CIMB BANK BERHAD v Anuar Bin Ahmad (PA-29NCC-98-03/2021)

This is an appeal (“this Appeal”) by the Judgment Debtor against the decision of the Senior Assistant Registrar (“SAR”) on 22.12.2023 in dismissing the Judgment Debtor’s application to set aside the Bankruptcy Notice (referred to as BN) dated 15.03.2021 and the Amended Creditor’s Petition (referred to as CP) dated 14.12.2022 and the Order in which the SAR had allowed the Judgment Creditor to commence bankruptcy proceedings against the Judgment Debtor.

In this Judgment, parties are referred to as they were addressed before the Learned SAR (Judgment Creditor’s shall be referred to as JC and Judgment Debtor’s as JD)

The cause papers referred to during the hearing of Enclosure 87 are as follows:

Request to issue Bankruptcy Notice dated 15.03.2021 [Enclosure1]

(ii) Bankruptcy Notice dated 15.03.2021 (“BN”) [Enclosure 2]

(iii) Amended Creditor’s Petition dated 14.12.2022 (“Amended CP”) [Enclosure 48]

(iv) Summon in Chambers dated 02.10.2023 to set aside the Bankruptcy Notice dated 15.03.2021 and Amended Creditor’s Petition dated 14.12.2022 [Enclosure 71]

Affidavit in Support affirmed by Anuar Bin Ahmad dated 02.10.2023 [Enclosure 72]

(vi) Affidavit in Reply affirmed by Lim Chew Liang on

17.10.2023 [Enclosure 76]

(vii) Affidavit in Reply affirmed by Anuar Bin Ahmad on

30.10.2023 [Enclosure 77]

(viii) Notice of Appeal dated 27.12.2023 against the SAR’s decision in dismissing Enclosure 71 [Enclosure 87] Law on appeal [4] It is trite law that, when an appeal against the decision of the Learned SAR is brought before the Judge in Chambers, the matter will be heard afresh, as though the matter comes before the Judge for the first time. This principle has been established by the Federal Court in the case of Tuan Haji

Ahmed Abdul Rahman v. Arab-Malaysian Finance Berhad [1996] 1 CLJ The principle that has been decided in the abovementioned case has been followed by the High Court in the case of Re: Sulaiman Sahari; Ex-Parte: Hafitz Khalid & Anor [2019] 1 LNS 1138, where the Court held as follows: “[10] Firstly, an appeal to the Judge in Chambers from a discretionary order of the SAR is treated as if the matter comes before the Judge for the first time. In Seloga Jaya Sdn. Bhd. v. Pembinaan Keng Ting (Sabah) Sdn Bhd. [1994] 2 CLJ 716, the Supreme Court cited with approval the decision of Lord Atkin in Evans v. Bartlam [1937] AC 473 as follows: - “(1) In an appeal from a discretionary order of the master to a Judge in Chambers, the Judge exercises his own discretion as though the matter comes before him for the first time, unfettered by the previous exercise of the master’s discretion; and

So far as the master’s decision is concerned, the Judge will give it the weight it deserves.” (see Re Ahmed Ismail bin Hj Amin; ex parte Lembaga Kumpulan Wang Simpanan Pekerja [2022] MLJU 129) Issues The two (2) main issues that have been argued before the Learned SAR and before this Court are as follows:

JD is not the only guarantor to be liable for the judgement debt; and

(ii) The Insolvency Department subsequent to the filing of the Bankruptcy Notice and Creditor’s Petition, paid out dividends which reduced the total debt owing by the JD to the JC, then amounts are not accurate as stipulated in the BN and Amended CP. Undisputed material facts [5] This Court refers to the facts of the case which are not disputed by the parties as the basis for the background facts. [6] The JC filed this BN on 15.03.2023 based on a Judgment dated 28.05.2019 recorded at the Kuala Lumpur Session Court Suit No. WA-B52NCC-203-04/2019 (Suit 203) for a sum of RM 876,876.14. [7] The Defendants named in Suit 203 are as follows: -

Y.C Travel & Tours [Company no. 811016-V](in liquidation)(“Principal Debtor”);

Chu Sau Ben (NRIC: 651001-01-5167);

