MUHAMMAD DANISH RAHMAN BIN SUHAIMI 055409

TEST 1 INSOLVENCY
Part A

Question 1

The property that can pass to the Director General of Insolvency is listed in
Section 48 (1)(b)(i) of the Insolvency Act of 1967, which can be used to locate assets
of a bankrupt person. All of the property vested in acquired or devolves to him upon
the commencement of bankruptcy and before his discharge, as well as the property
over which the bankrupt can exercise rights, are included in this section.

After that, any property purportedly owned by someone based on bills of sale, a
goods-in-possession order, or a disposition made with the owner's knowledge at the
time of bankruptcy will be released. To demonstrate ownership by the bankrupt, three
conditions must be met. First, the goods must be in the bankrupt's custody or be
subject to a possession order when filing for bankruptcy. Second, the situation
demonstrates that the reputed owner is bankrupt. Thirdly, the commodities are
discovered in the bankrupt's possession with the approval and knowledge. of the true
owner, as in the case of goods displayed for sale in a shop window.

Things in the action other than debts due or due to the bankrupt in the course
of his trade or business may not be deemed to constitute goods, according to Section
48(2) of the Insolvency Act.

In the meantime, the DGI will look for a transfer or Power of Attorney to take
ownership of any foreign assets. Included in the list of assets that can transfer to the
DGI are shares and shareholdings.

Additionally, the test for whether properties can pass the DGI was laid down in
the case of Agroco Plantation Sdn Bhd v. Besharapan Sdn Bhd & Ors. It was
determined that every beneficial interest of a bankrupt passed to the DGI to turn a
profit and be distributed among the bankrupt's creditors. The DGI does not acquire a
greater title to the assets than the bankrupt had assets available for debt repayment.
Subject to the rights of other parties with whom the bankrupt has dealt as well as the
interests of third parties, the rights arising from contracts entered into by the bankrupt
pass to DG unless disclaimed or renounced. After filing for bankruptcy, the bankrupt
can no longer convey good title to any of his property or make lawful dispositions of
any of them.
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Finally, Section 50(1) of the Act states that if a creditor has issued an execution
on a debtor's property, the creditor cannot continue to benefit from the execution or
attachment until the revenues of the attachment have been fully realised before the
bankruptcy decision was made.

Question 2

According to Section 40(3) of the Insolvency Act, all debts and liabilities,
present or future, certain or contingent, to which the debtor is subject as of the
bankruptcy order or to which he may become subject before his discharge due to any
obligation incurred before the date of the bankruptcy order, shall be deemed to be
debts provable in bankruptcy, except for those outlined in subsections (1) and (2).
Based on this part, it may be inferred that all debts incurred before the Court issuing
a bankruptcy order will be included, and any obligations acquired following that date
won't be included in the total. A list of debtors and the amount owed to each must be
prepared and filed in Court by the Director General of Insolvency in accordance with
Section 32.

Every creditor with a claim must submit a proof of debt to the Director General
of Insolvency, who may accept or reject the claim no later than 24 hours before the
first creditors' meeting or any postponed meeting thereof, in accordance with rule 163
of the Insolvency Rules 2017. A statement of accounts, an affidavit certifying the debt,
and information indicating whether the creditor is a secured or unsecured creditor may
be provided to the DGI in order to show a debt. Every proof of debt must be examined
by the DGI, who either accept it in full, reject it in part, or request additional evidence.
A creditor will receive the dividend notice once the proof has been obtained. Following
Rule 143, the DGI must request a day in Court for the debtor's public examination. All
creditors must receive notice of the date, time, and location of the general examination,
and the minister of finance must also receive notice in writing.

Question 3

According to Section 8(1)(b) of the Insolvency Act of 1967, when a person is

declared bankrupt, their property is divided among their creditors and passes to the
Director General of Insolvency (DGI), who is then responsible for acting as the
bankrupt's receiver, manager, administrator, and trustee for all of their assets. The
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Director General of Insolvency will follow the Act's provisions in distributing the
bankrupt person's assets. As a result, only those creditors who could properly show
their debts under Section 62(1) of the Insolvency Act 1967 are eligible to receive
distributions of the assets. The Director General of Insolvency or even the Court
cannot order him to distribute assets of the bankrupt to any creditors or third party who
has not proven his debt, regardless of how logical and proper it may appear, according
to Re Jimmy Zee Chin [1957].

