Section 17A

has been declared unlawful by an order of the Minister under section 5;

is notified by the Registrar to the Director General of Insolvency to be an unlawful society under paragraph 41(1)(c); or

has, otherwise, become an unlawful society under subsection 41(1), the provisions of section 17 shall apply to the branch and its property in the same manner as they apply to a society and its property, and the reference in subsections 17(3) and (4)

to the governing body of a society shall in such case be accordingly construed as a reference to the governing body of the branch concerned, and the reference in subsection 17(6) to a branch of a society shall in such case be accordingly construed as a reference to a branch subordinate to the branch concerned.

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Vesting in a new registered society of property of a society whose registration has been cancelled 17B.  (1)  Where the property of any society has vested in the

Director General of Insolvency under paragraph 17(1)(a), then notwithstanding subparagraph 17(1)(b)(ii), the Director General of Insolvency may, if he is satisfied that—

another society has been registered under this Act (after this referred to as “the new society”);

constitution and the rules of the new society are substantially similar to those of the registered society whose registration has been cancelled by the Registrar under section 13

(after this referred to as “the old society”); and

a majority of persons who were lawful members of the old society immediately before the cancellation of its registration are members of the new society, apply to the High Court for an order for vesting all the assets, debts and liabilities of the old society and all its branches in the new society, provided the Director General of Insolvency has first received a written request and the consent of the governing body of the new society for such vesting and a written undertaking that the new society will assume responsibility for all the debts and liabilities of the old society then existing, and the Court may, if it is satisfied as to all the matters set out before, approve such application with such modifications or variations as the justice of the case may require.

The application shall be made by way of originating summons which shall be advertised by publication in the Gazette and in two newspapers, one in the national language and one in English, circulating in Malaysia, and any person likely to be affected or aggrieved by the decision of the Court in his capacity as a member of either the old or new society or as a creditor of the old society may apply to the Court to appear and make representation thereon in accordance with the Rules of Court 2012

[P.U. (A) 205/2012].

Societies 35

Any person who was a lawful member of the old society immediately before the cancellation of its registration and who is not a member of the new society who does not object to the application of the Director General of Insolvency shall be discharged from all personal liability for all debts and liabilities of the old society and all its branches upon the making of the order sought by the Director General of Insolvency.

(Deleted by Act A859).

Upon a vesting order being made by the Court under subsection (1), all the property comprised in the vesting order shall vest accordingly in the new society without any further conveyance, transfer or assignment.

Notwithstanding that an application under subsection (1) is pending in the Court, it shall be lawful for the Director General of Insolvency to do or take such action as may be necessary to manage any property or discharge the debts and liabilities of the old society as if such application had not been made.

If the Court approves the application under subsection (1)

with or without modification or variation, the Director General of Insolvency shall publish such decision in the Gazette and in two newspapers, one in the national language and one in English, circulating in Malaysia, and thereupon the Director General of

Insolvency shall be fully discharged from all his responsibilities and liabilities in the matter.

All costs and expenses incurred by the Director General of Insolvency in the matter shall be paid out of the assets of the old society and all its branches, in priority to all other debts and liabilities.

All deeds, bonds, agreements, instruments and working arrangements subsisting immediately before the publication in the Gazette of the decision of the Court approving the Director

General of Insolvency’s application under subsection (1), shall be of full force and effect against or in favour of the new society and enforceable as fully and effectually as if, instead of the old society, or any person acting on behalf of the old society, the new society has been named in the application or has been a party to the application.

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The provisions of subsections 17(3), (4) and (5) shall apply in relation to this section in the same manner as they apply in relation to section 17.