PEMIUTANG PENGHAKIMAN 1. ) JAYASURI A/L WICKRAMASENA 2. ) VIGNESWARY A/P MUTHALOO PENGHUTANG PENGHAKIMAN CHANG SOON TAT

WA-29NCC-356-03/2022 Kand. 32 04/11/2022 14:37:44 IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR (COMMERCIAL DIVISION) BANKRUPTCY NO.: WA-29NCC-356-03/2022 BETWEEN 1. JAYASURI A/L WICKRAMASENA (NRIC No.: 720331-14-5315) 2. VIGNESWARY A/P MUTHALOO (NRIC No.: 761019-08-5582) ... JUDGMENT CREDITORS AND CHANG SOON TAT (NRIC No.: 861109-56-5553) … JUDGMENT DEBTOR JUDGMENT OF THE COURT Introduction [1] The Judgment Debtor (“JD”) filed the present application by way of Summons in Chambers in Encl. 21 to set aside the Bankruptcy Notice dated 24.3.2022 (“BN”). 1 S/N HcdCnP2Euk29dWlvB/cDbg **Note : Serial number will be used to verify the originality of this document via eFILING portal [2] Parties fild their respective affidavits in Encl(s). 22, 23, 24, 25 and their written submissions in Encl(s). 26 and 27. [3] Today is fixed for hearing/decision for the application in Encl. 21. [4] The JD’s application in Encl. 21 prays for the following: (a) bahawa Notis Kebankrapan bertarikh 24.3.2022 (“Notis Kebankrapan”) diketepikan; (b) berikutan pengenepian Notis Kebankrapan, suatu dekalarasi bahawa tiada perbuatan kebankrapan yang telah dilakukan oleh Penghutang Penghakiman di bawah Notis Kebankrapan tersebut; (c) bahawa kos permohonan ini ditanggun oleh Pemiutang- Pemiutang Penghakiman; dan (d) relif lanjut yang difikirkan sesuai dan adil oleh Mahkamah Yang Mulia ini. Brief facts [5] On 31.1.2019, the Kuala Lumpur High Court (“KLHC”) vide suit no. WA-22NCvC-114-02/2018 (“Suit 114”) dismissed the JD’s and Shalini a/p Jan’s claim against the Judgment Creditors (“JCs”) and allowed the JCs’ 2 S/N HcdCnP2Euk29dWlvB/cDbg **Note : Serial number will be used to verify the originality of this document via eFILING portal counterclaim for the balance of deposit in the sum of RM19,475.00, balance of purchase price amounting to RM262,359.17 and the costs of RM10,000.00 and interest at the rate of 4%, in respect of the sale and purchase of a leasehold property namely a double-story link house owned by the JCs located at No. 464, Jalan Samudra Timur 5, Taman Samudra, 68100 Selayang, Batu Cave (“Property”). [6] The sale and purchase agreement for the Property was entered into between the JCs as the vendors and the JD and Shalini a/p Jan as the purchasers on 28.7.2016. [7] After obtaining the KLHC’s judgment on 31.1.2019 (“Judgment”), the bankruptcy notice founded upon the said Judgment was issued on 24.3.2022 against the JD, claiming for RM RM347,190.73. [8] Following that, the present application in Encl. 21 was filed by the JD to set aside the BN. JD’s Submission [9] Succinctly, JD submits that– (a) the amount claimed in the BN exceeds the total Judgment’s sum because the Judgment has actually ordered the JD and Shalini a/p Jan to pay the JCs the amount of RM281,843.17 together with interest of 4% from the day immediately after the completion 3 S/N HcdCnP2Euk29dWlvB/cDbg **Note : Serial number will be used to verify the originality of this document via eFILING portal date until the date of full realization and costs of RM10,000.00 which all in all adds up to RM347,190.73 as at 24.3.2022, the date on which the BN was filed; (b) JD is one the (2) parties ordered by the KLHC in Suit 114 to pay the JCs and therefore the JD and Shalini a/p Jan shall only be liable to pay RM173,595.37 every each of them and certainly not the amount of RM347,190.73 each; (c) the Judgment has not expressly stated that the JD and Shalini a/p Jan have to pay the JCs on joint and severally liability basis; (d) the JCs have acted with mala fide in filing (2) bankruptcy notices against the JD and Shalini a/p Jan separately and this amounts to a double claim which is oppressive to the JD; (e) JD relies on the case of J Raju a/l Kerpaya v Commerce International Merchant Bankers Bhd [2000] 3 MLJ 177; Ghazali bin Hj Ibrahim v CIMB Bank Bhd [2012] 9 MLJ 768; Low Mun v Chung Khiaw Bank Ltd [1988] 1 MLJ 263 and submits that the amount claimed in the BN is in excess and not in accordance with the terms of the Judgment; (f) JD further cites in support the case of Sumathy Subramanian v Subramaniam Gunasegaran & Another Appeal [2018] 2 CLJ 305 and submits that the words ‘jointly and severally’ are not 4 S/N HcdCnP2Euk29dWlvB/cDbg **Note : Serial number will be used to verify the originality of this document via eFILING portal stated in the Judgment, therefore the JD and Shalini a/p Jan are to pay the amount claimed in the BN in equal proportion; (g) the JD has a cross-claim against the JC vide the judgment of the High Court in suit no.: WA-22NCVC-21-01/2020 (“Suit 21”); (h) this is because, the JD and Shalini a/p Jan had brought a separate claim against the solicitor in-charge for the sale and purchase of the Property, ‘Hoo Lin Coln’, to indemnify all JCs’ claim as Hoo Lin Coln had failed and/or neglected in paying RM281,843.17 to the