Mbsb Bank Berhad v Nadine Zandra A/P Fernandez (WA-29NCC-1347-08/2024)

Before the Court are two appeals.

The first appeal is in Enclosure 39, the Judgment Debtor’s appeal against the decision of the learned Senior Assistant Registrar (SAR) dated 14 March 2025, which dismissed the Judgment Debtor’s application to set aside the Bankruptcy Notice dated 1 August 2024.

The second appeal is in Enclosure 40, the Judgment Debtor’s appeal against the SAR’s decision of the same date, which allowed the Judgment Creditor’s application for leave to commence bankruptcy proceedings against the Judgment Debtor under section 5(3) of the Insolvency Act 1967 and Rule 97 of the Insolvency Rules 2017.

Both appeals were heard together before this Court because they involve the same parties, the same bankruptcy proceedings, and a common question of law.

After considering the cause papers and the parties’ written and oral submissions, this Court dismissed both appeals with costs. These are the grounds for my decision.

The Judgment Creditor, MBSB Bank Berhad, a licensed financial institution, granted Islamic financing facilities (Islamic Facilities) to GVE Asia Sdn Bhd (the Company) under a Letter of Offer dated 27 March 2020. The total Islamic Facilities amounted to RM15,500,000.00.

The Judgment Debtor, Nadine Zandra a/p Fernandez, was, at all material times, a director of the Company and a guarantor under a joint Guarantee Agreement executed on 17 September 2020, together with Siri Devan a/l Vidondaraja.

Among the securities provided for the Islamic Facilities were:

A Corporate Guarantee from GVE Autocare Sdn Bhd (Corporate Guarantor);

The Judgment Debtor and Siri Devan a/l Vidondaraja had unconditionally and irrevocably executed the Guarantee

The Company’s 1st-party legal charge dated 6 January 2021 over a piece of industrial property in Bandar Glenmarie, Daerah Petaling, Selangor (the Property);

A Memorandum of Deposit in respect of a cash deposit of RM1 million by the Company; and

A Letter of Set-Off over the same deposit, executed by the Company.

The Company and all security parties, including the Judgment Debtor, defaulted on the Islamic Facilities. As a result, the Judgment Creditor terminated the Islamic Facilities on 11 October 2022 and, on 14 October 2022, exercised its rights under the Memorandum of Deposit to uplift the Company’s deposit of RM1,043,402.49 as part payment towards reducing the outstanding debt.

On 4 November 2022, the Judgment Creditor commenced a writ action under Suit No. WA-22M-760-11/2022 (Suit 760) against the Company and its security parties, including the Judgment Debtor, to recover the full outstanding amount under the Islamic Facilities.

On 6 September 2023, the Company was wound up pursuant to Winding-Up Petition No. WA-28NCC-97-02/2023, and a private liquidator was subsequently appointed.

On 2 October 2023, the High Court granted summary judgment against the security parties, including the Judgment Debtor, with costs of RM5,000.00 (the Judgment). On 18 January 2024, following leave under section 471 of the Companies Act 2016, a further summary judgment was entered against the Company itself.

Neither the Judgment Debtor nor the Company appealed against any of these decisions. The Judgment therefore remained unchallenged and enforceable.

Following the Judgment, the Judgment Creditor took the following steps:

On 22 April 2024, the Judgment Creditor commenced winding-up proceedings against the Corporate Guarantor (GVE Autocare Sdn Bhd), and a winding-up order was obtained on 23 July 2024.

On 1 August 2024, the Judgment Creditor issued a Bankruptcy Notice against the Judgment Debtor; and

Separately, on 1 August 2024, the Judgment Creditor filed a Bankruptcy Notice against the co-guarantor, Siri Devan, who was adjudicated bankrupt on 2 October 2024.

The Judgment Creditor also initiated foreclosure proceedings against the charged Property by Originating Summons No. BA- 24MFC-620-12/2022 in the Shah Alam High Court. The Bankruptcy Proceedings before the SAR

On 21 October 2024, the Judgment Debtor filed Enclosure 14, a Summons in Chambers seeking to set aside the Bankruptcy Notice, on the ground that the Judgment Creditor had not obtained leave of Court under section 5(3)(b) of the Insolvency Act 1967 and Rule 97 of the Insolvency Rules 2017 before filing and issuing the Bankruptcy Notice.

