GROUNDS OF JUDGMENT

By an originating summons in enclosure 3 the applicant sought for the following prayers:

“(a) that all proceedings in Johor Bahru High Court Winding-Up Petition No: 28-116-94 should be stayed, or

(b) that the order obtained on 28.9.95 be set aside and Winding-Up Petition No: 28-116-94 be struck off and/or dismissed.

(c) Costs.

(d) any other relief that this Honourable Court deems fit.“

The facts as extracted from the affidavit of Iskandar Basha Hj. Abdul Kadir in enclosure 2 and affirmed on October 18, 1995 may be stated thus. Pursuant to an agreement dated January 9, 1995 between Mawaria Shipping (M) Sdn Bhd (“Mawaria“) and the applicant, Mawaria became a major shareholder of the applicant’s company and, consequently, the whole management and control of the applicant’s company came under the command of Mawaria. From the tenor of the agreement, all the liabilities of the applicant at the time of the purchase fall in the hands of Mawaria and these liabilities were to be settled from the monies that accrued as a result of the sale of the shares. The shares were sold at a colossal price of RM7.5 million and out of that sum a relatively handsome sum of RM2.5 million was set aside to settle all the liabilities of the applicant. Mawaria found it extremely difficult to ascertain the liabilities of the applicant as its records were missing and its previous owner by the name of Khalid Ghouse had since passed away. This prompted Mawaria to look at individual creditors to support and justify their claims before payment is effected. In the meantime, the first respondent had commenced winding-up proceedings against the applicant vide Winding-Up Petition Number 28-116-1994 to recover the debts owed to them by the applicant and which debt was unpaid. By letter dated May 29, 1995 the applicant issued and fowarded two post-dated cheques to the first respondent. The first cheque was for RM10,000.00 while the second cheque was for RM10,203.50 being full and final settlement of all the debts owed by the applicant to the first respondent pursuant to an amicable arrangement as agreed upon by both parties. The first respondent acknowledged receipt of these two post-dated cheques by letter dated June 9, 1995 and particulars of these two post-dated cheques were as follows:

The bank statements of the applicant’s accounts reflected clearly that both these two post-dated cheques were cleared on July 6, 1995 for cheque no: 385487 and on August 3, 1995 for cheque no: 385488. Somehow the clearance of these two post-dated cheques lulled the applicant into complacency. The applicant thought, and this was the wrong impression that was relayed to them, that the first respondent would discontinue the winding-up proceedings as the debt due to the first respondent was finally paid up when cheque no: 385488 was cleared on August 3, 1995. This was not to be. On the hearing date of the winding-up proceedings, and this was on September 28, 1995, the first respondent proceeded with their winding-up petition no: 28-116-94 and obtained an order in terms of their application. The innocent applicant who were not represented on that day as they had settled their debt were in for a shock - they were slammed with the winding-up order and they now come to this Court to seek the prayers in enclosure 3 as set out in the early part of this judgment. The applicant deposed that they verily believe and was advised that on the hearing date of the winding-up petition, the first respondent was not legally a “creditor“ and, consequently, should not have obtained the order in terms of their application.

A preliminary objection was launched by Mr. Ong Ban Chai, the learned counsel for the first respondent, to the effect that the procedure adopted in enclosure 3 to set aside the winding-up order dated September 28, 1995 was wrong in law - it should be by way of motion and not by way o