JCs, the monies of which, were entrusted to him as a stakeholder and as at 12.12.2019 the sum had ballooned to RM347,567.63; (i) upon an intervener’s application filed by the JCs in Suit 21, and they were made the interveners; (j) on 27.1.2020, the High Court in Suit 21 entered judgment in default of appearance against Hoo Lin Coln and ordered him to indemnify the JD and Shalini a/p Jan the sum of RM347,567.63 together with interest at 4% annually from 12.12.2019 until full realisation, to be paid to the JCs; and (k) therefore, the JD submits that there is a cross-demand which is equal to the amount claimed in the BN and also referring to the 5 S/N HcdCnP2Euk29dWlvB/cDbg **Note : Serial number will be used to verify the originality of this document via eFILING portal case of Per: Tan Kooi Lim; Exparte AA Anthony Securities Sdn Bhd [2010] 7 MLRH 174. JCs’ Submission [10] Briefly, the JC submits that– (a) the Judgment obtained in Suit 114, in which the BN is based, is a final Judgment and the said Judgment is not subject to any stay of execution and setting aside; (b) the amount claimed in the BN is accordance with the terms of the Judgment; and (c) there is no cross-demand and relying on the case of Kejuteraan Bintai Kindenko Sdn Bhd v Fong Soon Leong [2021] MLJU 142, the JC submits that the Judgment imposes joint liability on the JD and Shalini a/p Jan despite the same was not stated clearly in the said Judgment. Issues [11] Upon perusing the written submissions and the affidavits of the parties cautiously, this Court finds the following issues are most pertinent for determination: 6 S/N HcdCnP2Euk29dWlvB/cDbg **Note : Serial number will be used to verify the originality of this document via eFILING portal (a) whether the amount claimed in the BN is excessive and not in accordance with the terms of the Judgment so as to render the BN void and invalid; and (b) whether the JD has a cross-demand against the judgment debt which the JD could not set up in the action in which the Judgment was obtained. Findings of this Court Issue (a): whether the amount claimed in the BN is excessive and not in accordance with the terms of the Judgment so as to render the BN void and invalid. [12] Section 3(1)(i) of the Insolvency Act 1967 (“IA”) provides that– "If a creditor has obtained a final judgment or final order against him for any amount and execution thereon not having been stayed has served on him in Malaysia, or by leave of the court elsewhere, a bankruptcy notice under this Act requiring him to pay the judgment debt or sum ordered to be paid in accordance with the terms of the judgment or order with interest quantified up to the date of the issue of the bankruptcy notice, or to secure or compound for it to the satisfaction of the creditor or the court; and he does not within seven days after service of the notice in case the service is 7 S/N HcdCnP2Euk29dWlvB/cDbg **Note : Serial number will be used to verify the originality of this document via eFILING portal effected in Malaysia, and in case is effected elsewhere then within the time limited in that behalf by the order giving leave to effect the service, either comply with the requirements of the notice or satisfy the court that he has a counterclaim, set off or cross demand which equals or exceeds the amount of the judgment debt or sum ordered to be paid and which he could not set up in the action in which the judgment was obtained or in the proceedings in which the order was obtained: Provided that for the purposes of this paragraph and of section 5 any person who is for the time being entitled to enforce a final judgment or final order shall be deemed a creditor who has obtained a final judgment or final order. [13] The JD who seeks to set aside and / or challenge the BN on the ground that the amount specified therein exceeds the amount actually due, must act in accordance with proviso (ii) to section 3(2) of the IA. Hence, the JD must, within the time prescribed in the BN oppose and / or dispute the validity of the BN on the ground that it claims an amount larger than that lawfully due – see J. Raju M. Kerpaya v. Commerce International Merchant Banker Bhd [2000] 3 CLJ 104, CA). [14] For ease of reference, section 3(2) of the IA provides that– 8 S/N HcdCnP2Euk29dWlvB/cDbg **Note : Serial number will be used to verify the originality of this document via eFILING portal (2) A bankruptcy notice under this Act shall be in the prescribed form and shall state the consequences of non-compliance therewith and shall be served in the prescribed manner: Provided that a bankruptcy notice - (i) …; (ii) shall not be invalidated by reason only that the sum specified in the notice as the amount due exceeds the amount actually due unless the debtor within the time allowed for payment gives notice to the creditor that he disputes the validity of the notice on the ground of such mistake; but if the debtor does not give such notice he shall be deemed to have complied with the bankruptcy notice, if within the time allowed he takes such steps as would have constituted compliance with the notice had the actual amount due been correctly specified therein. (emphasis added) [15] The BN in the present case was issued on 24.3.2022 and thereafter the JC applied for substituted service to effect the service of the BN and the Order of substituted service was granted by the Court vide Order dated 18.5.2022. The said Order of the Court is not subject to any challenge, setting aside, appealed against and/or declared null and void, therefore, is a valid Order. 