On 28 October 2024, the Judgment Creditor filed Enclosure 18, a Summons in Chambers supported by an affidavit seeking leave under section 5(3)(b) of the Insolvency Act 1967 and Rule 97 of the Insolvency Rules 2017.

On 14 March 2025, the learned SAR dismissed Enclosure 14 (the Judgment Debtor’s application to set aside the Bankruptcy Notice) and allowed Enclosure 18 (the Judgment Creditor’s application for leave).

A Creditor's Petition was filed on 19 March 2025.

Dissatisfied with both decisions, the Judgment Debtor filed the present appeals in Enclosures 39 and 40, challenging the dismissal in Enclosure 14 and the granting in Enclosure 18.

The issues for determination in both appeals may be summarised as follows:

Whether, under section 5(3)(b) of the Insolvency Act 1967, the Judgment Creditor was required to obtain leave of Court before filing and issuing the Bankruptcy Notice, so that failure to do so renders the Bankruptcy Notice invalid or a nullity.

Whether the filing of Enclosure 18, the leave application submitted after the Bankruptcy Notice was issued but before any Creditor's Petition was filed, constitutes compliance with section 5(3)(b) of the Insolvency Act 1967 and Rule 97 of the Insolvency Rules 2017.

Whether the Judgment Creditor had exhausted all modes of execution and enforcement against the principal debtor company within the meaning of sections 5(4) and 5(6) of the Insolvency Act 1967, thereby entitling the Court to grant leave under section 5(3)(b) of the Act. FINDINGS OF THE COURT

Section 5(3) of the Insolvency Act 1967 provides as follows: “(3) A petitioning creditor shall not be entitled to commence any bankruptcy action —

against a social guarantor; and

against a guarantor other than a social guarantor unless the petitioning creditor has obtained leave from the court.” [emphasis added]

Section 5(4) of the Insolvency Act 1967 further provides that, before granting such leave, the Court must be satisfied that the petitioning creditor has exhausted all modes of execution and enforcement to recover debts owed by the debtor.

Section 5(6) of the Insolvency Act 1967 defines those modes as including seizure and sale, judgment debtor summons, garnishment, and bankruptcy or winding-up proceedings against the borrower.

Section 5(7) of the Insolvency Act 1967 further provides that if the petitioning creditor fails to comply with the requirements of section 5, the court shall dismiss the petition.

Rule 97(1) of the Insolvency Rules 2017 requires that an application for leave under section 5(3)(b) be made by Summons in Chambers, supported by an affidavit, and served on the debtor. Rule 97(3) provides that leave shall not be granted unless the petitioning creditor has complied with the rule.

It is common ground between the parties that the Judgment Debtor is a non-social guarantor. A “social guarantor” is defined in section 2 of the Insolvency Act 1967 as a person who gives a guarantee to secure an educational loan, a loan for a personal dwelling, research, or a hire-purchase agreement for a vehicle for personal, non-business use.

The Judgment Debtor’s guarantee was given to secure corporate Islamic financing facilities extended to a company. She therefore falls squarely outside the definition of a social guarantor, and the requirement to obtain leave under section 5(3)(b) of the Insolvency Act 1967 applies. When Must Leave be Obtained?

The central legal question in these appeals is at what stage leave under section 5(3)(b) of the Insolvency Act 1967 must be obtained, whether it must be obtained before the Bankruptcy Notice is issued or whether it is sufficient to obtain it at any time before the filing of the Creditor’s Petition.