Section 43 of the Insolvency Act of 1967 lays forth the priority of debts for
distribution to identify how to distribute assets in bankruptcy. The first focus is on
bankruptcy administration costs. According to Section 43(1) of the Act, the distribution
of the property of a bankrupt there shall be paid in priority to all other debts para which
includes (a) all local rates and land tax due from the bankrupt at the date of the
Bankruptcy Order and having become due and payable within twelve months before
that time, (b) income tax and other assessed taxes on the bankrupt up to 31 st
December before the date of the Bankruptcy Order and not exceeding the whole one
year's assessment, (c) salaries of employees which not exceeding one thousand
ringgit for each service rendered during five months before the date of Bankruptcy
Order or termination of service if it is within twelve months before Bankruptcy Order,
(d) all amounts due to in respect of contributions payable during the twelve months
before the Bankruptcy Order by the bankrupt as the employer, (e) all amounts due in
respect of workers' compensation accrued before the date of the Bankruptcy Order.
Next, priority debts. The debts of priority shall rank equally among themselves and
shall be paid in full following Section 43. However, if the bankrupt's assets are
inadequate to satisfy them, they must diminish equally among themselves following
Section 43(2) of the Act

Third, the Bankruptcy Order shall effectively terminate or dismiss any

apprenticeship contract in accordance with Section 44 of the Insolvency Act 1967.
Upon application, the apprentice may receive a refund of any fees paid. According to
Section 44(4) of the Insolvency Act, international workers who travel to Malaysia to
work with the bankrupt must be given back transportation. Fourth, in accordance with
Section 43(4) of the Act, all other debts proven in the bankruptcy shall be paid in pari
passu, which means that the obligations should be paid equitably and without
preference after the priority and preferential debts have been settled. Finally, interest
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in responsibilities can be shown. When a debt includes interest, it must be calculated
or counted for dividend purposes at a rate that does not exceed 6& per year up until
the bankruptcy order date, according to Section 43(6) of the Act. The following
additional interest may be granted where there is a surplus in assets after all
obligations proven have been fully paid: first, the difference between the interest rate
of 6% and the interest that the creditor is entitled to up until the date of the Bankruptcy
Order. The creditor is then allowed to additional interest on the debt proved from the
date of the bankruptcy order to the date of payment at a rate of 6% per annum if there
is still a surplus.

Furthermore, a payment known as a dividend is often how the assets are

distributed. According to Section 62(1) of the Act, the Director General of Insolvency
shall announce and distribute dividends to the creditors who have established their
claims as soon as practicable. The first dividend, if any, must be declared and
dispersed in accordance with Section 62(2) of the same Act within a year of the
bankruptcy order's issuance. The declaration may be delayed if it is not practicable,
but the Director General of Insolvency must provide the creditors with justification in
advance. Furthermore, absent compelling justification to the contrary, further
dividends shall be declared and distributed at intervals not exceeding twelve months,
subject to Section 62(3) of the Act. If a married woman has been declared bankrupt,
her husband is not eligible for dividends as a creditor until all other creditors' claims
have been paid in accordance with Section 46 of the Act. If the bankrupt judge is the
husband, the same guidelines apply.
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Part B

First, via an annulment order made in accordance with section 105 of the
Insolvency Act of 1967. Once all debts have been settled in full, including case
administration fees and charges, to all creditors who have established their claims in
bankruptcy, through the Director General of Insolvency (DGI), the bankrupt files this
application. The bankruptcy order will be revoked after the Court is satisfied that all of
the bankrupt's debts have been paid in full. According to Section 105(1) of the Act, the
bankruptcy order may be revoked in three different ways. First, where the Court
believes that a debtor should not have been declared bankrupt. Second, when it can
be demonstrated to the Court's satisfaction that the bankrupt's debts have been fully
paid. Thirdly, if it appears to the Court that there are ongoing legal processes in the
Republic of Singapore regarding the division of the bankrupt's estate and effects
among his creditors pursuant to that nation's bankruptcy or insolvency law, and that
the division should occur there,

However, the property of the debtor who was declared bankrupt shall vest in
such person as the Court appoints, or in the absence of any such appointment, revert
to the debtor for a period of time to be determined by the Court. Section 105(2) of the
Insolvency Act 1967 provides that all sales and dispositions of property, payments
duly made, and acts thereto for done by the Director General of Insolvency, or other
person acting under his authority, shall be valid.

According to Section 105(3) of the Insolvency Act of 1967, such annulment

must also be gazetted and published in at least one local newspaper. According to the
ruling in Sardar Mohd Roshan Khan v. Perwira Affin Bank Bhd [2010] 4 MLJ 285, the
consequence of the annulment of bankruptcy decision is to restore the debtor to his
pre-bankruptcy status.