9 S/N HcdCnP2Euk29dWlvB/cDbg **Note : Serial number will be used to verify the originality of this document via eFILING portal [16] The affidavit of service proving the service of BN had been filed by the JC on 29.7.2022 in Encl. 22 wherein the last service of BN via substituted service was done on 14.7.2022. For ease of reference paras. 4 and 5 of Encl. 22– 4. Pada hari Khamis, 13hb Julai 2022, Tetuan Sodhi Chambers mengiklankan satu Notis Penyampaian Ganti Bentuk Iklan bertarikh 18.5.2022 di satu terbitan akhbar hari tempatan, iaitu “The Star”. [Sesalinan keratan akhbar “The Star” yang bertarikh 13.7.2022 dilampirkan di sini dan ditandakan sebagai Eksibit “MM-2”] 5. Saya telah pada 14hb Julai 2022, menampalkan dokumen- dokumen tersbut di alamat terakhir Penghutang Penghakiman tersebut yang diketahui iaitu di D-08-01, PPR Sri Semarak, Jalan Air Keroh, Air Panas, 53300 Setapak Kuala Lumpur. [Sesalinan surat iringan yang bertarikh 13.7.2022, gambar- gambar penampalan dokumen-dokumen tersebut di alamat terakhir Penghutang Penghakiman yang diketahui oleh Pemiutang Penghakiman adalah dilampirkan di sini dan ditandakan secara kolektif sebagai Eksibit “MM-3”] [17] In compliance with rules 95 and 109 of the Insolvency Rules 2017 (“IR”), the Court finds that the BN had been properly and regularly served to 10 S/N HcdCnP2Euk29dWlvB/cDbg **Note : Serial number will be used to verify the originality of this document via eFILING portal the JD by way of substituted service and in accordance with the terms of the SS Order. [18] The JD through its counsel on record (M Manoharan & Co.) filed the present application in Encl. 21 to set aside the BN on 20.7.2022, without filing any affidavit to oppose and/or challenge the validity of the BN. [19] Notwithstanding the fact that the JD has filed the setting aside application in Encl. 21, the statutory requirements as stipulated in ss 3(1) and 3(2) of the IA must still be complied with by the JD, which the JD in the present case appears to have not done so. [20] This is because, based on the facts of the present case, it is apparent that the JD has failed to comply with the requirements under ss 3(1)(i) and (2)(ii) of the IA to raise any objection, opposition or challenge to the validity of the BN on account of the excessive amount of judgment debt being claimed by the JCs in the BN. [21] Section 3(2)(ii) of the IA and rule 93 of the IR allow the JD to challenge, oppose, set aside and/or invalidate the BN provided that the JD shall file an affidavit within seven (7) days after being served with the BN. Failing to do so within that period would result in the JD committing an act of bankruptcy upon which a creditor's petition under the provisions of the IA can be issued. [22] The law is settled and clear, in that strict compliance with ss 3(1)(i) and (2)(ii) IA and rule 93 IR is mandatory. Any procedural non-compliance with 11 S/N HcdCnP2Euk29dWlvB/cDbg **Note : Serial number will be used to verify the originality of this document via eFILING portal the said requirements cannot be regarded as mere procedural irregularity – see Development & Commercial Bank Bhd v. Datuk Ong Kian Seng [1995] 3 CLJ 307, FC; J Raju M Kerpaya v Commerce International Merchant Bankers Berhad [2000] 3 CLJ 104, CA. [23] In Re Woo Yoke San, ex p OCBC Bank (M) Bhd [2006] 2 CLJ 589 at pages 595-596, his Lordship Ramly AN J. (as he then was)– "...Strict compliance with s. 3(2)(ii) of the Bankruptcy Act 1967 is mandatory. Failure of the JD to comply with the said requirements cannot be regarded as a mere procedural irregularity. There are a number of authorities on this point. In Development & Commercial Bank Bhd v. Datuk Ong Kian Seng [1995] 3 CLJ 307; the Federal Court held, inter alia that: the Respondent cannot be allowed to dispute the validity of the bankruptcy notice on the ground on which he now relies because the notice of dispute by way of his affidavit affirmed on 18 February 1992 has not complied with proviso (ii) to section 3(2) of the Act, it having been served on the appellant about seven months after the service of the bankruptcy notice on him (the Respondent). The bankruptcy notice cannot therefore be challenged as to the interest specified therein. 