BANKRUPTCY

PROCEEDINGS
BANKRUPTCY NOTICE
 BANKRUPTCY NOTICE (BN)
Acts of Bankruptcy- Section 3
Bankruptcy Act 1967
The most important pre-condition to
initiating BN
S.3(1)(i)..creditor obtained final
judgment/order
Ref Judgment: identify elements in
the judgment
 Judgment Sum/Quantified
Sum
Amount stated must be due
To follow terms of judgment
Interest must be quantified
 Bankruptcy Notice
The beginning of bankruptcy
proceeding
It is a demand notice
The amount claimed not less than
RM30,000.00-Rule 92(b) inclusive of
interest
 Bankruptcy Notice

Rule91.What Court to issue

Rule92.Issue of notice
Rule93.
Transmission of notice to Official Assignee
Rule94.Particulars to be endorsed on notice
Rule95.Application to set aside
Rule96.Duration of notice
Rule97.Service of notice
Rule98.Setting aside notice
 Rule 92. Issue of notice.
When applying for the issue of a bankruptcy notice,
the creditor shall -

(a)produce to the Registrar an office copy of the

judgment or order on which the notice is founded;

(b)file the notice, together with a request for issue

[Form 4];

(c)lodge sufficient number of copies of the

bankruptcy notice to be sealed and issued for service.
 Rule 94. Particulars to be endorsed on notice.
(1) Every bankruptcy notice shall be endorsed with -

(a)the name and place of business of the solicitor who is suing out
the notice, or if no solicitor is employed, with a memorandum that it
is sued out by the creditor in person;

(aa)the name and National Registration Identity Card number of

the debtor.

(b)an intimation to the debtor that if he has any counter-claim, set

off or cross demand which equals or exceeds the amount of the
judgment debt, and which he could not have set up in the action in
which the judgment or order was obtained, he must within the time
specified in the notice file an affidavit to that effect with the
Registrar.

(2) In the case of a notice served in the Federation the time shall be
seven days. In the case of a notice served elsewhere the Registrar
when issuing the notice shall fix the time.
 Rule 109. Personal service.
A creditor's petition shall be
personally served and service shall
be effected by an officer of the Court
or by the creditor or his solicitor or a
person in their employment by
delivering a sealed copy of the
petition to the debtor.
 Rule 110. Substituted service.
(1) If the Court is satisfied by affidavit or other
evidence on oath that prompt personal service
cannot be effected because the debtor is keeping
out of the way to avoid service of the petition or
any other legal process or for any other cause it
may order substituted service to be effected in
such manner as it thinks fit.

(2) Where any such order has been carried out the
petition shall be deemed to have been duly
served on the debtor[Form 15].
 Duration of Notice: 3 months from
date of issue and extendable with
leave of court BRrr96, 109
Service is to be done within the
validity of the BN
 Service on Partnership
All partners must be served with the
original writ of summons where the
final judgment originate
Failure to comply to the above will
lead to the BN being void BR r91(4)
Keyword: leave of court!
 Mulitiple Judgments

Cannot be combined in 1 BN see BR r

91(2) even if obtained in the same
writ
 Doctrine of Relation Back
Section 47: all transaction will be
traced within 6 months preceding the
date of the presentation of the BN-
act of bankruptcy
 Setting Aside BN
Grounds: BR r94(1)(b)
Counter claim, set off or cross demand
which equal or exceed the amount
claimed by JC
Defects in the BN-non compliance with
forms of judgment
Defective service
 Procedure to Set Aside
Application by way of affidavit
claiming of set off/counter claim
BRr95(1)
Filed within 7 days of service of BN-
rule 94(2)
Until this application is heard, there
is no act of bankruptcy found
If other than set off: file summons in
chambers supported by affidavit-no
automatic stay of act of bankruptcy
 Death of Debtor
Section 122(2) BA-the JC may
present petition praying for the
administration of the estate of the
deceased debtor in Form 12
 Creditors Petition (CP)
BRr99(3):only issued if:
Amount of debt RM30K
Debt liquidated/quantifiable
Based on the act of bankruptcy-BN,
which occurred within 6 months before
filing of CP
JD domiciled in Malaysia, or within 1
year before the date of presentation
ordinarily reside/business in Malaysia
 Procedure
CP in Form 11 & 12 BRr99 supported
by affidavit form 13 & 14
Attestation then witnessed by
solicitor, magistrate, official assignee
or registrar within Malaysia-BRr102
Filed in the court in the state where
the debtor resides BA s.93(7)
 Hearing of CP
Hearing of CP must be after
expiration of 8 days from the service
BRr114(2)
JC must satisfy court-BA s.6(2)
Petitioning creditors debt
Commission of an act of bankruptcy
Proof of service of petition (JD absent)
Debtors inability to pay debt
Show Cause Against Petition
JD may dispute the CP by filing a
notice in form 18 BR and transmit it
to JC 3 days before the hearing date
in the CP
Ground to set aside: validity of the
debt
If the ground are other than
challenging the statements made in
the CP, JD must file summons in
chambers supported by affidavit
 Adjudication and Receiving Order
AORO
Usually given simultaneously
When debt, act of bankruptcy and
service of CP proven in order/proper:
Court award AORO
RO: enable the OA to take
possession, custody & control of he
JD property-as caretaker
AO:vesting of all the property of the
Bankrupt upon OA-available for
division
 Process After AORO
Statement of Affairs s. 16 BA
Bankrupt reveal assets, debt, liabilities,
name, residence, occupation of his
creditors-financial info form 38 BR
Meeting of Creditors/First Creditors
Meeting
After Statement of Affairs filed-OA may
call meeting
 Proof of Debt-POD
Upon AORO creditor has to prove
debt owning to him by delivering to
OA an affidavit according to Rules in
Schedule C of BA section 15, 42
The Affidavit shall contain statement
of account, particulars of debt,
vouchers etc
OA shall examine the POD
 Dividends
Once the property has been realized
and sufficient money is available OA
will proceed to declare and distribute
dividends among the creditors whose
claims have been admitted to rank
for dividends-see Section 62(1), 65,
66, 82 BA.
 Discharge of Bankrupt
Section 33-35 BA 1967-certificate
from the Official Assignee
Hearing of the application
Refer Flow Chart: Kebankrapan
 Rescission & Annulment
BRr155: section 105 BA provides the
ground:
AORO ought not to have been made
Debt paid in full
Proceeding in Singapore/out of
jurisdiction and ought to be effected
there
Annulment eradicated the whole
record of bankruptcy as it there was
no act of bankruptcy