GROUNDS OF JUDGMENT

The Applicants filed an Ex-parte Originating Summons for a Scheme of Arrangement and Reconstruction under section 176(1) of the Companies Act.

2. The purpose of this application is obviously to allow the applicants to escape liquidation by seeking the required consent of the creditors forming the three-fourth in value of the creditors or class of creditors or members present and voting thereat either in person or by proxy and its subsequent approval by an order of Court, and the Court upon being satisfied, may then grant a temporary moratorium under section 176(10) restraining the creditors from proceeding in any action against the company unless with the leave of Court first had and obtained.

3. The question of importance therefore before the Court was a preliminary issue, and that was whether such an application ought to be commenced by an Originating Summons or by a Petition.

4. The counsel submitted that it has been the accepted practice in Malaysian Courts; relying on the case law : [2]

(i) ;Sri Hartamas Development Sdn. Bhd. vs.MBf Finance Bhd. (1990) 2 MLJ page 31;

(ii) ;Twenty First Century Oils Sdn. Bhd. vs. Bank of Commerce (M) Bhd. & Ors. (No.2) (1993) 2 ML