12 S/N HcdCnP2Euk29dWlvB/cDbg **Note : Serial number will be used to verify the originality of this document via eFILING portal [24] Considering that the JD has failed to comply with the requirements under ss 3(1)(i), (2)(ii) IA and rule 93 IR to challenge, set aside and/or invalidate the BN, the Court holds that the application in Encl. 21 cannot operation as an application to set aside the BN and also, it bears emphasizing that s 3(2)(ii) of the IA operates to render the BN valid notwithstanding any dispute of the sum stated therein subsequently exceed the amount actually due and owing to the JCs. [25] That aside, this Court will now turn to the crux of the present issue whereby the contention of the JD is that the amount claimed in BN is excessive and not accordance with terms of the Judgment because the JD is one the (2) parties ordered by the KLHC to pay the JCs the judgment debt and therefore the JD and Shalini a/p Jan shall only be liable to pay RM173,595.37 every each of them and certainly not the amount of RM347,190.73 each as the Judgment has not expressly stated that the JD and Shalini a/p Jan shall pay the JCs on joint and severally liability basis. [26] It is undisputed that the BN is founded upon the Judgment dated 31.1.2019 vide case no. WA-22NCvC-114-02/2018 and as there is no stay of proceedings/execution, setting aside application or an appeal pending against the Judgment, the terms of the Judgment therein are final and shall be upheld. This Court opines that it is not the duty of this Court to question/dispute the terms of the Judgment. 13 S/N HcdCnP2Euk29dWlvB/cDbg **Note : Serial number will be used to verify the originality of this document via eFILING portal [27] The passage of the Supreme Court in Sovereign General Insurance Sdn Bhd v. Koh Tian Bee [1988] 1 CLJ Rep 277; [1988] 1 CLJ 155 at page 158– "An irregularity or formal defect in the judgment is no sufficient reason for going behind it: Re Beauchamp [1904] 1 KB 572. As a general principle, the validity of the judgment debt will only be inquired into when there is evidence of fraud or collusion or miscarriage of justice. Re Flatau [1889] 22 QBD 23; Re Howell [1915] 84 LJKB 399 [28] Referring to the terms of the Judgment wherein the relevant part of which is reproduced hereinbelow for ease of reference: “ADALAH DENGAN INI DIHAKIMI bahawa tuntutan plaintif- plaintif terhadap defendan-defendan ditolak dan tuntutan balas defendan-defendan dibenarkan dan plaintif-plaintif hendaklah membayar kepada defendan-defendan baki deposit RM19,475 dan baki harga belian RM262,359.17 dan kos sebanyak RM10,000.00 DAN JUGA DIPERINTAHKAN BAHAWA defendan-defendan membayar kepada plaintif-plaintif faedah sebanyak 4% atas harga belian setahun dan tarikh sehari selepas “completion date” sehingga tarikh pembayaran penuh. [29] It is not in dispute that by reference to the said Judgment, the defendants are the JCs in the present case and the first plaintiff is the JD 14 S/N HcdCnP2Euk29dWlvB/cDbg **Note : Serial number will be used to verify the originality of this document via eFILING portal whereas the second plaintiff is another JD, Shalini a/p Jan (NRIC No. 870421-56-5114). [30] The JD’s predominant ground for the setting aside of the BN is that since there is another JD by the name of Shalini a/p Jan, who is allegedly liable to pay the judgment sum, the JD in the present case shall then only be liable to pay one half (½) of the total judgment sum which is equal to RM173,595.37. [31] In other words, each of them is only liable to RM173,595.37 and not the entire judgment sum RM347,190.73 because the Judgment has not expressly ordered for the judgment sum to be paid by the JD and Shalini a/p Jan on joint and several liability basis. [32] The next question therefore is whether the JD here is really only liable to pay RM173,595.37 only to the JC based on the terms of the Judgment. [33] This Court after careful examination of the said Judgment finds that the terms of the Judgment ultimately ordered that both the first plaintiff (JD) and the second plaintiff (Shalini a/p Jan) to pay the defendants (JCs) the balance of the deposit in the sum of RM19,475.00 and the balance of purchase price in the sum of RM262,359.17 together with costs of RM10,000.00 together with the interest. [34] In determining whether the JD is only liable to RM173,595.37 of the judgment sum as opposed to the entire judgment sum, this Court refers to 15 S/N HcdCnP2Euk29dWlvB/cDbg **Note : Serial number will be used to verify the originality of this document via eFILING portal the reasoning of Justice Nallini Pathmanathan (FCJ) in the case of Lembaga Kumpulan Wang Simpanan Pekerja v Edwin Cassian Nagappan [2021] 7 CLJ 823, and finds that reasoning most relevant and pertinent. [35] Per Nallini Pathmanathan (FCJ) at paras. 