Lecture 3: Insolvency: Individual:

Bankruptcy Petition
3. Bankruptcy Petition

Let’s continue…
Mr. A fails to challenge the Bankruptcy Notice
and is now served with a Creditor’s Petition.
What can he do to save himself from
bankruptcy?
3. Bankruptcy Petition
• The bankruptcy petition is the second stage of the bankruptcy
proceedings after the filing of the BN and there is no compliance
to the BN or if there was an application to set aside the BN the
application was dismissed by court.
• A bankruptcy petition requests the court to make a bankruptcy
order against the debtor.
• Sec. 5 of IA 1967: Conditions in which the creditor may petition
against a debtor.
• Procedure –
• Filing of the bankruptcy petition;
• Format of the bankruptcy petition;
• Witnessing/attesting the bankruptcy petition;
• Affidavit verifying the creditor’s petition;
• Service of the petition.
3. Bankruptcy Petition
• Once there is commission of an act of bankruptcy under Section 3 IA
2017 (e.g. non-compliance of Bankruptcy Notice), the next step in
bankruptcy proceedings is the issuance of a petition for bankruptcy.
• There are 3 types of bankruptcy petition:
• i. Creditor’s Petition
• ii. Debtor’s Petition
• iii. Joint petition: where 2 or more creditors files a petition against a
debtor to obtain a bankruptcy order.

• Commencement: R 98 IR2017
• R98 (1)- Every petition shall be dated, signed, and witnessed.
• (2)- The creditor or debtor shall lodge with the registrar sufficient
number of copies of the petition to be sealed and issued for service.
• (3) The creditor or debtor shall submit a sealed copy of the petition to
the Director General of Insolvency by post or otherwise.
3. Bankruptcy Petition
• Form 40-Debtor’s Petition (r.98) (s.7(1) IA)
• This is filed by the debtor himself
• it shall allege that the debtor is unable to pay his debts;
• the presentation of a debtor’s petition is deemed as an act of
bankruptcy;
• the court shall make a bankruptcy order upon the presentation of a
debtor’s petition
• once a debtor’s petition is presented before the court it shall no be
withdrawn without the leave of the court.

• Form 41-Creditor’s Petition (r.99)

• The petition may be presented either by the debtor himself or the

creditor.
• Petition requests the court to make a Bankruptcy Order (BO) for the
protection of the debtor’s estate.
3.1 Conditions for a Creditor’s Petition (S.5 IA
2017)
• A CP is filed by the creditor.
• Conditions in which the creditor may petition against a debtor (s.
5 IA)
• (a) Debt owing to the petitioning creditor or to the petitioning
creditor and his co-petitioner(s) jointly amounts to not less than
RM100,000.00 (s.5(1)(a) IA as amended); Form No. 41 of IR
paragraph 2
• (b) the debt is a liquidated sum payable immediately or at some
certain time in future time (s.5(1)(b) IA); Refer to Form No. 41 of
IR paragraph 2
• (c) the act of bankruptcy on which the petition is based on has
occurred within 6 months before the presentation of the petition
(s. 5 (1)(c) IA). Refer to Form No. 41 of IR paragraph 4. Case:
Kewangan Utama Bhd. v Muhibah Hj. Ali [2008] 1 LNS 880 - the
Creditor’s petition must be presented before the expiry of 6
months from the date of bankruptcy. Otherwise it would be out
of time.
 3.1 Conditions for a Creditor’s Petition (S.5 IA
2017)
• (d) the debtor must be domiciled in Malaysia; or within 1
year before the date of the presentation of the CP, the
debtor has –
• Ordinarily resided in Malaysia; or
• Had a dwelling house in Malaysia; or
• Had a place of business in Malaysia; or
• Carried on business personally in Malaysia or through an agent;
or
• Has been, or is, a member of a firm or partnership which has
carried on business in Malaysia by means of partner or partners
or an agent or manager.
• (s.5(1)(d) IA) Refer to Form No. 41 of IR paragraph 1
• See: Case: Fung Beng Tiat v Marid Construction Co.
(suing as a firm) [1997] 2 CLJ 1 (FC)
3.1 Conditions for a Creditor’s Petition (S.5 IA
2017)
• Section 5(3)
• The time to file for leave to initiate Bankruptcy Proceedings against
a guarantor is either upon the issuance of the bankruptcy notice, or
even prior to that, up to and immediately upon filing of the
Creditors’ Petition – Case: Hong Leong Bank Berhad v Ong Moon
Huat & Another Appeal [2018] 1 LNS 1612 (Court Of Appeal).
• Section 5(4) IA
• the word “debtor” in the said subsection must be read together
with section 5(6) of the IA. Hence the word “debtor” must
necessarily mean principal debtor or borrower and not the
guarantor – Hong Leong Bank Berhad v Ong Moon Huat & Another
Appeal [2018] 1 LNS 1612 (Court of Appeal).
3.1 Conditions for a Creditor’s Petition (S.5 IA
2017)
• Restrictions S5(3) IA 1967
• A petitioning creditor shall not be entitled to commence any bankruptcy
action against a
• (a) “Social Guarantor” and
• (b) against a guarantor other than a social guarantor
• unless the creditor proves to the satisfaction of the court that the creditor
has exhausted all avenues to recover debts owed.
• “Social guarantor” is defined in S2 IA1967 -means a person who provides,
not for the purpose of making profit, the following guarantees:
• (a) A guarantee for a loan, scholarship or grant for educational or research
purposes;
• (b) A guarantee foe a hire-purchase transaction of a vehicle for personal or
non-business use; and
• (c) A guarantee for housing loan transaction solely for personal dwelling.
3.1 Conditions for a Creditor’s Petition (S.5 IA
2017)
• If the creditor is a secured creditor, he must state in his petition –
(a) that he is willing to give up his security for the benefit of the
creditors in the event the debtor is alleged a bankrupt; or
(b) give an estimate of the value of his security.