A court order is the second way a bankrupt can be released from his bankruptcy
status in accordance with section 33(3) of the Insolvency Act of 1967. After a
bankruptcy order has been issued, the bankrupt may file this application to the court
at any time. Regarding the debtor's actions throughout the bankruptcy administration,
the Court will review DGI's report. Additionally, the court will choose whether to grant
a discharge that is unconditional, conditional, or to reject the discharge application.
MUHAMMAD DANISH RAHMAN BIN SUHAIMI 055409
TEST 1 INSOLVENCY
The procedures for bankruptcy discharge under section are as follows. When
requesting a discharge, the bankrupt must give the Registrar a certificate from the
Director General of Insolvency detailing the number of creditors of whom he is aware
and whether they have submitted proofs of debt. The Court shall fix a hearing date
pursuant to section 33(1) of the Insolvency Act of 1967. The Director General of
Insolvency must be given 28 days' notice, which must be published, of the hearing's
date, time, and location by the Registrar. A fourteen-day notice of the hearing must be
given to each creditor by the Director General of Insolvency. According to Section
33(3) of the Act, a creditor must give written notice to the Director-General of
Insolvency detailing his reasons based on the conduct of the bankrupt if he intends to
object to the application's hearing. According to Section 33(4) of the Act, the Court
must consider a number of considerations before granting a discharge request,
including the bankrupt's age, behaviour, the size of the debt that has been resolved,
the public interest, and the DGI report. According to Section 33(3) of the Act, a creditor
must give written notice to the Director-General of Insolvency detailing his reasons
based on the conduct of the bankrupt if he intends to object to the application's
hearing. According to Section 33(4) of the Act, the Court must consider a number of
considerations before granting a discharge request, including the bankrupt's age,
behaviour, the size of the debt that has been resolved, the public interest, and the DGI
report.

The discharge by DGI pursuant to Section 33A of the Bankruptcy Act 1967 is
the third method by which a bankrupt may be released from his bankruptcy status. If
five years have passed after the bankruptcy order's effective date and the bankrupt
satisfies specific criteria set forth by the DGI for the exercise of his discretion, he may
file a petition for discharge with the DGI. The DGI will also evaluate the petition's
supporting facts, the potential payout of dividends, the debtor's cooperation and
behaviour during the case's administration, as well as the interests of the creditors.

The procedures for releasing a bankrupt under a DGI certificate are as follows.
The Director General of Insolvency is required by Section 33A(1)-(6) of the Insolvency
Act of 1967 to inform each creditor who has submitted a proof of debt of the intention
to discharge the bankrupt. Between the date of the bankruptcy order and the
publication of the notice of intention, at least five years must pass. According to Section
33B(2) of the Act, a creditor has 21 days to serve a notice of objection detailing his
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reasons. If you didn't, it would be assumed that you had no objections. According to
section 33B(3) of the Act, a creditor whose complaint has been denied by the Director
General of Insolvency may appeal to the High Court. The Court may deny the
application or order that the Director General of Insolvency not issue a certificate for
up to two years in line with section 33B(4). Nevertheless, in line with section 33A read
in accordance with section 33B(2A) of Act 360, the DGI may discharge four (4)
categories of bankrupts without facing resistance from creditors. The four categories
are: a bankrupt who was declared insolvent due to his status as a social guarantee; a
bankrupt who was registered as a person with a disability under the Persons with
Disabilities Act 2008; a bankrupt who has passed away; and a bankrupt who has a
serious illness that has been certified by a government medical officer.

The Director General of Insolvency's discretion to discharge based on a

certificate of automatic discharge must be applied in a way compatible with the public
interest and justice, it was stated in Re Benny Ong Swee Siang; Ex P United Overseas
Bank (Malaysia) Bhd [2016] 3 CLJ 1001. Similar to this, it was decided in Maybank
Finance Bhd v. Lee Kee Sen [2014] 10 CLJ 543 that the Director General of Insolvency
must establish that a discharge is necessary. The public good and commercial integrity
cannot be at odds with a bankrupt's discharge. It's important to find a balance.

According to section 33C of the Bankruptcy Act of 1967, a bankrupt may petition
for an automatic discharge three years after submitting the Statement of Affairs,
subject to specific requirements. This is the fourth way a bankrupt can be released
from his bankruptcy status. The conditions imposed by Section 16(1) of the Act are
that the bankrupt has paid the required percentage of his provable debt and has
satisfied with Section 38(1)'s requirement that he give the DGI an account of his assets
(b). The DGI determines the contribution of the bankrupt's proven debt, taking into
account the bankrupt's provable debt, the insolvent's current monthly income, the
extent to which the bankrupt's spouse's current monthly income can support the family,
the estimated monthly income of the bankrupt during the bankruptcy, the fair costs of
maintaining the bankrupt and his or her family, or the property of the bankrupt under
section 48(1)(b) that can be used for that purpose.

Between six and one year before the end of the three-year period, the DGI must
send a notice of discharge to each of the debtor's creditors. Within 21 days after the
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notice's service, a creditor who wants to contest the discharge must ask the court for
an order suspending it. A creditor is assumed to have no objections if they don't
oppose to the discharge. At least 14 days before the date of the objection hearing, a
notice of objection must be served on the DGI and the bankrupt. The Court will hear
from both the DGI and the bankrupt despite the opposition of the creditor. The Court
may dismiss the application and grant the discharge under this section, or it may
suspend the discharge under this section for two years after hearing from all parties.
The bankrupt must continue to fulfil his tasks and obligations throughout that time, as
directed by the court, and will be automatically dismissed after two years. The DGI will
then issue a certificate of automatic release to the applicant after receiving an
application from any interested party and payment of the required sum.

In conclusion, there are a few different ways a bankrupt might be released from
their debts: by court order, by the Director General of Insolvency (DGI), automatically,
and by other means.