26-27– [24] In this jurisdiction in any event, the common law is inapplicable, as we are governed by the Contracts Act 1950. Section 44 of the Contracts Act 1950 (Act 136) ("the Contracts Act") is the relevant provision relating to joint liability. It states: (1) When two or more persons make a joint promise, the promisee may, in the absence of express agreement to the contrary, compel any one or more of the joint promisors to perform the whole of the promise. (emphasis added) [25] Section 44 of the Contracts Act is in pari materia with s. 43 of the Indian Contract Act, 1872. In Re Vallibhai Adamji (supra), BJ Wadia observed that the provision: ... makes the liability on all contracts joint and several, and allows the promisee to sue one or more of the several joint promisors as he chooses, and excludes the right of any one of them to be sued along with his co-promisor or co- promisors. 16 S/N HcdCnP2Euk29dWlvB/cDbg **Note : Serial number will be used to verify the originality of this document via eFILING portal (See also: Union of India v. East Bengal River Steamer Service Limited 1963 Indlaw Cal 177; AIR 1964 Cal 196) [26] In summary therefore, unless a contrary intention is expressed in the contract, all joint contracts effectively impose a full liability for the debt on each of the promisors, by virtue of s. 43 of the Indian Contract Act, 1872: see Pollock & Mulla: Indian Contract and Specific Relief Acts - vol. 1, 13th edn., (India: LexisNexis, 2009), at p. 1043-1044. Thus, where the debts are jointly incurred, each promisee is liable for the whole amount: see Dhanki Mahajan v. Rana Chandubha Vakhatsing AIR 1969 SC 69. [27] Accordingly, so long as a judgment debt remains unrealised, the judgment creditor is entitled to proceed against one or any number of judgment debtors to secure the performance of an obligation in its entirety. [28] The issue that possibly gives rise to confusion is s. 44(2) of the Contracts Act which allows the promisor who has paid the full promised amount to claim contribution from the joint promisor for an equal contribution. This means that the liability for the full promised sum is shared equally between all the promisors. However that is between the promisors, inter se. It does not 17 S/N HcdCnP2Euk29dWlvB/cDbg **Note : Serial number will be used to verify the originality of this document via eFILING portal affect the rights of the creditor which are governed by s. 44(1) of the Contracts Act. [29] This brings us to the underlying rationale for joint liability as opposed to joint and several liability. Each of these doctrines relates to the number of promises made, and not the number of promisors who made a particular promise. In the case of joint liability, there is one promise and two or more promisors. Each is liable to the extent of the promised amount. In the case of a joint and several liability, there is more than one promise. The promisors make two or more promises and thus several liability arises. [36] In Kejuruteraan Bintai Kindenko Sdn Bhd v Fong Soon Leong [2021] 5 CLJ 1, the Court of Appeal held that judgment debtors are regarded as jointly and severally liable to honour the entire judgment sum, unless it is stated otherwise. That is to say, the judgment sum is not halved and / or shared equally as each of the judgment debtors is liable for the entire judgment sum. The reasoning of Court of Appeal in this case was cited with approval by the Federal Court in Lembaga Kumpulan Wang Simpanan Pekerja v Edwin Cassian Nagappan (supra). [37] Applying the authorities above, this Court will now turn to examine the Agreement dated 28.7.2016 for the sale and purchase of the Property which was entered into between the JCs as the vendors and the JD and Shalini a/p Jan as the purchasers, in order to determine the intention of the parties and 18 S/N HcdCnP2Euk29dWlvB/cDbg **Note : Serial number will be used to verify the originality of this document via eFILING portal whether the Agreement effectively imposes a full liability to pay on the JD and Shalini a/p Jan. [38] Upon careful examination of the Agreement, this Court finds that the terms and conditions in the Agreement are unequivocal and clear, in that the JD and Shalini a/p Jan were the purchasers who jointly agreed to purchase the Property under their joint names, the leasehold property held under Pajakan Mukim 2877, Lot No. 55142, Bandar Selayang, Daerah Gombak – see inter alia the Recitals, clauses 2, 3 dan 6 of the Agreement. [39] It is also apparent from the Agreement that the Agreement was properly stamped under the Stamp Act 1949 and the signatures of the JD and Shalini a/p Jan on the Agreement prove that the JD and Shalini a/p Jan had executed the Agreement conclusively as the joint purchasers of the Property under Agreement and therefore, were clearly the joint promisors who were liable to pay the earnest deposit, balance deposit, and the balance of the purchase price to the vendors, the JCs. [40] This Court further finds that the intention of the parties namely, the JCs, JD and Shalini a/p Jan at the time when the Agreement was executed, was ad idem whereby the JD and Shalini a/p Jan were the joint purchasers who had made a promise to pay for the full promised sums under the Agreement and therefore this Court holds that they are to be held jointly liable to pay the earnest deposit, balance deposit, and the balance of the purchase price to the vendors, the JCs, for the purchase of the Property. 