INNOSEVEN SDN BHD v Muhammad Zahir Sanjay Bin Abdullah (WA-29NCC-569-06/2023)

This is an appeal by Judgment Debtor (“JD”) in Enclosure 47 against the decision of the Senior Assistant Registrar (“SAR”) in dismissing the JD’s application to set-aside the Bankruptcy Petition. The only ground stated in the application to set-aside the Petition in Enclosure 26 is the failure on the part of the Judgment Creditor (“JC”) to attach the Affidavit Verifying Petition (AVP) together with the Petition which was served on the JD on 20.11.2023.

The JC submits that this ground to set-aside the Bankruptcy Petition is misconceived since there is no requirement in the Insolvency Rules 2017 for the AVP to be served on the JD. The rules only provide for the Creditors Petition (the Petition”) to be personally served.

Rule 108 of the Insolvency Rules 2018 provides as follows: Personal service Rule 108. “A creditor’s petition shall be personally served and the service shall be effected by an officer of the court or by the creditor or his solicitor … by delivering a sealed copy of the petition to the debtor.”

The above provision is identical with the provision of the previous Rule 109, of the Bankruptcy Rules 1969 which was repealed and replaced by the Insolvency Rules 2017. Therefore, the cases decided by the courts based on the old Rule 109 of the Bankruptcy Rules 1969 are applicable to this proceedings.

In Re Dato Othman Bokhari Ex p Diners Club (M) Sdn Bhd [1998] 4 CLJ Supp 315, the Judgment Debtor alleged that the Affidavit Verifying Petition was not served together with the Creditor’s Petition based on Section 6 of the Bankruptcy Act 1967. The High Court held as follows: There is no requirement in the Act or the rules that the affidavit be served. Subsection (1) of Section 6 of the Act states:

A creditor’s petition shall be verified by affidavit of the creditor or of some person on his behalf having knowledge of the facts, and shall be served as prescribed. What is required by the subsection to be served as prescribed is the petition and not the affidavit. In any case, I do not think that non-service of the Affidavit, where there is in fact an affidavit, is grounds for setting aside or refusing a Petition because it would not prejudice the judgment debtor in opposing the Petition. [6] Section 6(1) of the Insolvency Act 1967 which is identical with section 6 of the earlier Bankruptcy Act 1967 states as follows:

6.(1) A creditor’s petition shall be verified by affidavit of the creditor or of some person on his behalf having knowledge of he facts, and shall be served personally to a debtor. [7] In Re Normah Kassim Ex p Public Finance Bhd [200] 4 CLJ 649 (pages 31-40, JCBOA), the High Court held as follows: In this case, the fact that the verifying affidavit was never served on the debtor would not have prejudiced his rights; in fact it will not even be useful to him. Even if there had been some procedural defect, this defect certainly was not something that would have caused substantial injustice to him. [8] I am in agreement with the above decided cases, therefore I find that there is no requirement in the Insolvency Act or Rules for the AVP to be served on the JD. [9] The JD in his written submission have contended that the JC’s written submission filed to oppose the JD’s application contain statements from the Bar. I agree with the JC’s submission that the issues pertaining to the service of the AVP are issues of law which is not required to be addressed in the JC’s affidavit in opposition. [10] In Chan Min Swee v Melawangi Sdn Bhd [2000] 7 MLJ 111 (pages 18-50, JCBOA2), Abdul Malik Ishak J held as follows: It would certainly not be a proper course of action for the defendant to undertake by filing an affidavit to dispute the legal effect of a document since the role of an affidavit is limited to the purpose of deposing to a state of facts and not in regard to a question of law. [11] Therefore, only facts can be deposed in an affidavit. Questions of law, especially on whether the service of AVP is mandatory an issue of law to be submitted by lawyers and to be decided by this Court. [12] In his submission the JD raised another issue which concerns his potential loss of earning a livelihood which was not raised in application in Enclosure 26 or in any of his affidavits. [13] I agree with the JC’s submission that the JD is not allowed to raise new issues which were not before the SAR, at the appeal stage. [14] In the case of Score Option Sdn Bhd & Anor v Duar Tuan Kiat & Ors (2013) 5 MLJ 716 (see page 24-35, JCBOA (3)), the Court of Appeal held that the since the respondents did not raise the issue in the summons in chambers and supporting affidavits, such issue should not be raised at the appellate stage. [15] After reading the affidavits and submission by the parties, I find no merits in the JD’s appeal and therefore I dismiss the JD’s appeal with costs. Dated 25 March 2025 ……………t.t…………………. Ahmad Murad Bin Abdul Aziz Judge High Court of Malaya Kuala Lumpur COUNSEL FOR THE JUDGMENT DEBTOR: MUHAMMAD ZAHIR SANJAY BIN ABDULLAH SOLICITORS FOR THE JUDGMENT DEBTOR: TETUAN KAMARUDIN WEE & CO COUNSEL FOR THE JUDGMENT CREDITOR: TAN XUAN YOU SOLICITORS FOR THE JUDGMENT CREDITOR: TETUAN KESAVAN Cases Referred to: ➢ Re Dato Othman Bokhari Ex p Diners Club (M) Sdn Bhd [1998] 4 CLJ Supp 315 ➢ Re Normah Kassim Ex p Public Finance Bhd [200] 4 CLJ 649 ➢ In Chan Min Swee v Melawangi Sdn Bhd [2000] 7 MLJ 111 ➢ Score Option Sdn Bhd & Anor v Duar Tuan Kiat & Ors (2013) 5 MLJ 716 Legislation Referred to: ➢ Companies Act 2016 ➢ Rules of Court 2012 ➢ Insolvency Rules 2018 ➢ Bankruptcy Rules 1969 ➢ Bankruptcy Act 1967 Decision date: 24 July 2024