• Refer to Form No. 41 of IR paragraph 3

• Non-compliance of any of the requirements under s.5 will result in

the dismissal of the creditor’s petition (s.5(7) IA).
3.1 Conditions for a Creditor’s Petition (S.5 IA
2017)
• R. 105(1) & R 105(2) IR2017 - Creditor’s petition must be
verified by affidavit by creditor or some person who can
depose all the statements contained in the petition.

• R 106 IR 2017- Joint Petitioners - Where 2 or more

creditors jointly present a petition it is not necessary for
each to depose an affidavit. But each statement in the
petition must be deposed by a person having full
knowledge.
3.1 Conditions for a Creditor’s Petition (S.5 IA
2017)
• R. 108-112 IR 1967– Personal Service - A Creditor’s Petition
shall be personally served failing which substituted service
must be effected.
• Case: Lim Boon Kiak v Affin Bank Berhad (formerly known
as BSN Commercial Bank (M) Bhd) [2013] 4 AMR 303;
[2013] 1 LNS 294
• CA: Creditor’s petition against judgment debtor cannot be
served on a firm of solicitors.
• Read also case: Goh Kein Hooi v OCBC Bank (Malaysia)
Berhad & another Appeal [2014] 4 CLJ 274
• case: Re Tan Hwee Earn, Ex-parte The People’s Insurances
Company (M) Sdn. Bhd. [1999] 4 CLJ 325
3.1 Conditions for a Creditor’s Petition (S.5 IA
2017)
• Case: Samuel Pakianathan a/l Jabamanukam v. Perwira
Habib Bank Malaysia Bhd [1996] 1 LNS 40
• Held: the CP was not served on the debtor but handed to
someone in the debtor’s premises who acknowledged that
the debtor lived there was good service so long as it was
brought to his notice.

