JUDGMENT

Lee Hun Hoe CJ (Borneo):

We allowed the appeal and stated we would give reasons later. We do so now. The only issue is the question whether the learned Judge was right to stay the creditor's petition against the respondent.

On 21 May 1979 the respondent Esah binti Abdul Ghani became a guarantor (the surety) for a loan of RM16,000 granted by the appellant Bank Bumiputra Malaysia Bhd. (the bank) to Mohd. Yusoff bin Haji Ibrahim (the principal debtor). As security the bank also held a charge over two properties EMR 877 Lot 937 and EMR 878 Lot 939 in Luit, Pekan belonging to the principal debtor and two others, namely Alias bin Haji Ibrahim and Rokiah binti Haji Ibrahim. The two pieces of land were valued at RM21,500 on 4 January 1979. The principal debtor failed to pay the loan. On 20 August 1980 the bank took foreclosure proceedings on the land but before the issuance of an order of sale one of the owners died. So foreclosure was not proceeded with. Instead, the bank took out a writ against the principal debtor and the surety. On 14 October 1983 judgment was entered against both. On 7 April 1984 based on the said judgment, a bankruptcy notice was issued calling on the surety