Choong Hin Seong (NRIC: 710708-07-5419) and

JD [8] This Suit was filed against the JD on the alleged grounds that the JD stood as a guarantor for the Principal Debtor pursuant to a Guarantee and Indemnity by Individual or Company (Guarantee Agreement) dated 25.10.2016. [9] Before the action was taken against the JD, there were also some other actions that had been taken by the JC before the Principal Debtor went into liquidation vide a proceeding at the Shah Alam High Court Winding Up Petition No. BA-28NCC-382-06/2019 on 25.09.2019. Vide an email by the Official Receiver (OR) dated 02.04.2021, the OR confirmed having receipt of a sum of RM 853,549.02 on 09.02.2021 being excess of the auction of Principal Debtor’s assets. [10] By virtue of OR’s letter dated 31.03.2023, the JC had received two (2) payment of dividends deriving from the estate of the Principal Debtor an amount of (1) RM 181,123.20 and (2) RM 187,869.43 whereby in total, RM 369,092.63, being 19.81% of the approved amount of proof of debts filed against the Principal Debtor. Judgment Debtor’s Submissions [11] At the outset, the JD submitted on the following grounds before the SAR and this Court. The grounds relied upon are as follows: -

The JC had recovered two (2) partial payments of dividends from the OR in the form of dividends in respect of the Principal Debtor’s estate;

(ii) For that reason, the amount stipulated in the Bankruptcy Notice dated 15.03.2021 and Amended Creditor’s Petition dated 05.01.2023 ought to be reduced;

(iii) Vide Clause 1.1 of the Guarantee Agreement, it is clearly stated that the amount claimable against the JD shall be the amount that ‘which are owing and payable by the Borrower’;

(iv)

The JC had initiated a bankruptcy proceeding against the Choong Hin Seong vide Penang High Court Bankruptcy No.: PA- 29NCC-97-03/2021 for the same amount as claimed against the JD;

(vi) However, the JC did not initiate any bankruptcy proceeding against Chu Sau Ben regardless of the latter’s status as one of the guarantors for the Principal Debtor;

(vii) In light of the above paragraph (a) – (f), the JD, at all material times, does not owe the amount stipulated in the BN and Amended CP; and;

(viii) Hence, the Bankruptcy Notice and Amended Creditor’s Petition must be set aside. Judgment Creditor’s Submissions [12] The main arguments of the JC are summarised as follows:

The JD failed to cause an appearance and a judgment in default was entered against the JD on 28.05.2019;

(ii) The Borrower was wound up by Standard Chartered Bank Malaysia Berhad in the Shah Alam High Court in Winding Up Petition No. BA-28NCC-382-06/2019;

(iii) The JC filed a proof of debt against the Borrower and commenced this bankruptcy proceeding against the JD as the guarantor. This is in line with Clause 31 of the Letter of Offer which was accepted by parties;

(iv) Despite being fully aware of the current status of the debt, the JD till to date failed, refused and/or neglected and/or elected not to make payment of the Judgment Debt to the JC;

On 18.10.2022, the Insolvency Department had issued a letter stating that the dividend payable is approximately 17.42% of the debt lodged. As such, it was already clear at that point in time that the Judgment Debt will not be satisfied by the dividends;

(vi) On 08.02.2023, the Insolvency Department had paid out to the JC the dividends in the sum of RM181,123.20 and RM187,969.43;

(vii) As such, the liquidation of Y.C Travels and the payments of dividends thereof to its creditors is completed; and

(viii) It is submitted at the outset, that both the grounds relied on by the JD is wholly unmeritorious and clearly a mala fide attempt to stifle and delay the JC’s rights under the Judgment once again. Findings of the Court

JD is not the only guarantor to be liable for the judgement debt; [13] On the issues of the JC had recovered two (2) partial payments of dividends from the OR in the form of dividends in respect of the Principal Debtor’s estate, the JD was relying on Clause 1.1 of the Guarantee Agreement which clearly stated that the amount claimable against the JD shall be the amount that ‘which are owing and payable by the Borrower’. [14] Therefore the amount stipulated in the Bankruptcy Notice dated 15.03.2021 and Amended Creditor’s Petition dated 05.01.2023 ought to be reduced. The JD was referring to the case of Sumathy Subramaniam v. Subramaniam Gunasegaran & Another Appeal [2018] 2 CLJ 305. [15] On the other hand, the JC submitted that the Guarantee and Indemnity by Individual or Company dated 25.10.2016 expressly indicates that the Guarantors are guarantee as principal debtors, jointly and severally. Besides, the Judgment in Default dated 28.05.2019 explicitly states that the JD is jointly and severally liable for the judgment sum. Clause 31 states that: [16] Therefore, the JD is one of the guarantors of the JC and had executed a Guarantee and Indemnity dated 25.10.2016 in favour of the JC. Clause 2

