Akiff Energy Resources Sdn. Bhd. v Sam Moon Engineering (M) Sdn. Bhd. (JA-28NCC-68-04/2025)

This is a winding up petition brought pursuant to ss. 465(1)(e) and 466 of the Companies Act 2016 ("CA 2016").

The Petitioner seeks a winding up order against the Respondent on the basis that the Respondent has failed to satisfy or secure the outstanding debt of RM625,832.00 as demanded in the statutory notice issued by the Petitioner and duly served on the Respondent.

The Respondent opposes the petition on a single ground — that the alleged outstanding debt is genuinely disputed.

Having carefully considered the cause papers, the affidavits filed by both parties, and the written and oral submissions of learned counsel, this Court finds in favour of the Petitioner. Enclosure 1 is allowed with costs.

The grounds for this Court's decision are set out below.

The Respondent was appointed by HRSB Power Control Sdn Bhd ("HRSB") as a sub-contractor for a project known as "Civil Works (Scope 1) For Effluent Treatment System (ETS) Melaka" ("the Project").

In connection with the Project, the Respondent requested the supply of labour from the Petitioner. The Petitioner issued its quotation dated 3.1.2022, and the Respondent accepted the same by issuing its Purchase Order dated 8.1.2022.

The Petitioner avers that as of 14.11.2023, the Respondent had accumulated an outstanding debt of RM625,832.00 in respect of labour supplied by the Petitioner to the Respondent for the period from 6.1.2023 to 4.8.2023.

The Petitioner further avers that the Respondent had expressly acknowledged owing the said sum by way of its letters dated 5.3.2024 and 2.4.2024.

The Petitioner, through its solicitors Messrs Kheng Hoe & Lee Yuen, formally issued a statutory notice of demand pursuant to s. 466(1)(a) of the CA 2016, dated 11.3.2025, upon the Respondent.

The Respondent failed to satisfy the said demand within twenty-one

days as required under the said notice. This gave rise to a statutory presumption of insolvency, again under s. 466(1)(a) of CA

2016.

The Petitioner accordingly filed the present winding up petition.

In opposing the petition, the Respondent contends that the sum claimed is not a correct sum as it is subject to deductions imposed by HRSB towards the Respondent in connection with the late supply and unsatisfactory quality of the labour provided by the Petitioner.

The Respondent further contends that there exists an addendum to the sub-contract agreement between the parties, under which the Petitioner agreed to direct its claims for outstanding payment to HRSB directly, subject to HRSB's deductions for any delay or variation in the specifications of the Project.

Finally, the Respondent contends that as there are numerous disputed facts relating to the claimed sum, the Petitioner ought to have commenced a writ action instead of pursuing the present petition. On that basis, the Respondent urges this Court to dismiss the petition. Analysis and findings

The sole question before this Court is whether the debt of RM625,832.00 claimed by the Petitioner is bona fide disputed on substantial grounds, such as to warrant the dismissal of this petition.

The test applicable in winding up proceedings where a debt is disputed is well-established. A court will not make a winding up order if the debt underlying the petition is the subject of a bona fide dispute on substantial grounds [see NKM Development Sdn Bhd v Irex Sdn Bhd (1988) 2 CLJ Rep 56].

The burden therefore lies on the respondent to demonstrate that the dispute is genuine and not merely a crafty device to frustrate a creditor's legitimate claim. In Lafarge Concrete (M) Sdn Bhd v Gold Trend Builders Sdn Bhd [2012] 6 MLJ 817 at p 823 the Court of Appeal observed as follows: “… in order to oppose a winding up petition, the respondent must raise a bona fide dispute in both a subjective and objective sense. It must be honestly believed to exist and must be based on substantial or reasonable grounds …

Reference is also made to Kumpulan Liziz Sdn Bhd (in liquidation) v Pembinaan Azam Jaya Sdn Bhd [2022] 1 MLJ 570 where it was held by the Court of Appeal that:- “Merely saying that the debt is being disputed would not be sufficient to resist a winding up order for after the petitioner has filed its affidavit verifying the various averments as to how the debt had arisen and become due and owing, the respondent would need to rebut those allegations or show that the debt is seriously and substantially being disputed and the evidence and reasons in support of the dispute.”

Having carefully examined the affidavit evidence, this Court is not satisfied that the Respondent has raised a bona fide dispute on substantial grounds.

First, it is not disputed that the Respondent issued its letters dated 5.3.2024 and 2.4.2024 to the Petitioner acknowledging the outstanding sum owed to the Petitioner (refer Exhibit E and Exhibit F in Enclosure 1). These acknowledgments constitute clear and unequivocal admissions of the debt. The Respondent has not adduced any credible explanation as to why these acknowledgments ought to be disregarded or set aside.

Second, the Respondent's contention that HRSB's deductions should reduce the amount that it owed to the Petitioner is misconceived and must fail under the doctrine of privity of contract. The relevant contractual relationship in this matter is between the Petitioner and the Respondent. Any deductions or disputes between the Respondent as sub-contractor to HRSB are matters to be resolved in separate proceedings between them and do not affect the Respondent's liability to the Petitioner under the contract for labour supply.

Third, the alleged addendum — purportedly requiring the Petitioner to direct its claims to HRSB and to be subject to HRSB's deductions — has not been established to the satisfaction of this Court. The Respondent has failed to produce any documentary evidence of such an addendum, and its existence has been expressly denied by the Petitioner. The Respondent's bare assertion as such is insufficient to give rise to a genuine bona fide dispute of the debt on substantial grounds.

Fourth, the Respondent's submission that the Petitioner should have commenced writ proceedings does not, in itself, constitute a ground to dismiss a winding up petition. The Court retains a discretion to refuse or stay a petition where a genuine dispute exists, but where, as in here, the debt has been acknowledged and no credible dispute has been raised, there is no basis for denying the Petitioner its remedy.

This Court is therefore satisfied that the debt of RM625,832.00 is not bona fide disputed on substantial grounds, and that the Respondent is unable to pay its debts within the meaning of s. 465(1)(e) read with s. 466 of the CA 2016.

For the foregoing reasons, the winding up petition (Enclosure 1) is hereby allowed. It is ordered that the Respondent be wound up under the provisions of the Companies Act 2016.

Costs of this petition are awarded to the Petitioner, subject to payment of allocator fees. Dated: 15.06.2026 …………………………………………………… NOOR HISHAM BIN ISMAIL JUDGE HIGH COURT OF MALAYA JOHOR BAHRU For the Petitioner : Messrs Kheng Hoe & Lee Yuen A3-3-6, Solaris Dutamas No. 1 Jalan Dutamas 1 50480 Kuala Lumpur. For the Respondent : Messrs Mokhtar Ngah & Co No. 30, Jalan SS1/22A 47300 Petaling Jaya