Zavarco Plc v Amrit Kaur A/P Manjeet Singh (WA-29NCC-1114-11/2021)

This is the Judgment Debtor’s (“JD”) application by way of Summons in Chambers in Encl. 23 to set aside the amended creditor’s petition dated 1.4.2022 and affidavit verifying the petition affirmed on 31.3.2022.

Parties filed their respective affidavits in Encl(s). 23, 27, 28, 29, 30, 31 and their written submissions in Encl(s). 32, 34, 37 and 38.

The JD’s application in Encl. 23 prays for the following:

Bahawa Petisyen Pemiutan Terpinda bertarikh 1.4.2022 diketepikan dan/atau dibatalkan;

Bahawa Afidavit Menentusahkan Petisyen yang diikrarkan pada 31.3.2022 adalah tidak sah dan dibatalkan; dan

Bahawa tiada sebarang perbuatan kebankrapan yang telah dilakukan oleh Penghutang Penghakiman;

Bahawa kesemua perkara dan keseluruhan prosiding kebankrapan yang difailkan oleh Pemiutan Penghakiman terhadap Penghutang Penghakiman di bawah Akta Insolvensi 1967 diketepikan dan/atau dibatalkan;

Kos permohonan ini ditanggung oleh Pemiutang Penghakiman; dan

Sebarang perintah selanjutnya yang difikirkan adil dan suaimanfaat diberikan oleh Mahkamah Yang Mulia ini. [4] Today is fixed for hearing/decision. Brief facts [5] The Judgment Creditor obtained a final judgment at the Kuala Lumpur High Court vide Suit No. WA-22NCvC-498-10/2013 against the JD, the third defendant for the sum of RM880,000.00 on 24.4.2018 (“Final Judgment”). [6] The sum owed by the JD is based on the Final Judgment after a full trial in which the JD has no further avenue to appeal as the Federal Court had dismissed the JD’s notice of motion for leave to appeal to the Federal Court on 4.4.2022. [7] The Judgment Creditor (“JC”) commenced the bankruptcy proceedings against the JD and the Bankruptcy Notice dated 1.11.2021 (“BN”) was issued followed by the Creditor’s Petition on 1.4.2022. [8] Subsequent to that, the Creditor’s Petition was amended by the order of the Court dated 18.5.2022, and the amended creditor’s petition (“Amended CP”) was filed in Encl. 11. [9] The Amended CP was served and received by the JD personally on 22.6.2022. [10] The present application in Encl. 23 was later lodged with the Court on 15.8.2022. Submission of the JD [11] Briefly, the JD submits that–

the date of the alleged act of bankruptcy (“AOB”) in the Amended CP is wrong and hence, non-compliance with section 5(1)(c) of the Insolvency Act 1967 (“IA”) referring to the case of Sivakadatcham P Sethuram Vandayar v CIMB Bank Bhd [2019] 6 CLJ 504 for the calculation of AOB;

no AOB has been committed on 25.12.2021 and therefore, the misstatement of the AOB in the Amended CP is a fatal and substantive mistake, applying Order 3, rule 2 of the Rules of Court 2012; citing the case of Lonpac Insurance Bhd v Embi Bin Bahari [2022] MLJU 1797; Stephen Wong Leong Kiong v HSBC

the affidavit verifying the petition is invalid, pre-mature and incompliance with section 6(1) IA because it was affirmed on 31.3.2021 and the creditor’s petition was filed on 1.4.2021, referring to the case of Sobri Arshad v Associated Tractors Sdn Bhd 756 [1991] 3 CLJ (Rep) 756. Submission of the JC [12] In brief, the JC submits as follows:

the creditor’s petition was filed on 1.4.2022 after the AOB be it on 25.12.2021 or 29.12.2021 and hence, there is no prejudice whatsoever caused to the JD, referring to Azamn Jufir v

the creditor’s petition is valid as it was filed on 1.4.2022 well within 6 months from the date of AOB, the JD’s contention is therefore a non-starter;

no attempt by the JD to satisfy the judgment debt, no dispute as to the quantification of the judgment debt, JD has not further avenue to appeal against the judgment debt, JD’s repeated admission that the AOB has been committed on 29.12.2021, referring to Esso Malaysia Bhd v Hills Agency (M) Sdn Bhd & Ors [1994] 1 MLJ 740; Wong Kian Wah v Ng Kian Boon [2018] MLJU 989;

JD has failed to adduce any evidence of prejudice caused;

the present application by the JD is clearly an attempt to delay and derail the bankruptcy proceedings;

the misstatement of the AOB in the Amended CP is curable, applying the case of Azman Jufri (supra) and pursuant to s 131 IA;

the JD’s ground of premature affidavit verifying petition is misconceived, referring to the case of Lee Boon Hooi, Re Ex P;

such irregularity in the affidavit verifying petition is curable and the JD’s contention is obviously flawed and not supported by any provision of law, citing the case of Zamri Naim Bin Ismail v Ex-Parte: Bank Muamalat Malaysia Bhd [2014] MLJU 1337; Re Ho Weng Keong, Ex P Marketlink (M) Sdn Bhd [1993] 1 MLJ 60; and

