JUDGMENT

Facts

By an agreement dated the 29.7.1988 (hereinafter called "the Sale & Purchase Agreement") made between the Defendant as vendor of the one part and the Plaintiff as purchaser of the other part, the Defendant has agreed to purchase a portion of the land held under land title HS(D) BP 2/84 No.P.T.2356 Lot 4472, Mukim Hulu Bernam Timur, Daerah Batang, Negeri Perak measuring an area of 23.22 acres which portion is more particularly described in the Sale & Purchase Agreement as the Red Portion at the purchase price of RM35,000.00 per acre upon the terms and conditions therein contained. The said land has since been sub-divided and separate issue documents of title in respect of the Red Portion and the areas known as the Green Portion and the Blue Portion as described in the Sale & Purchase Agreement.

Pursuant to the Sale & Purchase Agreement, the Plaintiff has agreed to grant a loan to the Defendant amounting to RM895,000.00 with interest thereon at the rate of ten per cent per annum as to the sum of RM300,000.00 and free of interest as to the sum of RM595,000.00 upon the security of a first legal charge over the said land which has been duly registered.

In accordance with the terms and conditions of the Sale & Purchase Agreement, the sale and purchase of the Red Portion has been duly completed on the 4.5.1989 upon the due registration of the Red Portion under title HS(D) BP 171/89 P.T. 2527 Mukim Hulu Bernam Timur, Daerah Batang Padang, Negeri Perak in the name of the Plaintiff.

Pursuant to Clause 12 of the Sale & Purchase Agreement, the Defendant has granted an option to the Plaintiff to purchase the Green Portion comprising an area of 20 acres free from encumbrances and of squatters and with vacant possession at the purchase price of RM15,000.00 per acre which said option shall not be exercisable except upon the default of the Defendant in the repayment of the balance of the said loan together with interest accrued thereon within the period of one year from the date of the Sale & Purchase Agreement. The said clause also provides that in the event the Plaintiff shall become entitled to and shall elect to purchase the same, the Plaintiff shall be entitled to set-off the purchase price from the said loan or the balance thereof (if any) outstanding and due by the Defendant to the Plaintiff.

In default of the terms of the Sale & Purchase Agreement the Defendant has failed to repay the said loan which as at the 28.7.1989 amounts to RM214,343.62.

The Plaintiff, through its solicitors Skrine & Co. on the 2.9.1989 duly exercised its option pursuant to Clause 12 of the Sale & Purchase Agreement to purchase the said Green Portion (hereinafter referred to as the said property).

In the meantime, by a Notice of Appointment dated 27.2.1989 and pursuant to the terms of a Debenture dated the 29.12.1982 created by the Defendant in favour of Public Bank Berhad, one Encik Ahmad Kamal bin Abdullah Al-Yafii of Messrs Hanafiah Raslan & Mohamad, (hereinafter called "the Receiver and Manager") has been appointed by the Chargee as the Receiver and Manager of all the property of the Defendant comprised in or charged by the debenture. However, the directors of the Defendant disputed the authority, power or otherwise of the Receiver and Manager to deal with inter alia , the said Property on the basis that the same had been released from the Debenture upon payment of the redemption sum to the Chargee. The Receiver and Manager had then made an application to Court for directions under Originating Summons No. 24-913-90 inter alia as to whether the said Property had been duly released form the debenture.

Pursuant to the due exercise of the option to purchase the Green Portion, the plaintiff through its solicitors forwarded a draft sale and purchase agreement to the Receiver and Manager of the defendant on or about 14.9.1989. On the 31.12.1990, the Plaintiff was informed by the Receiver and Manager that, pursuant to a meeting with the directors of the Defend