of the Guarantee and Indemnity further states that the JC is entitled to claim and to enforce against the JD as though they were the principal debtors for all the sums guaranteed by the Guarantors (JD). Clause 2 (a) states that: [17] In supporting his argument, the Learned Counsel for the JC was relying on the case of Kejuruteraan Bintai Kindenko Sdn Bhd v Fong Soon Leong [2021] MLJU 142. [18] After examining the argument, this Court found that the JD's allegations that if each of the JD settle the judgment sum, the JC will be getting more and this is oppressive and is without merits. JD is relying on the case of Sumathy (supra) on this issue, but in fact, it has been commented by the Federal Court in the case of Lembaga Kumpulan Wang Simpanan Pekerja v. Edwin Cassian Nagappan @ Marie [2021] 5 MLJ 253, where the Federal Court stated that: [27] Accordingly, so long as a judgment debt remains unrealised, the judgment creditor is entitled to proceed against one or any number of judgment debtors to secure the performance of an obligation in its entirety. [28] The issue that possibly gives rise to confusion is s 44(2) of the Contracts Act 1950 which allows the promisor who has paid the full promised amount to claim contribution from the joint promisor for an equal contribution. This means that the liability for the full promised sum is shared equally between all the promisors. However, that is between the promisors, inter-se. It does not affect the rights of the creditor which are governed by s 44(1) of the Contracts Act 1950. [29] This brings us to the underlying rationale for joint liability as opposed to joint and several liability. Each of these doctrines relates to the number of promises made, and not the number of promisors who made a particular promise. In the case of joint liability, there is one promise and two or more promisors. Each is liable to the extent of the promised amount. In the case of a joint and several liability, there is more than one promise. The promisors make two or more promises and thus several liability arises. ………………….. “[39] In our considered opinion, the courts below erred in law in invoking the presumption that joint liability means liability for only half the debt and not the full amount. As mentioned earlier, joint and several liability gives rise to one joint obligation and to as many several obligations as there are joint and several promises. The promisee, i.e. the Board, is therefore entitled to proceed against one promisor, or the other, or both, in order to procure full performance as is evident from s 44 of the Act. [19] The Federal Court further stated in paragraphs: [31] As stated earlier, the courts below regarded themselves bound by the earlier Court of Appeal decision in Sumathy. In Sumathy, the creditor sued the principal borrower and the guarantor for monies outstanding under a friendly loan. Summary judgment was entered against both defendants, on the same terms, but the judgment did not state whether the liability of the parties was joint or several. Subsequently, two separate bankruptcy notices were filed at the same time against the principal borrower and the guarantor, both specifying the judgment debt of RM291,800. [32] The Court of Appeal held at para. 19 of the judgment that a plaintiff who becomes a judgment creditor where the liability is joint, is only entitled to seek recovery in equal proportions against each of the defendants. This premise is, with respect, flawed because it pre-supposes that liability is proportionate to the number of promisors, from the perspective of the creditor. In Sumathy, the position of the creditor was conflated with the position of the debtors or promisors inter se, as we have explained above. ……………….. [40] Furthermore, there is a notable absence of terms creating ‘joint’ liability in the judgment itself. Even if such a term had been inserted that would not entitle the courts to conclude that liability is somehow halved between the two obligors or promisors. Given the prevailing interpretation of s 44 of the Act, merely inserting the word ‘jointly’ in the consent judgment would not suffice to halve liability as there must be express words