Siti Norma Yaakob JCA:

We heard this appeal, dismissed it with costs and we now give our reasons for our decision.

On 30 November 1995, the High Court ordered the winding up of the appellant ('the company') after allowing a preliminary objection raised by the respondent/petitioner ('the bank') that there was no cross claim disclosed by the company that warranted their notice of intention to oppose the petition to be heard on its merits. It is to appeal against this order that the parties were before us.

By way of a factual background we need to go back to 1982 when on 11 February of that year, the bank approved an additional overdraft facility for RM5.5 million to one T. Raju s/o M. Kerpaya @ Jayaraman s/o M. Kerpaya ('the borrower') for a period of one year and repayable on demand.

The overdraft facility was secured by a first legal charge created on land, Pegangan No. 1361, Pechahan Bandar 1, Daerah Timur Laut, Pulau Pinang (the charged land) of which the company were the registered proprietors at the material time.

On 24 February 1984, the bank issued a letter of demand to the company stating the amount of the borrower's indebtedness to be RM8,741,469.37 as at 19 February 1984 and demanding that the company pay the amount within fourteen days of the date of the letter of demand, failing which the bank would proceed to foreclose the charged land and sell it under the provisions of the National Land Code 1965 ('the NLC').

Needless to say the company failed to comply with the letter of demand and on 15 March 1984, the bank served the company with a Form 16D notice, pursuant to s. 254 of the NLC. The company also failed to remedy the specified breach within the time stipulated in the statutory notice and the bank filed originating summons No. F 525 of 1984 in the High Court at Kuala Lumpur praying principally for an order of sale of the charged land. A consent order to that effect was obtained by the bank on 3 April 1985 for the recovery of RM10,450,952.26. The charged land was subsequently auctioned for RM1,162,800 on 19 September 1988.

Since the proceeds of sale were insufficient to settle the borrower's indebtedness in full, the bank filed in Kuala Lumpur High Court, Civil Suit D4-22-1509-90 ('the 1990 suit') against the company and another claiming the balance of RM10,324,147.03, interest at 16% per annum on monthly interests from 1 August 1990 to date of realisation and costs after credit was given for the proceeds of sale. Summary judgment under O. 14 of the Rules of the High Court 1980 was obtained by consent on 4 July 1991 and thereafter the bank took steps to enforce the judgment sum.

This came in the form of a statutory notice dated 30 November 1991 under s. 218 of the Companies Act 1965 ('the Act') , and served on the company on 2 December 1991.

The company failed to comply with the notice calling upon them to make payment of RM12,763,391.24, the judgment sum inclusive of interest and costs remaining outstanding as at 30 November 1991 within the three weeks limited by the notice, and the bank then issued a winding up petition, D2-28-56-92 dated 31 January 1992 and 24 September 1992 was endorsed as the hearing date of the petition. On 21 September 1992, three days before the hearing, the company filed a notice of intention to oppose the petition on the ground that they dispute the debt due to the bank.

After a number of postponements, the petition was finally fixed for hearing on 24 November 1995, four years after the petition was presented. This delay was due to the fact that:

(1) The company filed appeals against the consent judgment obtained in the 1990 suit. The first appeal to the Judge in chambers was dismissed and likewise their subsequent appeal to the then Supreme Court on 8 December 1994.

An application for stay of execution was also applied for by the company but this too, was refused by the High Court on 20 June 1995.

(2) The company, as co-plaintiff together with the borrower and anot