the validity of the creditor’s petition is affirmed in Re Mohd Sharif Bin Sapie, Ex P Malayan Banking Bhd [1992] 2 MLJ 102; Re Sharma Kumari Shukla; Ex P Dato’ Abdullah Hishan Bin Haji Mohd Hashim (No. 2) [2000] 6 MLJ 391. Issue [13] Upon careful scrutiny and consideration of the application in Encl. 23, affidavits and written submissions, this Court finds that the following issues are most pertinent for this Court’s determination:

whether the Amended CP (Encl. 11) ought to be set aside on the ground that the AOB date in the Amended CP is incorrect and/or wrong; and

whether affidavit verifying the creditor’s petition is premature and invalid. Analysis and Findings Issue (a): whether the Amended CP (Encl. 11) ought to be set aside on the ground that the AOB date in the Amended CP is incorrect and/or wrong. [14] Based on the affidavits and written submissions of the parties, it is undisputed that the AOB had actually occurred and/or committed by the JD on 29.12.2021 and the creditor’s petition was eventually filed by the JC on 1.4.2022. [15] The date of the AOB was also confirmed and verified by the Court and the JC Counsel during the case management which was held on 31.1.2022. The relevant part of the minutes of proceedings is reproduced hereinbelow for ease of reference: Peguam Pemiutang Penghakiman: Puan berdasarkan kepada penyampaian kediri pada 17.12.2021, tarikh perbuatan kebankrapan oleh pihak JD telah dilakukan pada 25.12.2021. Mahkamah: Peguam, mengikut pengiraan Mahkamah, Tarikh Perbuatan Kebankrapan adalah pada 29/12/2021. Peguam Pemiutang Penghakiman: Puan, pihak kami mengambil maklum atas tarikh perbuatan kebankrapan pada 29.12.2021. Mahkamah: Maka dengan itu tarikh akhir pemfailan Petisyen Pemiutang adalah pada 28/6/2022. Mahkamah menetapkan tarikh pengurusan kes selanjutnya adalah pada 29/6/2022 bagi Peguam mengemukakan status pemfailan Petisyen Pemiutang. Tarikh tersebut akan dilapangkan sekiranya Petisyen Pemiutang tersebut telah difailkan dengan lebih awal. Peguam Pemiutang Penghakiman: Terima kasih Puan. Pihak kami mengambil maklum arahan Mahkamah di atas. System : Next Schedule : CM-Track - 29 Jun 2022 09:00 AM (Puan Nurul Farha binti Sulaiman) System : Today's session has ended. [16] However, when the creditor’s petition (“1st creditor’s petition”) was presented by the JC on 1.4.2022, the sole act of bankruptcy as allegedly committed by the JD was stated differently in paragraph 4 of the petition as follows–

Bahawa Amrit Kaur A/P Manjeet Singh dalam masa enam (6) bulan sebelum tarikh penyerahan permohonan ini telah melakukan perbuatan kebankrapan yang berikut, iaitu Amrit Kaur A/P Manjeet Singh telah gagal sebelum 25.12.2021 untuk mematuhi akan kehendak-kehendak Notis Kebankrapan bertarikh pada 1.11.2021 yang telah disampaikan kepada beliau melalui penyampaian secara kediri Notis Kebankrapan tersebut dan di mana beliau menandatangani penerimaan Notis Kebankrapan tersebut pada 17.12.2021. [17] The 1st creditor’s petition was subsequently amended by the JC via the Court’s order granted on 18.5.2022 and the Amended CP was eventually filed in Encl. 11 on 19.5.2022. Notwithstanding that, it appears that the sole act of bankruptcy as presented in paragraph 4 of the Amended CP was still not amended as the amendments were only made with respect to the content in the ‘Catitan’ of the Amended CP. For ease of reference paragraph 4 and the Catitan of the Amended CP as follows: [18] It follows that on 15.8.2022, the JD by Summons in Chambers in Encl. 23, filed the present setting aside application to set aside the Amended CP and one of the main grounds for the setting aside is that the date of the alleged act of bankruptcy as stated in the Amended CP is wrong and inaccurate and hence, such misstatement is a fatal mistake and/or flaw as there was no act of bankruptcy had been committed by the JD on 25.12.2021. [19] In response, the JC submits that the Amended CP is valid as it was originally presented on 1.4.2022 which was well within 6 months from the date of the AOB (be it from 25.12.2021 or 29.12.2021) and any allegation of misstatement of the date of the AOB is curable citing the Court of Appeal’s case of Azman Jufri v Medtronic Australasia Pty Ltd [2015] 6 MLJ 841. [20] The JC further submits that the JD has admitted to the commission of the AOB on 29.12.2021 as can be seen in the application in Enc. 23 and affidavit-in-support in Encl. 24. Despite the misstatement, the JC has immediately filed a summons in chambers to amend the date of AOB in paragraph 4 of the Amended CP by way of an amendment application in Encl. 25 on 30.8.2022 and therefore, the JD’s contention is a non-starter as it is clear that there is no prejudice and/or substantial injustice caused to the JD. [21] In considering whether the Amended CP in Encl. 11 ought to be set aside on the ground that the AOB date in the Amended CP is incorrect and/or wrong, firstly, the relevant provision for this Court's determination is with regards to s 5(1)(c) of the IA. The crux of the issue is essentially whether ‘the act of bankruptcy’ on which the Amended CP is grounded has occurred within six months before the presentation of the creditor’s petition. [22] Section 5 of the IA stipulates the ‘Conditions on which creditor may petition’– 5 Conditions on which creditor may petition

