Under section 2531
enables the charge to obtain the sale of land or lease to which his charge
relates in the event if there is a breach on the part of the charger of nay of
the terms in the agreement or the implied provisions. This remedy is also
popularly referred to as ‘foreclosure proceedings’.
National Land Code prescribes different procedures for
the application for an order of sale in respect of Registry Titles and land
Office Titles. According to section 256(1) and (2)2,
if the land held under registry title; the form of qualified title
corresponding to Registry Title; or Subsidiary Title, an application for an
order for sale shall be made to the Court by way of Originating Summon
supported by an affidavit. Under section 260(1) and (2)3,
if land held under land office title; the form of qualified title corresponding
to Land Office title; or Subsidiary Title, the application for an order for
sale 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 the
charge, an application for order for sale, if made to the court, will be
refused as the proper procedure is to apply to the Land Administrator under
In an application for an order for sale, the charge
must supply the particulars as required by Order 83 Rule 3 of the Rules of the
High Court 1980, the non-compliance of which would invalidate the order for
Under Section 431(1)6,
where it deals with the methods of service to a person or body. In the case of
Standard Chartered Bank Malaysia Bhd v Tunku Mudzaffar7,
it was held that the service of notice is mandatory because the National Land
Code prescribed the various methods of service of Form 16D. Thus, a charge
document 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 the
existence of cause to the contrary. It is for the charger or any third party
claiming to have interest in land to prove the existence of any cause to the
contrary at the application for an order for sale. The court has the discretion
to 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 registered
proprietor of all that land under HS(d) 2974 for Lot No 11041 in the Mukim of
Sungei Buloh (‘the said land’). On 2 October 1985, she executed a charge over
the said land in favour of the Respondent to secure a loan of RM600,000.00
granted by the respondent bank(‘the bank’) to one Zinger Feedmill Sdn Bhd (‘the borrower’). This is commonly known
among the members of the legal profession land to secure a loan made by the
lender to a third party. As correctly submitted by counsel, it is nothing more
than 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 the
other obligations inter se the appellant and the bank are set out in the
annexure to the instrument of charge.
The charge was duly registered in the appropriate land
registry on 9 November 1985 and the loan disbursed to the borrower. The
borrower having defaulted in making repayment of the principal and interest,
the bank took out an application to enforce the statutory charge by way of an
order for sale. The Appellant resisted the bank’s application on several
grounds, all of which were argued before us. However, none of them found favour
with the learned judge who heard the application. He therefore made an order
directing the sale of the land by public auction. It is against this order that
the present appeal has been brought.
The appellant argued that the learned judge was wrong
in making order for sale of the land. Counsel submitted that the order applied
for ought to have been refused for three main reasons.
where the court laid down three situation of cause to
contrary. Firstly, when a charger was able to bring his case within any
exceptions to the indefeasibility doctrine in section 34010.
Secondly, when a charger could demonstrate that the chargor had failed to meet
the conditions precedent for the making of an application for an order for
sale. Thirdly, when a charger could demonstrate that the grant of an order for
sale would contrary to some rule of law or equity.