• R109- Substituted service may be ordered by court if it is

satisfied by an affidavit or other evidence on oath that
prompt personal service cannot be affected under R108.
3.2 Filing The Petition
• R 100 IR 2017 – in Form 41, to be filed at High Court where it is
to be presented.
• Where the debtor has for the greater part of one year
immediately before the presentation of petition carried on
business in one State and resided in another, the petition may be
filed in the court of the State in which he has carried on business.
• Note: Practice Direction No. 3 of 1993, paragraph 2(ii) – all
bankruptcy cases must be filed in the State in which the JD
resides (administrative not mandatory).
• *remember this will also determine the issuance of the BN.
• Re: Chin Kwan Kee exparte Paper (M) Sdn. Bhd. [1996] 6 CLJ
694- The petition should be filed in the State in which the debtor
resides.
• S.93(7) IA 2017- If filed otherwise, the irregularity may be cured
by transferring it to the proper Court.
3.2 Filing The Petition
• Re: Chin Kwan Kee exparte Paper (M) Sdn. Bhd. [1996] 6
CLJ 694
• Held:
• Notwithstanding that the petition was filed in the wrong
State, the filing of the petition in a State other than the
State in which the debtor is resident does no invalidate the
petition. Section 93(7) IA can be applied.
3.2 Filing The Petition
• Cases:
• Fung Beng Tiat v Marid Construction Co. (suing as a firm)
[1997] 2 CLJ 1 (FC)
• Alliance Bank Berhad v. Suhaili Abdul Rahman [2014] 10 CLJ
144 (HC)
• Pantai Bayu Emas Sdn. Bhd. & Ors v. Southern Bank [2009]
2 CLJ 630 (FC)
• Syarikat Nip Kui Cheong Timber Contractor v. Safety Life and
General Insurance Co. Sdn. Bhd. [1975] 1 LNS 173
• Hap Seng Plantations (Rivers Estates) Sdn. Bhd. v. Excess
Interpoint Sdn. Bhd. & Anor [2016] 4 CLJ 641
3.2 Filing The Petition
• Case:
• Fung Beng Tiat v Marid Construction Co. (suing as a firm)
[1997] 2 CLJ 1 (FC)
• (a) By the provision of article 121 of the FC, there are 2 HC in
Malaysia exercising distinct territorial jurisdiction over different
geographical areas of the country, that is, the HC in Malaya and the
HC in Sabah and Sarawak. Each has jurisdiction over disputes arising
within its territory. There is no Federal legislation that confers
power upon one HC to transfer proceedings to the other.
• (b) The provision in s. 93(7) of the Bankruptcy Act 1967 on
transferring proceedings between one State to another refers to a
State within the territorial jurisdiction of the respective HC.
3.2 Filing The Petition
• Deposits (r.102 IR)
• Prior to the filing of the bankruptcy petition, the petitioner
has to deposit with the DGI a sum of RM1500 if a debtor,
and RM2000 if a creditor.
• The receipt of the DGI must be produced to the court of the
filing of the petition.

• Withdrawal of CP (s.6(7) IA)

• Once filed, a CP cannot be withdrawn without the leave of
court.
3.2 CP – Service
• S. 6(1)IA and r.108 IR – personal service to debtor. Service
of the petition shall be proved by affidavit. See r.110 IR and
Form 44
• Case: Lim Boon Kiak v Affin Bank Bhd [2013] 6 CLJ 579 – CP
must be served personally to the debtor and not to a firm
of solicitors.
• S. 6(1A) IA and r. 109 IR – substituted service to debtor
• r.111IR – death of debtor before service – the court may
order service to be affected on the personal representative.
3.3 Affidavit Verifying the Petition

1. Can an affidavit be
affirmed and file before
the creditor’s petition?

2. Does the verifying

petition have to be tied
to the creditor’s
petition?
3.3 Bankruptcy Petition

• Important things about Bankruptcy Petition:

• Format;
• Who should execute/sign the bankruptcy petition;
• Who should attest/witness the bankruptcy petition;
• A creditor’s petition must be accompanied by an
affidavit of truth of statements in petition;
• A creditor’s petition must be served personally on
the debtor. If this fails an application for SS may be
made.
3.3 Affidavit Verifying the Petition

• Case: Sobri Arshad v. Associated Tractors Sdn. Bhd.

[1991] 1 CLJ 798- CP- 10 November 1989. Affidavit
verifying the petition- 9 November 1989.
• Held: Dismissed the creditor’s petition holding that it
was not curable under s. 131 of the Bankruptcy Act
1967.