A creditor shall not be entitled to present a bankruptcy petition against a debtor unless-

the debt owing by the debtor to the petitioning creditor, or if two or more creditors join in the petition the aggregate amount of debts owing to the several petitioning creditors, amounts to one hundred thousand ringgit;

the debt is a liquidated sum payable either immediately or at some certain future time;

the act of bankruptcy on which the petition is grounded has occurred within six months before the presentation of the petition;

the debtor is domiciled in Malaysia or in any State or within one year before the date of the presentation of the petition has ordinarily resided or had a dwelling house or place of business in Malaysia or has carried on business in Malaysia personally or by means of an agent or is or has been within the same period a member of a firm or partnership which has carried on business in Malaysia by means of a partner or partners or an agent or manager. [23] Pursuant to s5(1)(c) of the IA, one of the mandatory express conditions for the JC to comply with for the presentation of a creditor’s petition is that the act of bankruptcy on which the creditor’s petition is grounded has to occur within six months before the presentation of the petition. This is in line with the passage in para. 2 of the Federal Court’s judgment in Westech Sdn Bhd v Thong Weng Lock [2017] 8 CLJ 257– [2] Under s. 3(1)(i) of the Bankruptcy Act 1967 (BA), an act of bankruptcy is committed upon the expiry of seven days from the date of service of the BN. In this case, on the premise that no legal impediment exists, the act of bankruptcy begins from 1 November 2011. Any creditor's petition (CP) to be filed, must be done within six months of the latter date (s. 5(1)(c) of the BA). [24] Also, based on the case of Tan Ah Tong v Dato' Seri Dr Kuljit Singh [2002] 6 CLJ 484, Vincent Ng J explains that the express condition as stipulated in s 5(1)(c) is two-fold– The requirement of section 5(1)(c) is two-fold:

the CP must state only one act of bankruptcy committed by the JD although JD could have committed several Acts of Bankruptcy based on several bankruptcy notices as there is nothing wrong for a judgment creditor to issue repeated bankruptcy notices under new bankruptcy proceeding numbers after abandoning a preceding bankruptcy notice. On this topic GK Ganesan, in his opus 'Bankruptcy Law in Malaysia and Singapore ' Marsden Law Book Company (edn 2001) at p. had this to say: In The Law and Practice in Bankruptcy by Williams and Muir Hunder (19th Ed) at p. 1, the learned authors, in explaining the provision of s. 4(c) of the English Act, which is in pari materia with the Malaysian s. 5(1)(c) except that under the English Act the period is three months instead of six months state: The commission by the debtor of at least one act of bankruptcy is the fact which gives the bankruptcy court jurisdiction to make a receiving order in respect of his estate, and is to be treated as a statutory recognition of his insolvency. Such an act of bankruptcy must be proved to have been committed within three months before the presentation of the petition..., and any act so proved must be recited in the receiving order.'

The particular 'one' act of bankruptcy stated in the petition must have occurred within six months prior to the date of filing of the CP (the calculation of the time period of six months runs backwards from the date of filing of the CP to determine if the particular act of bankruptcy falls within six months). [25] In other words, any asserted act of bankruptcy as allegedly committed by the JD must occur within 6 months prior to the filling of the creditor’s petition, such an act of bankruptcy (or more) has to be stated in the creditor’s petition and more importantly, it has to verified by an affidavit verifying the petition, proving the commission of the act of bankruptcy by the JD. The act of bankruptcy is to be considered as a statutory recognition of the JD’s failure in complying with statutory requisitions in the bankruptcy notice, the JD’s insolvency and also the inability to pay the debts, which thereby warrant the making of a bankruptcy order by the court. [26] It follows that, upon the express conditions as stipulated in s 5(1) being fulfilled, the proceedings and order on the creditor’s petition shall then be regulated by s 6 IA, which prescribes as follows: 6 Proceedings and order on creditor's petition

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 personally to a debtor.

Notwithstanding subsection (2), the court may make an order for substituted service of a creditor's petition as prescribed if the creditor can prove to the satisfaction of the court that the debtor, with intent to defeat, delay or evade personal service-

departs out of Malaysia or being out of Malaysia remains out of Malaysia; or

departs from his dwelling house or otherwise absents himself, or secludes himself in his house or closes his place of business.

An application for an order for substituted service shall state the facts on which the application is founded.

A substituted service of a creditor's petition, in relation to which an order is made under this section, is effected by taking such steps as the court may direct to bring the creditor's petition to the person to be served.

At the hearing the court shall require proof of–

the debt of the petitioning creditor; and

the act of bankruptcy or, if more than one act of bankruptcy is alleged in the petition, some one of the alleged acts of bankruptcy; and

if the debtor does not appear, the service of the petition, and if satisfied with the proof may make a bankruptcy order in pursuance of the petition.

