JUDGMENT

Mohd Azmi Kamaruddin SCJ:

[1] When allowing this appeal and setting aside the order of the High Court dated 11 September 1990 striking out the appellant's Bankruptcy Petition, we indicated that we would be giving our reasons. We do so now.

[2] By a 1983 Loan Agreement, the appellant Bank gave credit facilities to San Hong Brick Sdn Bhd (hereinafter referred to as the Principal Borrower) by way of a term loan and overdraft facility on the securities of (1) a first legal charge created by the Principal Borrower over its 25.33 acres of land in Gurun, Kedah, (2) a debenture over fixed and floating charges over all the assets of the Principal Borrower, and (3) a joint and several personal guarantee by Mr Samuel (the respondent), Mr Eng Bong Hiang, Mr Ooi Soo Nee and Madam Tan Phaik Thoo, who were all directors of the Principal Borrower. Pursuant to the Loan Agreement a contract of guarantee was executed on 26 November 1983, by Mr Samuel together with the other three directors, in their personal capacity. The guarantee was in the usual form in which the guarantors inter alia "jointly and severally unconditionally and irrevocably guarantee payment on demand... of all monies a