Under section 2531enables the charge to obtain the sale of land or lease to which his chargerelates in the event if there is a breach on the part of the charger of nay ofthe terms in the agreement or the implied provisions. This remedy is alsopopularly referred to as ‘foreclosure proceedings’.National Land Code prescribes different procedures forthe application for an order of sale in respect of Registry Titles and landOffice Titles. According to section 256(1) and (2)2,if the land held under registry title; the form of qualified titlecorresponding to Registry Title; or Subsidiary Title, an application for anorder for sale shall be made to the Court by way of Originating Summonsupported by an affidavit.
Under section 260(1) and (2)3,if land held under land office title; the form of qualified title correspondingto Land Office title; or Subsidiary Title, the application for an order forsale shall be made to the Land Administrator.In the case of Tan Teng Pan v Wong Fook Shang4,where the court held under Land Office title is the subject matter of thecharge, an application for order for sale, if made to the court, will berefused as the proper procedure is to apply to the Land Administrator undersection 2605In an application for an order for sale, the chargemust supply the particulars as required by Order 83 Rule 3 of the Rules of theHigh Court 1980, the non-compliance of which would invalidate the order forsale. Under Section 431(1)6,where it deals with the methods of service to a person or body. In the case ofStandard Chartered Bank Malaysia Bhd v Tunku Mudzaffar7,it was held that the service of notice is mandatory because the National LandCode prescribed the various methods of service of Form 16D. Thus, a chargedocument could not prescribed a different method of service.
Under Section 256(3)8,where the court will grant the order for sale unless it is satisfied of theexistence of cause to the contrary. It is for the charger or any third partyclaiming to have interest in land to prove the existence of any cause to thecontrary at the application for an order for sale. The court has the discretionto reject the application.In the case of Low Lee Lian v Ban Hin Lee Bank Bhd9.The facts relevant to the appeal as follows. The Appellant is the registeredproprietor of all that land under HS(d) 2974 for Lot No 11041 in the Mukim ofSungei Buloh (‘the said land’). On 2 October 1985, she executed a charge overthe said land in favour of the Respondent to secure a loan of RM600,000.
00granted by the respondent bank(‘the bank’) to one Zinger Feedmill Sdn Bhd (‘the borrower’). This is commonly knownamong the members of the legal profession land to secure a loan made by thelender to a third party. As correctly submitted by counsel, it is nothing morethan a secured guarantee.The loan in the present case bore interest at 25%above the bank’s prevailing base lending rate. The rate of interest and theother obligations inter se the appellant and the bank are set out in theannexure to the instrument of charge.The charge was duly registered in the appropriate landregistry on 9 November 1985 and the loan disbursed to the borrower.
Theborrower having defaulted in making repayment of the principal and interest,the bank took out an application to enforce the statutory charge by way of anorder for sale. The Appellant resisted the bank’s application on severalgrounds, all of which were argued before us. However, none of them found favourwith the learned judge who heard the application. He therefore made an orderdirecting the sale of the land by public auction. It is against this order thatthe present appeal has been brought. The appellant argued that the learned judge was wrongin making order for sale of the land.
Counsel submitted that the order appliedfor ought to have been refused for three main reasons. where the court laid down three situation of cause tocontrary. Firstly, when a charger was able to bring his case within anyexceptions to the indefeasibility doctrine in section 34010.Secondly, when a charger could demonstrate that the chargor had failed to meetthe conditions precedent for the making of an application for an order forsale.
Thirdly, when a charger could demonstrate that the grant of an order forsale would contrary to some rule of law or equity.