DA-28PW-7-08/2023 (Mahkamah Tinggi)

DA-28PW-7-08/2023 (Mahkamah Tinggi)

Section 524 of the Companies Act 2016 and Items 9-11 of Schedule C of the Insolvency Act 1967 do not apply to a third‑party secured creditor whose security was created by a third party; applying those insolvency provisions to third‑party security would conflict with Section 268(3) National Land Code and would improperly subject non‑bankrupt third‑party property to DGI jurisdiction. Therefore the DGI's rejection of the Petitioner's POD for failure to surrender the third‑party security was set aside and the POD must be admitted.

Citation
DA-28PW-7-08/2023 (Mahkamah Tinggi)
Parties
Petitioner: Maybank Islamic Berhad; Respondent: Eastmate Development Sdn. Bhd.
Court
High Court
Jurisdiction
Malaysia
Judgment Date
7 February 2024
Case Number
DA-28PW-7-08/2023 (Mahkamah Tinggi)
Procedural Posture
Companies (pre Winding Up) / Notice of Motion to Quash DGI Rejection of Proof of Debt
Outcome
Notice of Motion allowed; decision of DGI set aside; DGI ordered to admit and accept Petitioner's Proof of Debt dated 30/07/2023 for RM2,015,306.48
Legal Topics
Third Party Charge, Secured Creditor, Proof of Debt, Surrender of Security, Conflict of Laws, National Land Code S268
Source Language
Malay/English
Company Law Insolvency Law Property Law Third Party Charge Secured Creditor Proof of Debt Surrender of Security Conflict of Laws +1 more

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Parties

Maybank Islamic Berhad

Petitioner

Eastmate Development Sdn. Bhd.

Respondent

Procedural Posture

Companies (pre Winding Up) / Notice of Motion to Quash DGI Rejection of Proof of Debt

Legal Issues

  1. 1 Whether a third‑party secured creditor is bound by Section 524(1) Companies Act 2016 and Items 9-11 Schedule C Insolvency Act 1967
  2. 2 Whether the DGI properly rejected the Proof of Debt for failure to surrender security
  3. 3 Whether applying insolvency provisions to third‑party security conflicts with the National Land Code

Ratio Decidendi

Section 524 of the Companies Act 2016 and Items 9-11 of Schedule C of the Insolvency Act 1967 do not apply to a third‑party secured creditor whose security was created by a third party; applying those insolvency provisions to third‑party security would conflict with Section 268(3) National Land Code and would improperly subject non‑bankrupt third‑party property to DGI jurisdiction. Therefore the DGI's rejection of the Petitioner's POD for failure to surrender the third‑party security was set aside and the POD must be admitted.

Court Disposition

Notice of Motion allowed; decision of DGI set aside; DGI ordered to admit and accept Petitioner's Proof of Debt dated 30/07/2023 for RM2,015,306.48

Orders

  • Set aside the decision of the Director General of Insolvency rejecting the Proof of Debt dated 30/07/2023
  • Director General of Insolvency to admit and accept Petitioner's Proof of Debt dated 30/07/2023 for the full amount of RM2,015,306.48