Bankruptcy proceedings must not be delayed without strong justification; delays contrary to the Bankruptcy Act principles are disallowed.

Zaleha Zahari J:

Enclosure (66) is an appeal against the senior assistant registrar's decision dated 23 November 1996 in granting an order-in-terms of two applications for stay filed on 19 April 1993 (encl. (36)), and that filed on 16 November 1995 (encl. (46)), by the judgment debtor, J Raju Jayaraman a/l Kerpaya (hereinafter referred to as the "judgment debtor").

The prayers sought by the judgment debtor in these two application reads as follows:

Enclosure 36

That all proceedings in the above Bankruptcy action and or the Creditor's Petition be stayed until after due determination of:

(a) The proceedings in Kuala Lumpur High Court Suit No. S3-22-583-92;

(b) The proceedings in Kuala Lumpur High Court Originating Summons No. 31-1069-92;

(c) The proceedings in Kuala Lumpur High Court Civil Suit No. D5-22-1120- 92.

Enclosure (46)

That all bankruptcy proceedings against the Judgment Debtor be further stayed until the determination of Court of Appeal No: 03-20-94.

It is common ground that Court of Appeal No. 03-20-94 has been renumbered as "W-02 642-95".

On 12 November 1997 I allowed OCBC Bank (Malaysia) Berhad's (hereinafter referred to as the "judgment creditor") appeal and set aside the senior assistant registrar's decision. My reasons are as follows:

The Law

The judgment debtor's applications under encls. (36) and (46) for stay are made pursuant to s. 97 of the Bankruptcy Act 1967which states:

The court may at any time, for sufficient reason, make an order staying the proceedings under a bankruptcy petition, either altogether or for a limited time, on such terms and subject to conditions as the court thinks just.

There is no doubt that a judge is vested with jurisdiction to stay proceedings under a bankruptcy petition, albeit discretionary, where a judgment debtor has successfully shown sufficient reason. However, in exercising such a discretion, on being moved by an application by the judgment debtor, as in this case, the judge has to take into account factors which are relevant surrounding the circumstances of the institution of the institution of the bankruptcy petition.

Before I turn to the facts and the circumstances in this case I propose to set out briefly well settled principles that must be applied to the issues raised in this application. The following principles emerges from the authorities cited by both counsels and may be summarised as follows: (a) that under s. 3(1)(i) of the Bankruptcy Act 1967 a debtor commits an act of bankruptcy if a creditor has obtained a final judgment or final order for any amount and execution thereon not having been stayed has served upon him a bankruptcy notice requiring him to pay the judgment debt or sum ordered to be paid in accordance with the judgment. The debtor has seven (7) days after service of the notice to comply with the requirements of the notice or satisfy the court that he has a counterclaim, set off or cross demand which equals or exceeds the amount of the judgment debt or sum ordered to be paid;

(b) that bankruptcy proceedings are meant to be expeditiously disposed of and the court has to ensure that delays are to be avoided or minimised once it has been instituted and that adjournments which are too long is equated to a stay being given ( Re Dato' Mohd Pilus bin Yusof Ex parte Southern Bank Berhad [1988] 1 CLJ 102);

(c) that the court has to attach sufficient weight to the importance in bankruptcy proceedings of minimising delays as the primary purpose of such proceedings is to enable an independent person (Official Receiver) to ascertain and preserve all of the assets of the debto