Kerajaan Malaysia V Inti Johan Sdn Bhd

  

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MALAYSIA

 

IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR

 

(COMMERCIAL DIVISION)

 

WINDING-UP PETITION NO: D-21NCC-37-2009

 

In the matter of Section 218(1) (e) of the Companies Act 1965

 

And

 

In the matter of INTI JOHAN SDN BHD (Company No: 319805-H)

 

BETWEEN

 

KERAJAAN MALAYSIA …PETITIONER

 

AND

 

INTI JOHAN SDN BHD

 

(Company No.: 319805-H) …RESPONDENT

 

BEFORE THE HONOURABLE JUDGE Y.A. HAJI HAMID SULTAN BIN ABU BACKER

 

IN OPEN COURT

 

JUDGMENT

 

This is my judgment in respect of the respondent’s notice of motion to seek a declaration that the dissolution of the respondent on 25.3.2010 to

 

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be void. The petitioner and the Official Receiver have no objection to the petition.

 

Briefs facts

 

1. The notice of motion is based on the following grounds namely: (a) the service of the petition is not in order; (b) the judgment in default obtained by the petitioner was never served and/or received by the respondent; (c) the respondent is not aware of the judgment of default vide suit S2-21-239-2007 dated 30/6/2008; (d) the respondent is a solvent company; (e) petitioner’s application is prejudicial and unfair to the respondent.

 

2. It must be noted that the notice of motion is not seeking an order to set aside the order of court on the grounds of irregularity and/or nullity, but seeking a declaration against an order of court.

 

3. I have read the application, affidavits and submission of the parties in detail. I take the view that the notice of motion must be allowed. My reasons inter alia are as follows:

 

(i) As a general rule court may entertain an application to set aside an ex-parte order obtained on the grounds of irregularity and/or nullity. [see Badiaddin Mohd Mahidin & Anor v. Arab Malaysian Finance Bhd [1998] 2 CLJ 75]. The court in the ordinary circumstance will not entertain a declaration to declare an order of court of competent jurisdiction to be null and void. However, in

 

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the instant case section 307 of the Companies Act 1965 permits the court to entertain such an application. The said section 307(1) reads as follows:

 

“(1) Where a company has been dissolved the Court may, at any time within two years after the date of dissolution, on application of the liquidator of the company or of any other person who appears to the Court to be interested, make an order upon such terms as the Court thinks fit declaring the dissolution to have been void, and thereupon such proceedings may be taken as might have been taken if the company had not been dissolved. ”

 

(ii) In the instant case it is not disputed that the petitioner was not aware of the judgment in default and the service of the petition. And the petitioner concedes as to the defect in service of the petition. In essence, there is substantial defect in service which is not in compliance with Rule 25 of the Companies (Winding-up) Rules 1972. And that the defect on the facts of the case is of a nature that substantial injustice has occurred as the respondent says it is solvent. In consequence, the defect cannot be validated pursuant to Rule 194 CR 1972 which reads s follows:

 

“(1) No proceedings under the Act or the Rules shall be invalidated by any formal defect or any irregularity, unless the Court is of the opinion that substantial injustice has been caused by the defect or irregularity, and that the injustice cannot be remedied by any order of the Court.

 

(2) No defect or irregularity in the appointment or election of a receiver, liquidator, or member of a committee of inspection shall vitiate any act done by him in good faith. ”

 

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Courts have in the past set aside the winding up order when there was a breach of the winding up Act or Rules. [See Weng Wah Construction Co Sdn Bhd v. Yik Foong Development Sdn Bhd [1994] 3 CLJ 511]. Support for the proposition is found in a number of cases. To name a few are as follows:

 

(a) In Mui Bank Bhd v. Golden Hornbill Hotel Sdn Bhd [1993] 1 CLJ 204 the court in allowing the motion to set aside the winding up order had this to say:

 

“[2] Service of process is an essential procedural step in properly constituted judicial proceedings. Rule 25(1) though directory in nature, ought to be properly and carefully adhered to. ”

 

(b) In Syarikat U.D. Trading Sdn Bhd v. Beauty World Enterprise Sdn Bhd[1995] 1 LNS 237 the court stated:

 

“It seems clear that the petitioner has not complied with r. 25(1). Section 350 of the Act relied on by the petitioner’s Counsel has no application as it relates to service of a document and not a petition. Neither could the petitioner rely on r. 194 of the Rules as the defect or irregularity, in my view, is not formal and has caused substantial injustice. ”

 

4. For reasons stated above, I allow the notice of motion with no order as to costs. The O.R.; to ensure that the relevant advertisement and/or gazette procedure etc are strictly complied with within the time frame, if any according to law.

 

I hereby order so.

 

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(Y.A. DR.HAJI HAMID SULTAN BIN ABU BACKER)

 

Judge

 

High Court (Commercial Division)

 

KUALA LUMPUR

 

Date: 9th July 2010

 

For the Petitioner : Arsyad, Legal Officer; Inland Revenue Board For the Respondent: Ricky Tan; M/s Ricky Tan & Co.

 

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