If the court is not satisfied with the proof of the petitioning creditor's debt or of the act of bankruptcy or of the service of the petition, or is satisfied by the debtor that he is able to pay his debts, or that for other sufficient cause no order ought to be made, the court may dismiss the petition.

When the act of bankruptcy relied on is non-compliance with a bankruptcy notice to pay, secure or compound for a judgment debt, the court may if it thinks fit stay or dismiss the petition on the ground that an appeal is pending from the judgment.

Where the debtor appears on the petition and denies that he is indebted to the petitioner, or that he is indebted to such an amount as would justify the petitioner in presenting a petition against him, the court, on such security, if any, being given as the court may require for payment to the petitioner of any debt which may be established against the debtor in due course of law and of the costs of establishing the debt, may, instead of dismissing the petition, stay all proceedings on the petition for such time as may be required for trial of the question relating to the debt.

Where proceedings are stayed the court may, if by reason of the delay caused by the stay of proceedings or for any other cause it thinks just, make a bankruptcy order on the petition of some other creditor, and shall thereupon dismiss, on such terms as it thinks just, the petition in which proceedings have been stayed as aforesaid. [27] Pursuant to s 6 of the IA, in particular the provisions in ss 6(1), (2) and

(3), wherein it is clear that a creditor's petition shall be verified by an affidavit and at the hearing of the creditor’s petition, the court shall require proof of the debt, of the service of the creditor’s petition, and of the act of bankruptcy, or, if more than one act of bankruptcy is alleged in the petition, if satisfied with the proof, may make a bankruptcy order in pursuance of the creditor’s petition. [28] It is also worth emphasising that a bankruptcy order granted by the court shall state nature and more significantly the date of every act of bankruptcy as prescribed in rule 133(1) of the IR. For ease of reference rule 133(1) provides that– 133 Form and contents of bankruptcy order

A bankruptcy order shall state the nature and date of every act of bankruptcy upon which the order is made.

Every bankruptcy order shall contain a notice requiring the bankrupt forthwith after service of the order upon him to attend on the Director General of Insolvency at the place mentioned therein.

Where the petitioner is represented by a solicitor, the bankruptcy order shall be endorsed with the solicitor's name and address. [29] Upon a proper construction of the provisions of law in sections 5(1)(c), 6(1), (2)(b), 6(3) IA and rule 133 IR, this Court finds that it is imperative that the date of AOB on which the creditor’s petition is grounded has to be stated clearly in the Amended CP, also see Form 41, Note (e) of the IR. [30] This is because the act of bankruptcy which is allegedly has been committed by the JD is verily an indispensable substance in which the Amended CP shall be based and such act of bankruptcy is the requisite that forms the basis of the presentation of the Amended CP as the court shall require proof of the act of bankruptcy failing which section 6(3) of the IA gives the court the discretion to dismiss the Amended CP. [31] The act of bankruptcy which has been allegedly committed by the JD brings with it a date on which the bankruptcy act has occurred and to this effect, the date of commission and / or occurrence of the bankruptcy act shall be regarded as the fundamental that gives life to the Amended CP. [32] Simply put, it is the foundation for which the Amended CP is grounded and is invariably the act of bankruptcy that goes to the substance of the Amended CP. Therefore, if the date of the act of bankruptcy is incorrect and/or wrongly stated in the Amended CP, it is this Court’s considered view that such Amended CP shall be regarded as a creditor’s petition in vacuo and/or has been presented in vacuo, that is to mean, without the necessary substance, basis, fundamental and foundation because there is no commission and/or occurrence of any act of bankruptcy on the alleged date in the Amended CP. [33] This Court is further of the opinion that a creditor’s petition if it were to be filed on the basis of a specific act of bankruptcy being committed by