On this question, the highest authority is the Federal Court's decision in Hong Leong Bank Bhd v Khairulnizam bin Jamaludin [2016] 4 MLJ 302 (Khairulnizam). In that case, the Federal Court held that the words “bankruptcy action” in section 5(3) of the then Bankruptcy Act 1967 ought to be read as “bankruptcy petition”. The Federal Court made this clear: “[28] With respect, we are unable to agree with the decision of the courts below. If the Legislature has so intended one would expect it to have spelt out that requirement in an express and clear provision to that effect. Such as important requirement cannot, in our view, be inferred from the words used in s 5(3) of the Act. We are not at liberty to brush aside the explicit provisions of s 5(3) of the Act and r92 of the Rules 1969. There is nothing to say that leave must first be obtained by the creditor before a bankruptcy notice is applied.” [emphasis added]

In paragraph [34] of Khairulnizam, the Federal Court further held that it would be sufficient compliance if a creditor shows, by way of affidavit at the hearing of the creditor's petition, that it has satisfied the requirements of section 5(3) of the Insolvency Act 1967: “[34] In our judgment, a reading of s 5(3) of the Act in the context of the purpose identified above would clearly advance the meaning that it would be sufficient compliance with s 5(3) of the Act if a creditor shows by way affidavit at the hearing of the creditor’s petition that he has satisfied the requirement of s 5(3) of the Act. The words “bankruptcy action” in s 5(3) of the Act has to be read as “bankruptcy petition”. Under s 2 of the Act, the term “bankruptcy petition” includes a petition for receiving order. [emphasis added]

This principle was elaborated upon and applied by the Court of Appeal in Hong Leong Bank Bhd v Ong Moon Huat [2018] 1 LNS 1612 (Ong Moon Huat). The Court of Appeal held that it is open to a judgment creditor to apply for leave to proceed against a guarantor either upon the issuance of the bankruptcy notice or even before then, up to and immediately before the filing of a creditor's petition. The Court of Appeal stated that: “[13] …The Federal Court accepted the appellant's submission that there was nothing provided in the Act or Rules under the bankruptcy provisions that an ex-parte application for leave to commence a bankruptcy action against a social guarantor should be made when applying for the issuance of a bankruptcy notice. The Federal Court refused to take such a narrow and restrictive meaning and held instead that all a creditor has to do is to satisfy the court at the hearing of the creditor's petition that it has exhausted all avenues to recover debts owed to it by the principal debtor. That it was held could be done by way of an affidavit pursuant to s 6(1) of the Insolvency Act 1967. It is in this context that the Federal Court went on to hold that a judicial decision was made at the creditor's petition stage whereas the issuance of a bankruptcy notice is more administrative in nature. [14] However there is nothing in the judgment of the Federal Court that holds that:

A judgment creditor is precluded from filing an application for leave at the point in time when the bankruptcy proceedings are initiated;

(ii) on the contrary the Federal Court is extending time for the obtaining of leave of court to proceed against a social guarantor up to the point in time when a creditor's petition is filed, at which point it is necessary to stipulate that leave of court has been obtained;

(iii) In other words there is nothing to prevent a judgment creditor from obtaining leave at a point in time prior to the commission of an act of bankruptcy i.e. soon after the issuance of the bankruptcy notice or with the application for the issuance of a bankruptcy notice. The practical difficulty is that there will be no cause papers with an intitulement to enable the judgment creditor to file a summons in chambers and affidavit in support until the bankruptcy notice is issued. Therefore most solicitors, as a matter of practice may wish to obtain leave as a matter of prudence at this juncture, rather than wait for the act of bankruptcy to be committed. This is because it leaves a very narrow window of time for the application for leave to be filed and heard. However as stated by the Federal Court in Khairulnizam it is open to a judgment creditor to even simply file an affidavit in support at a later stage prior to the filing of the creditor's petition which will require confirmation, as a matter of fact, that all other avenues against the principal debtor have been exhausted. [15] For these reasons we are of the view that on a proper reading of Khairulnizam which is wholly relevant coupled with s 5(3)(b) as well as rule 97 it is open to a judgment creditor to file an application for leave to proceed against a guarantor either upon the issuance of the bankruptcy notice, or even prior to that, up to and immediately prior to the filing of a creditor's petition. This gives leeway to the judgment creditor to obtain such leave as it deems fit in the circumstances of a particular case. This will in no way prejudice the judgment debtor/guarantor who is protected by the legislation which requires such leave to be obtained as a prerequisite to the grant of receiving and adjudication orders.” Was the Bankruptcy Notice Invalid for Want of Prior Leave? (Enclosure 39)

The Judgment Debtor’s primary argument in Enclosure 39 was that the Judgment Creditor was required to obtain leave of Court before filing or issuing the Bankruptcy Notice, and that failure to do so rendered the Bankruptcy Notice a nullity, or at the very least premature and liable to be set aside.

