Re: Nagarani d/o Karuppiah

Facts

Nagarani d/o Karuppiah and Chinnakaruppan Kalaiyarasan (Mr Arasu) founded and directed the CKR Group of companies, including CKR Contract Services Pte Ltd and CKR Paints & Coating Specialists Pte Ltd. The great majority of their debts arose from personal guarantees they signed for the group companies. The group's companies sought scheme moratoria from October 2023, but the later applications in HC/OA 54/2025 and HC/OA 124/2025 were dismissed on 10 March 2025 and CKR Contract was wound up that day.

After OCBC filed bankruptcy applications against them, the two filed HC/OSB 36/2024 and HC/OSB 37/2024 and obtained interim orders under s 276 of the Insolvency, Restructuring and Dissolution Act 2018 (IRDA) on 23 April 2024. By their own account, their proposed individual voluntary arrangements depended heavily on the group schemes. The interim orders were extended several times and lapsed on 23 February 2025. An assistant registrar dismissed their applications in HC/SUM 533/2025 and HC/SUM 534/2025 for a further extension to 23 May 2025. They appealed in HC/RA 56/2025 and HC/RA 57/2025 and, by HC/SUM 1187/2025 and HC/SUM 1188/2025, asked to adduce fresh affidavits with nominees' reports and a new proposal. Maybank and UOB, their largest creditors, opposed; OCBC held a watching brief.

Issues

1. Whether the fresh affidavits with the nominees' reports should be admitted on appeal
2. Which IRDA provision governed an extension of the interim orders at this stage
3. Whether the claimants had a serious and viable proposal that justified extending the interim orders

Holding

The High Court dismissed the applications to adduce fresh evidence and dismissed both registrar's appeals, leaving the refusal of the extension in place. The non-parties reserved their right to claim costs under the banking documents by proof in the bankruptcies.

Reasoning

On fresh evidence, the court placed the case in the middle of the spectrum described in Anan Group (Singapore) Pte Ltd v VTB Bank (Public Joint Stock Co) [2019] 2 SLR 341. The affidavits were in substance an attempt to put forward new proposals, so they were not strictly relevant to decisions made on earlier schemes, and because the new proposals were doomed to fail they would not have materially influenced the result. The claimants had also not been diligent in finding nominees and producing reports.

On the provision, following Re Aathar Ah Kong Andrew [2019] 3 SLR 1242, the court agreed that s 280(4) applied when the summonses were filed, since the stated purpose was more time for the nominees' report. As the reports now existed, s 280(5) would appear to be the relevant provision. Either way the same principles governed the discretion.

On the merits, an extension must meet the requirements for the original interim order, a fortiori: the proposal must be serious and viable, as explained in Re Sifan Triyono [2021] 4 SLR 656 and Re Yap Shiaw Wei (RHB Bank Bhd and others, non-parties) [2024] SGHC 232. The court read the remarks in Re Lemarc Agromond Pte Ltd [2023] SGHC 236 as going to that question rather than as separate requirements. The original basis had collapsed with the dismissal of the group's scheme applications. A possible sale of a Kaki Bukit property for about $60m had been talked of since April 2024 without result. The new investor-based proposal needed a special resolution of 75% by value, but Maybank and UOB, holding more than 80% of Mdm Nagarani's debt value and more than 70% of Mr Arasu's, remained firmly opposed, so the hope that they might change their minds was conjecture. The court found insufficient evidence of concealment, dissipation or abuse of process, though the share transfer in Arasu Restaurant Pte Ltd was unexplained. The claimants' slow conduct, including securing new nominees only the day after their last extension was refused, supported the view that they were prolonging the inevitable.

From the judgment