Jaswinder Singh Bajaj v Murali A/L Maliappan (WA-29NCC-459-04/2022)

(b), (c) and (d) of the Rules of Court 2012 (“ROC 2012”). THE LAW [3] It is trite law that the test applicable to striking out pleadings is whether a claim or defence is obviously unsustainable. (See Bandar Builders Sdn Bhd v United Malayan Banking Corp Bhd [1993] 3 MLJ 36). The courts’ power under this rule applies to conspicuously unsustainable cases and is exercised sparingly by the courts. (See Affin Bank Bhd v Eye Bee Sdn Bhd [2005] 7 MLJ 1) [4] The Federal Court in Bandar Builders also clarified that in deciding whether to strike out any pleadings, the court is not required to undertake any minute examination of the conflicting affidavit evidence to decide if the claim is obviously unsustainable. Any conflict of evidence should be determined at the hearing or trial of the matter before the court. ISSUES BEFORE THE COURT [5] The issues raised by the JD in its application to strike out the Petition are;

The JC’s failure to notify its willingness to release the security provided for the loan

(ii) Delay in service of the CP

(iii) Failure to serve the Affidavit Verifying the Petition pursuant to section 6(1) of the Insolvency Act 1967, and lastly

(iv) the issue of Res Judicata. [6] (i) On the issue of the failure to notify his willingness to release the security for the loan, I find this submission to be misconceived. The loan on which the judgment in favour of the JC is based was an unsecured loan.

(ii) The relevant term of the loan agreement is that both parties agree that the JC will be allowed to lodge a private caveat on the land belonging to the JD and the title be deposited with a law firm as a “stakeholder”. It is trite law that a secured creditor gets priority over other unsecured creditors in relation to the proceeds of sale from the security interest. There was no registered charge nor any lien holder’s caveat lodged against the property in question. A private caveat lodged with the consent of the proprietor does not grant any security to the caveator. The effect is only to restrict the proprietor from dealing with the property which is subject to a private caveat. (See section 322(2) of the National Land Code).

(iii) Additionally, the same issue was raised at the trial in the Sessions Court which also held that a private caveat does not create a security interest in the property subject to a private caveat. Thus, this issue is Res Judicata.

(iv) In the case of Sungai Dinar Sdn Bhd v. Koperasi Pekebun Kecil Wilayah Johor Selatan Bhd [2017] 1 CLJ 333 which allowed the Defendant’s application to strike out a claim on the ground of Res Judicata, the Court held “[14] … The matter had already been decided on the merits by the competent court and that accordingly it is conclusive between the defendant and the plaintiff as to all matters that were already litigated or that could have been litigated in the first suit. Res judicata therefore applies to the present action as to estop the plaintiff from litigating the same issue.” [7] The next issue raised by the JD is the alleged delay in serving the Petition.

The Amended CP was served on the JD’s solicitor by letter dated 27.09.2020 (See Exhibit J-4, JC’s Affidavit in Reply). This mode of service of the Amended CP was agreed by the parties, and the JD did not challenge this mode of service of the Petition.

(ii) In any event the service was affected during the validity period of the Petition. On the date of service of the CP, the date of validity had not expired. Therefore, I find this submission to be misconceived. [8] The final issue is the alleged failure by the JC to serve the Affidavit Verifying the Petition on the JD. However, Exhibit J-4 of the JC’s Affidavit in Reply is evidence of service of the said Affidavit. In the case of Teoh Thean Peng v D & C-Leasing Sdn Bhd [1993] 2 CLJ 665, the JD opposed the petition, inter alia, on the ground that: “the petition was not physically annexed to the verifying affidavit as required by the Bankruptcy Rules 1969.” K C Vohrah J (as he then was) held that: “the proceedings are not rendered a nullity even if the petition is not annexed to the said affidavit since the affidavit clearly identifies the petition by its distinctive title and number.” [9] Furthermore, there are no provisions in the Insolvency Rules 2017 which require the Affidavit Verifying Petition to be served at the same time as the service of the Petition. [10] In any event, this appeal, being against the dismissal of the JD’s application to strike out the CP under Order 18 Rule 19 of the ROC 2012, I find the CP filed by the JC is not obviously unsustainable. [11] For the abovementioned reasons, I dismiss the JD’s appeal with costs of RM 3,000.00. Dated 27th December 2023 …………t.t……….. Ahmad Murad Bin Abdul Aziz Judge High Court of Malaya Kuala Lumpur COUNSEL FOR THE JUDGMENT DEBTOR: SURENTHIRAN RAJ SOLICITORS FOR THE JUDGMENT DEBTOR: TETUAN FRANCIS PEREIRA & SHAN COUNSEL FOR THE JUDGMENT CREDITOR: PARVINDER SINGH DOAL SOLICITORS FOR THE JUDGMENT CREDITOR: TETUAN PRITAM SINGH DOAL & CO Cases Referred to: ➢ Bandar Builders Sdn Bhd v United Malayan Banking Corp Bhd [1993] 3 MLJ 36 ➢ Affin Bank Bhd v Eye Bee Sdn Bhd [2005] 7 MLJ 1 ➢ Sungai Dinar Sdn Bhd v. Koperasi Pekebun Kecil Wilayah Johor Selatan Bhd [2017] 1 CLJ 333 ➢ Teoh Thean Peng v D & C-Leasing Sdn Bhd [1993] 2 CLJ 665 Legislation Referred to: ➢ Order 18 Rule 19(1)(a), (b), (c) and (d) of the Rules of Court 2012 ➢ Section 6(1) of the Insolvency Act 1967 ➢ Section 322(2) of the National Land Code ➢ Insolvency Rules 2017 Decision Date: 10.08.2023