Under the Companies Act, failure to challenge statutory demands of creditors establishes a presumption of insolvency, enabling winding up orders.

[1] This is an appeal in respect of a winding up order made against the Respondent company pursuant to a Companies (Winding Up) Petition No. WA-28NCC-1047-12/2016 (Winding Up Petition) presented by the Petitioners. The Winding Up Petition was filed on 13 December 2016.

[2] The winding up order was made on the date fixed for hearing of the Winding Up Petition, namely, 13 February 2017 (Winding Up Order). The Official Receiver was appointed as the liquidator of the Respondent company. Neither the Respondent company nor its counsel were present on the hearing date of the Winding Up Petition. No affidavit opposing the Winding Up Petition was filed by the Respondent company.

Factual Background

[3] The Petitioners which presented the Winding Up Petition consists of:-

(a) Juasa Holdings Sdn Bhd (Co. No: 103246-W);

(b) Utusan Melayu (M) Berhad (Co. No: 7170-V);

(c) Utusan Publications & Distributions Sdn Bhd (Co. No: 26823-A); and

(d) Tintarona Publishing Sdn Bhd (Co. No: 276554-X).

[4] Respondent, Arah Pendidikan Sdn Bhd, is a private limited company by shares. It was incorporated on the 17th day of June 2003 under the Companies Act 1965 (the CA 1965). Based on the corporate information of the Respondent company with the Companies Commission of Malaysia (Exhibit "A" to the Petition) the registered office of the Respondent company is at No. 17-1 & 17-2, Jalan Wangsa Delima 5 Seksyen 5 Pusat Bandar Wangsa Maju (KLSC) 53300 Kuala Lumpur. The nature of business of the Respondent company is publications and distributions of books.

[5] In its Winding Up Petition the Petitioners stated, among others, as follows:-

(a) the Respondent company is indebted to the Petitioner for the sum of RM2,431,091.89 (the Sum) being part of the consent judgment sum obtained on the 9th day of March 2016 by the Petitioners against the Respondent company in the High Court at Kuala Lumpur via Writ Summons No: 22NCC-415-12/2015 (Writ Action). A copy of the consent judgment for the sum RM2,471,091.89 (Consent Judgment) is annexed and marked as "Exhibit B" to the Winding Up Petition;

(b) on 27 September 2016, the Petitioner through its solicitor, Messrs Rao & Kamal, served a statutory notice pursuant to s 218 of the CA 1965 dated 27 September 2016 (Statutory Notice) to the Respondent company at its registered address at No. 17-1 & 17-2 Jalan Wangsa Delima 5 Seksyen 5 Pusat Bandar Wangsa Maju (KLSC) 53300 Kuala Lumpur demanding payment of the Sum. A copy each of the said Statutory Notice and the Statutory Declaration in respect of the said service is annexed and marked as "Exhibit C" and "Exhibit D" respectively to the Winding Up Petition;

(c) over 3 weeks have lapsed since the said Statutory Notice Demand was served on the Respondent company, but it has still failed, refused and/or neglected to pay or satisfy the Sum or any part thereof or to make any offer to the Petitioners to secure or compound the same; and

(d) due to such failure the Respondent company is deemed to be insolvent and unable to pay its debt pursuant to s 218(2)(a) of the CA 1965.

[6] In the Writ Action the Respondent company was cited as the second defendant while another company known as Baiduri Stationery Sdn Bhd was the first defendant. The terms of the Consent Judgment recorded between the Petitioners and the Respondent company in the Writ Action includes the following:-

(i) Baiduri Stationery Sdn Bhd and the Respondent company shall pay a sum of RM2,471,091.89 to the Petitioners as full and final settlement and the said sum was to be paid in 124 monthly instalment;

(ii) the first instalment was to be paid on 20 March 2016 and the subsequent monthly instalment on the 20th day of each subsequent month; and

(iii) the directors of the Respondent company has agreed to be jointly and severally liable to pay the sum RM2,471,091.89

[7] As the Winding Up P