Ramesh Mohandas Nagrani v United Overseas Bank Ltd
Court | High Court (Singapore) |
Judge | Chua Lee Ming JC |
Judgment Date | 20 October 2015 |
Neutral Citation | [2015] SGHC 266 |
Citation | [2015] SGHC 266 |
Defendant Counsel | Chew Ming Hsien Rebecca and Ang Siok Hoon (Rajah & Tann Singapore LLP) |
Published date | 30 October 2015 |
Plaintiff Counsel | Assomull Madan D T (Assomull & Partners) |
Hearing Date | 17 July 2015,31 July 2015 |
Docket Number | Originating Summons (Bankruptcy) No 78 of 2014 (Registrar’s Appeal No 117 of 2015) |
Date | 20 October 2015 |
Subject Matter | Bankruptcy,Insolvency Law,Statutory Demand |
This was an appeal by the plaintiff (“the Debtor”) against the Senior Assistant Registrar’s decision dismissing his application to set aside the statutory demand (“the SD”) issued against him by the defendant (“the Bank”).
The debt claimed in the SD arose out of three guarantees (“the Guarantees”) signed by the Debtor in respect of banking facilities obtained by three companies (“the Borrowers”) from the Bank. The Debtor was the sole director and shareholder of each of the Borrowers.
Before me, the Debtor sought to set aside the SD on three distinct grounds:
I disagreed with the Debtor’s submissions and dismissed the appeal. The Debtor has appealed against my decision.
Whether there was non-compliance with r 94(1) of the Rules, and if so, whether the SD must be set aside under r 98(2(d)The SD was dated 25 February 2014 but the amount of the debt claimed in the SD was stated to be as of 20 February 2014. In addition, the note to the Debtor in Part B of the SD stated as follows:
If you do not comply with this statutory demand or set it aside, the creditor may file a bankruptcy
petition against you.If you wish to avoid a bankruptcy
petition being presented against you, you must pay the sum demanded … [emphasis added]
Rule 94(1) of the Rules provides that a statutory demand “shall be in Form 1”. Form 1 is the prescribed form for a statutory demand and requires the creditor to state the “[e]xact sum due as of date of demand”. The note in Part A of Form 1 explains that the particulars of the debt must include the “actual amount of debt as of the date of the demand”. The note to the Debtor in Part B of Form 1 uses the expression “bankruptcy application” instead of “bankruptcy petition”. For these two reasons, the Debtor submitted that the SD failed to comply with r 94(1) since it did not conform to the specifications of Form 1.
The Bank accepted that the note in Part B of the SD should have referred to a “bankruptcy application” but submitted that the Rules did not require the SD to state the amount of the debt due on the date of the SD. The Bank submitted that under the Rules, a statutory demand can state an amount that is different from the amount actually owing by the debtor as at the date of the statutory demand; all that is required is that the amount demanded must have accrued by the date of the statutory demand. In support, the Bank referred to r 94(2) which provides that the “statutory demand shall state the actual amount of the debt that has accrued as of the date of the demand”. According to the Bank, the SD had complied with r 94(2) of the Rules since on 25 February 2014, the amount of the debt stated on the SD (which was expressed to be the amount owing as of 20 February 2014) had already accrued.
I disagreed with the Bank’s submissions. The Bank had to comply with r 94(1); failure to do so was a ground for setting aside the SD under r 98(2)(
The next question was whether the two defects in the SD were fatal. The Debtor argued that strict compliance with r 94(1) of the Rules was necessary and submitted that as r 98(2)(
The Debtor also submitted that strict compliance with r 94(1) was necessary because of the “draconian” and “quasi-penal” consequences of bankruptcy. The Debtor referred to
I disagreed with the Debtor’s submissions. The Debtor’s submissions meant that any non-conformity with Form 1, no matter how trivial or inconsequential, would invalidate a statutory demand. In my view, this could not have been the intent behind rr 94(1) and 98(2)(
I agreed with the Bank’s submission that s 158(1) of the Bankruptcy Act (Cap 20, 2009 Rev Ed) (“the Act”) applies to situations of non-compliance with r 94(1) of the Rules. It reads as follows:
No proceedings in bankruptcy shall be invalidated by any formal defect or by any irregularity, unless the court before which an objection is made to the proceedings 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 that court.
