Abdul Hamid Mohamed JC:

On 25 January 1986, Malayan Banking Bhd. (petitioning creditor), obtained a judgment in default against Sing Pin Jih Pao Sdn. Bhd. and the judgment debtor as follows:

No appearance having been entered by the 1st and 2nd defendants herein, It is this day adjudged that the 1st and 2nd defendants do pay the plaintiffs the sum of RM1,554,274.67 plus interest at the rate of 13.25% per annum on the Overdraft limit of RM800,000 and 14.25% per annum on excess amount (or at such other rate as shall be varied by the plaintiffs) as from 10 September 1985 until date of payment and the sum of RM369,689.10 plus further interest at the rate of 13.25% per annum as from 10 September 1985 until date of full payment and also the 1st and 2nd defendants do pay the sum of RM10,000 being legal professional charges and costs RM232.50.

Appeal to the Supreme Court was dismissed on 18 November 1987. The Supreme Court order reads as follows:

This appeal coming up for hearing this day in the presence of Mr. Oliver Phipps (Mr. Ooi Teik Hoe with him) of Counsel for the Appellant and Ms. Liow Sook Ching of Counsel for the respondents And upon reading the Record of appeal filed herein And upon hearing Counsel as aforesaid It is ordered that the Appeal be and is hereby dismissed with costs And it is further ordered that the sum of RM500 deposited into Court by the Appellant as security for costs of this Appeal be paid to the Respondent to account for taxed costs.

The petitioning creditor commenced bankruptcy proceedings against the Judgment Debtor - Vide 43-500-86. On 20 June 1988, Dzaiddin J made a receiving and adjudication order against the judgment debtor. The judgment debtor appealed to the Supreme Court. The Supreme Court allowed the appeal on the sole ground that the Judgment Notice was bad as interest was not quantified.

The petitioning creditor issued a fresh bankruptcy notice on 27 April 1989. The amount of the debt was quantified as follows:

1. Judgment Sum (Overdraft RM1,554,274.67

Interest at the rate of 13.25% p.a. on the

overdraft limit of RM800,000 as from

10 September 1985 to 27 April 1989 RM 385,084.91

Interest at the rate of 14.25% p.a. on the

excess amount as from 10 September 1985

to 27 April 1989 RM 331,663.82

2. Judgment sum (Trust Receipt A/C) RM 369,698.10

Interest at the rate of 13.25% p.a.

as from 10 September 1985 to

27 April 1989 RM 177,952.13

Legal profession charges RM 10,000.00

Costs RM 232.50

Less Payment to account RM 224,983.85

Total amount owing as at 27 April 1989 RM2,603,913.28

The new bankruptcy notice was served on the judgment debtor on 2 May 1989. On 6 May 1989 the judgment debtor filed an affidavit (Encl. 3). Paragraphs 3 and 4 read as follows:

3. I deny and further dispute that I am indebted to the judgment creditors in the sum of RM2,603,913.28 as stated therein. In this respect I state that the figure is based on an erroneous calculation and grossly exaggerated.

4. In the premises, I am accordingly advised by my solicitors and verily believe that the bankruptcy notice is bad ab initio and I am therefore not obliged to comply with same. My solicitors will submit on points of law at the hearing.

It is clear that this affidavit was filed pursuant to s. 3(2) proviso (ii) of the Bankruptcy Act 1967 and r. 95 of the Bankruptcy Rules 1969.

On 20 October 1989, that is, about 5½ months after the bankruptcy notice was served on the judgment debtor, the petitioning creditor filed the creditor's petition. It was served on 29 November 1989. On 29 December 1989, that is, almost seven months after the service of the bankruptcy notice and exactly one month after the service of the creditor's petition, the judgment debtor filed a lengthy "affidavit in opposition" - Encl. 15. This "affidavit in opposition" which appears to be in opposition of the creditor's petition contains numerous grounds, including the dispute of the amount of debt already raised in Encl. 3.

The creditor's petition (Encl. 13) and