to that effect to state that the liability of the joint promisors is to be borne in equal proportions. Moreover, such halved liability should take root from the original promise whereby the liability of a promisor for a debt owed to a creditor is expressly stated to be only half of the debt. If we are to accept the premise that ‘joint and several liability’ cannot be read into the judgment due to an absence of such words, it similarly follows that a silent judgment cannot automatically be inferred to impose ‘joint’ liability where there is no such mention. This is especially so when the liability that arises is explicitly stipulated by statute. In the circumstances, liability under the consent judgment must necessarily be both joint and several in light of our discussion above. [41] One final point remains to be made. The Court of Appeal in Sumathy was concerned that the judgment creditor would be “very much overpaid” if both defendants were to be liable for the amounts in the bankruptcy notices. To address this, guidance can be gleaned from Tang Min Sit v. Capacious Investments Ltd [1996] AC 514, where Lord Nicholls of Birkenhead delivering the Privy Council judgment at p. 522 said that: “... a plaintiff cannot recover in the aggregate from one or more defendants an amount in excess of his loss. Part satisfaction of a judgment against one person does not operate as a bar to the plaintiff thereafter bringing an action against another who is also liable, but it does operate to reduce the amount recoverable in the second action. However, once a plaintiff has fully recouped his loss, of necessity he cannot thereafter pursue any other remedy he might have and which he might have pursued earlier. Having recouped the whole of his loss, any further proceedings would lack a subject matter. This principle of full satisfaction prevents double recovery”. (see Re Ahmed Ismail bin Hj Amin; ex parte Lembaga Kumpulan Wang Simpanan Pekerja [2022] MLJU 1291) [20] In the case of Herukh Thakurdas Jethwani & Anor v. Bank Simpanan Nasional [2021] 8 MLJ 407, held that: ‘...l hold that notwithstanding that the judgment is silent as to whether the obligations for the judgment sum are joint and several or joint only, the defendant’s rights against the plaintiff in this case is on a joint and several basis as provided for in the annexure aforesaid and this continues to survive the judgment’. [21] In Kejuruteraan Bintai Kindenko Sdn Bhd v Fong Soon Leong [2021] 2 MLJ 234, the Court of Appeal held that: “In both Sumathy’s case and Edwin Cassian’s case, the Court of Appeal had concluded that a judgment entered against two or more judgment debtors, without more, created a joint liability such that each of the joint debtors was only liable for an aliquot portion of the judgment sum and therefore enforcement may only be limited to that aliquot portion. However, in the present appeal, the court had arrived at different conclusion from that in Sumathy’s case and Edwin Cassian’s case. Upon the authorities discussed in the present appeal and the consistency of judicial views expressed, the court was inclined to conclude that a judgment entered for payment of a sum of money against several judgment debtors imposed upon them and each of them, a joint and several liability to honour the entire judgment debt, and not merely an equal portion of it, unless otherwise stated (see paras 56 & 58). (see Ber: Siti Thasleem bt Osman Ghany; ex parte Fast Meridian Sdn Bhd [2023] MLJU 3121) [22] The argument on this issue is without merits, therefore I cannot agree with the submission by the Learned Counsel for the JD. Furthermore, JD has also failed to show that there is any counterclaim, set-off or cross-claim against the JC as per Section 3(1)(i) of the Insolvency Act 1967 and therefore all the allegations raised by the JD in objecting to the filing of the BN should be dismissed. Then the total debt can be claimed as in the case of Re Low, Ex Parte Gibson [1985] 1 Q.B. 734, it was decided that: '..where judgment has been recovered against several persons jointly, a bankruptcy notice may be issued against one of the joint judgment debtors without including the others'

