[1] The appellant (the respondent in the court below) was incorporated on 7 November 1995 and has an authorised capital of RM500,000 divided into 500,000 shares of RM1 each. Its paid-up capital is RM250,000. The appellant was indebted to the respondent, a finance company (the petitioner in the court below) in the sum of RM3,908,860.31 as at 26 January 1998.

[2] On 24 June 1998 the respondent’s solicitors served on the appellant a notice pursuant to s 218 of the Companies Act 1965 by leaving it at its registered office. Under the said notice, the appellant was required to pay to the respondent the said sum of RM3,908,860.31 within 21 days from the date of service. The appellant did not make any payment. On 26 November 1998. The respondent presented to the court a petition to wind up the appellant.

[3] In the petition, the respondent contended that the appellant made several admissions and acknowledgment of the correctness of the outstanding debt it owed to the respondent and undertook to make all payments due. The appellant had also by letters to the respondent dated 24 January 1998 and 6 March 1998 requested for time to settle the outstanding debt due and owing. Notwithstanding those requests, the appellant failed to pay the said sum of RM3,908,860.31 or any part thereof. As such, the respondent aver that the appellant is unable to pay its debts and that in the circumstances, it is just and equitable that the appellant be wound up.

[4] The indorsement on the petition — the petition was not dated — showed that it was presented to the court on 26 November 1998 and the senior assistant registrar thereupon ordered that it be heard on 22 February 1999. By letter dated 10 February 1999, the appellant’s solicitors served on the respondent’s solicitors a copy of a notice of intention to appear and of their intention to raise a preliminary objection, namely, that there was non-compliance with r 26 of the Companies (Winding Up) Rules 1972 on the part of the respondent. Rule 26 of the Companies (Winding Up) Rules 1972 (‘the Rules’) provides:

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Every petition for the winding-up of a company by the Court shall be

verified by an affidavit referring thereto. The affidavit in Form 7

shall be made by the petitioner or by one of the petitioners, if more

than one, or, in case the petition is presented by a corporation, by

some director, secretary or other principal officer thereof and shall

be sworn after and filed within four days after the petition is

presented, and the affidavit shall be prima facie evidence of the

statements in the petition.

(Emphasis added.)

[5] It would be appropriate to mention at this stage that r 30 of the Rules provides as follows:

(1) Affidavits in opposition to a petition that a company may be

wound up shall be filed and a copy thereof served on the

petitioner or his solicitor at least seven days before the time

appointed for the hearing of the petition.

(2) Any affidavit in reply to an affidavit filed in opposition to a

petition (including a further affidavit in support of any of the

facts alleged in the petition) shall be filed within three days

of the date of service on the petitioner of the affidavit in

opposition and a copy of the affidavit in reply shall be

forthwith served on the opposing petitioner or his solicitor.

[6] It would also be appropriate to mention here that the appellant did not file any affidavit in opposition to the petition within the time specified in r 30(1) of the Rules when the matter came up for hearing on 22 February 1999.

[7] At the outset of the hearing on 22 February 1999 before the learned judicial commissioner, in relation to the preliminary objection, learned counsel for the appellant pointed out that the petition and the affidavit verifying the