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 wher