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2015 MarsdenLR 403

HIGH COURT MALAYA KUALA LUMPUR
JAMBATAN MERAH SDN BHD – Appellant
Versus
PUBLIC BANK BERHAD – Respondent
[Suit No: 22NCC-335-09/2014]



Courts can impose duties on chargees under the National Land Code to provide discharge statements, including implications of indemnities and rights accorded despite a corporate winding up.

Headnote:In this judgment concerning the rights of a chargor under the National Land Code (NLC), the court analyzed sections 243, 249(1), 266, and relevant case law, determining entitlement to a Discharge Statement and assessing Indebtedness in light of the Plaintiff's winding up and the Defendant's breach of duty. The court framed the main issues around the Defendant's obligation to provide a Discharge Statement, the extent of Indebtedness, and whether the subsequent claim for legal costs was justifiable. A mandatory injunction was granted compelling provision of a Discharge Statement, while restricting the Defendant's rights under section 271 NLC due to its prior breach.

Table of Content
1. defendant's obligation to provide discharge statement as per nlc. (Para 20 , 26)
(c) land held under HS(D) 116409, PT No 236, Bandar Sultan Sulaiman, District of Klang, State of Selangor (Lot No 31). In this judgment, I will refer the NLC charge over Lot No 31 as the "Charge".

[6] To resolve the Related Companies' Debts:-

(a) the Plaintiff,

(b) the Defendant and

(c) the Related Companies

- entered into a "Restructure and Reschedule Arrangement" (R&R Arrangement). The R&R Arrangement is contained in 4 letters, all dated 22 October 2010, from the Defendant to each of the Related Companies (Defendant's 4 Letters dated 22 October 2010). The Plaintiff has accepted the Defendant's 4 Letters dated 22 October 2010 by signing all these 4 documents

[7] The Defendant issued a letter dated 14 October 2010 (Defendant's Letter dated 14 October 2010) stating the terms for the Plaintiff's "redemption" of Lot No 28A. I have discussed earlier in a judgment regarding the Plaintiff's application for an interlocutory injunction (court enclosure no 5) that it is not appropriate under NLC to use the term "redemption" of a registered charge - please see Jambatan Merah Sdn Bhd v. Public Bank Berhad (Encl 5); [2014] 1 LNS 1657; [2015] AMEJ 212 [Jambatan Merah (No 1)].

[8] The Defendant issued a second letter dated 25 October 2010 to the Plaintiff (Defendant's Letter dated 25 October 2010) stating the terms for the Plaintiff's "redemption" of the Plaintiff's 3 Lots The Plaintiff and the Related Companies accepted the Defendant's Letter dated 25 October 2010.

[9] The Plaintiff managed to "redeem" Lot Nos 28 and 28A for a total sum of RM8,533,000.

[10] After the "redemption" of Lot Nos 28 and 28A, the Defendant claimed that the Plaintiff was still indebted to the Defendant in respect of the Credit Facilities in the sum of RM1,259,433.88 as at 30 September 2012 but this was disputed by the Plaintiff. The Plaintiff initially alleged that the Plaintiff's indebtedness to the Defendant under the Banking Facilities had been fully settled after the "redemption" of Lot Nos 28 and 28A. In this suit, the Plaintiff has seemingly changed its stand.

[11] The Plaintiff is wound up by an order of the Kuala Lumpur High court (Winding Up court) on 19 September 2011 and the Official Receiver (OR) has been appointed as the Plaintiff's liquidator (Liquidator). On 25 October 2011, the Winding Up court appointed Dato' Narendra Kumar Jasani a/l Chunilal Rugnath (Dato' Narendra) as the Liquidator in place of the OR.

[12] On 22 August 2012, the Winding Up court granted, among others, leave to the Liquidator to "enter into a license/tenancy/lease agreement" in respect of Lot No 31 for the purpose of the Plaintiff's liquidation (Winding Up court's Leave for Liquidator to Let Out Lot No 31).

C. 1st Suit

[13] On 7 September 2012, the Plaintiff filed the 1st Suit (Kuala Lumpur High court Suit No: 22NCC-1356-09/2012) against the Defendant claiming for, among others:-

(a) a declaration that no R&R Arrangement under s 176 of the Companies Act 1965 () existed between the Plaintiff, Related Companies and the Defendant;

(b) a declaration that the Banking Facilities had been fully settled by the Plaintiff; and

(c) an order to direct the Defendant to deliver to the Plaintiff within 7 days from the date of service of the order:-

(i) the issue document of title of Lot 31 (IDT); and

(ii) a duly executed and registrable instrument of discharge of the Charge.

[14] Pursuant to the Winding Up court's Leave for Liquidator to Let Out Lot No 31, the Liquidator let out Lot No 31 to the Tenant by way of a tenancy agreement dated 7 March 2013.

[15] The Defendant's solicitors sent 2 letters dated 22 May 2013 to the Tenant:-

(a) the first letter (Defendant's 1st Letter dated 22 May 2013) stated, among others, as follows:-

"4. We are instructed by [Defendant] to inform you that pursuant to agreements between [Defendant] and [Plaintiff], the [Plaintiff] shall not lease or let out [Lot No 31] without the prior

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