Zavarco Plc v Ranjeet Singh Sidhu (WA-29NCC-687-04/2024)

This is an appeal (“Appeal”) against the decision of the Learned Senior Assistant Registrar’s (“SAR”) decision dismissing enclosure 4 (Enclosure 4) filed by the Judgment Debtor (“JD”) for the Notice of Bankruptcy Dated 22.4.2024 (“BN”) to be set aside on the grounds that a. the same is inter alia defective and not in accordance with the terms as specified in the Judgment b. the BN had combined 2 or more judgments

In hearing the Appeal under enclosure 17 (Enclosure 17) on 9.7.2025 and after hearing oral submissions from counsels from both sides as well as reading their respective written submissions filed earlier on, 2 this Court had made an order to dismiss the said Enclosure 17 with costs of RM5,000.00 (Enclosure 17 Order).

Herewith are now my written grounds with regards the Enclosure 17 Order.

The JC Respondent respectfully submits that the undisputed facts are as follows:

4.1 The JC Respondent obtained a Judgment in Kuala Lumpur High Court Suit No. 22NCVC-498-10/2014 (“Judgment”) against the JD Appellant on 24.4.2018 for the joint and several sum of RM12,069,570.16. The Judgment was handed down by Her Ladyship Nik Hasmat J.

4.2 The Judgment was then affirmed by the Court of Appeal.

4.3 Leave to appeal to the Federal Court was denied.

4.4 There is presently no active enforceable order for a stay of execution against the Judgment nor is there any application to impeach the Judgment.

4.5 As such, the present Bankruptcy Notice is predicated on a final judgment which has not been stayed and has been duly served on the Judgment Debtor. 3 4.6 From the above, it cannot be disputed that the JD Appellant accepts that there is a final and conclusive Judgment against him notwithstanding that there is no averment of the existence of any impeachment proceeding or stay of execution.

4.7 The JD Appellant filed Enclosure 4 to set aside the Bankruptcy Notice based only on tow main grounds, namely that: a) The JC Respondent have purportedly failed to ensure strict compliance with the terms of the Judgment before commencing the bankruptcy proceedings; and b) The Bankruptcy Notice was not filed base on a single final judgment without combining cost and allocatur. [5] The JD Appellant claims that the Bankruptcy Notice was filed not in compliance with the terms of the Judgment and that it was also filed based on the combination of two or more Judgments. [6] The SAR after having perused all the affidavits and written submissions, had on 9.6.2024 dismissed the JD Appellant’s application to set aside the bankruptcy notice with costs of RM1,000.00 and hence, the present appeal by the JD Appellant. Analysis & Findings Parties Respective Case [7] To surmise the JD had argued the following

7.1 bankruptcy proceedings are criminal in nature and there must be meticulous compliance with the law and the rules thereunder

