Procedural compliance is essential for challenging a bankruptcy notice, including the proper filing of applications.

The judgment creditor obtained final judgment against the judgment debtor for a certain amount.The judgment did not order interest on the amount.The judgment creditor served on the judgment debtor a bankruptcy notice requiring him to pay within seven days a sum comprising the judgment amount, interest thereon and costs.To the judgment debtor, therefore, to use the words in para. (ii) of the proviso to s. 3(2) of the Bankruptcy Act 1967 , "the sum specified in the notice as the amount due exceeds the amount actually due". For that reason, he sought to invalidate the bankruptcy notice.To be qualified to do that, the parargraph requires him to give to the judgment creditor, within the seven days, notice "that he disputes the validity of the notice on the ground of such mistake."

The giving of notice under the said para. (ii) is a precondition to be fulfilled before a debtor can proceed to have a judgment notice invalidated on the ground of mistake of excess demand.If he fails to give the required notice, he cannot make the attempt.The usual way of giving notice is by way of a formal letter.After that must follow some form of application for having the judgment notice invalidated because, without an application, the question would not be before the court for adjudication.

What the judgment debtor in this case did within the seven days was to file an "affidavit-in-opposition to bankruptcy notice" in which he complained about the excessive demand in the bankruptcy notice, contended that for that reason the bankruptcy notice was invalid and prayed that it be set aside.

It is accepted by the judgment creditor that the filing of that affidavit served as the giving of notice to him, as required by the said para. (ii), that the judgment debtor disputed the validity of the bankruptcy notice on the ground of mistake of excessive demand.With that, the judgment debtor has fulfilled the precondition for taking up the dispute.

The preliminary question that arises in this appeal and that I am asked to decide first is whether that affidavit serves also as a proper application by which to take up the dispute for adjudication with a view to having the bankruptcy notice set aside as invalid on the ground of mistake of excessive demand.The learned senior assistant registrar ruled that the affidavit was not a proper application and he dismissed the affidavit or, I should rather say, since dismissing is not something apt that one does to an affidavit, that, regarding it as an application that was not proper, he dismissed the application.

To answer the question, it is necessary to understand something about a bankruptcy notice.It is involved in one of the ten cases or circumstances under s. 3(1) of the Act in which a debtor commits an act of bankruptcy, the commission of which is necessary to provide the ground for a bankruptcy petition.The case of an act of bankruptcy that involves a bankruptcy notice is the case under para. (i) of s. 3(1).

A bankruptcy notice may be served on a debtor after the creditor has obtained a final judgment or final order against the debtor for any amount.It requires the debtor to settle the demand, that is to say, pay the sum with interest or satisfactorily secure or compound for it. After service of the bankruptcy notice on him, the debtor has to do one of two things, and he has to do it within seven days (in case of service in Malaysia). He has to comply with the requirements of the notice, by paying up or securing or compounding satisfactorily for the debt and interest.Alternatively, he has to satisfy the court "that he has a counter-claim, set off or cross demand which equals or exceeds the amount of the judgment debt or sum ordered to be paid" and which he could not set up in the case in which the judgment or order was obtained.If he fails to do either of those things within seven days, then according to para. (i), he commits an act of bankruptcy.

How does a debtor set about doing the alternative th