19 S/N HcdCnP2Euk29dWlvB/cDbg **Note : Serial number will be used to verify the originality of this document via eFILING portal [41] And hence, considering that– (a) the expressed intention of the parties at the time when the Agreement was executed, wherein the JD and Shalini a/p had agreed to jointly purchase the Property and make a joint promise to pay the JCs; (b) the fact that the Agreement was essentially as joint contract between the JD and Shalini a/p Jan to purchase the Property; (c) the Property was purchased jointly by the JD and Shalini a/p Jan under their joint names; and (d) the JD and Shalini a/p Jan being the plaintiffs who had been ordered by the KLHC to pay the judgment sum to the JCs under the terms of the Judgement, it is the considered view of this Court that the JD and Shalini a/l Jan are to be held jointly liable to pay the whole judgment sum as the judgment debt are jointly incurred based on the terms of the Agreement and therefore each of them is liable for the whole amount as ordered in the Judgment. [42] As for the case of Sumathy Subramaniam v Subramaniam Gunasegaran & Another Appeal [2018] 2 CLJ 305 cited in support by the JD, this Court opines that the JD’s reliance on the said case is misguided – 20 S/N HcdCnP2Euk29dWlvB/cDbg **Note : Serial number will be used to verify the originality of this document via eFILING portal see paras. 31-33 Lembaga Kumpulan Wang Simpanan Pekerja v Edwin Cassian Nagappan (supra). For ease of reference paras. 31-33– [31] As stated earlier, the courts below regarded themselves bound by the earlier Court of Appeal decision in Sumathy. In Sumathy, the creditor sued the principal borrower and the guarantor for monies outstanding under a friendly loan. Summary judgment was entered against both defendants, on the same terms, but the judgment did not state whether the liability of the parties was joint or several. Subsequently, two separate bankruptcy notices were filed at the same time against the principal borrower and the guarantor, both specifying the judgment debt of RM291,800. [32] The Court of Appeal held at para. 19 of the judgment that a plaintiff who becomes a judgment creditor where the liability is joint, is only entitled to seek recovery in equal proportions against each of the defendants. This premise is, with respect, flawed because it pre- supposes that liability is proportionate to the number of promisors, from the perspective of the creditor. In Sumathy, the position of the creditor was conflated with the position of the debtors or promisors inter se, as we have explained above. [33] We would also respectfully point out that the doctrine of merger has no application in the issue of whether or not the enforcement court can look behind the judgment. Merger comes into play when the cause of action is sought to be revisited against the same parties. 21 S/N HcdCnP2Euk29dWlvB/cDbg **Note : Serial number will be used to verify the originality of this document via eFILING portal [43] In other words, the Federal Court in the case of Lembaga Kumpulan Wang Simpanan Pekerja v Edwin Cassian Nagappan (supra) held that the Court of Appeal in Sumathy Subramaniam v Subramaniam Gunasegaran & Another Appeal (supra) has pre-supposed that liability to pay the debt is proportionate to the number of promisors, from the perspective of the creditor and that the doctrine of merger has no application in the issue of whether or not the enforcement court can look behind the judgment. [44] In the premises, the Court finds that the JD and Shalini a/p Jan are jointly liable for the whole judgment sum as was entered against him and Shalini a/p Jan under the Judgment. Consequently, the JD and Shalini a/p Jan, do pay the JC the entire sum as claimed in the BN as opposed to the sum of RM173,595.37 each. Issue (b): whether the JD has a cross-demand against the judgment debt which the JD could not set up in the action in which the Judgment was obtained. [45] For the reasons as adverted in the foregoing, in that the JD has failed to comply with the requirements under sections 3(1)(i), (2)(ii) IA and rule 93 IR in raising a cross demand to challenge, oppose, set aside and/or invalidate the BN, the Court holds that this issue must be answered in the negative as strict compliance with the provisions of the IA and IR is mandatory. 