Saling Bin Lau Bee Chiang v DINESH KANAVAJI A/L KANAWAGI (WA-29NCC-306-03/2022)

These Grounds concern 3 Notices of Appeal to the Court of Appeal against my decision on 5.3.2026. These Notices of Appeal are: a. Encl 382 filed by Saling bin Lau Bee Chiang & 13 other Judgment Creditors against my decision in allowing the appeal in Encl 176 to set aside the Creditors Petition in Encl 151 (“the CP”) dated 13.6.2024; S/N 8pac56IPV0TboYws11uvg b. Encl 381 filed by Saling bin Lau Bee Chiang & 13 other Judgment Creditors against my decision in allowing the appeal in Encl 216 setting aside the Bankruptcy Order dated 14.11.2024 in Encl 221 (“the BO”); c. Encl 383 filed by JC18 against my decision in allowing the appeal in Encl 241, setting aside the BO in Encl 221.

As stated above, the Appeal in Encl 176 is the Judgment Debtor's (“JD”) appeal against the dismissal by the Registrar of the JD’s application to set aside the CP in Bankruptcy No. WA-29NCC-306-03/2022.

Encls 216 and 241 are appeals by the JD and JC18 respectively, against the decisions of the Registrar in dismissing the application to set aside the BO. The BO was granted pursuant to the CP. If the appeal in Encl 176 is allowed, it would follow that the BO is bad and the appeals in Encls 216 and 241 will be allowed. Encl 176

I will first deal with Encl 176, being the appeal to the Judge in Chambers against the Registrar’s decision in refusing to set aside the CP. My decision on appeals in Encl 216 and 241 will follow accordingly. S/N 8pac56IPV0TboYws11uvg 3 5. This appeal in Encl 176 is confined to defects in the CP. It turns on a narrow issue which is said to go to the root of the CP itself. In short, it was submitted that the BN was taken out by 26 JCs, but the names of 3 JCs were deleted from the CP by the solicitors of the JCs. These JCs, whose names were deleted (Nos. 11, 15, 19), are deceased.

This deletion, it is submitted, changes the character of the CP by being initially based on a different act of bankruptcy. And as such, the deletion invalidates the CP. The Underlying Facts

The Bankruptcy Notice (“the BN”) was issued by 26 Judgment Creditors, see Encl 2. The CP (Encl 151) was proceeded with by only 23 JCs, after the names of the 3 JCs No: 11, 15 and 19 in the CP were deleted, see intitulement of the CP for the deletion. In the affidavit verifying petition their names were deleted, see intitulement of Encl 153.

The deletion was not supported by any application to amend nor was a Court Order obtained.