(ii) The Insolvency Department subsequent to the filing of the Bankruptcy Notice and Creditor’s Petition, paid out dividends which reduced the total debt owing by the JD to the JC, then amounts are not accurate as stipulated in the BN and Amended CP. [23] In this case there is also no evidence that JD also has a counter claim against JC which allows the BN to become irregular which allows it to be set aside by the Court. This is clear as outlined in the case of Kapten Ho Ooi V Standard Charted Bank Malaysia Berhad [2004] MLJU 733, which decided as follows: “...They must as decided in Datuk Lim Khenq Khim v Malayan Banking Bhd

2 MLJ 298, follow the requirement under r 18 of the Bankruptcy Rules where unless the Judgment Debtor has a counter claim, set off and cross demand which equals or exceeds the judgment debt, challenges to any creditor’s petition or Bankruptcy Notice must be made by filing a notice of motion (summons in chambers now after the amendment on r 18 of the Bankruptcy Rules), supported by an affidavit...” [24] In Re Cheah Wee Liam Ex P Robert Teng Lye Hock v. Citibank Bhd [1999] 6 MLJ 615, held: “There are only two ways to challenge the bankruptcy notice, ie under r 95 of the Rules on the ground of the existence of counterclaim, etc and under r 18 on other grounds. This application is made under r 95 by way of an affidavit filed within seven days after the service of the bankruptcy notice. The affidavit does not say anything about the existence of a counterclaim, set-off or cross demand. The affidavit cannot operate as an application to set aside the bankruptcy notice within the contemplation of s 3(1)(i) of the Bankruptcy Act 1967, and the case should have been treated as if no affidavit under r 95 had in fact been filed. Similarly, the affidavit does not attract the provisions of proviso 2(ii) of s 3 of the Bankruptcy Act 1967 because it does not condescend to particulars of the amount actually due’ [25] In Shahfie bin Ahmad; ex parte Azizi bin Yom Ahmad [2022] MLJU 03725, held: “(54) Dalam kes Per ： Selvaraja Namachivayam; ex parte Narayanasamy a/l Krishnan [2022] MLJU 2141, memutuskan bahawa: [22] Mahkamah Agung dalam kes SOVEREIGN GENERAL INSURANCE SDN BHD v KOH TIAN BEE [1988] 1 MLJ 304; [1988] 1 CLJ REP 277, memutuskan bahawa BN yang menuntut jumlah yang lebih besar tidak akan mencacatkannya dan boleh dipinda seperti diputuskan oleh Lee Hun Hoe CJ (Borneo) bahawa: “Williams and Muir Hunter on The Law and Practice of Bankruptcy (19th Ed) at p. 492 under the heading ‘Formal Defect Not To Invalidate Proceedings’, refers to s. 147(i) of the English Bankruptcy Act 1914 which is word for word the same as our s. 131: 147①No proceeding in bankruptcy shall be invalidated by any formal defect or by Irregularity, unless the court before which an objection is made to the proceeding is of opinion that substantial injustice has been caused by the defect or irregularity, and that the injustice cannot be remedied by any order of that court.” [23] Mahkamah Agung juga dalam kes DATUK LIM KHENG KIM v. MALAYAN BANKING BHD [1993] 1 MLRA 288; [1993] 2 MLJ 298; [1993] 3 CLJ 324 tidak menerima alasan bahawa jumlah yang tidak tepat akan menjadikan BN tidak sah. Mahkamah memutuskan seperti berikut: “Similarly, as para 3 of the enclosure merely disputes his indebtedness in the said sum to the respondent “based on an erroneous calculation and grossly exaggerated” without condescending to particulars of the amount actually due, we say that the said affidavit does not attract proviso 2(ii) of s 3 which states that a bankruptcy notice shall not be invalidated by reason only that the sum specified in the notice as the amount due exceeds the actual amount due.” [26] At this stage, JD can no longer challenge the judgment and also BN and CP which has been issued based on a valid judgment, unless it can be proven by the JD that the principle in the case of Sovereign General Insurance Sdn Bhd v Koh Tian Bee [1988] 1 MLJ 304 and the case of Malayan Banking Berhad v Datuk Lim Kheng Khim (Supra) are applicable. [27] In the case of Malayan Banking v Datuk Lim Kheng Khim (supra), Abdul Hamid JC decided that: "I shall now try to summarize the law from the authorities. It seems to me that:

a bankruptcy court has power to go behind a judgment on which the bankruptcy proceedings are founded if there is evidence of fraud, collusion or miscarriage of justice;

an irregularity or formal defect is no sufficient reason for going behind the judgment;

a bankruptcy court may go behind a judgment if it is founded on a contract which is void because it is contrary to an express statutory provision;

a bankruptcy court may go behind a judgment and inquire into the validity of the judgment even if an application to set aside the judgment had been made, dismissed, and affirmed by a court superior to the bankruptcy court.” [28] Referring to Section 3(1)(i) of the Insolvency Act 1967 provides: ".A debtor commits an act of bankruptcy if a creditor has obtained a final judgment or final order against him for any amount and execution thereon not having been stayed has served on him in the Federation, or by leave of the court elsewhere, a bankruptcy notice under this Act requiring him to pay the judgment debt or sum ordered to be paid in accordance with the terms of the judgment or order with interest quantified up to the date of issue of the bankruptcy notice, or to secure or compound for it to the satisfaction of the creditor or the court; and he does not within seven days after service of the notice in case the service is effected in Malaysia, and in case the service is effected elsewhere then within the time limited in that behalf by the order given leave to effect the service, either comply with the requirements of the notice or satisfy the court that he has a counter-claim, set off or cross demand which equals or exceeds the amount of the judgment debt or sum ordered to be paid and which he could not set up in the action in which the judgment was obtained or in the proceedings in which the order was obtained….” [29] But it should be remembered once again, in this case only the claimed amount is alleged to be inaccurate. But this Court agrees with the JC's argument that it is protected by Section 2 of the Act (including provisio (ii) of the Act) which provides that: ".... bankruptcy notice under this Act shall be in the prescribed form and shall state the consequences of non-compliance therewith and shall be served personally to a debtor: Provided that a bankruptcy notice

may specify an agent to act on behalf of the creditor in respect of any payment or other thing required by the notice to be made to or done to the satisfaction of the creditor; and