22 S/N HcdCnP2Euk29dWlvB/cDbg **Note : Serial number will be used to verify the originality of this document via eFILING portal [46] The Bankruptcy Court is distinctly and specifically governed by the powers and jurisdiction exercisable only in strict compliance to the provisions of the IA and IR – see s24 Courts of Judicature Act 1964, Badiaddin bin Mohd Mahidin & Anor v. Arab Malaysian Finance Bhd [1997] 1 LNS 353; [1998] 1 MLJ 393; Sobri bin Arshad v. Associated Tractors Sdn Bhd [1991] 3 CLJ Rep 756; [1991] 3 MLJ 32. [47] The present application in Encl. 21 cannot operate as an application to set aside BN and does not at all come within the meaning of s3(1)(i) IA and s3(2)(ii) IA. This Court further opines that such set aside application of the BN by the JD must be dismissed by the Court unless it be made in strict compliance with the provisions in s3 IA and IR as alluded above and, as it was not so made in the present case in compliance with the said provisions, the application in Encl. 21 is bound to fail. [48] Be that as it may, for the sake of completeness, this Court will continue to deal with issue of whether the JD has a cross-demand against the judgment debt which the JD could not set up in the action in which the Judgment was obtained. [49] In Sovereign General Insurance Sdn Bhd v. Koh Tian Bee [1988] 1 CLJ Rep 277; [1988] 1 CLJ 155; [1988] 1 MLJ 304, Lee Hun Hoe SCJ in delivering the judgment of the Court held that: 23 S/N HcdCnP2Euk29dWlvB/cDbg **Note : Serial number will be used to verify the originality of this document via eFILING portal "If the respondent was making a cross-demand, he must quantify it. He just could not come to court and said his shares were worth considerably [1988] 1 MLJ 304 at 306 more. The burden of proof is on the respondent to show by the affidavit or affidavits three things which were stated clearly by Warner J. in Re a debtor (No 75N of 1982, Warrington), ex parte The Debtor v. National Westminster Bank [1983] 3 All ER 545 553 as follows: "... First, the affidavit or affidavits must show that he has a cross- demand against the creditor which is genuine. To satisfy that requirement, the cross-demand must be put forward in good faith and must have a reasonable probability of success, or, as it has also been expressed, must give rise to a triable issue. In the latter respect, there is no hard and fast rule as to the degree of proof required. It depends in each case on the particular facts and circumstances of that case. Second, the affidavit or affidavits must show that the cross-demand could not have been set up in the action in which the judgment relied on by the creditor was obtained. Third, the affidavit or affidavits must show that the cross-demand need not be for a liquidated sum or even for a sum of money at all. But it must be capable of being quantified in terms of money and the affidavit or affidavits must quantify it." [50] In the Federal Court case of Datuk Lim Kheng Kim v. Malayan Banking Berhad [1993] 3 CLJ 324; [1993] 2 MLJ 298, it was held that– 24 S/N HcdCnP2Euk29dWlvB/cDbg **Note : Serial number will be used to verify the originality of this document via eFILING portal "It is,... necessary that the affidavit in question should, on the face of it, show a counterclaim, set-off, or cross demand which equals or exceeds the amount of the Judgment debt, and which the debtor could not have set up in the action in which the judgment or order was obtained.' The Supreme Court in that case went on to further say that "We are concerned here with the contents of the said affidavit. It merely denies and disputes that the appellant was indebted to the respondent in the sum of RM2,603,913.28, but fails to disclose that he has a counterclaim, set-off or cross demand, etc. against the respondent, which he is required to depose under s. 3(1)(i) of the Bankruptcy Act ('the Act') and provided for in Form 7. Following the above decision and in the face of the above affidavit, we are of the opinion that the said affidavit cannot operate as an application to set aside the bankruptcy notice within the contemplation of s. 3(1)(i) of the Act, and the case should have been treated as if no affidavit under r. 95 had in fact been filed." [51] Applying principles of law as propounded in the authorities above, this Court finds that the application in Encl. 21 cannot operate as an application to set aside the BN for the further reasons as follows: (a) this Court after examining the affidavits and submission of the JD finds that the JD has failed to properly condescend to particulars of the cross-demand against the amount as claimed in the BN, 25 S/N HcdCnP2Euk29dWlvB/cDbg **Note : Serial number will be used to verify the originality of this document via eFILING portal as the JD merely denies and disputes that the BN ought to be set aside because the JD has a cross-demand which is equal to the amount of the judgment sum; (b) there is no cross-demand as against the judgment sum under the Judgment in which the BN is founded and therefore, there is no cross-demand against the judgment sum as was entered against the JD and Shalini in Suit 114; (c) this is because the cross-demand raised by the JD was essentially a cross-demand of JD based on the judgment in default of appearance against Hoo Lin Coln, a separate legal suit brought by the JD and Shalini a/p Jan in Suit 21 wherein Hoo Lin Coln was ordered to indemnify