Cs Nam Sdn Bhd v Alm Trading Sdn Bhd (WA-28NCC-911-09/2025)

This is a winding-up Petition filed by the Petitioner against the Respondent pursuant to section 465(1)(e) of the Companies Act 2016.

After perusal of the cause papers and having considered the written and oral submissions by the parties, I allowed the Petition and ordered the Respondent to be wound up. These are my reasons.

The Respondent, ALM Trading Sdn Bhd, was incorporated on 06.03.2003 as a private company limited by shares. Its registered office is at Lot 4.81, Tingkat 4, Wisma Central, Jalan Ampang, 50450 Kuala Lumpur, while its business address is at Lot 12, Jalan S1A/223, 46100 Petaling Jaya, Selangor. Its paid-up capital is RM1,400,000.00.

The Petition was founded on an unpaid judgment debt arising from the decision of the Sessions Court at Kuala Lumpur dated 16.06.2025 in Civil Suit No. WA-B52NCC-77-01/2023. After a full trial, the Sessions Court ordered the Respondent to pay the principal amount of RM375,126.97, interest at 5% per annum from the date of filing the writ until full settlement, costs of RM15,000.00 to the Petitioner, and also dismissed the Respondent’s counterclaim with costs of RM11,950.00.

Following the judgment, the Petitioner issued notices under section 466 of the Companies Act 2016 dated 17.07.2025 and 04.08.2025, served at the Respondent’s registered and business addresses.

Upon the expiry of the 21 days of the statutory period, and in the absence of payment, security, or composition to the Petitioner’s satisfaction, the present Petition was filed on 04.09.2025.

The Petition stated that as of 17.07.2025, the amount owed by the Respondent to the Petitioner was RM448,787.99. This sum included the principal judgment amount of RM375,126.97, accrued interest of RM46,711.02, and total costs of

In its Affidavit in Opposition, the Respondent did not deny that the Sessions Court had entered judgment against it. Its position was instead that the debt remained disputed because the Sessions Court decision had been appealed, and that its defence and counterclaim in the Sessions Court gave rise to a genuine and substantial dispute. Among the matters referred to by the Respondent were the denial of delivery of goods, limitations under the Limitation Act 1953, an alleged promise relating to a “Hoist Unit” and facilities worth approximately RM100,000.00, and the dismissal of its counterclaim, said to be valued at RM300,000.00 plus general damages to be assessed.

The Respondent also initially challenged the validity of service of the section 466 notice on the ground that the acknowledgements were not stamped or signed by the Respondent itself but by “Star Corporate Service Sdn Bhd”, and that no AR card had been exhibited.

The Petitioner argued that the notice was served at the Respondent’s registered office and business address, supported by proof of posting and a statutory declaration. The Respondent’s own affidavit confirmed service on the company secretary. The Petitioner also asserted that the Respondent’s appeal did not operate as a stay, and the judgment debt remained valid and enforceable.

Having examined the Petition, affidavits, and written submissions, the following issues have arisen for determination: a. whether the service of the statutory notice and Petition was regular and good. b. whether the debt relied upon by the Petitioner was a debt due and payable for the purposes of sections 465(1)(e) and 466 of the Companies Act 2016. c. whether the Respondent had established a bona fide dispute or substantial cross-claim such as to make it inappropriate to issue a winding-up order; and d. whether, in the circumstances of this case, the Petition was premature, oppressive, or an abuse of the winding-up jurisdiction.

At the hearing before this Court, however, two matters assumed particular significance. First, the Court was informed that the Respondent’s appeal to the High Court against the Sessions Court decision had already been dismissed on 18.12.2025.

Secondly, the Respondent agreed that service of the Petition at the registered address was proper and valid. Nevertheless, the Respondent filed a further notice of appeal to the Court of Appeal.

I will first address the issue of service. In my view, this issue no longer presents any real difficulty, because at the hearing of the Petition, the Respondent agreed that service of the Petition at the registered address was proper and valid. Once that position was established, the earlier challenge raised in the Affidavit in Opposition regarding the sufficiency of service could no longer be meaningfully maintained.

In any event, even on the documents before the Court, I am satisfied that the Petitioner had taken the necessary steps to serve the statutory notice and the Petition at the Respondent’s registered office and business address. The Petition itself explicitly pleaded the registered office and business address of the Respondent, the issuance of the statutory notice, and the acknowledgement of receipt at the registered office address on 05.08.2025.

