the original application" is an apt one: it is the original application that determines whether a proceeding is one "against the company". On its facts, An Guang Shipping fell on the other side of the line the original application there was a summons for directions taken out by the insolvent company's own officeholders on a question of priorities, so the appeal from it was held not to be a proceeding against the company but the test the court applied cuts both ways, and it is the test, not the outcome on those facts, that matters here. The decision is of particular persuasive value because the judicial management regime in the Companies Act 2016 was derived from the Singapore statutory model. It is also to be noted that the Court of Appeal observed, at [15], that it is difficult at a general level to describe an appeal as a defensive step at all: the purpose of an appeal is to displace a ruling in favour of the respondent and replace it with one in favour of the appellant. [12] The same substantive test has been applied in Malaysia. In Asean Security Paper Mills Sdn Bhd v Provincial Insurance (Malaysia) Sdn Bhd [2000] 1 CLJ 759, the High Court, construing the corresponding restraint in section 226(3) of the Companies Act 1965, adopted the formulation in Rahmat Ali v Calcutta National Bank AIR [1955] Allahabad 169 that proceedings are "against the company" where their object is to fasten liability upon the company or its assets, and distinguished defensive steps taken by a party in litigation originally commenced by the company itself, which fall outside the restraint. That exception can have no application here, for the underlying action in the Sessions Court was not commenced by the appellants; it was brought against them. [13] Applying that test, the conclusion follows directly. The action in the Sessions Court was a proceeding against the appellants, whose object was to fasten liability upon them. This appeal is a continuation of that same litigation at its appellate stage; its subject matter remains the liability sought to be imposed upon the companies and, ultimately, exigible against their property. The circumstance that the companies themselves filed the notice of appeal does not alter the character of the proceedings, which is fixed by the nature of the original action. [14] Nor does the appellants' voluntary prosecution of the appeal amount to a waiver of the statutory restraint. Section 410 is expressed in mandatory terms and operates by law, not at the election of the company. The restraint exists to hold the company's affairs and assets in place while the court seised of the judicial management application determines whether the company should be given the protection of the corporate rescue mechanism. That purpose would be undermined if a company enjoying the protection of the section could unilaterally reactivate litigation and thereby expose itself to litigation costs and to an enforceable adverse outcome simply by filing or pressing an appeal. [15] Accordingly, while the period prescribed by section 410 subsists in respect of an appellant, this appeal is a proceeding "continued ... against the company or its property" within section 410(c) as regards that appellant, and it may be continued only with leave of the Court and subject to such terms as the Court may impose. The leave contemplated by section 410(c) is that of the court administering the statutory protection, namely the High Court seised of the judicial management application, which alone is positioned to weigh the continuation of particular litigation against the purposes of the prospective rescue. Any application for leave is therefore to be made in the judicial management proceedings before the High Court at Shah Alam. That construction is consistent with Asean Security Paper Mills Sdn Bhd v Provincial Insurance (Malaysia) Sdn Bhd (supra), where the analogous leave under section 226(3) of the Companies Act 1965 was treated as the leave of the insolvency court administering the statutory protection. C. THE SUBSISTENCE OF THE STATUTORY PERIOD [16] Whether the statutory period presently subsists in respect of each appellant is a matter of fact, to be established on the record. The period commenced on 12.06.2026 upon the making of each application and ends, for each appellant, upon the making of a judicial management order or the dismissal of the application. The hearing date fixed for the originating summons concerning Sheng Tai International Sdn. Bhd., 21.07.2026, has passed, and there is no evidence before this Court of its outcome; the originating summons concerning Plentifield Marketing Sdn. Bhd. was fixed for hearing on 10.08.2026. If a judicial management order has been made or is made in respect of either appellant, attention will shift to the moratorium under section 411; if either application has been or is dismissed, the protection of section 410 lapses for that appellant and the appeal may proceed against it in the ordinary way. Section 410 fixes no outer limit to the period: it endures until one of those terminal events occurs, however long the applications remain pending, and the directions below therefore operate irrespective of the state of the proceedings at Shah Alam and impose a continuing obligation of disclosure. Rule 9(1) of the Companies (Corporate Rescue Mechanism) Rules 2018 requires a hearing date to be fixed not later than sixty days after filing, but that requirement is not itself a terminal event under section 410, and section 405(2) permits the hearing to be adjourned. Further, a withdrawal by the original applicant does not necessarily determine the application because rule 16 permits the substitution of another eligible applicant. The operative position must therefore be established from the sealed orders of the High Court, including any order for substitution or disposal. D. CONCLUSION AND DIRECTIONS [17] For the reasons given, the Court holds that this appeal constitutes a continuation of proceedings against the appellants and their property within the meaning of section 410(c) of the Companies Act 2016. While the statutory period under section 410 subsists in respect of an appellant, the appeal shall not be continued as against that appellant except with leave of the Court under section 410(c) and subject to such terms as may be imposed. No separate application for a stay is necessary, and none is directed. [18] The Court accordingly directs as follows:

(a) the appellants shall, by 25.9.2026, being a date after the hearing dates fixed for both originating summonses before the High Court at Shah Alam (21.07.2026 and 10.08.2026 respectively), file and serve an affidavit verifying the current status of Originating Summons No. BA-28JM-6-06/2026 and Originating Summons No. BA- 28JM-7-06/2026, exhibiting the sealed cause papers and any orders made therein, and stating the outcomes of the hearings fixed on 21.07.2026 and 10.08.2026, the next hearing dates, if any, and, where either originating summons has not been heard or has been adjourned, the adjourned or further hearing dates and, if known, the reasons therefor;

(b) the appellants shall file and serve a further affidavit within seven days of any material development in either originating summons, including the making of a judicial management order, the dismissal or withdrawal of either application, or any adjournment or re-fixing of the hearing dates;

(c) while the statutory period under section 410 subsists in respect of an appellant, no further step shall be taken in the appeal as against that appellant except with leave of the Court under section 410(c); any party seeking to continue the appeal during that period shall apply for leave in the judicial management proceedings before the High Court at Shah Alam, and shall file a sealed copy of any order granting or refusing leave in this appeal within seven days of its making;

(d) if a judicial management order is made in respect of either appellant, the parties shall address this Court on the effect of section 411(4)(c), including whether the judicial manager consents to the continuation of the appeal or whether leave of the Court has been or will be sought; if either judicial management application is dismissed, withdrawn or otherwise disposed of, the parties shall address this Court on whether the appeal may properly proceed against the affected appellant separately, or whether the interrelationship of the appellants' cases requires the appeal to remain administratively held pending further directions;

(e) the intended application to adduce further evidence in the appeal shall be held in abeyance, without prejudice to the right of the respondents to file such application if and when the appeal may properly proceed, whether upon the grant of leave or upon the expiry of the statutory period;

(f) a further case management is fixed on 06.10.2026 at 9.00 a.m. to review the position, or such earlier date as may be appointed upon the filing of an affidavit under subparagraph (b);

(g) the costs of the case management and of the preliminary issue shall be costs in the appeal; and

(h) parties are at liberty to apply. [19] For the avoidance of doubt, nothing in this ruling expresses any view on the merits of the appeal, on the judicial management applications pending before the High Court at Shah Alam, or on the allegations and counter-allegations exchanged between the parties, none of which has been established on the record before this Court. Dated 31 July 2026 (YA Dato' Sri Raja Segaran A/L S. Krishnan) (Judicial Commisioner) High Court Of Malaya Malacca High Court (MELAKA) Lawyer For Appellant : Encik Amritpal Singh a/l Ram Singh bersama Encik Lee Heng Sing Tetuan Amritpal Singh Peguambela dan Peguamcara No. 32-1, Jalan 6/38 D, Taman Sri Sinar, Segambut, 51200 Kuala Lumpur. Lawyer For Respondents : Datuk Govin Thangadurai a/l Govindarajoo Tetuan Govin T.Durai & Co. Peguambela dan Peguamcara No.12A-1, Lorong Batu Nilam 21B, Bandar Bukit Tinggi 2, 41200 Klang, Selangor. (b.p. Respondent 1) Puan Sarah binti Zolkapaly Tetuan Go Tiong Siew & Associates Peguambela dan Peguamcara No. 1-1 & 3-1, Jalan KL 3/11, Taman Kota Laksamana Seksyen 3, 75200 Melaka. (b.p. Respondent 2)