In support of this, the Judgment Debtor relied on three cases:

Re Tan Peck Kee; Ex Parte LDE Project Sdn Bhd & Ors [2024] 10 MLJ 631; (ii) Yuri Zaharin bin Wahab v Ann Joo Metal Sdn Bhd [2024] MLJU 2387; and (iii) Liew Hon Kong v Bank Pertanian Malaysia Bhd [2021] MLJU 1389.

The Judgment Debtor also cited Affin Bank Berhad v Abu Bakar bin Ismail [2017] MLJU 232, which held that bankruptcy proceedings are quasi-criminal in nature and that strict compliance with the law and rules is required.

This Court accepts the general proposition that strict compliance is required in bankruptcy proceedings. However, the question is what the law actually requires, and on that point, the binding authorities are clear.

Having carefully examined the cases relied upon by the Judgment Debtor, this Court finds them either distinguishable from the facts of this case or inapplicable, as submitted by the Judgment Creditor.

This Court, applying the principles in Khairulnizam (Federal Court) and Ong Moon Huat (Court of Appeal), finds that:

There is nothing in the Insolvency Act 1967 or the Insolvency Rules 2017 that requires a Judgment Creditor to obtain leave of Court before filing or issuing a Bankruptcy Notice against a non-social guarantor.

The requirement for leave under section 5(3)(b) of the Insolvency Act 1967 arises on the commencement of a bankruptcy petition, not on the issuance of a Bankruptcy Notice.

A creditor may seek leave at any time, including after issuing the Bankruptcy Notice, provided that leave is obtained before the filing of the Creditor’s Petition.

On the facts of this case, the Judgment Creditor filed the leave application (Enclosure 18) on 28 October 2024, and the Creditor’s Petition was filed only on 19 March 2025, approximately four and a half months later. The Judgment Creditor therefore complied with the statutory requirement within the permitted timeframe. The Bankruptcy Notice was not rendered invalid or a nullity by reason of the leave application not having been obtained before the Bankruptcy Notice was issued.

The SAR was correct to dismiss the Judgment Debtor’s application to set aside the Bankruptcy Notice. Accordingly, the appeal in Enclosure 39 is dismissed. Was the Filing of Enclosure 18 an Afterthought or an Abuse of Process?

The Judgment Debtor argued that the Judgment Creditor’s filing of Enclosure 18 on 28 October 2024, seven days after the Judgment Debtor filed Enclosure 14 on 21 October 2024, was an afterthought, an admission of non-compliance, and an abuse of the Court’s process. The Judgment Debtor relied on the case of Tetuan Tanjung Teras Sdn Bhd & Ors v Tetuan Syn Tai Hung Trading Sdn Bhd [2003] 4 MLJ 465, in which the Court characterised a late application as a “delayed rescue operation”.

The Judgment Debtor also argued that the appeal in Enclosure 39 ought to be heard before that in Enclosure 40 on grounds of logic and sequence, and relied on Westech Sdn Bhd (In Voluntary Liquidation) v Thong Weng Lock (as surviving Partner of Thong Kee Trading Co) [2014] 3 MLJ 427 and The Ka Wah Bank Ltd v Low Chung Song & Ors [1998] 2 MLJ

507.

This Court does not accept these arguments for the following reasons.

The case of Tetuan Tanjung Teras concerned a defendant’s belated application for leave to file an additional affidavit out of time and to introduce fresh evidence that was inconsistent with and fundamentally altered the earlier case. It has no application here. The Judgment Creditor’s filing of Enclosure 18 was not an attempt to amend or reverse any existing position. It was a straightforward step taken within the time expressly permitted by law, as endorsed in Ong Moon Huat, to fulfil a statutory obligation that the law allows to be discharged at this stage. It was not an afterthought; it was proper and lawful compliance.