• Case: Re Mohd Sharif Sapie, Ex-parte Malayan Banking

Bhd [1991] 1 LNS 40- Curable under s. 131 of the
Bankruptcy Act 1967 and gave leave to file a fresh
verifying affidavit.
3.3 Validity of the Petition-Affidavit of truth of
statements in CP
• Important things concerning the affidavit of truth of
statements in CP:
• Format;
• Who should affirm the affidavit of truth of statements in
CP;
• When should the affidavit of truth of statement in CP be
affirmed;
• Must the CP be attached to the affidavit of truth of
statement in CP?
• The CP shall be supported by an affidavit verifying the petition. See s.6(1) IA and
r.105 (1) IR.

• The affidavit affirms the truth of the statements in the petition. Where the CP is not
verified by an affidavit, the CP and all the subsequent proceedings are a nullity.
3.3 Validity of the Petition-Affidavit of truth of
statements in CP

Format of the affidavit

• Form 42 – Affidavit of truth of statements in petition
• Form 43 – Affidavit of truth of statements in joint petition.
• The affidavit will have the same title and distinctive number as
the first proceeding i.e the BN and the CP.
• Under r.107 IR before the Registrar seals copies of the petition,
he must investigate the truth of the petition through the
verifying affidavit. Therefore, if the verifying affidavit has the
same title and distinctive number as the petition, it would allow
the Registrar to identify the petition to the verifying affidavit
and thus the affidavit would verify the statement in the petition
sufficiently.
3.3 Validity of the Petition-Affidavit of truth of
statements in CP

Who should affirm the affidavit?

• if the creditor is an individual, it should be affirmed by the
creditor himself;
• where the petitioner is a corporation, it is to be affirmed
by an authorized person by the corporation under the
company’s seal.
• See s.133(a) IA and rule 215 IR
3.3 Validity of the Petition-Affidavit of truth of
statements in CP

Case: Re Mohd Sharif bin Sapie, ex p Malayan Banking Bhd

[1992] 2 MLJ 102
• The petition was not invalid simply because the verifying
affidavit was affirmed before the petition was presented
to court.
• There is no time frame prescribed in the Bankruptcy Act
1967 or Bankruptcy Rules 1969 for the swearing and filing
of the affidavit verifying the bankruptcy petition.
3.3 Validity of the Petition-Affidavit of truth of
statements in CP

Case: Re Koh Kim Kuay, ex p MBf Finance Bhd [1995] 1 MLJ

792
• Every creditor’s petition presented to court without an
affidavit verifying the petition annexed to it will not be
received by court. Therefore, the affidavit verifying the
petition is to be affirmed before the presentation of the
creditor’s petition to court.
3.3 Validity of the Petition-Affidavit of truth of
statements in CP

Case: Re Teoh Thean Peng, ex p D&C Leasing Sdn Bhd [1993]