Furthermore, the Petitioner pointed to the Respondent’s own affidavit as acknowledging that the Petition had been served on the company secretary. This, combined with the Respondent’s concession at the hearing, strengthened the conclusion that service was proper.

I therefore find that the objection on service is no longer sustainable and that the statutory notice and Petition have been properly served. Whether the debt was due and payable

I now turn to the central question, namely, whether the debt relied upon by the Petitioner was a debt due and payable within the scope of sections 465(1)(e) and 466 of the Companies Act 2016.

It is crucial at the outset to emphasise that winding-up proceedings are separate from execution proceedings. They are not a replacement for ordinary enforcement under the Rules of Court 2012. Instead, they constitute a distinct statutory process based on the company’s inability to pay its debts and involve a collective insolvency jurisdiction.

That said, the fact that the Petition is based on an unpaid judgment debt does not, on its own, make the Petition improper. A judgment debt may, depending on the circumstances, form the basis for the statutory presumption of inability to pay debts to arise. The key questions are whether the debt is due and payable, whether the statutory demand was properly served, whether the debt remains unpaid after the statutory period, and whether there is any genuine reason for the winding up Court to refuse the order sought.

In the present case, the debt relied upon by the Petitioner arose from a judgment of the Sessions Court entered after a full trial. This was not a provisional order, an interlocutory determination, or an adjudication of an interim nature. The rights of the parties in the Sessions Court action had been adjudicated upon, the Petitioner’s claim had succeeded, and the Respondent’s counterclaim had been dismissed.

The Petitioner referred to Peninsular Land Development Sdn Bhd v K Ahmad (No. 2) [1970] 1 MLJ 253, adopting an English case of Bozson v Altrincham Urban District Council [1903] 1 KB 547, for the proposition that an order is final if it conclusively disposes of the rights of the parties. On the facts before this Court, it is clear that the Sessions Court judgment dated 16.06.2025 is a final order.

More importantly, the factual premise of the Respondent’s opposition had materially changed by the date of the hearing. The Respondent’s appeal to the High Court had already been dismissed on 18.12.2025. Therefore, the judgment debt had not only survived the first instance trial but also withstood appellate scrutiny at the High Court level.

The Respondent nevertheless argued that because it had filed a further notice of appeal to the Court of Appeal, the debt had not reached sufficient finality for the purposes of the winding-up jurisdiction. I am unable to accept that argument.

It is trite that an appeal does not operate as a stay unless a stay is obtained (see: Shanmugam Pillai v Panjali [1961] 1 MLJ 290; Ming Ann Holdings Sdn Bhd v Danaharta Urus Sdn Bhd [2002] 3 MLJ 49).

I am mindful, of course, that these were stay authorities and that the winding-up Court is not to treat the absence of a stay as automatically requiring the making of a winding-up order. The Respondent was correct in reminding the Court that the absence of a stay does not compel winding-up. The discretion remains with the Court, which must consider whether the debt is genuinely disputed and, in the circumstances, whether it is appropriate to invoke its insolvency jurisdiction.

But based on the facts before me, the absence of a stay remained significantly relevant. It indicated that the judgment debt persisted as a valid and enforceable obligation. It was not suspended. It was not set aside. It was not displaced by any order from any appellate court. The Respondent itself explicitly stated that it was not seeking a stay in these proceedings.

It is trite that a judgment debt which has not been stayed or set aside on appeal remains a valid and enforceable debt for the purposes of a winding-up Petition. A winding-up Court is not the proper forum to re-open or re-examine the merits of the underlying judgment. This Court will not go behind the said judgment (see: Gulf Business Construction (M) Sdn Bhd v. Israq Holding Sdn Bhd [2010] 2 MLRA 411; [2010] 5 MLJ 34; [2010] 8 CLJ 775 (CA)). The validity of the said judgment cannot be challenged at the hearing of this winding-up Petition in the absence of any evidence that it was procured by fraud or collusion, and no such evidence exists in the present case (see: Sri Jeluda Sdn Bhd v. Pentalink Sdn Bhd [2008] 3 MLJ 692).

