RK Nathan JC:

Background Facts To The Filing Of The Petition

[1] On 19 January 1990 the petitioner had obtained a final judgment against Bukit Ritan Realty Sdn Bhd (BRR), a wholly owned subsidiary of the respondent in the sum of RM33,875 together with interest at the rate of 8% per annum from 15 March 1985 till the date of the notice made pursuant to s 218 of the Companies Act 1965 (the Act) dated 8 January 1996. The said notice was for a sum of RM130,740.65.

[2] Willway Industries Sdn Bhd (WISB) was a house purchaser which signed a sales and purchase agreement with BRR on 9 April 1995. WISB duly paid the 10% of the purchase price for the said property amounting to RM33,887.50. WISB subsequently changed its name to Wangsini Sdn Bhd (WSSB), the petitioner in the present proceedings. The petitioner rescinded the sales and purchase agreement with BRR and sued BRR for the refund of deposit and claimed liquidated damages for loss of rental income together with interest and costs. The plaintiff (WSSB, formerly known as WISB) obtained judgment in default on 19 January 1990. At all material times the present respondent and BRR were fully aware of this judgment, had never disputed it and had not attempted to appeal against it.

The Present Proceedings

[3] The respondent had assumed all the debts owing to BRR under a Composite Scheme of Arrangement (the Schemes) pursuant to s 176 of the Act which was subsequently sanctioned by the High Court on 4 January 1994 by way of Kuala Lumpur High Court Originating Summons No D3-24-53-93 (the D3 suit). The petitioner had on 8 January 1996 issued a s 218 notice for the sum of RM130,740.65 to the respondent. Thereafter the petitioner presented this winding-up petition on 30 January 1996.

Issues Not In Dispute

[4] The petitioners highlighted the issues not in dispute, namely that:

(a) The sale and purchase agreement between the petitioner and BRR was rescinded by the petitioner on 25 October 1989.

(b) The petitioner had obtained judgment against BRR on 19 January 1990.

(c) The judgment debt as at the date of the statutory notice on 8 January 1996 is RM130,740.65 and that this debt has not as yet been paid by the respondent.

(d) The respondent has assumed all the debts and liabilities of BRR under the Schemes.

(e) Both the petitioner and the respondent are bound by the Schemes which were sanctioned by the High Court on 4 January 1994, approved by the respondent's shareholders in the Extraordinary General Meeting on 2 July 1993 and by virtue of s 176(3) of the Companies Act 1965.

(f) Scheme E Option B under the Schemes together with other relevant clauses are applicable and all house purchasers are entitled to be paid by the respondent in full by cash RM1 for every RM1 owing by BRR.

(g) The s 218 notice and the petition was filed and served in accordance with the Act and the Companies (Winding-Up) Rules 1972.

The Petitioner's Case

[5] Relying on Sri Hartamas Development Sdn Bhd v. MBF Finance Bhd, [1992] 1 MLJ 313 the petitioner argued that the demand notice had not been complied with and that the respondent had, for three weeks after the service of the demand, neglected to pay the sum or to secure or compound for it to the reasonable satisfaction of the petitioner.

[6] Further it was the case of the petitioner that since the petitioner had obtained judgment against BRR and that since subsequently the respondent herein had assumed all the debts and liabilities of BRR under the Schemes, the respondent has therefore neglected to pay the amount stated in the notice within the three weeks after service of demand and therefore the petitioner contended that the presumption of insolvency had arisen against the respondent. It was also pointed out to me that Scheme E and other provisions of the said Scheme, in particular cl 41, confirmed, accepted and recognised judgments and made provisions for the payment of judgment debt including costs and interest incurred thereon. The relevant clauses of the Schemes relied on by t