a judgment debtor within the meaning of s3(1) of the IA, the date on which the act of bankruptcy is committed and/or has occurred is crucial and must be stated clearly in the creditor’s petition. The reason is that a creditor having elected to file the creditor’s petition on the basis that the specific act of bankruptcy has been committed by a debtor for failure to comply with the requisitions of a bankruptcy notice, has to live with that election by stating clearly as to when is it exactly the act of bankruptcy has allegedly been committed, verify the same by affidavit and prove the same. [34] And the very reason why the date on which the act of bankruptcy is committed and/or has occurred is crucial and ought to be stated clearly in a creditor’s petition, in my view, is further fortified by the provisions of sections 6(1), 6(2)(b), 6(3) of the IA and rule 133 of the IR wherein it is clear that section 6(1) shall require the creditor’s petition be verified by affidavit, section 6(3) shall require proof of the act of bankruptcy and this Court has to be satisfied with such proof of the act of bankruptcy as alleged in the creditor’s petition at the hearing of the petition, and also given the requirements in rule 133 of the IR, the contents of a bankruptcy order (if granted by this Court) shall state the date of every act of bankruptcy. [35] Therefore, applying the reasonings above to the present case, it is manifestly clear that if the date of the act of bankruptcy is not clearly stated in the Amended CP, this will result in the non-compliance with requirements in the provisions of sections 6(1), (2)(b), (3) of the IA and rule 133 of the IR and consequently, the Amended CP may be dismissed by this Court. [36] Further to that, this Court is of the view that the certainty as to the commission and / or occurrence of the act of bankruptcy is very crucial. This is because any the act of bankruptcy really cannot be proved to have been committed and / or occurred if the date on which the act of bankruptcy is committed and/or has occurred is not clearly stipulated and hence, the commission and / or occurrence of the act of bankruptcy cannot be established in law and in fact, and if that does happen, by virtue of s5(1)(c) the JC shall not be entitled to present the 1st creditor’s petition. [37] In addition, the date of the act of bankruptcy must be stated clearly in the Amended CP is very crucial because without which it is plausibly impossible for the six months’ statutory time period for the filing of the 1st creditor’s petition as prescribed in section 5(1)(c) of the IA can be complied with. [38] The reason is that, if the date of the act of bankruptcy is not certain and/or clearly stipulated, there cannot be any certainty as to when is the six months’ statutory time period shall begin and/or end. There cannot be any certainty as to when shall the JC be entitled to present the 1st creditor’s petition. There also cannot be any act of bankruptcy which is allegedly has been committed and also there cannot be any act of bankruptcy which is allegedly to have occurred within six months. Finally, there cannot be any act of bankruptcy which can be verified by affidavit and be proven within the meanings of s 6(1) and 6(2)(b) of the IA. [39] More importantly, by reference to the provisions as prescribed in sections 5(1)(c), 6(1) and (2)(b) of the IA, it bears emphasising that in the said provisions, the word “shall’’ has been used and this signifies the intention of the Parliament that the compliance of which is strictly mandatory. [40] Further to that, as can been seen in s5(1) IA, the words ‘A creditor shall not be entitled to present a bankruptcy petition against a debtor unless’, have a very strong connotation and this Court takes the view that such connotation carries with it the mandatory implication and, by reading ss5(1) and 5(1)(c) together, it is manifestly clear that one of the mandatory express conditions for the JC to comply with for the filing of the 1st creditor’s petition is that the act of bankruptcy on which the petition is grounded has to occur within six months before the presentation of the 1st creditor’s petition. [41] In the Supreme Court of India's decision of State of Haryana v. Anr v Raghubir Dayal (1995) 1 SCC 133, at p. 5 which was also referred to by the Federal Court in the case of Bursa Malaysia Securities Bhd v Mohd Afrizan Husain [2022] 4 CLJ 657, wherein it was held that–