The Federal Court (by majority) in Ambank (M) Bhd v Lim Sue Beng [2019] 4 MLJ 701, held that when there are multiple petitioning creditors, the removal of a named petitioner from the CP changes the character of the CP itself. S/N 8pac56IPV0TboYws11uvg “[19] It is also an important point to bear in mind that the appellants and RHB collectively issued the bankruptcy notice. Similarly, they presented the creditor’s petition on 25 November 2011. The appellants and RHB in this case had elected to proceed collectively on the strength of a single judgment; this was central to the character of the bankruptcy notice and the creditor’s petition. [20] It is against the above background that we should consider the appellants’ application in encl 46, which sought for leave from the High Court for RHB, one of the co-petitioners in the creditor’s petition who had initially elected to proceed collectively pursuant to a single judgment against the respondent to cease to be a party to the bankruptcy proceedings commenced against the respondent. In addition to the prayer for the cessation of RHB as a party to the proceedings, the appellants had also sought for leave for certain consequential amendments to be made to the bankruptcy notice and the creditor’s petition. … [21] It is plain for us to see that these amendments would have the effect to change the bankruptcy notice, which form the basis or substance of the creditor’s petition being issued as if RHB was never a party to the bankruptcy proceedings from the outset. If such amendments were not made the creditor’s petition would not be able to proceed as proposed. The amendments reflect the change in the bankruptcy notice as well as the creditor’s petition. … [29] However, as seen earlier, the proposed amendments in our present case are not due to a minor or clerical error made by the appellants but instead an attempt to withdraw a party namely RHB. The appellants and RHB had elected to proceed collectively in pursuing bankruptcy proceedings against the respondent. Clearly, the High Court erred in treating encl 46 as an application to correct S/N 8pac56IPV0TboYws11uvg a misnomer and or a formal defect in the bankruptcy notice and creditor’s petition when the case was concerned with substantive change to the character of the bankruptcy notice upon which the creditor’s petition was issued. In our opinion, the appellants are not permitted to change the character of the bankruptcy notice and creditor’s petition in the manner it was done in this case. The creditor’s petition was filed on the basis of a specific act of bankruptcy. The judgment creditors elected to proceed collectively and they must live with their election to do so. Having filed the creditor’s petition on the basis that the respondent’s failure to comply with the bankruptcy was an act of bankruptcy, it was not open to the appellants, to recharacterise the creditor’s petition as having been grounded on a different act of bankruptcy, ie as involving only the appellants, excluding RHB. The proposed amendment would therefore cause prejudice to the respondent. In our opinion, the proposed amendments in the present case go to the substance of the bankruptcy notice and creditor’s petition and could not be regarded as a technical one or a mere slip. Hence, in the present case s 93(3) of the BA 1967 could not be invoked for the purposes of encl 46. [30] There are no provisions in the BA 1967 and the 1969 BR that allow a co-petitioner to withdraw as a party to the bankruptcy proceedings when there are multiple judgment creditors. …”.

The majority of the Federal Court in Lim Sue Beng (supra) makes the effect of removing a Petitioning creditor clear. The removal of the 3 JCs changes the character of and goes to the root of the CP. As such the CP is invalidated. In short, the CP issued by 23 JCs has recharacterised the act of bankruptcy as the CP was grounded on a different act of bankruptcy involving S/N 8pac56IPV0TboYws11uvg 6 26 JCs. In accordance with Lim Sue Beng (supra), this is fatal and, on this ground alone, appeal 176 must be allowed.

If any changes are to be made, it appears that the BN must be redrawn and a new BN issued. This is the effect of the decision of the Court of Appeal in Lim Sue Beng (supra), see paras 12, 58 and 59 of the Federal Court’s judgment.

Lastly, it appears that Justice Murad made no amendment to the CP removing the names of the 3 JCs and no such order was produced. Be that as it may, following the majority decision of the Federal Court in Lim Sue Beng (supra) there is some doubt whether Justice Murad would have had any such power, in any event.

In the circumstances the CP was invalidated. As such, I allowed the appeal in Encl 176. If follows that the BO made based on the invalid CP is also invalid. Therefore, I allowed Encl 216 and Encl 241. I also awarded costs to the JD of RM7,500.00 for each of Encl 176 and Encl 216. I also award RM7,500.00 for Encl 241 in favour of JC18. All costs orders are subject to allocatur. Dated the 27th day of March 2026 S/N 8pac56IPV0TboYws11uvg ........................tt............................ YA TUAN SAHERAN SUHENDRAN JUDICIAL COMMISSIONER OF THE HIGH COURT (COMMERCIAL 11) (INSOLVENCY 2) OF KUALA LUMPUR IN THE TERRITORY, MALAYSIA Case References: • Ambank (M) Bhd v Lim Sue Beng [2019] 4 MLJ 701 Decision Date: 05th March 2026 Counsel for the Judgment Debtor: Solicitors: Dinesh Kanavaji (appear in person) Messrs. Melissa Ram (Kuala Lumpur) Counsel for the Judgment Creditor (JC 1 to JC 25) (except for JC 18) : Solicitors: David Ragumaren and Surren Ramachandran Messrs. G. Ragumaren & Co. (Kuala Lumpur) Counsel for the Judgment Creditor (JC 18) : Solicitors: Rabia bt Abdul Halim Messrs.Wira Law Firm (Pelabuhan Klang) S/N 8pac56IPV0TboYws11uvg