Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
(4) Although the ROAO were usually made simultaneously, the making of an AO does not necessarily
follow the making of an RO. If the debtor satisfied the court that he was in a position to offer a
composition or make a scheme or arrangement acceptable to his creditors then an AO would be made
Re: Tan Sri Kishu Tirathraj; ex parte Affin Bank Berhad [2007] 2 MLJ 53 (HC).
1
Lec 4: Subsequent Bankruptcy UIS4612
(5) However, today, when a Bankruptcy Order is made:
No creditor can proceed with or commence any action or other legal proceeding unless with the
leave of the court
Bankrupt’s property becomes divisible among his creditors and vests in the DGI. DGI will be the
receiver, manager, administrator and trustee of all properties of the bankrupt.
(6) It does not affect the right of any secured creditor to deal with his security.
s8 (2A) IA 1967 - notwithstanding subsection (2), no secured creditor shall be entitled to interest
on his debt if he does not realize his security within 12 months from the date of the bankruptcy
order.
S8(3) IA 1967- Debtor shall within 24 hours after the order is served. File an affidavit to the office
of the DGI, containing a true and correct statement of the name, residences of all the partners, and
his business and his principal assets and liabilities.
Tanavus S/B v Simon Jungking Pigguan[1995] 2MLJ 564
HC:-
i. s.8(1) BA 1967 Once RO granted no creditor can bring an action against the debtor
except with the leave of the court.
ii. (ii) s.40(1) BA 1967 debt provable in bankruptcy – includes demand for unliquidated
damages under a contract – therefore leave of court is necessary before
commencement of any action against the debtor.
2
Lec 4: Subsequent Bankruptcy UIS4612
ii. S.52 is restricted in its application to settlements made prior to a settlor being
adjudged a bankrupt. In the present case, the land was transferred after the act of
bankruptcy of the bankrupt. Therefore, reliance on s. 52 BA could not be sustained.
iii. The fact that the 2nd respondent had given valuable consideration for the purchase
of the land and had acted in good faith brought him within the protection
contemplated by s.53(B)(3) .
iv. S. 24(4) must be interpreted as being qualified by s. 349 NLC in so far as land is
concerned. The registered title of a bankrupt does not vest in the Official Assignee
until a transmission is registered in the official capacity of the latter; if a bankrupt
transfers his interest in land to a person who registers the transfer before any
transmission is registered by the Official Assignee, then the bankrupt's interest will,
notwithstanding his bankruptcy, pass to that person.
v. The applicant would be entitled to proceed under s. 340(2) NLC if he could bring
himself within the requirements of that section.
vi. In order to ensure that a registered proprietor of land who has been adjudged a
bankrupt does not deal with the land before it is vested in the Official Assignee, the
Official Assignee ought to caveat the land under s. 323 NLC.
vii. 2nd. Respondent’s (bona fide purchaser for value) appeal allowed.
4
Lec 4: Subsequent Bankruptcy UIS4612
Gan Hong Hoe v Gan Kim Hee [1939] 1 MLJ 295;
Kwan Chew Shen v Citibank N.A. [1987] 1 CLJ 314;
Lim Wah Siang v Perwira Affin Bank Bhd [1997] 1 MLJ 374
A debtor therefore is thus not totally debilitated by his bankrupt status. If a bankrupt
were to be construed as an incompetent witness, it would undo statutory provisions that
require a bankrupt to file an affidavit giving a true picture of his assets at the DGI’s
office, public examination of the bankrupt etc. S.118 EA refers to categories of witnesses
who may be disqualified from giving evidence by reason of tender age, extreme old age,
incapacitated by diseases whether of body or mind, or any other cause of the same kind.
Therefore under the Evidence Act 1950 a debtor’s status as a bankrupt is not a disability
that will dilute his competency to testify, especially if all the rules of evidence have been
complied with.
FC Held: Debtor’s (6th. Plaintiff) evidence admissible despite being a bankrupt
Ho Ken Seng v Progressive Insurance Sdn Bhd. (CA) [2012] 1 MLJ 297; [2012] 2 AMR 1
FC: Q: ‘whether an undischarged bankrupt when exercising his rights under s. 92 BA
1967 to review, rescind or vary any order made by the Court under its bankruptcy
jurisdiction is required to obtain the previous sanction of the Director General of
Insolvency pursuant to Section 38(1)(a) of the Act.’
HELD: Section 38(1)(a) Bankruptcy Act not relevant when a bankrupt invokes s92(2)
or s.105(2) for a review. a bankrupt is no longer required to obtain sanction from the
Director General of Insolvency (“DGI”) to challenge or appeal against bankruptcy
orders made by the Bankruptcy Court
Low Kok Tuan ex-parte Arab Malaysia and Merchant Bank Bhd [1997] 4 CLJ 185, Bathamani
Suppiah v Southern Finance Company Bhd [2002] 2 CLJ 650 over ruled.
Remitted to CA comprising a different panel to hear the merits of the case.
Ng Yen Kok v AmFinance Berhad (formerly known as MBf Finance Berhad Civil Appeal No
M-03- 247-2009 (CA) [2012] 1 MLJ 297; [2012] 2 AMR 1
Receiving order and adjudication order granted on the basis of an invalid creditor’s
petition were invalid, and therefore set aside. JD obtained and BNotice was served by
way substituted service. However, Appeal Record did not contain the order for
substituted
service. RO & AO set aside.
