Gunn Chit Tuan SCJ:

[1] On 12 July 1988, MBf Finance Bhd (hereinafter referred to as "the respondent"), obtained judgment in the High Court at Kuala Lumpur against Sri Hartamas Dvpt Sdn Bhd (hereinafter referred to as "the appellant") for the sum of RM5,197,060.82 together with interest and costs.

[2] By a letter dated 24 December 1988, the respondent sent to the appellant a demand under s 218(2)(a) of the Companies Act 1965, (hereinafter referred to as "the Act") which reads as follows:

Statutory Demand Pursuant To s 218 of the Companies Act 1965 (Act 125) For Payment Of A Debt

To: Sri - Hartamas Dvpt Sdn Bhd.

3rd Floor

Wisma Low Kim Her,

225-227, Jalan Tun Sambanthan

50470 Kuala Lumpur

Take Notice that, We, M/s Cheang & Ariff of 18th Floor, Plaza MBf, Jalan &ang, 50450 Kuala Lumpur, solicitors for MBf Finance Bhd hereby require you to pay to us the principal sum due on a final judgment dated 12 July 1988 obtained by MBf Finance Bhd against you in the High Court at Kuala Lumpur in Civil Suit No: D4-23-2067-87 that is to say the sum of RM5,197 060.82 together with interest thereon at the rate of 17% per annum from 1 December 1986 until the date of realisation and costs at RM400 whereon execution has not been stayed or you must secure or compound for the aforesaid sum to the satisfaction of the said MBf Finance Bhd within 21 days of the date hereof and that the consequences of not complying with the requisition of this notice are that winding-up proceedings may be taken against you.

Dated this 24 December 1988.

Sgd. M/s Cheang & Ariff

Solicitors for MBf Finance Bhd.

[3] That demand was served on the appellant on 27 December 1988. As the appellant failed to pay the debt as demanded, the respondent on l9 January 1989, presented a petition dated 17 January 1989, to wind-up the appellant on the ground that the appellant had failed to comply with a statutory demand and was therefore insolvent and unable to pay its debt. At the hearing in the High Court before Justice Dr Zakaria bin Mohd Yatim, several grounds were raised to resist the said petition. None of them found favour with the learned Judge who, after hearing arguments, ordered the appellant to be wound up.

[4] On appeal to us, Mr G Sri Ram, leading Counsel for the appellant, contended firstly that the appellant ought not to have been wound up because the statutory demand did not comply with the terms of s 218(2)(a) of the Act, which is as follows:

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218(2) A company shall be deemed to be unable to pay its debts if:

(a) a creditor by assignment or otherwise to whom the company is indebted in a sum exceeding five hundred dollars then due has served on the company by leaving at the registered office a demand under his hand or under the hand of his agent thereunto lawfully authorized requiring the company to pay the sum so due, and the company has for three weeks thereafter neglected to pay the sum or to secure or compound for it to the reasonable satisfaction of the creditor;