(ii)shall not be invalidated by reason only that the sum specified in the notice as the amount due exceeds the amount actually due unless the debtor within the time allowed for payment gives notice to the creditor that he disputes the validity of the notice on the ground of such mistake; but if the debtor does not give such notice he shall be deemed to have complied with the bankruptcy notice, if within the time allowed he takes such steps as would have constituted compliance with the notice had the actual amount due been correctly specified therein." [30] The JC submits that the JC does not dispute on the payments of dividends that has been made by the Insolvency Department. However, these payments of dividends had been made subsequent to the filing of the Bankruptcy Notice and the Amended Creditor’s Petition. At the time when the Bankruptcy Notice and Amended Creditor’s Petition was filed, the amounts stated therein were accurate. This fact cannot be disputed by the JD. [31] JD refers to a case of Re Yusnita Hussain, Ex P MBF Finance Bhd [2000] 6 CLJ 511, which ruled that, once the BN is filed, no further acceptance of payment can be made. If the JC accepts it, then it will cause the BN to be invalid. The Court also decides that, unless the debt is paid in full, the creditor may reject that part payment and await the receiving order. So long as payments are accepted after the act of bankruptcy has occurred, the creditor runs the risk of having his petition declared defective. [32] After examining the facts of the case, this Court found that in that case, the JC itself had received the payment whereas in our current case, the receipt was by the Insolvency Department. Based on the facts, it is different and this Court does not intend to follow that decision which was decided at the High Court level, keeping in mind that it is not binding on this Court. With all due respect, that case is no longer an established law for the time being. [33] This Court agrees with the Learned Counsel for the JC that a Bankruptcy Notice and a Creditor’s Petition is not vitiated merely because the creditor has received part payment towards the debtor’s debt after the presentation of the petition unless the amount of the debt has been reduced to less than the statutory threshold of RM100,000-00. In Re Fong Yuan Kwong, Ex P Public Bank Bhd [1996] 4 MLJ 42 wherein it was held: - “(5) Any dispute or discrepancies in the amount actually due from the judgment debtor to the petitioning creditor ought to have been raised at the bankruptcy notice stage, within the time frame and in the manner and on grounds stipulated in the bankruptcy notice. The judgment debtor is, at the creditor's petition stage, precluded from raising the issue that payments made by the judgment debtor have not been accounted for (see pp 52I and 53A-B).

Even where the judgment debt on which the creditor's petition was founded had by the date of the hearing of the petition been substantially reduced, the court could still make a receiving order unless the judgment debt was below the statutory minimum. Here, the debt was RM39,744, i.e. above the statutory limit. The petitioning creditor had disclosed material facts relating to the judgment debt, i.e. that security held had been auctioned and the proceeds received (see p 53C-D; Re Loh Kok Huah, ex p Ban Hin Lee Bank Bhd [1992] 1 MLJ 687 followed)” [34] In the case of Moscow Narodny Bank Ltd v Ngan Ching Wen [2005] 3 MLJ 693, the Federal Court held: - “(60) In Re Patel (A debtor) [1986] 1 All ER 522, it was held that where a debt on which the bankruptcy petition was founded had by the date of the hearing of the petition been reduced by part-payment to less than the statutory minimum the court had no jurisdiction to make a receiving order. That is a very sensible judgment, because, if the debt at the time of making the receiving order, is less than the statutory minimum, then the bankruptcy court clearly has no jurisdiction to make the receiving orders. But, where the debt is above the statutory minimum, the court's jurisdiction is not ousted.