Furthermore, the law clearly states that a judgment debt is an undisputed debt. In Pacific & Orient Insurance Co Bhd v Muniammah Muniandy [2010] MLJU 2217, the Court of Appeal held: “[22] The status of the judgment on the insurer under s. 96(1) of the Road Transport Act 1987 is the same with status of the said judgment on the insured earlier granted in favour of the respondent. Unless set aside or stayed by proper authority, the said judgment remains. Upon the respondent obtaining the judgment against the insured, the debt ceased to be a disputed debt. Thereafter the question whether the debt or amount due was bona fide disputed became non-issue. This is so even though the appellant had filed an appeal against the said judgment because the filing of an appeal does not have the effect of reverting the status of the judgment debt to its original status as a disputed debt before judgment was obtained. The filing of an appeal does not make a valid and enforceable judgment a disputed debt. (see: SBSK Plantations Sdn Bhd v. Dynasty Rangers (M) Sdn Bhd [2002] 2 CLJ 329). [23] In the instant case, the respondent has the right to proceed to issue a statutory notice under s. 218(2)(a) of the Companies Act 1965. Upon the expiration of the 21 days period as set out in the statutory notice and the amount claimed remaining unpaid, the debt becomes ‘due and payable’ and the appellant as the insurer is deemed to be unable to pay its debts. Consequently, the respondent acquires the status of ‘creditor’ for the purpose of winding up proceedings under s. 217(1)(h) and 218(1)(e) of the Companies Act 1965.” [emphasis added]

Therefore, a winding-up Petition based on an unsatisfied judgment debt gives rise to a statutory presumption of insolvency under section 466(1)(a) of the Companies Act 2016.

In Klass Corp (M) Sdn Bhd v MKRS Management Sdn Bhd [2018] 9 MLJ 305, the High Court held that once a judgment is obtained, the debtor’s failure to satisfy it within the statutory period creates a presumption of inability to pay its debts under section 466(1)(a) of the Companies Act 2016. Unless the judgment is set aside or stayed, the debt cannot be disputed.

In Gulf Business Construction (M) Sdn Bhd v Israq Holding Sdn Bhd (supra), the Court of Appeal further observed that the presumption of inability to pay arises automatically once the debtor fails to comply with a statutory demand based on a judgment debt, and the Court is justified in granting a winding-up order. The Court of Appeal stated: “[11] The failure on the part of the company to pay as demanded would trigger the presumption that the company is unable to pay its debt. This presumption is, however, rebuttable. The onus shifts onto the company to show that it is able to pay the debt (PT Anekapangan Dwitama v Far East Food Industries Sdn Bhd). Thus, the inability to pay on the part of the company gives the requisite jurisdiction of the court to make a winding up order against the company (Securicor (M) Sdn Bhd v Universal Cars Sdn Bhd [1985] 1 MLJ 84).” [emphasis added]

In the present case, it is undisputed that the Petitioner, through its solicitors, issued and served upon the Respondent a Statutory Notice of Demand dated 17.07.2025 and 04.08.2025, pursuant to sections 465(1)(e) of the Companies Act 2016. The notice was duly served at the Respondent’s registered address via personal service on 04.08.2025 and by registered post on the same day. It was also served at the Respondent’s business address.

The 21-day period has lapsed since the service of the said Notice. However, the Respondent has failed to pay the debt, whether in whole or in part, or to make any bona fide offer to settle the debt. In these circumstances, failure to pay within the stipulated 21 days will give rise to the statutory presumption that the Respondent is unable to pay its debts, thereby conferring on the Court the jurisdiction to grant a winding-up order.

This statutory presumption is rebuttable, and it is the responsibility of the Respondent to prove that, at the relevant time, it was able to pay its debts as they fell due. However, in this case, the Respondent has not provided any evidence to rebut the presumption or to demonstrate that it was capable of settling the debt mentioned in the said Notice.

The Court therefore finds that the Respondent is unable to pay its debts within the meaning of section 465(1)(e) read with section 466(1)(a) of the Companies Act 2016. Whether there was a bona fide dispute or a substantial cross-claim

The Respondent then attempted to oppose the Petition by arguing that there was a genuine dispute and a substantial counterclaim.

I accepted as a general principle that the winding-up jurisdiction should not be invoked where there is a genuine and substantial dispute regarding the debt, or where a genuine cross-claim of such substance exists that permitting the Petition to proceed would be unjust. This broad proposition is reflected in the authorities cited by the Respondent, including Josu Engineering Construction Sdn Bhd v TSR Bina Sdn Bhd [2014] 11 MLJ 916 and Maju Holdings Sdn Bhd v Spring Energy Sdn Bhd [2021] 8 MLJ 275.