The use of the word "shall" is ordinarily mandatory but it is sometimes not so interpreted if the scope of the enactment or consequences to f low from such construction would not so demand. Normally, the word "shall" prima facie ought to be considered mandatory but it is the function of the Court to ascertain the real intention of the legislature by a careful examination of the whole scope of the statute, the purpose it seeks to serve and the consequences that would flow from the construction to be placed thereon. The word "shall" therefore, ought to be construed not according to the language with which it is clothed but in the context in which it is used and the purpose it seeks to serve. The meaning has to be described to the word shall; as mandatory or as directory accordingly. Equally it is settled law that when a statute is passed for the purpose of enabling the doing of something and prescribes the formalities which are to be attended for the purpose, those prescribed formalities which are essential to the validity of such thing would be mandatory. However, if by holding them to be mandatory, serious general inconvenience is caused to innocent persons or the general public, without very much furthering of the object of the Act, the same would be construed as directory. [42] For foregoing reasons, it bears reiterating that it is definitely mandatory for the JC in the present case to ensure that the act of bankruptcy on which the 1st creditor’s petition / Amended CP is grounded has to occurred within six months before the presentation of the petition and therefore, it is imperative that the date of the act of bankruptcy in the 1st creditor’s petition / Amended CP has to be stipulated clearly, and correctly. [43] This Court is of the view that the JC in the present case has failed to comply with the provision in ss 5(1)(c) and 6(1) IA, considering that the date of the bankruptcy act on which the 1st creditor’s petition / Amended CP was grounded (25.12.2021) had not occurred within the six months statutory time period before which the Amended CP could be presented. This is because the act of bankruptcy was indisputably committed by the JD on 29.12.2021, however, the statement in paragraph 4 of the Amended CP as affirmed by the affidavit verifying the petition is not clear and is incorrect / wrong as it states that ‘Bahawa Amrit Kaur A/P Manjeet Singh dalam masa enam (6) bulan sebelum tarikh penyerahan permohonan ini telah melakukan perbuatan kebankrapan yang berikut, iaitu Amrit Kaur A/P Manjeet Singh telah gagal sebelum 25.12.2021 untuk mematuhi akan kehendak-kehendak Notis Kebankrapan bertarikh pada 1.11.2021’. Therefore, the act of bankruptcy on which the 1st creditor’s petition / Amended CP was grounded had not actually occurred within the six months’ statutory time period as the act of bankruptcy could only occur on 29.12.2021, certainly not before 29.12.2021. [44] In other words, there cannot be any act of bankruptcy which can be verified by affidavit and be proven prior to 29.12.2021 and this Court opines that when the 1st creditor’s petition / Amended CP was grounded on the act of bankruptcy prior to the occurrence of the actual act of bankruptcy within the six months’ statutory time period under s5(1)(c) IA, the 1st creditor’s petition / Amended CP was essentially presented in vacuo as there was really no act of bankruptcy could be grounded on 25.12.2021 as at that material time the JD was still entitled to exercise its statutory rights to challenge, oppose and/or set aside the bankruptcy notice in accordance with s3(1) of the IA, even though the JD did not do so. [45] Therefore, considering that the six months’ statutory time period under s5(1)(c) IA shall only begin on 29.12.2021, this Court holds that the 1st creditor’s petition / Amended CP has grounded on the act of bankruptcy which has not actually occurred and / or committed by the JD within the six months’ statutory time period and therefore the 1st creditor’s petition / Amended CP is irregular and defective. [46] Such an irregularity and/or defect to my mind, is not merely an irregularity and/or defect which warrants the exercise this Court’s discretion under s131 of the IA to cure the irregularity or defect by way of an amendment application. Such irregularity and/or defect shall be regarded as a material and serious error in law and it is akin to re-characterised the 1st creditor’s petition / Amended CP as being grounded on an act of bankruptcy that has never occurred and / or in existence, and hence, is not amendable under section 93(3) of the IA. [47] This is because there has been a clear breach to the provision in s5(1)(c)IA, as it can be manifestly shown that such irregularity or defect in the 1st creditor’s petition / Amended CP is essentially the irregularity or defect that goes into the substance of the petition, considering that not only the rights of the JD under s3(1) of the IA will clearly be affected, but also the right of the JD to show cause against the petition under rule 116 of the IR will also be affected. [48] Be that as it may, this Court is of the further opinion that, if the 1st creditor’s petition / Amended CP is grounded on an act of bankruptcy after the occurrence of the actual act of bankruptcy on 29.12.2021, this Court will have no issues in holding that the JC has properly complied with the provision in section 5(1)(c) of the IA, so long as the statement with regards to the act of bankruptcy is clearly stipulated in the petition. This is because, the act of bankruptcy which forms substance, basis, fundamental and foundation on which the petition can be grounded, has actually occurred within the six months’ statutory time period within the meaning of s5(1)(c) IA and in the event that the specific date of the bankruptcy act is wrongly and/or incorrectly stated in the petition, the same is amendable at the Court’s discretion. [49] The reason being that, to my mind, such irregularity and/or defect is a mere technical irregularity and/or defect because the date of bankruptcy act on which the petition is grounded has actually occurred and/or committed within the six months’ statutory time period under s5(1)(c) IA and hence, the substance, basis, fundamental and foundation on which the petition is grounded is in existence, and is not in vacuo. [50] In any case, this Court is well-aware of the long line of authorities at the High Court and Court of Appeal which had in the past allowed the incorrect date of bankruptcy act in the creditor’s petition to be amended under section 131 of the IA and / or Bankruptcy Act 1967 on the ground that no substantial prejudice had been caused by the defect or irregularity in amending the same. [51] However, with due respect, it must be emphasised that these cases were decided without considering the express conditions and requirements as stipulated in ss 5(1)(c), 6(1), 6(2)(b), 6(3) of the IA and rule 133 of the IR– see Azman Jufri v Medtronic Australasia Pty Ltd [2015] 6 MLJ 841; Re Liow Fong Mooi supra; and Re Arif bin Sionggong, ex p Arab Malaysian Finance Bhd [1995] 3 MLJ 252; Re Abdul Rahman Bin Mohamad; Ex P Public Finance Bhd [2000] 4 MLJ 618; and Stephen Wong Leong Kiong v HSBC Bank Malaysia Berhad [2005] MLJU 43 (“case laws”). [52] With due respect, this Court is also not unmindful of the principle of the doctrine of stare decisis, whereby this Court is bound to follow the decisions of its immediately superior courts. Be that as it my, this Court finds that the present case is distinguishable and therefore, holds that the doctrine of stare decisis in so far as present case is concerned, is not applicable, for the further reasons below. [53] In the premises, this Court holds that the incorrect and/or wrong date of bankruptcy act as stated in the 1st creditor’s petition / Amended CP, is not merely an irregularity and/or defect but a material/serious error which goes to the substance of the 1st creditor’s petition / Amended CP and therefore not amendable by invoking s131 and s 93(3) of the IA for the further reasons as follows:

the present case is distinguishable from the cases of Azman Jufri v Medtronic Australasia Pty Ltd [2015] 6 MLJ 841; Re Liow Fong Mooi supra; and Re Arif bin Sionggong, ex p Arab Malaysian Finance Bhd [1995] 3 MLJ 252; Re Abdul Rahman Bin Mohamad; Ex P Public Finance Bhd [2000] 4 MLJ 618; and Stephen Wong Leong Kiong v HSBC Bank Malaysia Berhad [2005] MLJU 43 (“case laws”) because– (aa) in the present case, it bears reiterating the JC has breached the express condition as stipulated in section 5(1)(c) of the IA and this provision has not been considered and/or decided by the courts in the case laws; (bb) the case laws are also distinguishable from the present case because the High Courts and Court of Appeal in the case laws have not discussed the effects and / or consider the provisions of law in ss6(1), 6(2)(b), 6(3) of the IA and rule 133 of the IR;

(cc) the present case is also distinguishable from the case laws because this Court and the JC had during the case management held on 31.1.2022 confirmed and verified the date of the act of bankruptcy that it had occurred and/or committed on 29.12.2022, and such is not the case in the case laws;

(dd) despite the fact that the JC was informed about the confirmed and verified date of the act of bankruptcy, even so, the JC still proceeded to present the 1st creditor’s petition on 1.4.2022 by stating the incorrect and/or wrong date of the act of bankruptcy; (ee) much to this Court's dismay, even when the 1st creditor’s petition was subsequently amended via the court’s order dated 19.5.2022, the incorrect and/or wrong act of bankruptcy which formed the substance of the petition was still not amended by the JC in the Amended CP which was subsequently filed in Encl. 11; (ff) by then, more than 5 months has passed since the act of bankruptcy committed on 29.12.2022, but it was not until the JD filed the present application in Encl. 23 on 15.8.2022 to set aside the Amended CP that the JC realised that the date of bankruptcy act in the Amended CP was wrong and/or incorrect. The JC then proceeded to take an immediately action by filing the application to amend the Amended CP on 30.8.2022 (third amendments of the petition); (gg) and by this time, it was already near 9 months’ delays since the act of bankruptcy on 29.12.2022 and still the date of the bankruptcy act in the Amended CP was not able to be amended because the JD was objecting to the amendment application. This is due to the fact that the JD has filed the present setting aside of the Amended CP’s application in Encl. 23 prior to the amendment application being made by the JC; (hh) the emphasis is that, in the present case, the JC has actually taken 9 months to realise that there is an irregularity and/or defect as to the bankruptcy act in the Amended CP and also, the JC has actually taken nearly 5 months to file the amendment application to correct the date of the bankruptcy act;

(ii) and it is truly appalling that, even when the Amended CP is going to be amended for the third times after 9 months’ period has elapsed, the proposed amendment other than correcting and / or amending the date of bankruptcy act from 25.12.2022 to 29.12.2022, is still plagued with other irregularities as can be seen at the ‘Catitan’s page wherein the date (‘Bertarikh pada’) and the signature’s part (‘Penolong Kanan Pendaftar Mahkamah Tinggi Kuala Lumpur’) at the bottom of the page are still empty– (jj) referring to Form 41 under the IR, this part in the Catitan of the petition should be the indorsement’s (Pengindorsan) page by the Court, however, it is wrongly stated as ‘Catitan’ and this has remained incorrect since the 1st creditor’s petition was filed on 1.4.2022, and it was still the same even after second amendment made on 15.8.2022, and presently at the third amendment, it is still incorrect; (kk) without the proper indorsement by the Court, it is questionable that the 1st creditor’s petition and / or the Amended CP is even valid;

(ll) the unceasing amendments are untenable and have caused a serious waste of court's time, and tantamount to an abuse of the court’s processes;

(mm) finally, the present case is also distinguishable from the case laws because the effect of the filling of affidavit verifying the petition affirming the wrong and incorrect date of the act of bankrupt has not be considered in the case laws; (nn) in respect of the JC’s submission that there is no substantial injustice and/or prejudice has been occasioned to the JD, citing s131 of the IA and the JD’s admission to the commission of the act of bankruptcy on 29.12.2022. This Court is agreeable with the JC, however, this Court is of the view that s131 of the IA is a provision that specifically prevents the invalidation of any proceeding in bankruptcy by reason of any formal defect or irregularity unless such defect or irregularity has caused substantial injustice and cannot be remedied by the Court’s order. This Court opines that whether the formal defect and irregularity go into the substance of the 1st creditor’s / Amended CP will depend on the facts and circumstances of the present case, and is for this Court to determine. Therefore, considering that s131 of the IA does not specifically provide that an amendment can be ordered to cured any defect or irregularity, still, this Court can invoke s131 of the IA to sustain the present bankruptcy proceedings and exercise its discretion to remedy any defect or irregularity by any court’s order provided that there is no substantial injustice caused, in accordance with this Court’s discretion; and (oo) in relation to s93(3) of the IA, this Court must say that it is this Court’s discretion to consider whether to allow any amendment to the petition. Considering that this Court has decided that the incorrect and/or wrong date of bankruptcy act as stated in the Amended CP is not a mere irregularity and/or defect but a material/ serious error that goes to the substance of the petition, this Court holds that the date of the bankruptcy act is not amendable in the present case. [54] In the circumtances, this Court holds the Amended CP is defective and irregular, therefore, is a nullity and void. Issue (b): whether affidavit verifying the creditor’s petition is premature and invalid. [55] The crux of the issue at hand is that whether the affidavit verifying the 1st creditor’s petition / Amended CP is premature and invalid as it was affirmed prior to the presentation of the creditor’s petition, on 1.4.2022. [56] The JD’s contention is that the affidavit verifying the petition is premature and invalid because it was sworn to verify an unborn petition as at the date of the affirmation the 1st creditor’s petition was yet to be filed, referring to the case of Sobri Arshad v Associated Tractors Sdn Bhd 756 [1991] 3 CLJ. [57] Bankruptcy matters are regulated specifically by statutory and regulatory provisions in the IA and IR. As regards the affidavit verifying the creditor’s petition, section 6 of the IA and rule 105 of the IR provide that– Proceedings and order on creditor’s petition

(1) 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 personally to a debtor.

