JUDGMENT

Introduction

[1] This appeal arises from the decision of the Court of Appeal allowing the respondent's appeal and reversing the order of the High Court. The Court of Appeal allowed the appellants' application and ordered that one of the judgment creditors, RHB Bank Berhad ("RHB") do cease to be a party to the bankruptcy proceedings and that consequential amendments be made to the bankruptcy notice and creditors' petition.

Background Facts

[2] The appellants and RHB collectively brought an action under Suit No: MTKL D5-22-1648-2005 ("Suit") in respect of a syndicated loan granted to Gula Perak Berhad. The respondent stood as a guarantor to that loan facility and was joined in the Suit as a defendant in that capacity.

[3] After a full trial, on 29 October 2010, a joint judgment ("Judgment") was obtained by the appellants and RHB against the respondent in the Suit.

[4] Subsequently, on 24 February 2011, the appellants and RHB as judgment creditors collectively commenced bankruptcy proceedings against the respondent. The bankruptcy proceedings were based on the Judgment.

[5] The act of bankruptcy grounding the creditor's petition dated 25 November 2011 was the failure of the respondent to comply with a bankruptcy notice issued jointly by the appellants and RHB dated 24 February 2011.

[6] The respondent then issued a letter dated 30 September 2015 to RHB and proposed a full and final settlement of the portion of the judgment debt due to RHB by the payment of RM3,851,200.00.

[7] By a letter dated 15 December 2015, RHB informed the appellants' solicitors that the debt payable by the respondent to RHB had been fully settled and accordingly, it intended to withdraw itself as a party in the bankruptcy proceedings against the respondent. It is a term of the settlement that RHB will upon full payment of the settlement sum seek leave to withdraw the bankruptcy proceedings against the respondent. The respondent had fully paid the settlement sum. These facts are not in dispute.