Bankruptcy proceedings require strict adherence to statutory procedures; failure to comply leads to a deemed act of bankruptcy.

JUDGMENT

Nadzarin Wok Nordin JC:

Preface

[1] The Judgment Debtor (JD) herein has appealed by way of a Notice of appeal to the Judge in Chambers dated 29 October 2021 (Appeal) in encl 36 against the decision of the Learned Penolong Kanan Pendaftar (PKP) dismissing the JD's Summons in Chambers in encl 23 dated 21 July 2021 (encl 23) to set aside the Bankruptcy Notice (BN) and the Creditors Petition (CP) with costs of RM1,000.

[2] The brief facts of the case are as follows:

[3] The JD had in support of the Appeal submitted inter alia that:

3.1 the Judgment Creditor (JC) has elected to serve the BN and the CP via substituted service (SS) under the Rules of Court and r 110 of the Bankruptcy rules 1969 instead of r 109 Insolvency Rules 2017

3.2 the service of the BN and CP were irregular and defective and/or contravene the Insolvency Rules 2017 as the JC had failed to show reasonable efforts to serve the said cause papers

3.3 the PKP had erred in dismissing encl 23

3.4 there is no fixed time line for the filing of encl 23

3.5 the sums in the BN and the CP are uncertain and ambiguous as the Judgment is not a final judgment as the unliquidated sums therein have not been assessed

3.6 as bankruptcy proceedings are quasi penal in nature the requirements of the Bankruptcy Act and rules thereto must be strictly complied with

3.7 the JD has a counter claim / set off

[4] In opposing the Appeal, the JC had averred amongst others that:

(i) the Appeal has no basis, is without merit and trivial

(ii) there has been a delay in filing encl 23

(iii) the service of the BN and the CP were proper

(iv) this Court cannot go behind the Judgment

(v) the Judgment is final and conclusive and thus the amount as stated in the BN is correct and valid

Court's Findings

Substituted Service

[5] This Court has firstly considered the effect of the JC applying to serve the BN by way of SS vide encl 5 and the Affidavit In Support thereto in encl 6 as well as service by way of SS for the CP vide encl 16 and the Affidavit In Support thereto in encl 17.

[6] After perusing the respective applications for BN and the CP, I find that the Applications per se in encls 5 & 16 (Applications) had not specifically referred to any particular provision of law in support of the said Applications and that the only references are in the respective Affidavits in Support thereto to the Rules of Court and the Bankruptcy Rules 1969.

[7] I hold that the said Applications are proper and effective in law as the same does not contravene the Insolvency Rules 2017 in that the Applications were made in accordance with r 17 thereto ie they were made by way of Summons in Chambers, and the respective Affidavits in Support thereto were filed in accordance with r 24 of the Insolvency Rules 2017 in that the same were filed with the Registrar not less than three days before the day appointed for the hearing.

[8] I further hold the fact that the respective Affidavits in Support had referred to the Rules of Court and the Bankruptcy Rules 1969 in the service of the SS under the Applications are inconsequential as the procedure for the Applications are similar albeit in the Bankruptcy Rules 1969 or the Insolvency Rules 2017 as the said Applications are in both sets of Rules to be made by way of Summons in Chambers (see r 18 of the Bankruptcy Rules 1969), and that Affidavits in Support thereto were to be filed with the Registrar not less than three days before the day appointed for the hearing (see r 26 of the Bankruptcy Rules 1969).

[9] It is also stated in both r 276 of the Bankruptcy Rules 1969 and r 284 of the Insolvency Rules 2017, that the Rules of 2012 were applicable in the event of a lacunae. The fact that r 286 of the Insolvency Rules 2017 states that the Bankruptcy Rules 1969 are revoked but reference was made in the respective Affidavits in Support thereto only to the Rules of Court and the Bankruptcy Rules 1969, is in view of the facts before me, inconsequential, as the respective provisions in the Bankruptcy Rules 1969