SUPREME COURT, KUALA LUMPUR
LEE HUN HOE CJ (BORNEO), WAN SULEIMAN SCJ, GEORGE SEAH SCJ
SOVEREIGN GENERAL INSURANCE SDN. BHD.
versus
KOH TIAN BEE
CIVIL APPEAL NO. 148 OF 1985
Decided On : 10-27-87
Lee Hun Hoe CJ (Borneo):
We allowed the appeal and stated that we would give our reasons. We do so now.
The appeal is against the decision of the learned Judge in striking off the creditor's petition. The appellant is the judgment creditor and the respondent the judgment debtor.
On 23 January 1976 the appellant obtained a judgment in the High Court (Civil Suit No. 817 of 1974) against the respondent in the sum of RM360,749.46 with costs together with interest at 6% per annum on the sum of RM100,000 only. The respondent failed to satisfy the judgment.
On 24 September 1979 by a writ of seizure and sale the appellant applied for leave to levy execution on the respondent's 75,000 ordinary shares in Global Insurance Co. Sdn. Bhd. (formerly known as Sovereign General Insurance Sdn. Bhd.). On 25 January 1980 these shares in the respondent's name were eventually changed and issued to the Sheriff to satisfy the judgment. On 20 June 1980 the Sheriff obtained an order to sell the said shares by way of private treaty to one of the shareholders Mr. Tan Kim Wah at a price of RM75,000 at RM1 per share. This sum was paid to the appellant to set off the judgment debt.
On 20 November 1980 a bankruptcy notice was issued and addressed to the respondent at No. 118, Jalan 17/14, Petaling Jaya, Selangor. This was the address given by the respondent himself in his affidavit sworn on 28 August 1974. The particulars of the debt were set out in the said notice. Interest of 6% per annum was based on RM360,769.46 when according to the Court order it should only be on RM100,000. This will have to be corrected when the final amount is worked out. As the said notice could not be served on the respondent substituted service was allowed by advertisement in the national newspapers. Despite this the respondent failed to comply with the said notice. So the appellant took out the creditor's petition. The respondent gave notice of his intention to oppose the said petition. The matter came up for hearing before V.C. George J on 5 June 1984 when it was adjourned to 6 July 1984 before Abdul Razak J. After hearing the parties he struck off the said petition with costs. Hence the appeal.
The respondent complained that the notice of sale was not served on him properly and that he was unable to contest the proceedings. His case is that in the execution proceedings insufficient credit was given on the value of his shares which were taken by the Sheriff in execution. He therefore contended that as the service of the notice of sale was invalid according to O. 43 r. 4(3) of the Supreme Court Rules 1957 which was then in force, the bankruptcy notice had become invalid. The learned Judge took the view that the notice of sale had not been served according to rule and that the respondent was not able to contest the selling price or the right to sell or to fetch the highest price to lessen his debt or to enable him, at the eleventh hour, to procure money to settle his debt. He was of the opinion that the bankruptcy notice was presented prematurely before the share price was determined. He was aware that the Court had approved the price but thought that it was due to lack of contest by the respondent. In support of this position the appellant cited Kamarudin v. United Motor Works Pte. Ltd. [1982] 1 MLJ 126, to show that though the notice had not been sent according to the prescribed rules it did not become void but was only an irregularity. The learned Judge held that the failure to comply with the rule vitiated the sale.
In the exercise of his jurisdiction in bankruptcy proceedings the learned Judge cannot go behind the judgment. Thus on an application to set aside a bankruptcy notice it was laid down as early as 1893 that the Court could not go behind the judgment. See In re Easton [1893] 10 Mor 111. Even if there has been an irregularity in the service of the notice of sale it is not open to the respondent in this case to challenge the execution proceedings. Under s. 3
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