7.2 there is a failure by the JC to specifically comply with the final judgement before commencing the bankruptcy proceedings as the amount demanded was not in accordance with the terms of the Judgment [8] In support of the JC’s submission to oppose the Appeal, the JC had submitted that the SAR was correct in his decision not to allow Enclosure 4. Alleged Failure By The JC To Specifically Comply With The Final Judgement [9] After examining the BN in question, I have found that under the heading ‘Special Damages’ the JC had claimed RM12,069,570.16 – (RM880,000 + RM349,804) = RM10,839, 766.16, which meant that the JC had claimed for a lesser sum in the BN than that in the Judgment. It is however my finding that the Judgment sum of RM12,069,570.16 was clearly and unequivocally expressed in the BN and that based on the aforesaid calculations, the amounts due as stated in the BN are correct and not excessive. [10] I rely on Lim Bon Peng v United Orient Leasing Co Bhd [1991] 1 CLJ (Rep) where the question in that appeal was whether a sum lesser than the amount that should be actually owing as at the date of the issue of the notice, was an incorrect sum which affects the validity of the notice. In that case the Supreme Court through a decision delivered by Mohd Azmi SCJ held “In our view, any reasonable person reading the bankruptcy notice should be left in no doubt at all that the amount which the appellant had to pay to avoid the commission of an act of bankruptcy under s. 3(1)(i) of the Bankruptcy Act 1967, was the quantified sum of RM47,449.45 cts. There was no room for dispute that on 8 June 1988, the said sum claimed in the body of the bankruptcy notice was capable of being made the subject of execution. The notice was clear and unequivocal. …. Much had been said about the requirement that the amount quantified in the body of the notice must be the correct sum owing as at the date of the bankruptcy notice. The question in this appeal was, was a sum less than the amount that should be actually owing as at the date of the issue of the notice, an incorrect sum for the validity of the notice? Obviously not. It could be a lesser amount than the sum actually owing and capable of being made the subject of execution at the date of issue of the notice.” [11] I have also examined the Judgment which I note was against several Defendants and that the Judgment was a ‘joint and several’ judgment as well as the fact that the 3rd and 4th Defendants in the said case had assumed liability on the said sums of RM880,000 and RM349,804 respectively. [12] Thus, in this Court’s view the JC has the absolute discretion to determine as to which of the Defendants that the JC intends to execute the Judgment. My said decision is made in accordance with the judgment of the Federal Court in Lembaga Kumpulan Wang Simpanan Pekerja v Edwin Cassian Nagappan [2021] 7 CLJ 823. [13] I also agree with learned counsel for the JC that the JD had failed to show that the BN had included a term which was not covered in the Judgment and caused prejudice to the JD as per J Raju M Kerpaya v Commerce International Merchant Bankers Bhd [2000] 3 CLJ 104 where a penalty interest and stamp duty specified in the BN were never awarded in the Judgment. [14] Thus, I hold that the alleged failure by the JC to specifically comply with the final judgement is totally devoid of any merit. Alleged Combination of Costs on Different Orders [15] There is further the contention by the JD that there is an alleged failure by the JC to specifically comply with the final judgement before commencing the bankruptcy proceedings as the amount demanded in the BN should be without consolidating costs and allocations based on 3 different orders. [16] For the record, Rule 89 (2) of the Insolvency Rules 2017 reads

A creditor is not entitled to apply for the issue of a bankruptcy notice by combining two or more final judgments or final orders. [17] I however find that there was in the matter before me, no combination of 2 or more judgments as the order for costs is part and parcel of the same Judgment since they arose from the same Judgment. It therefore does not in this Court’s judgment equate to a combination of 2 or more judgments. I agree with Mohd Nazlan J (now JCA) when he held in Re Liew Choo; Ex Parte Chuah Teng Heng [2016] 9 CLJ 598 and I respectfully quote “[33] It is worthy of emphasis that Re Chen Chong Fatt Willy was referred to in both Re Haroun Al-Rashid bin Mohd Yusof and Re Khong Yuen Leng. It is therefore my view that the position in law ought to be deemed well settled in that under r. 91(2) the prohibition against a bankruptcy notice containing a combination of more than one final judgment or order should not apply to orders for costs secured by the creditor which are specifically and directly awarded in reference to the final judgment in question because costs awards are inherently intertwined if not an integral corollary of the principal judgment itself. This should be the case even if the costs are granted at appeal proceedings, for as long as they relate to the same original final judgment. Separating them into different final judgments or orders, attracting the proscription that is r. 91(2), serves no discernible purpose or benefits to relevant stakeholders, especially since it poses no prejudice to the judgment debtors and does not contribute much to promote greater efficiency in the machinery and administration of bankruptcy laws in the country.” [18] I also find that the decision in Dr R. Ramachandran : Ex P Ganeswar a/p Ponnudurai [2003] 5 MLJ relied on by the JD to support their contention that the BN should be without consolidating costs and allocations based on 3 different orders is distinguishable from the matter before me as amongst others in Dr R. Ramachandran (supra) the JC had used a combination of 3 different costs orders to reach the statutory threshold to issue the BN. [19] In any event I also find that this argument by the JD on the issue of joint and several liability on the issue of costs of RM30,000.00 ordered by the Federal Court was never raised in the Summons in Chambers and the affidavits before me and as such has to be disregarded. Conclusion [20] All said and done, I do find that Enclosure 4 and the Appeal were filed to delay the JC in furthering the bankruptcy proceedings herein as the JD has clearly stated in another proceedings i.e in WA-22C-264- 06/2022 that he has no intention to satisfy the Judgment debt. [21] Accordingly based on all of my aforesaid grounds, I had dismissed the Appeal with costs. Dated: 9th day of July 2025 sgd. NADZARIN WOK NORDIN HIGH COURT JUDGE CONSTRUCTION COURT 1 COUNSEL FOR JUDGMENT DEBTOR: KY Lui (Messrs Kesavan] COUNSEL FOR THE JUDGMENT CREDITOR: Tan Xuan You (Messrs SL Lim & Lui)