The creditor's claim for total debt including accrued interest beyond the bankruptcy notice is not valid under Section 40(3), confirming that only the stated amount in the notice is payable.

Arifin Jaka J:

This is an appeal from the decision of the learned Senior Assistant Registrar (SAR) dated 4 September 1997 dismissing the creditors' petition with costs.

The facts so far as they are material for the purpose of this appeal are these. Perwira Affin Bank Berhad (formerly known as Perwira Habib Bank Malaysia Berhad) ("the judgment creditor") obtained a final judgment on 8 April 1988 against Muhaimi Ahmad Mustapha and Mohan Arunasalam ("the judgment debtors") vide High Court Kuala Lumpur (Commercial Division) Suit No. C-24-3748-86 for payment of the sum of $34,078.53 with interest at the rate of 16.5% per annum on monthly rests till date of full settlement and $350 costs. Based on this judgment the judgment creditor issued a bankruptcy notice dated 20 December 1990 separately against the judgment debtors. The notice was served on both judgment debtors. The demand for payment in the bankruptcy notice against each of the judgment debtor is for payment within seven days after service of the notice excluding the day of such service was for "the sum of $39,578.94" as being the amount due as at 20 December 1990 as shown in the "particulars" therein. The act of bankruptcy relied upon by the judgment creditor was the judgment debtors' failure to comply within seven days of service of the notice as provided under s. 3(1) of the Bankruptcy Act 1967 ("the Act"). On 27 April 1992 the judgment creditor issued a creditors' petition against the judgment debtors separately (vide Bankruptcy No. D3-29- 9328-90 - Mohan Arunasalam Arulgnanam s/o Arunasalam and vide Bankruptcy No. D3-29-9330-90 - Muhaimi Mustapha). In the petition the amount claimed by the judgment creditor is the sum of $39,578.94 being the aggregate sum which was still justly and truly due and payable to the judgment creditor as at 20 December 1990, the date of filing the bankruptcy notice. The petitions were served on both the judgment debtors.

By an order of court dated 21 July 1994 the petitions were consolidated and heard together. On 4 September 1997 the SAR heard and dismissed the petitions on the ground that he is satisfied that the judgment debtors are able to pay the debts. At the hearing before me counsels for both parties agreed that the only issue to be decided is whether the judgment creditor in this case is required under the law to accept the sum as stated in the bankruptcy notice or is entitled to full payment of the judgment sum including accrued interest calculated from the date of bankruptcy notice until date of full payment under the terms of the judgment dated 8 April 1988 on which the bankruptcy notice is based.

It is the judgment creditors' case that they are entitled to claim further interest on the judgment sum from the date of bankruptcy notice until the date of receiving and adjudicating orders are made against the judgment debtors. They argued therefore that the judgment debtors have to pay the amount inclusive of accrued interest calculated from 20 December 1990 ie, date of bankruptcy notice to date of full realisation to avoid the adjudication and receiving orders be made against them at the hearing of the petitions.

In the support of this contention the learned counsel relied on s. 40(3) of the Act which reads as follows:

Save as provided under subsections (1) and (2) all debts and liabilities present or future, certain or contingent, to which the debtor is subject at the date of the receiving order or to which he may become subject before his discharge by reason of any obligation incurred before the date of the receiving order shall be deemed to be debts provable in bankruptcy.

It is further contended by the learned counsel that this section preserves the right of a judgment creditor to claim for the continuing interest. With the greatest respect I disagree with the contention of the learned counsel. Section 40(3) of the Act deals with debts provable in bankruptcy and such debts and the proof of such debts are governed