Elangovan A/L Subramaniam Vs Alliance Islamic Bank Berhad

  

Download PDF Here

DALAM MAHKAMAH TINGGI MALAYA DI KUALA LUMPUR

 

(BAHAGIAN DAGANG)

 

DALAM KEBANKRAPAN NO. D-29-62-01/2013

 

Ber : ELANGOVAN A/L SUBRAMANIAM ( No. K/P: 631118-08-6091)

 

Ex Parte : ALLIANCE ISLAMIC BANK BERHAD ( No. K/P: 776882-V)

 

GROUNDS OF JUDGMENT

 

Enclosure 31 is an application by the applicant/intervener to, inter alia, be allowed to intervene and be added as a party in this proceedings for the purpose of the application for leave to commence proceedings against the Judgment Debtor (JD) in respect of the Sale and Purchase Agreement dated 25th September 2004 made between the company known as Prefaceco (M) Sdn Bhd as vendor of the one part and the JD as the purchaser of the other part in respect of the sale and purchase of the apartment known as Unit No: 502, 4th and 5th Floor, Seaview, Pasir Bogak Beach Apartment, Taman Pangkor Putri, 32300 Pulau Pangkor, Perak Darul Ridzuan ( the said apartment): and also that leave be

 

i

 

granted to the applicant/intervener to commence proceedings against the JD, inter alia, to declare the Sale and Purchase Agreement dated 25th September 2004 in respect of the said apartment as illegal and invalid and for all consequential order and directions thereto.

 

[2] The JD was granted a loan by Malaysia Building Society Berhad (MBSB) to buy the said apartment and by a Deed of Assignment dated 09th November 2004, the JD had assigned all his rights, title and interest in the said Apartment to MBSB. Subsequently the apartment was purchased by the applicant from MBSB at a public auction held on 30th May 2012.

 

[3] The applicant now intends to take action against inter alia the JD and MBSB as he is now advised by his solicitor that the said apartment was built in breach of the express condition of the title of the subject land which prohibits the construction of the said apartment.

 

[4] The Director General of Insolvency (DGI), at the hearing of this application in enclosure 31, has expressed objection against enclosure 31 on the ground that Receiving and Adjudication Orders had already been made against the bankrupt and the apartment had been auctioned by its secured creditor, MBSB. Hence it is the DGI’s contention that the JD, who is a bankrupt now, has no further

 

2

 

interest in the apartment and should not be made a party to any action brought by the applicant.

 

[5] The solicitor for the Judgment Creditor (JC) also objects to this application on the ground that leave to initiate proceedings against the bankrupt can be applied without the applicant being made a party to this bankruptcy proceeding as the bankruptcy proceeding has already been completed. Also the cause of action in the intended action is not connected to the bankrupt’s assets and not a debt due to the applicant.

 

[6] According to the learned counsel for the applicant, the applicant only seeks to obtain leave to commence an action against the JD and the estate of the JD will not be affected by this application.

 

Decision

 

[7] The Receiving and Adjudication Orders were made against the JD on 08th October 2013.

 

[8] This application in enclosure 31 was brought under section 8(1) of the Bankruptcy Act 1967 which reads as follows:

 

3

 

“ 8.

 

Effect of Receiving Order

 

(1) On the making of a receiving order the Director General of Insolvency shall be thereby constituted receiver of the property of the debtor, and thereafter, except as directed by this Act, no creditors to whom the debtor is indebted in respect of any debt provable in bankruptcy shall have any remedy against the property or person of the debtor in respect of the debt, or shall proceed with or commence any action or other legal proceeding in respect of such debt unless with the leave of the court and on such terms as the court may impose.”

 

[9] That section clearly enables only a creditor in respect of a debt provable in bankruptcy to commence action against the bankrupt’s assets or the bankrupt himself in respect of the debt, with the leave of the court.

 

[10] In this instant case, the two main prayers sought for by the applicant are briefly as follows:-

 

i. to intervene in this bankruptcy proceeding ;

 

ii. for leave to be granted to commence proceedings against the bankrupt.

 

4

 

[11] Hence the issues here are whether the applicant can intervene in the bankruptcy proceedings of the JD at this stage, after the Receiving and Adjudication Orders had been made against the JD; and whether a non creditor of a bankrupt can file an action against a bankrupt without prior leave of the court.

 

[12] Regarding the 1st issue, as I have mentioned earlier, it is obvious that the Receiving and Adjudication Orders had already been made against the JD on 08th October 2013. The JD is without doubt, now a bankrupt.

 

[13] The applicant now seeks to intervene to be added as a party to the bankruptcy proceeding. Proceeding is a legal action taken to settle a legal matter. See Macmillan Dictionary and also Oxford English Dictionary. Hence, in our context, the bankruptcy proceeding is a legal action taken to make a JD a bankrupt. As the JD herein has already been made a bankrupt when the Adjudication Order was made against him on 08th October 2013, the bankruptcy proceeding in this matter is complete. As such, I agree with the DGI and the JC and see no purpose in adding the applicant of enclosure 31 to the bankruptcy proceeding.

 

[14] Although learned counsel for the applicant seems to abandon the applicant’s first prayer in enclosure 31 by later telling the court that the applicant only seeks to obtain leave to commence an action against the JD, the applicant, in my view, is also obviously

 

5

 

not a creditor of a debt provable in the JD’s bankruptcy. The draft Writ Summons as shown in exhibit VS-5 of enclosure 32, affidavit in support of this application, shows that the action is not against the bankrupt’s assets. The said apartment was sold by public auction by the JD’s secured creditor i.e MBSB, to enforce the secured creditor’s rights, even before the JD was made a bankrupt. Therefore, even before the Adjudication Order was made, the apartment was no more the JD’s asset. The applicant is basing its application under section 8(1) of the Bankruptcy Act 1967. As the applicant is neither a creditor of a debt provable in the JD’s bankruptcy nor is the intended Writ Summon is against the bankrupt’s asset, the said section 8 (1) of the Bankruptcy Act 1967 does not apply. Refer to Faridah Begum bte Abdullah v Dato’ Micheal Chong [1995] 2 CLJ 951 and also M/S Hisham, Sobri & Kadir, Advocates & Solicitor v Lim Chan Seng & Anor [1987] 2 CLJ 57.

 

[15] Therefore, it is my view that there is no issue of the leave of this court to be obtained by the applicant in this case under section 8 (1) of the Bankruptcy Act 1967. However it is the bankrupt’s duty under section 38(1)(a) of the Bankruptcy Act 1967 to first obtain sanction from the Director General of Insolvency if he intends to defend himself from any action brought against him. To my mind, the applicant, not being a creditor of the bankrupt, can always file an action against the bankrupt without having to obtain prior leave of this court under section 8(1) of the Bankruptcy Act 1967. There

 

6

 

is also no necessity for him to be added as a party to this bankruptcy proceeding which was already over.

 

[16] For the above reasons, the application in enclosure 31 is dismissed with no order as to cost.

 

DATO’ ZALEHA BINTI YUSOF JUDGE

 

HIGH COURT OF MALAYA KUALA LUMPUR

 

Dated: 18th November 2014

 

For the Applicant: Jegathesan a/l Karupiah ; Messrs Karupiah & Co

 

For the Respondent: Leu Chai Yen; Messrs Ho Loke & Koh

 

For the Intervener: Nurulazeannie binti Jamian Dom ; Malaysia Department of Insolvency Malaysia

 

7

PDF Source: http://kl.kehakiman.gov.my