Malaysian courts have, on many occasions, followed Re Patel and took a similar view, ie where after the filing of the creditor's petition the amount owing by the debtor is reduced, the petition is not bad as long as the amount remaining owing at the date of hearing of the petition is more than the statutory limit. See Re Chong Ah Kwan Construction Co [1966] 2 MLJ 39; Re Loh Kok Huah [1992] 1 MLJ 687; Re Ti Hock Soon [1993] 1 CLJ 477; Re Sharifah Mohsin [1994] 3 CLJ 373; Re Fong Yuan Kwong [1996] 4 MLJ 42; Re Darshan Singh a/l Atma Singh, ex p OCBC Bank (Malaysia) Bhd [1996] MLJU 1195; Rozila bte Mohamed v American Express (M) Sdn Bhd [1999] MLJU 959; Dalam Perkara Hussain bin Manaf, ex p Malayan Banking Bhd [2001] MLJU 781; Re MSA Zachariah, ex p Boon Siew Finance Bhd [1993] 3 CLJ 279.” [35] In this case it is clear that the CP has been filed based on a valid Judgment which the JD did not comply with. On this basis, the Judgment can be enforced to safeguard the JC's interest in recovering payment premised on the JD’s act of bankruptcy for failing to comply with the Bankruptcy Notice dated 15.03.2021 and was the accurate amount owing by the JD to the JC until 08.02.2023, when the Insolvency Department paid out the dividends. Following the Federal Court case of Moscow Narodny (supra) and the accepted position of law in Malaysia, the Amended Creditor’s Petition does not become invalidated simply because the amount owing by the JD is reduced before the Creditor’s Petition could be heard. [36] This Court agrees with the submission by the Learned Counsel for the JC that the debt owing by the JD is well above the statutory minimum (even after taking into account the reduction) and the Court is empowered to make a bankruptcy order so long as it is satisfied that the amount owing by the JD remains above the statutory minimum. The debt due by the JD after the making of the bankruptcy order to its creditors is to be determined by the Director General of Insolvency. In Ambank(M) Bhd v Lim Sue Beng [2019] 4 MLJ 701, the Federal Court held that: “If a petitioning creditor could be substituted in the circumstances set out in s 95 of the BA, there was no reason why the Court could not, under s 93(3), allow for the CP to be amended to remove RHB as a co-petitioner and for the amount of the judgment debt to be reduced following the settlement of the debt by the respondent. Such an amendment would not affect the validity of the act of bankruptcy as the amount remaining due following the deduction would be well above the statutory limit and there was nothing in law to prevent the remaining petitioners from continuing with the bankruptcy proceedings against the respondent based on the amended petition (see paras 82-83). [37] Debt must be proven through proof of debt and will be assessed in order to make the payment. It does not provide any benefit nor will it prejudice the JD as the Director General of Insolvency is a party that has no interest. The Director General of Insolvency will examine the creditor’s claim and may reject or admit the proof of debt. It is submitted that any reductions in the debt owing by the JD will be accurately reflected in the proof of debt to be filed by the creditors in due course. The Learned Counsel for the JC referred this Court to Rule 26 of Schedule C of the Insolvency Act 1967: “26. The Director General of Insolvency shall examine every proof and the grounds of the debt, and in writing admit or reject it in whole or in part or require further evidence in support of it. If he rejects a proof he shall state in writing to the creditor the grounds of the rejection” [38] Therefore, the amount stated in the Bankruptcy Notice 15.03.2021 and Amended Creditor’s Petition 14.12.2022 was correct and accurate at the time they were filed. The JD committed an Act of Bankruptcy on 28.12.2021. [39] Other issue i.e. “abuse of court process “that have been raised by parties have also been considered. Whether JD's action is an abuse of court process should be seen on the facts of the case. This guidance has been given in the of Re: Tunku Maryam Bt Tunku Zainal Abidin ; Ex-Parte: Arab Malaysian Finance Berhad [2007] 8 CLJ 626, where it was decided that: “Regrettably, even in Bankruptcy cases, I have observed the not uncommon ploy of JDs to grossly delay court proceedings, by making all sorts of applications for striking out etc. at the BN stage, as well later, at the CP stage of the proceedings and then to appeal to the judge in chambers, the Court of Appeal and even to the Federal Courts coupled with an application for stay of the Petition. In the result, it sometimes takes a JC eight to fifteen years to recover the judgment debt or to secure a truly final adjudication and receiving order. Just take this case as an example. The JC first obtained judgment on 1st June 1995 before the SAR, which was confirmed by the judge in chambers and the Court of Appeal – without further appeal by the JD. Until now, about 11 years later, the JC has yet to recover the fruits of litigation and the JD is still trying to 'go behind the judgment'. When it dawned on her counsel that she was about to fail on this score her counsel adopted the 'other sufficient cause' argument to support her contention that "the existence of a valid judgment does not ipso facto warrant an Adjudication and Receiving Order." And, now that she has appealed against my decision confirming the AORO, a few years may yet have to be added to the eleven years delay that the JC has had to endure to recover the judgment debt.” [40] But this Court is of the opinion that JD's action in this case cannot be considered as an abuse of the Court process because this action to challenge the petition is allowed under the Insolvency Act 1967. Based on the facts of this case, there were several failures of JD to comply with it before BN and CP were to be set aside, for example JD failed to comply with basic matters including disputing the valid judgment without taking action to set it aside. [41] In a nut shell, there is no evidence that JC's claim against JD is not in compliance with the judgment that has been legally obtained for which BN and CP could be set aside. This principle has been stated in the case of J Raju M Kerapaya v Commercial International Merchant Bankers Bhd [2000] 3 CLJ 104, held that: “[1] When determining an issue under the Bankruptcy Act 1967, it is incumbent upon the court to accord its provisions a strict construction. The consequence of such an approach is that a bankruptcy notice that requires a debtor to pay a judgment debt otherwise than in accordance with the terms of the judgment is null and void ab initio” Pronouncement [42] In conclusion, , there is no good reason for this Court to disturb the findings by the Learned SAR. Other relevant issues are also considered, but in general, not in favour of the JD. [43] Appeal dismissed. The decision of the Learned Senior Assistant Registrar is upheld and affirmed. No order as to costs. …………sgd…………… AZIZAN MD ARSHAD Judicial Commissioner High Court (3) Pulau Pinang Dated: 18 April 2024. Counsel for the Judgment Creditor: Surein Wei Tetuan Zaid Ibrahim & Co. Peguambela & Peguamcara No.51-22 B & C, Menara BHL Jalan Sultan Ahmad Shah 10050 Pulau Pinang Counsel for the Judgment Debtor: Marcus Ow Wai Loon Tetuan Arthur Wang, Lian & Associates Unit No. 568-9-10 & 568-9-11 Kompleks Mutiara, 3 ½ Miles Jalan Ipoh 51200 Kuala Lumpur Legislations referred to:

Section 3(1)(i) of the Insolvency Act 1967

Rule 26 of Schedule C of the Insolvency Act 1967 Cases referred to :

Tuan Haji Ahmed Abdul Rahman v. Arab-Malaysian Finance

Re: Sulaiman Sahari; Ex-Parte: Hafitz Khalid & Anor [2019] 1 LNS 1138

Sumathy Subramaniam v. Subramaniam Gunasegaran & Another

Kejuruteraan Bintai Kindenko Sdn Bhd v Fong Soon Leong [2021]

Lembaga Kumpulan Wang Simpanan Pekerja v. Edwin Cassian

Herukh Thakurdas Jethwani & Anor v. Bank Simpanan Nasional [2021] 8 MLJ 407

Kejuruteraan Bintai Kindenko Sdn Bhd v Fong Soon Leong [2021]

Siti Thasleem bt Osman Ghany; ex parte Fast Meridian Sdn Bhd [2023] MLJU 3121

Re Low, Ex Parte Gibson [1985] 1 Q.B.

Kapten Ho Ooi V Standard Charted Bank Malaysia Berhad [2004] MLJU 733

Re Cheah Wee Liam Ex P Robert Teng Lye Hock v. Citibank Bhd [1999] 6 MLJ 615

Shahfie bin Ahmad; ex parte Azizi bin Yom Ahmad [2022] MLJU 03725

Sovereign General Insurance Sdn Bhd v Koh Tian Bee [1988] 1

Re Yusnita Hussain, Ex P MBF Finance Bhd [2000] 6 CLJ 511

Re Fong Yuan Kwong, Ex P Public Bank Bhd [1996] 4 MLJ 42

Moscow Narodny Bank Ltd v Ngan Ching Wen [2005] 3 MLJ 693

Ambank(M) Bhd v Lim Sue Beng [2019] 4 MLJ 701

Re: Tunku Maryam Bt Tunku Zainal Abidin ; Ex-Parte: Arab

of J Raju M Kerapaya v Commercial International Merchant