Mohd Azmi SCJ:

[1] This appeal poses a serious problem confronting the banking industry in this country, regarding the apparent difficulty in reconciling on the one hand, the indefeasibility of interest of registered chargees under s 340 of the National Land Code, in particular their right to foreclose the charged land, with the right on the other hand, of freezing the land by the Inland Revenue by refusing to remove a Registrar's caveat subsequently entered under s 320(1) (ba) thereby making it quite impossible for any dealing in the land to be effected even if an order of sale under s 256 could be successfully obtained. Further, no person in his right mind would agree to purchase any charged land which is also encumbered with a caveat, especially entered for the purpose of securing the availability of the land to satisfy the income tax liability of the proprietor. The fundamental issue for determination is not merely whether the Registrar's caveat under s 320(1)(ba) can be entered and maintained as of right over land already encumbered with a registered charge, but also more importantly on the issue whether the appellant chargee should have been granted under s 41 Specific