Bankruptcy proceedings in Malaysia are governed by the Insolvency Act 1967 and the accompanying Insolvency Rules. However, there are some key points that a practitioner needs to know to conduct Bankruptcy Proceedings that are only known to those who do Bankruptcy inside and out. This article aims to show three points which are not contained in the Act and Rules that may assist a practitioner in their insolvency matters.
In Peninsular Malaysia, there is only one High Court, the High Court of Malaya. As such, all High Courts have concurrent jurisdiction. For example in estate proceedings, if a person passed away in Melaka and had assets in Kelantan, there is nothing stopping his family who reside in Johor bringing administration proceedings in the Ipoh High Court. This is because all High Courts have jurisdiction in all states pursuant to our Federal Constitution.
All Insolvency actions must be started in the High Court. However, an Insolvency action can only be taken in the High Court of the residing state in which the person you wish to bankrupt resides. This is so even if you obtain a judgement against the intended bankrupt in proceedings in another state or court. For example, if the person you wish to bankrupt lives in Kelantan, then you can only bring bankruptcy proceedings against him in Kota Bahru High Court. This is so even if you obtain a judgement against the intended bankrupt in Seremban Sessions Court.
More curiously still is that our Malaysian courts interpret the High Court of the residing state as the nearest High Court to where the intended bankrupt lives. For example, if you wished to bankrupt a person residing in Taman Intan, Selangor, you would need to file proceedings in the Klang High Court and not the Shah Alam High Court. This is because Taman Intan is 2 km closer to Klang High Court than Shah Alam High Court.
While this author is puzzled by this requirement and has fallen foul of it, the Courts nevertheless have made it clear that this is the rule they follow. So if you don’t know, now you know.
Affidavit of Service on Insolvency Office
Another requirement not specified in the books is the need to file an affidavit of service for documents served on the Insolvency Office of the local state in which the intended bankrupt resides.
Once you have prepared and filed a Creditor’s Petition, you will need to serve the Creditor’s Petition on to the intended bankrupt. An Affidavit of Service of the Creditor’s Petition must be filed so that you can show the court proof of service. Upon service of the same, the Creditor’s Petition and all accompanying documents must be served to the Insolvency Office.
What is not listed in the Rules is that you will need to file an affidavit of service for the documents served on the Insolvency Office. This is to verify that the documents are indeed with the Insolvency Office. Some registrars will not proceed with the hearing of the Bankruptcy Order without the filing of the Affidavit of Service, even when you can show proof of service.
Filing of Status one day before hearing
When attending for a bankruptcy order hearing, the Creditor will need to show the proof of debt of the intended bankrupt, that the intended bankrupt has committed an act of bankruptcy, and that the creditor’s petition has been served. If a Creditor can satisfy the court of the same, the court will grant a Bankruptcy Order.
Dear reader, you will note that there is no requirement to file the status of the bankrupt one day before the hearing in order to obtain the Bankruptcy Order. However, certain courts and certain registrars have different requirements.
The registrars in Shah Alam tend to stick with the requirements under section 6 of the Insolvency Act. However, this author can attest that when attending a different High Court, he was informed that Registrars in the said High Court would need a filed status of the bankrupt at least three weeks before the hearing date. This author therefore took a new hearing date and complied with the registrar’s directions. Lo and behold that on the new hearing date, the Registrar had changed the direction and stated that the Creditor’s ought to file the status of the intended bankrupt on the day before hearing not three weeks before.
As any lawyer will tell you, the Court is (almost) never wrong. Therefore, this author advises that all Petitioners conduct a search on the status of the intended bankrupt one day before the bankruptcy hearing and file the results to avoid any confusion and/or delay to the Bankruptcy Order on the day of the hearing.
This author hopes the above points, learnt the hard way, may assist you in your future bankrupting endeavours. Please feel free to share any other additional requirements needed for a bankruptcy order that is not stated in the Act or the Rules.
 Section 6(2)(c) Insolvency Act 1967
 Section 6 Insolvency Act 1967