Gopal Sri Ram JCA:

[1] This appeal raises a point of importance touching upon jurisdiction of the High Court in bankruptcy proceedings. At issue is the question whether, upon annulment of an adjudicating order and rescission of a receiving order, a High Court in bankruptcy has power summarily to direct an assessment of damages in favour of the debtor. The matter arose in this way.

[3] On 20 October 1987, the respondent took out a motion to set aside these orders. He also asked for other relief, including an order that "damages be paid by the petitioning creditor to the debtor". On 19 June 1992, the learned judge who heard the respondent's motion granted an order in its terms Apart from annulling the adjudicating order and rescinding the receiving order, he directed that damages be paid by the appellant to the respondent. No appeal was preferred against this order, which was made inter partes in the presence of counsel for the appellant and after hearing argument. The appellant's solicitors approved the draft order submitted to them which contained the direction as to the payment of damages.

[4] On 23 March 1995, the respondent's solicitors wrote to the Senior Assistant Registrar of the High Court requesting for a date on which the inquiry as to damages was to be held. A date was assigned and after several adjournments, the assessment took place over a number of days before the registrar. Viva voce evidence was led and written submissions were put in. The appellant in its written submission merely argued that only nominal damages should be given. It was not argued at any stage until then that the order for damages had been made without jurisdiction. On 22 May 1995 the Senior Assistant Registrar assessed damages at RM2,166,275 to be paid by the appellant to the respondent. Each side preferred an appeal to the judge in chambers, the appellant complaining that the award was excessive and the respondent complaining that it was inadequate. Counsel has informed us that these appeals are pending before the High Court awaiting a decision of this Court in the present appeal.

[5] On 10 July 1995 the appellant filed a summons-in-chambers to set aside that part of the order dated 19 June 1992 that awarded damages to the respondent. The ground upon which the application was made was that the judge had no jurisdiction to make that order. The appellant's summons was heard before the learned judicial commissioner who, after hearing arguments, dismissed it on 2 March 1996. It is against that decision that the present appeal has been brought.

[6] When the appeal was called on yesterday, we formed the preliminary view that the High Court lacked the power to do what it did, namely to make a summary award of damages to be assessed. We therefore invited Mr B. Thangaraj of counsel for the respondent to address us first and have heard him yesterday and this morning. We then invited Mr Das of counsel for the appellant to present his arguments and afforded Mr Thangaraj an opportunity for further response. Mr Das' arguments in support of the appeal may, I think, be summarised as follows:

1. The receiving and adjudicating orders dated 10 March 1986 were made by the High Court in exercise of its bankruptcy jurisdiction. So too were the orders made on 19 June 1992 whereby the receiving order was rescinded and the adjudicating order annulled.

2. The power or jurisdiction - and I use these two expressions interchangeably for present purposes - of the High Court to rescind a receiving order and annul an adjudicating order is contained in s 105 of the Bankruptcy Act 1967 (