2 MLJ 1
• There is no irregularity where the affidavit verifying the
petition is affirmed after the petition was signed and
attested but before presentation to court. In this case the
petition was signed and attested on 30 May 1991, the
affidavit of truth of statement in the CP was affirmed on
31 May 1991 and the petition and the affidavit was
presented to court on 3 June 1991.
3.3 Validity of the Petition
• R 105 IR2017 - A creditor’s petition shall be verified by
affidavit
• Case: Re Ho Weng Keong ex p Marketlink (M) S/B [1993] 1
MLJ 60
• Nowhere in the BA or Rules did it require the affidavit
verifying the creditor’s petition to be affirmed and filed
after the petition.
• No statutory provision imposing 6 months limitation from
the act of bankruptcy within which an affidavit verifying a
creditor’s petition must be affirmed.
3.3 Validity of the Petition
• Case: Arul Das a/l Michale ex p MBB [2001] 1
• Case: Loo Cheng Lian v Ban Hin Lee Bhd. [1992] 2
CLJ 1219
• Case: Bathamani Suppiah v Southern Finance
Company Bhd [2000] 2 CLJ 650
3.4 Authority to present the Petition
• S. 133 IA1967; R.215 IR2017 - Where a corporation
presents a petition the officer of the corporation
may act in his own name, stating that he is duly
authorized under seal. A petition may be
presented by the corporation, and signed by the
officer on its behalf. Any person chosen by the
corporation to act for it as agent, is an "officer"
within S133 IA2017 and if authorized under seal
can act for the corporation.
3.4 Authority to present the Petition
• UMW Industries Bhd. v Lim Chee Hian [2005] 2 MLJ 239
• Although the request was innocent enough, it had the
effect of causing injustice to the respondent. such a defect
was not curable under s 131
• The inability of the appellant to produce the required
authorization at the hearing due to ‘time constraint’ was
not acceptable.
3.4 Authority to present the Petition
• CONTRAST WITH:
• Case: RE See Joon Siong ex p Mayban Securities Sdn.
Bhd.[2009] 2 CLJ 667
• In this case it was decided that the authorisation need not
always be under seal. What is important is that the officer is
authorized by the corporation.
3.4 Authority to present the Petition
• ** This requirement of s.133, R 215 has been presenting
certain problems to petitioners as to whether an authorized
officer has to be ‘authorised’ under a seal of the company
i.e. by a resolution passed by the BOD of the company. A
simple PA has been held valid. Re See Joon Seong may be
the present trend but not authoritative as it is only a HC
decision.
3.4 Authority to present the Petition
• Case: Alliance Bank Berhad v Suhaili Bin Abdul Rahman – LBN-29-
18/11-2012]
• (i) The petition shall be filed in the Court in which it is to be
presented.
• (2) Where the debtor has for the greater part of one year
immediately preceding the presentation of the petition carried on
business in one State and resided in another State the petition may
be filed in the Court of the State in which he has carried on
business.
3.4 Authority to present the Petition
• In the case of Pantai Bayu Emas Sdn. Bhd. & Ors v
Southern Bank [2009] 2 CLJ 630,
• FC held that as per s.23(1) Court of Judicature Act a vesting
order made by the High Court in Malaya has legal effect in
Sabah and Sarawak. Further s.7(2)CJA and Article 121(3) of
the Federal Constitution provides an order made under the
authority of the court can be executed anywhere in
Malaysia.
3.4 Authority to present the Petition
• Kay Hian Pte Ltd V. Ma Boon Lan[2014] 1 CLJ 464
• CA: dismissed appeal; affirmed HC decision.
• 1) The CP was set aside for non-compliance with O. 46 r. 2(1)(b) RHC
and there was no appeal against that order. JC was unable to show it
had capacity to issue execution on the judgment when it issued the
BN. Therefore BN was invalid and had to be set aside.
• (2) The JD’s application was made under BR r. 18 to challenge the
JC's capacity to issue the BN in view of O. 46 r. 2(1)(b) RHC as well as
the wrong mode employed to convert the sum claimed into
Malaysian Ringgit. Those issues certainly fell within the 'other
issues' ground under the r. 18 method of impugning a BN.
3.4 Authority to present the Petition
• See also:
• Ho Fok v Ann Bee (M) Sdn Bhd [2002] 5 MLJ 331 / [2002] 2
CLJ 223
• Re Daljit Kaur Harjan Singh; Ex P Perbadanan Pengurusan
Ixora [2015] 8 CLJ 573
3.5 Attestation of Petition
• R101 IR2017 - Every bankruptcy petition shall be attested. If
it be attested in the Federation, the witness must be a
Solicitor or Federal Counsel or Magistrate or Director
General of Insolvency or Registrar; or
• If it be attested out of the Federation, the witness must be
a Judge or Magistrate or a Consul or Vice-Consul or a
Notary Public.
• * Solicitors in Peninsular Malaysia are not allowed to attest
a petition from Sabah & Sarawak and vice versa.
• Re Lai Hua Kian [1990] 2 MLJ 487 at page 488 F right - CP
cannot be executed by a solicitor on behalf of the JC
• Ooi Thean Chuan v Banque Nationale de Paris [1992] 2
MLJ 526 / [1992] 3 CLJ Rep 160: where the CP was attested
in Singapore by a solicitor of the Republic of Singapore.
3.5 Attestation of Petition
• Case: Re V David, Re: Ex-Parte; United Asian Bank Bhd
[1991] 2 CLJ 1047
• There is nothing in the creditor’s petition that the attorney
is authorized by the JC to sign the petition. There is also no
evidence that the attorney is acting under a valid power of
attorney. As such the attorney who signed the petition was
not lawfully authorized to sign the petition.
3.5 Attestation of Petition
• Lie Kok Keong v Tang Container & Services S/B [2004] 1 MLJ 373
• CA Held: Judgment debtor's appeal allowed; no attestation or
attestation bad in law - void
• no evidence to support the JC's claim that the signature of TTY on
the creditor's petition was attested by a solicitor in Kuching,
Sarawak. Neither TTY nor the attesting solicitor filed any affidavits
to verify such a claim.
3.6 Authenticity of the signature
• The signature of the officer signing the petition
and affirming the affidavit should be consistent.
• Re Lim Chooi Sang [1998] 7 MLJ 286 – signatures
in the 2 documents were different and no
explanation was given for the discrepancy.
Therefore, appeal to set aside bankruptcy petition
was allowed.
3.7 Validity of debt
• Affin Credit S/B v Dato Hj Raun D Jallil Atmasumarto [2004] 4 CLJ
337
• CA Held
• (i) The court could not at the stage of the bankruptcy petition
inquire into the validity of the public auctions as there was no proof
that the auctions were not carried out according to the provisions of
the law. The issue should have been raised at the execution stage.