The fact that the Judgment Debtor, by filing Enclosure 14, brought the leave issue to a head does not mean that the Judgment Credito’s subsequent compliance was improper. On the contrary, the Court of Appeal in Ong Moon Huat expressly contemplated that leave could be obtained “soon after the issuance of the bankruptcy notice or with the application for the issuance of a bankruptcy notice”, and that this would not prejudice the guarantor.

As for the arguments regarding the sequencing of the appeals based on Westech and Ka Wah Bank: both cases turned on their own peculiar facts, and in Westech this Court noted that the parties had agreed to the order of hearing. No such agreement existed here. In any event, this Court has heard both appeals together and has considered all the arguments, rendering the sequencing argument academic. Has the Judgment Creditor Exhausted All Modes of Execution Under Sections 5(4) and 5(6) of the Insolvency Act 1967?

In opposing the grant of leave in Enclosure 40, the Judgment Debtor raised two further arguments before this Court:

The Judgment Creditor had not disposed of the charged Property (the industrial land in Bandar Glenmarie), and the proceeds of sale had not been set off against the outstanding debt, so the Judgment Creditor had not exhausted all modes of execution before seeking leave; and

There was an RM10 million fixed deposit, allegedly placed by the Company under the Facility Agreement, that had not been set off. As a result, the outstanding sum of RM26,309,643.22 in the Bankruptcy Notice and Creditor's Petition was inflated.

On the first argument, the failure to foreclose the charged property, this Court finds it to be without merit for the following reasons.

The modes of execution listed in section 5(6) of the Insolvency Act 1967 are seizure and sale, judgment debtor summons, garnishment, and bankruptcy or winding-up proceedings against the borrower. These are all in personam proceedings for the execution and enforcement of a judgment against the Company/principal debtor.

Foreclosure under the National Land Code 1965 is a right in rem exercised against the charged property as security (see Low Lee Lian v Ban Hin Lee Bank Berhad [1996] 2 MLRA 491). It is a distinct proceeding.

This distinction was clearly drawn by the High Court in Wong Choon Loong v Ambank (M) Berhad [2022] 3 MLRH 27, which held that: “[13] In s 5(4) of the Insolvency Act, reference was made to the modes of execution and enforcement that are related to claims in personam, whereas ‘foreclosure proceedings’ is a different kettle of fish altogether, as it is a right in rem and is regulated by the National Land Code. Furthermore, there were no authorities that the JD had submitted to convince this Court that the word ‘include’ encompassed ‘foreclosure proceedings’. [14] In any event, the Principal Debtor had been wound up vide JA-28NCC-241-11-2018, and in accordance with s 5(6) of the Insolvency Act, all modes of execution against the Principal Debtor had been exhausted. [15] … in my view, the principle is the same, that is, the Principal Debtor was wound up and s 451 of the Companies Act fortified the JC’s argument that resorting to bankruptcy proceedings was the correct approach, as it could no longer proceed against the Principal Debtor.” [emphasis added]

The Judgment Debtor argued that Wong Choon Loong was decided per incuriam because the High Court in that case acknowledged that no authority was cited to it suggesting that foreclosure falls within the word “include” in section 5(6) of the Insolvency Act 1967. This Court does not accept that characterisation. The High Court judge’s reasoning was grounded in the clear distinction between rights in rem and rights in personam, not merely in the absence of contrary authority. Furthermore, the Court of Appeal dismissed the appeal in Wong Choon Loong, thereby further affirming the correctness of the position.

The Judgment Debtor further relied on the High Court case of Re: Goh Kiang Ann; Ex Parte: OCBC Bank (M) Bhd [2024] MLJU 2859, which observed that the word “include” in section 5(6) of the Insolvency Act 1967 is not exhaustive, and on the Court of Appeal’s decisions in Tenaga Nasional Bhd v Tekali Prospecting Sdn Bhd [2002] 2 MLJ 707 and Public Prosecutor v Hun Peng Khai & Ors [1984] 2 MLJ 318 regarding the meaning of “includes” in a statute.

