A petition (encl (1)) for the winding-up of the respondent company (the company) was presented on 13 October 1989. An order for its winding-up was made on 21 February 1991. The company and its contributories, who had given notice of intention to oppose the petition, did not oppose the making of the order.

After the presentation of the petition and prior to the making of the winding-up order, the petitioner as plaintiff had, on 1 August 1990, filed in the commercial division of the High Court civil suit D1-22-1171-90 (the civil suit) against the company as defendant. In it the petitioner claimed special and general damages, interest and costs. The claim was grounded on an alleged breach of contract by the company in the supply of battery casings to the petitioner. The sum originally claimed under the head of special damages was RM2,093,799.93 but this was amended to RM1,585,850.60 on 2 October 1990 as the petitioner admitted owing the company a sum of RM507,949.36 for goods supplied.

A cursory look at the petition reveals that among the particulars given of mismanagement of the company making it just and equitable for it to be wound up, was the purchasing of lead inserts from Tai Kwong Battery Industries Sdn Bhd without those responsible for the management of the company, except for the petitioners representative, revealing their interest in the said vendor company particularly since the said lead inserts could be purchased elsewhere at a lower price. Another particular of mismanagement alleged was that the company arbitrarily stopped the supply of battery casings to the petitioner whilst maintaining a supply to itself. In the light thereof, it is immediately apparent that these particulars of reasons advanced for the winding-up of the company also formed the basis of the claim in the civil suit.

Subsequent to the winding-up order, the petitioner applied (vide encl (33)) on 20 June 1991 for leave of the court under s 226(3) of the Companies Act 1965 to proceed with the action against the company. It appears from the file that this application (the first application) was adjourned from time to time until it was fixed for hearing before me on 8 July 1992.

For convenience, any reference hereinafter to the Act or the Rules means a reference to the Companies Act 1965 or the Companies (Winding-Up) Rules 1972 and any reference to a section or rule by itself is a reference to a section or rule of the Act or rules respectively.

In the meantime, on 31 March 1992, the liquidators of the company applied for (vide encl (44)) and obtained orders empowering them:

(a) to settle in full the debts due and owing to all secured

creditors of the company;

(b) to pay in full all payments classified under s 292(1) which were

due and owing;

(c) to settle or pay in full all the creditors of the company who had

filed proofs of debt which had been admitted by the liquidators;

(d) to distribute amongst the shareholders in proportion to their

respective shareholdings in the company the surplus of the funds

or assets of the company after the payments mentioned in the

foregoing paragraphs;

(e) to compromise with the shareholders of the company by way of

set-off the debts due from them to the company from the payment

to be made to them from the said surplus; and

(f) to pay the costs of the application in priority under s 292(1).

The affidavit of Ong Kong Lai (encl (43)) affirmed on behalf of himself and the other liquidator Wong Cham Mew in support of the above application stated that pursuant to the order of the court for the winding-up of the company, its assets had been disposed of, and the monies realized from the proceeds of sales had been banked into a special interest-bearing account. the amount realized from the sale of assets and recovery of some of the debts due from the co