Validation of proof of debt is essential before constituting a Committee of Inspection in liquidation proceedings to ensure only legitimate creditors are included.

[1] Enclosure 74 is the Applicant's (Harlina Abdul Aziz) application pursuant to O 32 r 6 of the Rules of the 2012 and s 289 and/or s 241 of the Companies Act 1965 for the following orders,

1) Leave be granted to the Applicant to intervene in the proceedings;

2) The Ex-parte Order dated 13 June 2014 be set aside;

3) The Ex-parte Order dated 13 June 2014 be stayed pending the disposal of the application;

4) If prayer (2) is granted, a meeting of the creditors and contributories be called, held and conducted by the Liquidator within twenty-one (21) days from the order to consider and approve:-

i. the formation of the Committee of Inspection (COI); and

ii. the determination of the composition of members of the COI.

5) The Liquidator be appointed as Chairman of such meeting of creditors and contributories and to produce a report of the result to the Court within fourteen days (14) from the date of the meeting;

6) Cost; and

7) Further and/or other relief as the Court deems fit and just.

Salient Facts

[2] The Respondent was awarded a project to provide clean water supply to Orang Asli villages in various districts in the State of Pahang by the Ministry of Urban and Rural Development. The Respondent appointed sub-contractors in some districts to carry out the Ministry's project of supplying clean water to the Orang Asli villages.

[3] The Respondent is indebted to the Petitioner for a total outstanding sum of RM15,898.58. The Petitioner had obtained a judgment in default vide Summons No 72-140365-12/2011 on 9 February 2012. The Winding-up order was granted pursuant to a Winding-up Petition presented by the Petitioner against the Respondent on 12 October 2012. The Respondent did not file an appeal against the said Winding-up Order.

Decision and Reasons

[4] The Liquidator for the Respondent filed an Ex-parte Notice of Motion (Enclosure 59) dated 21 May 2014 seeking the following orders:

a) The appointment of a Committee of Inspection (COI) in the Respondent Company be dispensed with;

b) In the event the Court decides that a COI be appointed, an order that the following persons be excluded from sitting on the COI:-

i. Daniel Hasni Mustaffa;

ii. Harlina Abd Aziz;

iii. Hazlina Abd Aziz; and

iv. Cani Rasdi Leman.

c) Alternatively, the composition of the members of the COI to be determined by the Court;

d) Any further directions in respect of the appointment of COI and the composition; and

e) Any other further reliefs.

[5] The Respondent's application is made pursuant to s 237(3) and s 241(2) of the aforesaid Act. The Liquidator may apply to the Court for directions in relation to any particular matter arising under the winding-up. Since there is a dispute with regards to the constitution of the COI the Liquidator applied to this Court to resolve the dispute.

[6] It was contended by the Liquidator in the said application that the appointment of a COI was unnecessary and will interfere with the Liquidator's investigation and winding-up process of the Respondent. It was also submitted that that there is an ulterior motive on the part of the proposed members in requesting for the appointment of a COI at that material time calculated to hinder and deter the Liquidator from carrying out his duties in the liquidation process. There is also the issue of conflict of interest with respect to the proposed members of the COI as there is a purported close relationship between the directors of a company registered as Dunheved Sdn Bhd (Dunheved) and the directors of the Respondent. There is also an ongoing litigation between the Respondent and the proposed members of the COI, in particular Dunheved.

[7] The existing shareholders of the Respondent