This Court acknowledges that the word “include” is generally a word of extension. However, even on a broad, purposive reading of section 5(6) of the Insolvency Act 1967, foreclosure proceedings under the National Land Code fall outside its scope. Section 5(6) of the Insolvency Act 1967 is directed at modes of enforcement against the borrower or company. Foreclosure is not enforcement against the borrower; it is enforcement against the charged property. These are legally distinct concepts, and conflating them would not serve the purpose of sections 5(4) and 5(6) of the Insolvency Act 1967, which is to ensure that all viable in personam enforcement options against the principal debtor have been explored.

More fundamentally, the Company/principal debtor, GVE Asia Sdn Bhd, was wound up on 6 September 2023, over a year before the Bankruptcy Notice was issued. Once a company is wound up, section 451 of the Companies Act 2016 prevents the enforcement of any process against the company without the leave of the Court. Hence, all modes of execution and enforcement against the Company had been exhausted by virtue of the winding-up.

This position is supported by a consistent line of authorities: Tan Tiang Lai v KKRMC Trading Sdn Bhd [2020] MLRHU 707, which holds that once the principal borrower is wound up, there is no avenue to recover the debt by modes of execution under sections 5(4) and 5(6) of the Insolvency 1967 (see also Perkara: Rubina Mustafa Kemal; Ex-Parte: Small Medium Enterprise Development Bank Malaysia Berhad [2023] MLRHU 1118; and Per: Mohd Shahrizan M Sharif v Ex-Parte: Ardency Construction & Trading Sdn Bhd [2023] LNSc 1876).

The Judgment Creditor also wound up the Corporate Guarantor on 23 July 2024 and successfully adjudicated the co-guarantor, Siri Devan, bankrupt. It pursued all available enforcement avenues. This Court is satisfied that the requirements of sections 5(4) and 5(6) of the Insolvency Act 1967 have been met.

Regarding the second argument, the alleged RM10 million deposit, this Court accepts the Judgment Creditor's position that there is no evidence of any RM10 million deposit. The documents on record, specifically the Memorandum of Deposit dated 17 September 2020, show that the Company’s cash deposit was RM1 million, not RM10 million.

The RM1 million deposit was uplifted by the Judgment Creditor on 14 October 2022, pursuant to the rights conferred by the Memorandum of Deposit and the Letter of Set-Off. This occurred before the writ action was commenced. The applicable authority on the bank’s right to exercise set-off over a deposit is Rahimah bte Abdullah v Bank Bumiputra Malaysia Bhd [1993] 5 MLRH 172.

The Judgment Creditor contended that during Suit 760, the Company and the Judgment Debtor never disputed the amount of the deposit (RM1 million) or challenged the Judgment Creditor’s utilisation of it. The only objection in those proceedings concerned the timing of the uplift, not the amount. This Court agrees that the Judgment Debtor is therefore precluded from now raising the new allegation that the deposit was RM10 million. This is barred under the doctrine of res judicata in its extended sense, as issues that could and should have been raised in the earlier proceedings (see: Asia Commercial Finance (M) Berhad v Kawal Teliti Sdn Bhd [1995] 1 MLRA 611 (Supreme Court); David Cheah Seng Chye v So Miau Song & Ors And Other Appeals [2023] 5 CLJ 20 (Court of Appeal); Dato' Ahmad Johari Tun Abdul Razak v A Santamil Selvi Alau Malay @ Anna Malay & Ors and Other Appeals [2020] 4 MLRA 565 (Court of Appeal)).

Furthermore, it is trite that a bankruptcy court cannot go behind a judgment unless there is clear evidence of fraud, collusion, or miscarriage of justice. No such evidence has been presented here. The Judgment obtained by the Judgment Creditor in Suit 760 remains valid, unchallenged, and enforceable (see Sovereign General Insurance Sdn Bhd v Koh Tian Bee [1988] 1 MLJ 304 (Supreme Court); Malayan Banking Berhad v Datuk Lim Kheng Khim [1992] 2 MLJ 540).