The Bank also referred to
In the present case, there was no evidence of any injustice (let alone substantial injustice) suffered by the Debtor as a result of the two defects in the SD. It cannot seriously be suggested that the use of the term “bankruptcy petition” instead of “bankruptcy application” had caused any injustice to the Debtor. As for the amount of the debt stated in the SD, it was clear to the Debtor what he had to pay to discharge the SD. Had the Debtor paid the amount due as of 20 February 2015 (which was stated in the SD), the SD would have been spent. I therefore concluded that the non-compliance with r 94(1) of the Rules in this case was not fatal and I declined to set aside the SD under r 98(2)(
The Debtor had a car that was financed under a hire-purchase agreement with the Bank (“the HP Agreement”). According to him, as at the date of the SD, the value of the car exceeded the remaining amount owed to the Bank under the HP Agreement. The Debtor submitted that the car or, alternatively, his interest under the HP Agreement, was property which fell within the scope of r 94(5) of the Rules.
Rule 94(5) provides that:
...If the creditor holds any property of the debtor or any security for the debt, there shall be specified in the demand –
- (
a ) the full amount of the debt; and- (
b ) the nature and value of the security or the assets.
To continue reading
Request your trial-
ITronic Holdings Pte Ltd v Tan Swee Leon
...Oversea-Chinese Banking Corp Ltd v Ravichandran s/o Suppiah [2015] SGHC 1 (refd) Ramesh Mohandas Nagrani v United Overseas Bank Ltd [2016] 1 SLR 174 (folld) Rasmachayana Sulistyo, Re [2005] 1 SLR(R) 483; [2005] 1 SLR 483 (refd) United Overseas Bank Ltd v Chia Kin Tuck [2006] 3 SLR(R) 322; [......
-
Lalwani Ashok Bherumal v Lalwani Shalini Gobind and another
...into a new revised edition, s 158(1) of the Bankruptcy Act remains unchanged. In Ramesh Mohandas Nagrani v United Overseas Bank Ltd [2016] 1 SLR 174 (“Ramesh Mohandas”), the debtor applied to set aside the statutory demand. One of the grounds was that the amount claimed in the statutory dem......
-
Tarkus Interiors Pte Ltd v The Working Capitol (Robinson) Pte Ltd
...against the defaulting debtors in the contracts in Bombay Talkies (at [4]) and Ramesh Mohandas Nagrani v United Overseas Bank Ltd [2016] 1 SLR 174 (at [38]). In the first case, the bank specifically mentioned the possibility of “instituting winding up”. In the second case, which was relied ......
-
Lakshmanan Shanmuganathan v L Manimuthu
...v Chimbusco International Petroleum (Singapore) Pte Ltd [2014] 2 SLR 446 (folld) Ramesh Mohandas Nagrani v United Overseas Bank Ltd [2016] 1 SLR 174 (folld) Legislation referred to Bankruptcy Rules (2002 Rev Ed) rr 94(5), 94(5)(b) (consd); rr 94, 94(6), 98, 98(2), 98(2)(a), 98(2)(c), 98(2)(......
-
Insolvency Law
...1 which requires the creditor to state ‘the exact sum due as of date of demand’. In Ramesh Mohandas Nagrani v United Overseas Bank Ltd[2016] 1 SLR 174 (‘Ramesh Mohandas Nagrani’), the High Court held that a statutory demand which had stated an amount different from that actually owing by th......
-
Securities and Financial Services Regulation
...words ‘property’ or ‘assets’ but specify what is captured by the word. In contrast, Ramesh Mohandas Nagrani v United Overseas Bank Ltd[2016] 1 SLR 174 provides an interpretation of r 94(5) of the Bankruptcy Rules (Cap 20, R 1, 2006 Rev Ed) and the court found that a debtor's option to purch......