5
Lec 4: Subsequent Bankruptcy UIS4612
2. S105 (2) IA 1967– when bankruptcy order is annulled, all sales and disposition of property and
payments and acts done by DGI or other person acting under this authority shall be valid but
property shall vest in such person as the court appoints or to the debtor.
3. S105(3) IA 1967 – Notice of annulling a bankruptcy order shall be gazetted and published in at
least one local newspaper.
4. Effect of an annulment
- Terminates bankruptcy.
- Debtor reinstated to the original position.
- All property will re-vest except those that have been disposed.
7
Lec 4: Subsequent Bankruptcy UIS4612
4.5 Doctrine of Relation Back -s.47 IA 1967
1. This has far reaching effects on the bankrupt’s dealings, property and actions from the time the
act of bankruptcy is committed. Its objective is to protect creditors against fraudulent conveyances
and also to bar third party dealings with the debtor.
Koh Lian Hee (a bankrupt) v Koh Thong Chuan & Anor.[1997]
A father, 3 sons and brothers who controlled 4 private limited companies, acted as guarantors
to these companies. 22 Sept. 1990 father conveyed property worth RM1m to his youngest son
(D1) vide a SPA. D1 paid off the redemption sum and the said property was registered in his
name on 26 March 1991. Meanwhile on 15 Aug. 1991 a creditor’s petition was presented
against the father and on 3 July 1992 he was adjudged a bankrupt. In Sept. 1993 D1 charged
the said property to D2. The OA claimed that the transfer was void under ss 47 and 52
HC Held: - effective date of conveyance of said property was 26 March 1991 which was within
the 6 months of creditor’s petition on 15 Aug. 1991. Therefore alleged to be a fraudulent
conveyance and caught under s.47 – relation back
Koh Thong Chuan v The OA of the property of Koh Lian Hee, Bankrupt [2003]
D1 and D2 in the above action appealed separately to the CA against the decision of the HC.
CA Held:-
a. S.349NLC landed property would only be vested in the plaintiff by way of registration.
Until then, the plaintiff only has an equitable interest in the said property. Accordingly,
the legal interest in the charges acquired by the second defendant, as a bona fide purchaser
for value and without notice, would overreach the plaintiff's equitable interest. This also
rendered the second defendant's interest, as the registered chargees, indefeasible.
b. Though there was a finding of fraudulent transfer of the said property the title of the said
property had yet to be vested in the plaintiff pursuant to s. 349 NLC .Therefore, the
plaintiff only has an equitable interest in the property.
c. Whilst s. 53B(1) generally allows the OA to recover property from one who acquires it
from a bankrupt, s. 53B(3) provides an exception in respect of one who has given valuable
consideration and acted in good faith. Consequently remedy is only against persons who
entered into the transaction with the bankrupt, i.e. the first defendant.
d. First defendant's appeal dismissed with costs; second defendant's appeal allowed with
costs.
Abu Bakar b Jaafar & Anor. v MBB[1991]
The Ps who was a partner in Pen Trading & Co.(Pen) , was a customer of the D bank and
maintained current and deposit accounts. MBB sued Pen and summons was served on the Ps
by way of substituted service – newspaper advertisement. JID was obtained against the Ps and
MBB proceeded with bankruptcy proceedings. The Notice was also served by way of
substituted service – newspaper advertisement. The Ds on becoming aware of the bankruptcy
proceedings informed the Ps that the account was being frozen as per s.47(2). The Ps sued the
D Bank.
8
Lec 4: Subsequent Bankruptcy UIS4612
H: Ds right in freezing the accounts under s.47(2) – relation back. Once the Ds had knowledge
vide the newspaper advertisements s.54(1)(b) protection for bona fide transactions did not
apply.
Ooi Siew Chin v Jemari Bhd. & 3 Ors. [2009] 1LNS 1355
Contracts entered into by an undischarged bankrupt without knowledge of DGI – void.
Silver Corridor Sdn Bhd v Gallant Acres Sdn Bhd & Anor. [2015] 9 CLJ 919, CA - Grounds of
Judgment dated 01.09.2015
For a company under liquidation, section 293 of the Companies Act 1965 had to be read
either with section 52 or section 53 of the Bankruptcy Act 1967 to determine whether certain
transactions,
disposals or payments involving the assets of the company were void or voidable for the
reason that it constituted an ‘undue preference’ as against the assets or creditors of the
company concerned.
4. S.52 is the applicable provision when the challenge was that the disputed transaction was not
entered bona fide and/or for favourable consideration whereas section 53 would only be relevant
in a situation where the company is already insolvent and the challenge is to invalidate certain
disposals or payments effected to some creditors or beneficiaries, in preference to others or the
general body of creditors.
10
Lec 4: Subsequent Bankruptcy UIS4612
iii. s.54: protection of bona fide transactions for value without notice – includes – attachments,
executions, settlements, preferences shall not be invalidated:-
a) any payment by the bankrupt to any of his creditors;
(b) any payment or delivery to the bankrupt;
(c) any conveyance or assignment by the bankrupt for valuable consideration;
(d) any contract, dealing or transaction by or with the bankrupt for valuable consideration:
if -
(i) it takes place before the date of the RO; and
(ii) the person took without notice of the bankruptcy
11
Lec 4: Subsequent Bankruptcy UIS4612
8. S.38(1A) discretion of the DGI to grant any permission & the court may also impose such conditions
as it considers fit.
9. S.38(2) breach of any of the above conditions – deemed to be contempt of court.
12