the JD and Shalini a/p Jan the sum of RM347,567.63 together with interest at 4% annually from 12.12.2019 until full realisation, and in turn, for the JD and Shalini a/p Jan to pay the JCs; (d) the terms of said judgment in default of appearance against Hoo Lin Coln has not in anywhere ordered Hoo Lin Coln to indemnify and / or pay the JCs directly and also, it is clear that the said judgement in default of appearance in Suit 21 is not the final Judgment on which the present BN is founded and therefore, there is really no cross-demand against the judgement sum, the JCs in Suit 114; 26 S/N HcdCnP2Euk29dWlvB/cDbg **Note : Serial number will be used to verify the originality of this document via eFILING portal (e) on the basis thereof, it bears reiterating that there is actually no cross-demand as against the judgment sum and/or as against the JCs in the present case. This is because the High Court’s orders dated 9.7.2021 and 27.1.2022 in Suit 21 respectively and essentially ordered that the defendant therein, Hoo Lin Coln to indemnify the JD and Shalini a/p Jan, and hence, the cause of action lies with JD and Shalini a/p Jan to bring a legal action against Hoo Lin Coln in case he fails to indemnify the JD and Shalini a/p Jan; (f) thus, based on the High Court’s orders dated 9.7.2021 and 27.1.2022 in Suit 21, again, respectively and essentially, disclose no cause of action as against the JCs in that there can be no cause of cation that the JD and Shalini a/p Jan can possibly claim against the JCs, not to mention any cross-demand; (g) on that premise, how can then the JD herein be said to have a cross-demand as against the final Judgment obtained by the JCs; (h) the High Court’s orders dated 9.7.2021 and 27.1.2022 in Suit 21 obtained by the JD and Shalini a/p Jan were against Hoo Lin Coln and even though the JCs were made the interveners/defendants in Suit 21, Hoo Lin Coln is clearly the person being sued and is ordered and also liable to indemnify the JD and Shalini a/p for the 27 S/N HcdCnP2Euk29dWlvB/cDbg **Note : Serial number will be used to verify the originality of this document via eFILING portal sum of RM347,567.53 with interest at the rate of 4% until the date of full realization; (i) further, in Suit 21, Hoo Lin Coln is not under any obligation to pay or indemnify the JCs in whatsoever way and even so, still, the JD and Shalini is liable to pay the JCs in accordance with the terms of the Judgment in Suit 114; (j) apart from that, it is also worth emphasizing that Hoo Lin Coln was not even made a third party, defendant and / or co-defendant and / or co-plaintiff in the Suit 114, under which the Judgment was obtained, this is despite the fact that the JD and Shalini a/p Jan were the ones who initiated Suit 114 as the plaintiffs; (k) therefore, it appears that the JD has also failed to satisfy the second requirement within the meaning of s3(1)(i) of the IA in that the JD has failed to show that the cross-demand could not have been set up in Suit 114, the Judgment in which the BN is based; (l) the fact that the JD and Shalini a/p Jan brought a separate Suit 21 as against Hoo Lin Coln after they lost in Suit 114, effectively shows and proves that the JD and Shalini a/p Jan had effectively set up another legal claim and / or indemnity claim in law against Hoo Lin Coln separately in a separate suit and hence, the JD’s cross-demand lies with Hoo Lin Coln not the JCs; 28 S/N HcdCnP2Euk29dWlvB/cDbg **Note : Serial number will be used to verify the originality of this document via eFILING portal (m) therefore, this Court opines that regardless of whether Hoo Lin Coln indemnifies the JD and Shalini a/p Jan accordingly or not, the JD and Shalini a/p Jan still must comply with the legal obligation to pay the JCs the whole judgment sum in accordance with the terms Judgment in Suit 114; and (n) in the circumstances, this Court holds that the JD’s contention that he has a cross demand is misconceived and that JD’s cross- demand has no a reasonable probability of success in the present application. Conclusion [52] Based on the aforesaid reasons, and after careful scrutiny and judicious consideration of the parties’ written submissions and affidavits, the application in Encl. 21 is dismissed with costs. Dated: 14.10.2022 t.t (CHAI GUAN HOCK) Senior Assistant Registrar High Court of Malaya Kuala Lumpur 29 S/N HcdCnP2Euk29dWlvB/cDbg **Note : Serial number will be used to verify the originality of this document via eFILING portal Counsel/Solicitors For the Judgment Creditors: Ravinder Singh Sodhi A/L Manmohan Singh Sodhi Messrs. Sodhi Chambers Suite 3A-3, 3A Floor, Wisma Daju 5 No.21, Jalan Barat, 46200 Petaling Jaya Selangor For the Judgment Debtor: Dyna-sri Samadass Messrs. M Manoharan & Co C-5-5, Wisma Goshen Plaza Pantai Bharu, Persiaran Pantai Baharu Bangsar, 59200 Kuala Lumpur 30 S/N HcdCnP2Euk29dWlvB/cDbg **Note : Serial number will be used to verify the originality of this document via eFILING portal