• See also case: Tractors Malaysia Bhd v Charles Au Yong (1982) CLJ
152
3.8 Can a judgment debtor make payment after
commencement of bankruptcy proceedings?
• Moscow Narodny Bank Ltd. v Ngan Chin Wen
[2004] 2 CLJ 241 – FC – the fact that the judgment
debtor continued to make payment could not be
held as ‘oppression’ on the part of the judgment
creditor.

• Azlin Azrai Lan Hawari v. United Overseas Bank

(Malaysia) Bhd. & Other Appeals [2017] 10 CLJ
18- acceptance of a part payment did not nullify
the bankruptcy notice as the outstanding balance
due was over the minimum statutory limit.
3.9 Showing Cause against a Petition-Grounds to
challenge the CP

• The CP may also be challenged on other grounds, for

example, non- compliance with rules relating to the
petition:
• (i) The affidavit of truth of statement in the petition
was not properly affirmed, for example not by an
authorised person.
• (ii) The petition was not executed by the creditor
• (iii) The petition was not attested.
• (iv) The attestation of the petition was not done by an
authorised person under the rules
• (v) The CP was not served on the JD. See s.6(1) and
(2)(c) IA
3.9 Showing Cause against a Petition-Grounds to
challenge the CP
3.9 Showing Cause against a Petition
• R116 IR2017- debtor must file a notice in Form 45
with the Registrar specifying the statements in the
Petition that he intends to deny or challenge and
submit by post to the petitioning creditor and
petitioner’s Solicitor, if known, at least 3 days
before the petition is to be heard. Case: Re
Maheswary Ramasamy, ex p BSN Commercial
Bank (M) Bhd [2002] 5 MLJ 351 / [2001] 4 CLJ 544
• R117 IR 2017
• Affidavit in opposition is held not to be notice
under rule 116 IR which is mandatory- Case: D & C
Bank Bhd. v Datuk Ong Kien Seng [1995] 3 AMR
2063
3.9 Showing Cause against a Petition
• Case: Dato Sri Teong Teck Leng v Jupiter Securities S/B [2004] 1 MLJ 1
• CA:- Bankruptcy has 2 stages Notice of bankruptcy and the Creditor’s
Petition
• (i) r. 18(1) - challenge to a bankruptcy notice, to set aside the bankruptcy
notice – proceed by summons in chambers supported by an affidavit –
must satisfy s.3(1) debtor has a valid counter claim or set off or cross claim
• (ii) r. 117 where application is to show cause against a creditor's petition,
other than counter claim or set-off or cross claim –at the RO & AO stage, -
file a notice in Form 16 - specifying the statements in the petition which he
intends to deny or dispute. – instant case.
• (iii) distinction should be drawn between the phrases 'to show cause
against a petition' (RO & AO stage)and 'to challenge a petition' – ( setting
aside a Bankruptcy Notice ).
• **See also – Scott & English (Malaysia) S/B v Ling Chick Ngai [2009] 1 LNS
51 – reiterated above
• Case: Kay Hian Pte Ltd v. Ma Boon Lan [2014] 1 CLJ 464
3.10 Hearing of the Petition
• The hearing of petition is governed by S6(2), (3), (4) IA1967
and R 113 IR2017.
• R121 IR2017- after expiration of 8 days.
• The petition must not be heard until the expiration of 8
days from the service thereof unless a good cause is shown
for the earlier hearing. On the hearing the court must be
satisfied that: -
• (i) The creditor’s debt is in existence
• (ii) The act(s) of bankruptcy is alleged in the petition
• (iii) S.6(2)(C) IA1967 – if the debtor does not appear, proof
