In bankruptcy proceedings, a discharge cannot be granted when the bankrupt has failed to comply with statutory obligations, impacting creditors' rights.

[1] This is an appeal against the decision of the High Court in which the learned judge dismissed the appeal by the appellant against the Deputy Registrar's decision in allowing the application of the respondent for an order of discharge under s 33 of the Bankruptcy Act 1967 (the Act).

[2] We heard the appeal and after due consideration of respective submissions of counsel, we allowed the appeal and now give our reasons.

Factual Background

[3] The respondent was adjudged a bankrupt on 11 October 2001 through an application by the appellant for debt owed to it in the bankruptcy Court.

[4] The appellant thereafter lodged a claim with the Director General of Insolvency (DGI) of RM732,024.97. This proof of debt was accepted by the DGI as reflected in item 2 of the DGI's report dated 18 June 2012.

[5] The respondent on 19 April 2012 applied to the Court for a discharge of his bankruptcy and on 31 July 2012 the Deputy Registrar sustained the application and made the following order:

"Bankrap hendaklah dengan ini dilepaskan dengan syarat beliau membuat bayaran sebanyak RM500.00 sebulan kepada jabatan Insolvensi Malaysia selama 24 bulan mulai 1 Ogos 2012 hinga 31 Julai 2014 mengikut s 33(4) Akta Kebankrapan 1967 dan sekiranya gagal, perintah pelepasan ini akan ditarik balik."

[6] The appellant unsuccessfully appealed to the judge in chambers as the learned judge affirmed the decision of the Deputy Registrar on 12 October 2012. It is this decision which this appeal is concerned with.

Our Grounds Of Decision

[7] Our starting point is s 33 of the Act which reads as follows:

Section 33 :

(1) A bankrupt may at any time after being adjudged bankrupt apply to the Court for an order of discharge, and the Court shall appoint a day for hearing the application.

(3) On the hearing of the application the Court shall take into consideration a report of the Director General of Insolvency as to the bankrupt's conduct and affairs, including a report as to the bankrupt's conduct during the proceedings under his bankruptcy, and may either grant or refuse an absolute order of discharge, or suspend the operation of the order for a specified time, or grant an order of discharge subject to any conditions with respect to any earnings or income which may afterwards become due to the bankrupt, or with respect to his after-acquired property.

(4) In all cases where it is proved to the satisfaction of the Court that the bankrupt has committed any offence under this Act or under any written law repealed by this Act or under ss 421, 422, 423 or 424 of the Penal Code [Act 574] the Court shall unless for special reasons it otherwise determines either refuse the discharge or suspend the operation of the order until a dividend of not less than fifty per centum has been paid to the creditors, and on proof of any of the facts mentioned in subsection (6) the Court shall either:

(a) refuse the order; or

(b) suspend the operation of the order for a specified time; or

(c) suspend the operation of the order until a dividend of not less than fifty per centum has been paid to the creditors; or

(d) grant an order of discharge subject to such conditions as aforesaid.

The powers of suspending and attaching conditions to a bankrupt's discharge may be exercised concurrently.

[8] The complaints of the appellant are two fold. Firstly, there was no consideration by the DGI, Deputy Registrar and the learned judge of the allegation that the respondent had committed an offence under the Act. Secondly, there was also no consideration of the fact that the respondent had numerous creditors with debts amounting to RM1,614,658.87.