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2025 MarsdenLR 2759
HIGH COURT MALAYA KUALA LUMPUR
LUA THIANG POH – Appellant
Versus
KABIR SINGH JAGIR SINGH & ORS – Respondent
[Civil Suit No: WA-22NCC-283-06/2022]
Promissory Notes are void and unenforceable due to improper stamping and lack of valid consideration, confirming the Plaintiff's status as an unlicensed moneylender under the Moneylenders Act 1951.
Headnote:(A) Moneylenders Act 1951 - Sections 2, 10OA, and 15 - Stamp Act 1949 - Promissory Notes - Dispute over alleged investment versus loan - Court found that Promissory Notes were void due to improper stamping post-execution and lack of valid consideration from the Plaintiff to the Defendants, confirming unlicensed moneylending status of the Plaintiff. (Paras 30-45, 46-57, 71-89)
(B) Legal Principles - Conditions for valid consideration, definitions of moneylending, and enforceability under MLA 1951 are crucial for determining the nature of financial transactions between parties. (Paras 46-57, 72-82)
Facts of the case:
The Plaintiff filed a claim for RM2,300,000.00 on grounds of investment based on Promissory Notes executed with the Defendants between 2013 and 2015, which the Defendants countered as illegal moneylending transactions. (Paras 1-14)
Findings of Court:
The Promissory Notes are inadmissible as they were improperly stamped and lack consideration; despite claims of investment, the nature of the arrangement was ruled as loans, rendering them unenforceable under the MLA 1951. (Paras 102 a-d)
Issues: Whether Promissory Notes were admissible due to improper stamping, whether consideration was valid, whether the transaction was a loan or investment, and if the Plaintiff rebutted the presumption of being a moneylender. (Paras 29 a-e)
Ratio Decidendi: Promissory Notes must be duly stamped prior to execution; evidence must demonstrate valid consideration moving from Plaintiff to Defendants; transactions must clearly align with statutory definitions to determine enforceability. (Paras 30-39, 46-56, 71-79)
Result: Plaintiff’s claim dismissed; costs awarded to the Defendants. (Para 103)
| Table of Content |
|---|
| 1. overview of investment transactions. (Para 1 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16) |
| 2. parties' arguments on the nature of promissory notes. (Para 17 , 19 , 21 , 22 , 24 , 25) |
| 3. court's observations on legal and factual issues. (Para 29 , 30 , 31 , 32 , 34 , 35 , 46 , 56 , 58 , 60 , 64 , 66 , 69) |
| 4. outcome of the presumption under the moneylenders act. (Para 78 , 80 , 88) |
| 5. conclusion and dismissal of the plaintiff's claim. (Para 102) |
Introduction
[1] Before the court is the Plaintiff's claim against the Defendants for the sum of RM2,300,000.00, being the principal sum allegedly invested by the Plaintiff, together with a sum of RM2,784,000.00, being the alleged return on investment pursuant to several Promissory Notes entered into between the parties. The Plaintiff contends that these Promissory Notes represent legitimate investment agreements, which the Defendants have breached. The Defendants, however, assert that these Promissory Notes constitute illegal moneylending transactions, which are void and unenforceable under the Moneylenders Act 1951 ("MLA 1951").
[2] Having carefully considered the evidence adduced, the submissions of both parties, and the applicable legal principles, I find in favour of the Defendants for reasons elaborated in these grounds.
Background Facts
[3] This case involves a dispute between the Plaintiff, Lua Thiang Poh, and five Defendants: the 1st Defendant, Kabir Singh a/l Jagir Singh ("D1"), the 2nd Defendant, Jasminder Kaur a/p Jasbir Singh ("D2"), the 3rd Defendant, Manjeet Singh a/l Darshan Singh ("D3"), the 4th Defendant, Kawaljeet Kaur a/p Darshan Singh ("D4"), and Yokin Resources Sdn Bhd ("D5").
[4] Between October 2013 and November 2015, a series of transactions took place between the Plaintiff and the Defendants. These transactions were documented in six Promissory Notes ("Promissory Notes") executed by the parties. The Promissory Notes were prepared by the Defendants and/or their solicitors.
[5] At all material times, D5 was a licensed money lender with D1 and D3 as directors, and D1, D3, and one Ravinderjit Singh a/l Jasbir Singh as shareholders. One Ms Queck Kiok Fai ("QKF") was named as the payee in these Promissory Notes, while the Plaintiff acted as her nominee, duly authorised to conduct all matters regarding these transactions on her behalf.
[6] The first transaction occurred around October 2013 when D1 and D3 approached the Plaintiff and QKF. The Plaintiff transferred RM200,000.00 to D5 via two Public Bank ("PB") cheques of RM100,000.00 each, dated 1 November 2013. This was documented in a Promissory Note dated 1 November 2013 ("PN 1.1"). Under PN 1.1, the Defendants agreed to pay QKF and/or the Plaintiff RM2,666.00 per month for 12 months commencing 1 December 2013. The Defendants deposited 12 post- dated cheques for these monthly payments and two undated Hong Leong Bank ("HLB") cheques for RM100,000.00 each as security for the principal sum.
[7] The second transaction occurred around March 2014. The Plaintiff transferred RM500,000.00 to D5 via five Maybank Berhad ("MBB") cheques of RM100,000.00 each dated 1 May 2014. This was documented in a Promissory Note dated 29 April 2014 ("PN 2.1"). Under PN 2.1, the Defendants agreed to pay QKF and/or the Plaintiff RM10,000.00 per month for 12 months commencing 5 June 2014. The Defendants provided 12 post-dated cheques for these payments and five undated HLB cheques of RM100,000.00 each as security.
[8] The third transaction was around September 2014. The Plaintiff transferred RM500,000.00 to D5 via three MBB cheques and two PB cheques of RM100,000.00 each dated 24 October 2014. This was documented in a Promissory Note dated 24 October 2014 ("PN 3.1"). Under PN 3.1, the Defendants agreed to pay QKF and/or the Plaintiff RM10,000.00 per month for 12 months commencing 30 November 2014. The Defendants provided 12 post-dated cheques for these payments and five undated MBB che