of service of the petition on the debtor.
• HC’s Decision: (a) To stay; or (b) adjournment; or (c) dismiss
the petition.
3.10 Hearing of the Petition
• Attendance of the creditor
• Where the petitioning creditor is acting in person or where there is
serious challenge to the existence of the act of bankruptcy, the
petitioner must be present at the hearing of the petition.
• In other situations, the presence of his counsel is sufficient.
• Case: Affin Bank Bhd v Tan Sri Kishu Tirathrai [2008] 3 MLJ 72
(COA)
• The JC commenced bankruptcy proceedings against the JD.
• On 11/5/2005 a bankruptcy order was made against the JD. The JD
appealed. The appeal was allowed by the HC Judge.
• The JC appealed to the COA.
• The issue before the COA was whether the JC had complied with
s.6(2)(a) IA, that is, whether the creditor has proven his debt.
3.10 Hearing of the Petition
• Attendance of the debtor
• Where the judgment debtor fails to appear at the hearing
of the CP, the court may proceed to make a bankruptcy
order, provided the court is satisfied:
• That the requirements under s.5(1) of the IA has been; and
• The conditions in s.6(2) IA are fulfilled.
3.10 Hearing of the Petition
• Proceedings
• S.6(2) IA – at the hearing of the CP the court shall require proof
of:
• (a) There is a debt owing from the debtor to the petitioning
creditor.
• See the case of Affin Bank Bhd v Tan Sri Kishu Tirathrai [2008] 3
MLJ 72 (COA) where the COA held that although the word
‘shall’ appear in s.6(2) of the Act, it was not mandatory for the
petitioning creditor to prove the debt again through cross
examination at the hearing of the petition, especially when the
affidavit verifying the CP was never challenged or that there was
no material before the court to challenge the affidavit.
• (b) the act of bankruptcy;
• (c) if the debtor does not appear, the service of the petition.
3.11 Adjournments of Hearing-R126 IR2017
• R. 126 – no adjournment of the hearing of the
creditor’s Petition for Bankruptcy after 1 month of
the given date unless the debtor has given prior
notice that he intends to show cause against the
petition.
3.11 Adjournments of Hearing-R126 IR2017
• However,
• S.93(2) IA1967 -the court may at any time adjourn any proceedings
before it upon such terms, if any, as it thinks fit to impose (ie.
technicalities)
• Case: Tan Eng Niang v Eng Choo Kwan & Sons Hardware S/B [2003]
1 LNS 365
• r. 127 does not impose an absolute prohibition of adjournment just
because of the absence of a prior notice of intention to show cause,
so long as there is sufficient cause or reasonable ground to grant a
postponement eg, a genuine offer to settle the amount claimed, but
the possibility or probability that the debtor would settle the sum
due not sufficient cause or reasonable ground to grant an
adjournment.
3.11 Adjournments of Hearing-R126 IR2017
• See also:
• Dato’ Mohd Pilus Bin Yusoh, Re: Ex-parte Southern Bank
Bhd. [1998] 1 CLJ 102
• OCBC Bank (Malaysia) Bhd v. Sethu Ambalagara Thevar
[1998] 3 CLJ 563
• Tan Eng Niang; Ex-parte: Ng Choo Kwan & Sons Hardware
Sdn. Bhd. [2003] 1 LNS 365.
• Pembinaan KSY Sdn Bhd v. Lian Seng Properties Sdn Bhd
[1991] 1 CLJ 263; [1991] ; 343 SC
• RHB Bank Bhd v. Pembinaan MCP Sdn Bhd [2003] 5 CLJ 335
HC;
• Natseven TV Sdn Bhd v. Television New Zealand Ltd [2001]
4 CLJ 722).
3.12 Reinstatement of the Creditor’s Petition (CP)

