Jn Teguh Energy Sdn Bhd v Umd Energy Sdn Bhd (WA-28NCC-871-09/2024)

Enclosure 1 is a Petition to wind-up the Respondent pursuant to section 465(1)(e) read with 466 1(a) of the Companies Act 2016 (“CA 2016”). The basis of the Petition is the failure by the Respondent to settle a judgement sum after the expiry of 21 days from the service of a statutory notice on the Respondent.

The Petitioner obtained a judgment in the High Court under suit WA- 27NCC-26-06/2022 (“Suit 26”) against the Respondent for a sum of RM2,125,266.41 together with interest and costs.

The Petitioner issued and served a statutory notice under section 466(1)(a) of the CA 2016 on the Respondents (the Staturory Notice). Upon failure by the Respondent to settle the judgment sum stated in the Statutory Notice, the Petitioner filed this Petition to wind-up the Respondent. S/N 7zuE/X0B20ys6i86dflg7g **Note : Serial number will be used to verify the originality of this document via eFILING portal 3

The grounds by the Respondent to challenge the Petition are as follows:

There is an ongoing appeal against the decision in Suit 26 via Civil Appeal No.: W-02(ADM)(W) -1306-07/2024.

There is a fresh suit against the Petitioner, filed by the Respondent, that alleges fraud perpetuated by the Petitioner against the Respondent vide Civil Suit No.: WA22NCvC-711- 11/2024 (Suit 711). [5] The Respondent extensively submitted on the alleged fraud by the Petitioner and referred to the notes of evidence from the trial in Suit 26, which are too lengthy to reproduce herein. Suffice it to say, the Respondent, in its submission, disputes the findings of the trial judge in Suit 26. S/N 7zuE/X0B20ys6i86dflg7g FINDINGS BY THIS COURT [6] It is trite law that an appeal against the judgment on which the Statutory Notice is based, is not valid grounds to challenge the Petition. I am persuaded by the decision of the Court in Geopancar Sdn Bhd v Visage Engineering Sdn Bhd (2012) 1 LNS 1222, where Justice Mary Lim Thiam Suan held: 18 In short, the debt specified in the Notice issued by the Petitioner is disputed either because the judgment upon which the debt is founded is pending appeal before the Court of Appeal; or there is a pending application for leave to appeal to the Federal Court. The immediate concern is whether judgment debt is or becomes a disputed debt when the related judgment is under appeal. 19 With respect, I believe the answer is quite obvious. It is not. Otherwise, all judgments are of or will have no effect until either the appeals are disposed of; or where there are no appeals, until the period for lodging an appeal has passed. This is regardless of whether the judgment involves an award for monetary compensation or not. This is entirely different from where there is an order for a stay of the execution of the judgment pending appeal. Where there is none, the effect of the order of court is upon pronouncement. [7] Since, in the present case, there is no stay of execution against the judgment of the High Court, the appeal cannot be said to raise any bona fide dispute regarding the amount claimed in the Petition. S/N 7zuE/X0B20ys6i86dflg7g [8] The second issue raised by the Respondent is the alleged fraud by the Petitioner against the Respondent. Those allegations were fully ventilated in the proceedings in Suit 26, and the judgment was rendered after a full trial. [9] it is trite law that this Court in exercising its jurisdiction as winding up court cannot go behind a valid judgment pronounced by the trial court, which in the present case, is the Judgment in Suit 26. This very principle has been expressed clearly by the Court of Appeal in the case of Gulf Business Construction (M) Sdn Bhd v Israq Holding Sdn Bhd [2010] 5 MLJ 34 where a Petitioner premised its winding up notice on a court order, the Court instructively held as follows: “it is legally impossible for the respondent to challenge the validity of the court order dated 3 June 2005 in the winding up proceedings. If high authority is required for this simple proposition, the case of Sovereign General Insurance Sdn Bhd v Koh Tian Bee [1988] 1 MLJ 304 (SC) a decision of Lee Hun Hoe CJ (Borneo) should be referred to. There at p 305, His Lordship had this to say: In the exercise of this jurisdiction in bankruptcy proceedings, the learned judge cannot go behind the judgment. Thus, on an application to set aside a bankruptcy notice, it was laid down as early as 1893 that the court could not go behind the judgment. See in re Easton (1893) 10 Mor 111; 9 TLR 409. Even if there has been an irregularity in the service of the notice of sale, it is not open to the respondent in this case to challenge the execution proceedings.” S/N 7zuE/X0B20ys6i86dflg7g [10] The final contention by the Respondent is that it is a solvent Company. The Respondent submits as follows: “The financial state of the Respondent shows that the Respondent is in a position to service its debts and pay sums owing, as it is a going concern and has viable projects that would enable to Respondent to meet all its obligations.” [11] The simple answer to this submission is that the applicable test for winding-up under section 465 of the CA 2016 is commercial insolvency, not balance sheet insolvency. The Respondent’s failure to settle the outstanding judgment after the expiry of 21 days from the service of the Statutory Notice triggers the presumption that it is unable to pay its debts. [12] The above findings is supported by the case of Gulf Business Construction (M) Sdn Bhd v Israq Holdings Sdn Bhd (2020) 5 MLJ pg 34 where the Court of Appeal held as follows: “[7] The test to ascertain commercial insolvency is rather simple. It is this. That the company is unable to meet the current debts as they fall due. And such a company may still be categorized as ‘unable to pay its debts’ even though the company has substantial wealth which cannot be realized immediately and even though on liquidation the company will be able to meet all its liabilities. …. [10] The failure of the debtor to pay the debt within 21 days (there weeks) after the service of the notice of demand entitles the creditor to present a S/N 7zuE/X0B20ys6i86dflg7g petition and that petition cannot be restrained by an injunction. And it is not open to the debtor to say that it is able to pay the debt but chooses not to (Cornhill Insurance plc v Improvement Services ltd and others [1986] 1 WLR 114). [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.” [13] For the above reasons I find that the Respondent has failed to rebut the presumption of commercial insolvency and has also failed to raise any bona fide dispute to the amount claimed in the Statutory Notice. Therefore, I make the orders prayed for in the Petition with costs. Dated 26 January 2025 …………t.t…………………. Ahmad Murad Bin Abdul Aziz Judge High Court of Malaya Kuala Lumpur S/N 7zuE/X0B20ys6i86dflg7g COUNSEL FOR THE PETITIONER: IAN SHANG KUAN LAI YING JIE SOLICITORS FOR THE PETITIONER: TETUAN IAN SHANG KUAN COUNSEL FOR THE RESPONDENT: AZINUDIN KARIM SOLICITORS FOR THE RESPONDENT: TETUAN MUNAWAR & ASSOCIATES Cases Referred to: ➢ Geopancar Sdn Bhd v Visage Engineering Sdn Bhd (2012) 1 LNS 1222 ➢ Gulf Business Construction (M) Sdn Bhd v Israq Holding Sdn Bhd [2010] 5 MLJ 34 Legislation Referred to: ➢ Companies Act 2016 Decision date: 10 January 2025 S/N 7zuE/X0B20ys6i86dflg7g