This Court is therefore satisfied that the Judgment Creditor has met the requirements of sections 5(4) and 5(6) of the Insolvency Act 1967, and that the SAR was correct to grant the leave sought in Enclosure 18.

Accordingly, the appeal in Enclosure 40 is likewise dismissed.

For completeness, this Court also addresses the Judgment Debtor’s underlying suggestion that the Judgment Creditor ought to have completed the foreclosure and applied the proceeds before commencing bankruptcy proceedings. This Court rejects that suggestion.

The Federal Court in Chan Boi Loi v Public Bank Bhd & Another Application [2009] 2 MLRA 672 held clearly that: “We would reiterate that a lender is entitled to pursue all remedies available against a borrower simultaneously, contemporaneously or successively to recover the money lent unless there is an agreement to the contrary.”

The Supreme Court in Bank Bumiputra Malaysia Berhad v Esah Abdul Ghani [1985] 1 MLRA 211 likewise held that a creditor has unfettered discretion to choose which security to enforce, and that a guarantor has no right to dictate or restrict the bank’s right to commence legal action. Until the guarantor discharges her liability, she cannot impose conditions on the bank’s exercise of its rights.

In addition, Clause 10.07 of the Guarantee Agreement expressly entitled the Judgment Creditor to demand payment from the Judgment Debtor and to commence action against the Judgment Debtor without first resorting to the enforcement of any other security. The Judgment Debtor signed that Agreement and is bound by its terms.

The bankruptcy proceedings against the Judgment Debtor are based on her personal liability as a guarantor under the Guarantee Agreement and the resulting Judgment. They are entirely independent of the Judgment Creditor’s in rem rights under the Charge and of the Foreclosure Proceedings under the National Land Code 1965.

Therefore, this Court agrees with the Judgment Creditors’ argument that the Judgment Creditor is entitled to commence the foreclosure and bankruptcy proceedings against the Judgment, whether simultaneously, separately, or successively.

In conclusion, this Court finds that:

The Bankruptcy Notice was validly issued. There is no requirement under the Insolvency Act 1967 or the Insolvency Rules 2017 to obtain leave before issuing a Bankruptcy Notice. The leave application (Enclosure 18) was filed within the statutory time limit, after the Bankruptcy Notice and before the Creditor's Petition.

The filing of Enclosure 18 was neither an afterthought nor an abuse of process. It was a valid exercise of the Judgment Creditor's statutory right, consistent with the Court of Appeal's decision in Ong Moon Huat.

The Judgment Creditor had exhausted all available modes of execution and enforcement against the Company, as contemplated under sections 5(4) and 5(6) of the Insolvency Act 1967, the Company having been wound up.

The foreclosure of the charged Property is not a mode of execution within the meaning of section 5(6) of the Insolvency Act 1967, because it is a right in rem governed by the National Land Code 1965.

The Judgment Debtor’s allegation of a RM10 million deposit is unsupported by evidence and is res judicata because the matter was not raised and cannot now be raised in these proceedings.

The Judgment Creditor is entitled to pursue foreclosure and bankruptcy proceedings either simultaneously or successively, and the Judgment Debtor, as guarantor, has no right to restrict or dictate the Judgment Creditor's chosen mode of recovery.

For the reasons set out above, both the appeals in Enclosures 39 and 40 are dismissed with costs of RM5000.00 for each Enclosure. Dated 15 June 2026 -sgd-JAMHIRAH ALI JUDGE HIGH COURT OF MALAYA COMMERCIAL 10 (INSOLVENCY 1) KUALA LUMPUR To the parties’ solicitors: For the Judgment Creditor : Muhammad Ezwar Rusydan Mohd Basir & Nur Afiqah binti Zainol (Messrs Hisham Sobri & Kadir) For the Judgment Debtor : Lourdes Abishegam & Siti Nur Farahin binti Alwi (Messrs Zahir Jeya & Zainal)