JUDGMENTBY: REKHRAJ J

The petitioner had obtained a judgment on 17 April 1998 in the Kuala Lumpur Sessions Court SN 7-52-4945-97 against the respondent under a summary judgment procedure. The respondent has filed a notice of appeal to the High Court vide Civil Appeal No R1-12-194-98; and to date the appeal is pending disposal. The respondent had also proceeded to file an application for the stay of execution of the judgment; and the said application is also pending disposal by the sessions court. In the interim, the petitioner -- relying on the sessions court judgment -- proceeded to issue a statutory notice pursuant to s 218 of the Companies Act 1965, demanding of the respondent to pay the judgment sum within 21 days from the receipt of the said statutory notice; failing which the respondent shall be deemed to be unable to pay the debt and an appropriate action shall be taken for the winding-up of the respondent company. Immediately upon the expiry of the 21-day period, the petitioner proceeded to file the petition.

This is an application by notice of motion taken out by the respondent against the petitioner that all further proceedings in the companies winding-up petition be stayed pending the hearing and decision of the respondents Appeal No R1-12-194-98 pursuant to O 92 r 4 of the Rules of the High Court 1980, and or under the inherent jurisdiction of the court; and or in the alternative under s 222 of the Companies Act 1965.

To my mind, such an application for the stay of winding-up petition is specifically provided for under s 222 of the Companies Act 1965, which reads:

At any time after the presentation of a winding up petition and before

a winding up order has been made, the company or any creditor or

contributory may, where any action or proceeding against the company

is pending, apply to the Court to stay or restrain further

proceedings in the action or proceeding, and the Court may stay or

restrain the proceedings accordingly on such terms as it thinks fit.

(Emphasis added.)

Presentation of winding-up petitions are not a means of execution proceedings envisaged under O 45 of the Rules of the High Court, but are independent proceedings taken under s 218(1)(e) of the Companies Act 1965, by proving the establishment of a debt due and payable; in that it must be due at the time of the demand; and made enforceable by threat of winding-up proceedings. But where the debt is disputed, as in this case, being a debt on a judgment subject of a further appeal to a superior court, it certainly cannot be said to be an undisputed debt; and the petitioner cannot at this stage claim to be a creditor of the respondent until that judgment obtained in his favour has become final and conclusive upon the disposal of the appeal. Until then, the debt is sub-judice, and any presentation of the petition in the circumstances is an abuse of the process of court, and the court will lend its willing hands to restrain the petitioner from presenting or proceeding of the petition under s 222 of the said Act.

I now refer to the prayer of the respondent in the invocation of O 92 r 4 of the Rules of the High Court 1980 or in the exercising of the powers of the court under its inherent jurisdiction to strike or grant stay. Order 92 r 4 reads:

For the removal of doubts it is hereby declared that nothing in these

rules shall be deemed to limit or affect the inherent powers of the

court to make any Order as may be necessary to prevent injustice or to

prevent an abuse of the process of court.

Edgar Joseph Jr J (now FCJ), in the case of Pacific Centre Sdn Bhd v United Engineers (M) Bhd [1984] 2 MLJ 143 at p 147 said:

... It is also clear that the inherent jurisdiction of the court

includes all the powers that are necessary to fulfil itself as a court

of law to uphold, to protect or to fulfil the judicial functions of

administering justice according to law in a regular, or