Verification

A creditor’s petition shall be verified by affidavit.

A petitioning creditor who cannot himself verify all the statements contained in his petition shall file an affidavit made by some person who can depose to them. [58] Upon judicious consideration of the provisions in s 6 of the IA and rule 105 of the IR, this Court finds that it is manifestly clear that the wordings of the provisions do not require for an verifying the creditor’s petition to be affirmed only after a creditor’s petition has been filed. [59] It is also evident from the said provisions that there is no requirement stipulating that an verifying the creditor’s petition has to be affirmed, sworn and be filed at which point of time. [60] This Court is agreeable with the case laws as referred to by the JC, namely the cases of Lee Boon Hooi, Re: Ex P; Tan Ket Huat [1992] 2 CLJ (Rep) 699; Zamri Naim Bin Ismail v Ex-Parte: Bank Muamalat Malaysia Bhd [2014] MLJU 1337; Re Ho Weng Keong, Ex P Marketlink (M) Sdn Bhd [1993] 1 MLJ 60; Re Sharma Kumari Shukla; Ex P Dato’ Abdullah Hishan Bin Haji Mohd Hashim (No. 2) [2000] 6 MLJ 391. [61] Therefore, this Court holds that the affidavit verifying the 1st creditor’s petition / Amended CP which was sworn and affirmed prior to the filing of the petition on 1.4.2022 shall not be regarded as premature. [62] However, considering that the rationale behind the requirement for the filling of an affidavit verifying the creditor’s petition is to verify the facts (written statement), as a sworn affidavit under oath in respect of the facts and information contained therein, this Court finds that the affidavit verifying the 1st creditor’s petition / Amended CP in the present case is tainted with defect and irregularity when the affidavit verifying the petition was affirming and / or verifying the facts and information in relation to the act of bankruptcy which was not true and not in existence. [63] It is also pertinent to emphasise that, in the event of any change in respect of the facts and information contained in the 1st creditor’s petition / Amended CP that goes into the substance of the petition, as in the present case, the date of the commission and / or occurrence of the act of bankruptcy, the affidavit verifying the petition has to be reaffirmed. [64] This is because, at the point in time when the affidavit verifying the 1st creditor’s petition was filed, the officer of the JC who swore that affidavit on behalf of the JC was having the knowledge of the facts in relation to the commission and / or occurrence of the act of bankruptcy which was not true. [65] In the premises, given that this Court has held that the incorrect and/or wrong date of bankruptcy act as stated in the Amended CP, is not merely an irregularity and/or defect but a material and serious error which goes to the substance of the Amended CP, this Court holds that the affidavit verifying the petition which was filed on 1.4.2022 in Encl. 6 was not telling the truth and therefore is null and void. Conclusion [66] It is worth noting that the Bankruptcy Court is distinctly and specifically governed by the powers and jurisdiction exercisable only in strict compliance with the provisions of the IA and IR failing which any order made in breach is bound to be set aside. This is because bankruptcy action is quasi-criminal in nature and there are grave penal consequences directly flow from it, which involve losses of fundamental liberties and hence, strict compliance with the provisions of the IA and IR are mandatory– see section 24 CJA 1964; Badiaddin bin Mohd Mahidin & Anor v. Arab-Malaysian Finance Bhd [1998] 2 CLJ 75; [1998] 1 MLJ 393); Sobri bin Arshad v. Associated Tractors Sdn Bhd [1991] 1 CLJ 798; [1991] 3 CLJ (Rep) 756; [1991] 3 MLJ

[67] Based on the aforesaid reasons, and after careful scrutiny and judicious consideration of the affidavits and written submissions of the parties, and also in reliance on the powers of the courts under s131 of the IA, rules 282 and 283 of the IR, this Court orders that–

the application in Encl. 23 is allowed with costs subject to allocatur and the terms hereinbelow stated:

the Amended CP in Encl. 11 is set aside;

(ii) the affidavit verifying the creditor’s petition in Encl. 6 is set aside;

(iii) the act of bankruptcy has been committed and / or has occurred on 29.12.2021;

(iv) the JC is given liberty to refile afresh a creditor’s petition;

the time period to refile afresh a creditor’s petition is extended and abridged until 23.11.2022; and

(vi) the JC is to refile afresh a creditor’s petition together with affidavit verifying the creditor’s petition on or before 23.11.2022. Dated: 10.11.2022 t.t (CHAI GUAN HOCK) Senior Assistant Registrar High Court of Malaya Kuala Lumpur Counsel/Solicitors For the Judgment Creditor: Bryan Goh Messrs. Lim Kian Leong & Co 21, Jalan Pinang, Kuala Lumpur 50450 Kuala Lumpur For the Judgment Debtor: Natra Adibah Nubli Messrs. Kesavan 29-7 Menara 1MK, No.1 Jalan Kiara Mont Kiara, 50480 Kuala Lumpur