The difficulty for the Respondent, however, lay in the facts of the present case. The matters now relied upon by the Respondent as constituting a bona fide dispute were the very issues that had already been submitted to the Sessions Court. These included the alleged non-delivery of goods, the limitation point, the alleged promise concerning the “Hoist Unit” and facilities, and the Respondent’s counterclaim, said to amount to RM300,000.00, along with general damages.

Those matters were not left unaddressed. They were not merely collateral issues awaiting future adjudication. They had already been included as part of the defence and counterclaim in the Sessions Court proceedings. The Sessions Court nevertheless delivered judgment in favour of the Petitioner and dismissed the Respondent’s counterclaim. Subsequently, the Respondent appealed to the High Court, and that appeal was also dismissed on 18.12.2025.

In those circumstances, I find that the Respondent could not rely on the same rejected matters as if they remained, before this Court, fresh and substantial disputes concerning the existence of the debt. The winding-up Court is not an appellate forum to rehear or revisit the merits of issues already determined in the trial court, only to be revisited again on appeal to the High Court.

For these reasons, I find that the Respondent failed to establish any bona fide dispute or substantial cross-claim sufficient to justify the refusal or restraint of the Petition. Whether the Petition was premature, oppressive, or an abuse of process

I then considered whether the Petition was premature, oppressive, or an abuse of process, as argued by the Respondent.

As I have already stated, a winding-up Petition is not an execution proceeding. The Court must therefore exercise caution to ensure that the insolvency jurisdiction is not misused as a mere debt-collection tool. At the same time, the Court must not lose sight of the fact that the Companies Act itself deems a company unable to pay its debts when a proper statutory demand is served, the prescribed period has elapsed, and the company fails to pay, secure, or settle the debt to the creditor's satisfaction.

Based on the facts before me, the statutory demand was properly served. The debt remained unpaid. No acceptable proposal for security or composition was submitted. No stay was granted. The debt in question was a judgment debt that remained in force. These matters were all relevant to the Court’s discretion under the winding-up jurisdiction.

The Respondent argued that the Petition should be dismissed because permitting it would irreversibly ruin the company's substratum and make the Court of Appeal process purely academic in nature.

However, based on the materials before me, that submission remained a mere assertion rather than one supported by convincing evidence. The Respondent did not demonstrate, with proper evidence, why the normal consequences of a company’s failure to settle an unsatisfied judgment debt should, in this case, justify the refusal of a winding-up order. Nor did the Respondent present the Court with satisfactory evidence of solvency sufficient to rebut the statutory presumption arising under section 466 of the Companies Act 2016.

The authorities that I have stated earlier have decided that if the company fails to pay the demanded sum within 21 days, a presumption of insolvency arises. It then becomes the company's responsibility to demonstrate that it can pay its debts. According to the record before this Court, that burden was not met.

The Respondent also argued that its right of appeal should not be regarded as bad faith or an abuse of process. I accepted that merely exercising a statutory right of appeal cannot, in itself, amount to bad faith. I did not base my decision on any finding that the appeal itself was mala fide.

But the issue for the Respondent was not that it had exercised a right of appeal. The real problem was that, despite having a valid judgment debt, despite its appeal to the High Court being dismissed, despite the service of the statutory demand, and despite no stay being in place, the Respondent still failed to pay, secure, or settle the debt. It also failed to establish before this Court any genuine reason why the debt could be considered substantially disputed. That combination of circumstances ultimately justified the making of a winding-up order.

I therefore find that the Petition was neither premature nor oppressive and did not constitute an abuse of the winding-up jurisdiction.

Drawing the threads together, I find that the Petitioner has established the requirements for the grant of a winding-up order under section 465(1)(e) read with section 466 of the Companies Act 2016. In the circumstances, this is a proper case for the Court to exercise its insolvency jurisdiction and to make the winding-up order sought.

Accordingly, the winding-up Petition was allowed. The Respondent was ordered to be wound up. I also ordered that the Respondent pay RM10,000.00 in costs to the Petitioner. Dated 8 APRIL 2026 -sgd-JAMHIRAH ALI JUDGE HIGH COURT OF MALAYA KUALA LUMPUR To the parties’ solicitors: For the Petitioner : Tan Kim Tat (Messrs Deidra Sharina & Co) For the Respondent : Asmawi bin Ismail bersama Vel Manohran (Messrs Kinv’s Law Office)