• Q. Does an SAR have jurisdiction to reinstate a CP

which was struck out due to the failure of the
creditor to attend the hearing.
• Case: Mariam b Sasiman v BBMB Factoring
Bhd.[1999] 2AMR 1664
• HC Held: - The registrar had ample jurisdiction
under s 92(1) of the Act to order reinstatement.
What remained was the question whether the
registrar was correct in exercising discretion to
reinstate the creditor's petition.
3.12 Reinstatement of the Creditor’s Petition (CP)

• Case: BBMB Factoring Bhd v. Mariam Sasiman &

Another [2000] 3 CLJ 639
• A creditor who wishes to reinstate a creditor’s
petition that was dismissed due to his absence, has
two recourses open to him:
• (i) apply for reinstatement under s.92(1) or
• (ii) file a fresh petition against the debtor. If he
adopts the latter course and relies on the same
grounds he must first obtain the leave of court to
do so.
3.12 Reinstatement of the Creditor’s Petition (CP)

• O.2 r.3 of the Rules of Court 2012-unless non-

compliance has occasioned a substantial
miscarriage of justice.
• Case: Kasiah Kasban v. Sime Bank Berhad [2005] 1
LNS 371.
• Rules of Court are enacted to provide for the
vehicles for the purposes of obtaining necessary
prayer according to the rights and obligations of
the parties under the law. These rules relating to
rights and obligations should not be rendered
ineffective by highly technical objections.
TUTORIAL 3
Question 1
Bank Kaya Berhad (‘BKK’) wants to proceed with creditor’s petition
against Mr Hutang who has not complied with the bankruptcy notice
served on him by BKK. BKK was instructed by its solicitors to execute the
creditor’s petition and affidavit verifying the petition to enable them to
proceed with the bankruptcy proceedings. The creditor’s petition and
affidavit verifying the petition were executed on 10.3.2020. The
creditor’s petition and the verifying affidavit were filed into court on
14.3.2020 and were then served on you as solicitors for the debtor, Mr
Hutang. You have notified Mr Hutang regarding the creditor’s petition. He
now seeks your advice on the following:
• (i) Whether the creditor’s petition was properly served on him;
• (ii) Whether the creditor’s petition was invalid because the verifying
petition was affirmed before the creditor’s petition was presented.
• On 1.4.2020, you were informed by Mr. Hutang’s wife that he has
passed away. Mr Hutang’s wife wants to know whether the bankruptcy
proceeding will continue. Advice Mr Hutang’s wife.
TUTORIAL 3
Question 2
Borrow Easy Bank Bhd. (BEBB) obtained judgment against Linda Hutang
on 10.1.2018 “for the sum of RM230,000 and interest thereon at the rate
of 10% p.a. calculated form the date of judgment to the date of full
settlement”.
On 2.3.2018 BEBB issued a Bankruptcy Notice against Linda Hutang for
the sum of RM230,000 and interest at the rate of 10% calculated from
the date of judgment to the date of the Bankruptcy Notice dated
2.3.2018.
Although Linda Hutang resided at A-10, Jalan Tengah, Kampung Attap,
attempts at service of the Bankruptcy Notice and Creditor’s petition was
done at 10-A Jalan Setengah Kampung Attapchi.
An order for substituted service of the Bankruptcy Notice and Creditor’s
petition was obtained on the grounds that Linda Hutang could not be
located. Both the Bankruptcy Notice and the Creditor’s Petition were
served by substituted service by posting the documents to 10-A Jalan
Setengah Kampung Attapchi, and by advertisement in the “Star”
newspaper. Bankruptcy Order was then obtained against Linda Hutang on
10.12. 2018.
Linda Hutang now appoints you to set aside the Bankruptcy Order. What
are the grounds for such application?