The court determined that statutory notices must be validly issued prior to seeking a sale order under the Land Code, and partial sales of charged land are not permissible.

Introduction And Backgrounds

[1] By this Re-Amended Originating Summons herein (Encl 35), the Plaintiff is applying for an order under s 148(2)(c) of the Land Code (Cap 81) for the sale of the 2 - storey hypermarket including the car park (Phase 1 development) measuring approximately 3.106 acres only described as Lot 1856 and 1858 (part of parent lot 1304), Block 3, Sungai Merah Town District, Sibu (hereinafter referred to as "the Hypermarket") which is a portion within all that parcel of land together with the building thereon and appurtenances thereof situate at Sungai Merah, Sibu, containing an area of 5.272 hectares, more or less, and described as Lot 134 Block 3 Sungai Merah Town District (hereinafter referred to as "the Parent Lot 1304").

[2] The Parent Lot 1304 has been charged by the Defendants to the Plaintiff under Memorandum of Charge Instrument No L 3275/2010 registered at the Sibu Land Registry Office on the 16 March 2010 (hereinafter referred to as "the said Memorandum of Charge) to secure the repayment of monies due by one Episo Enterprise Sdn Bhd (hereinafter referred to as "the Borrower") to the Plaintiff in respect of banking facilities granted by the Plaintiff to the Borrower under various letters of offer of the Plaintiff and Facilities Agreement executed by the Plaintiff and the Borrower (Exhibits TMH-1 to TMH-7 of Encl 2)

[3] The banking facilities comprised two Term Loans and Letter of Guarantee which were granted by the Plaintiff to the Borrower to part-finance the Borrower in the construction of the Hypermarket with Subdivision Approval for commercial and residential development on the land under the Parent Lot 1304.

[4] From the affidavit evidence, it seems that approval has been obtained from the State Planning Authority for the development and subdivision of the land held under Parent Lot 1304 (hereinafter referred to as "the Subdivision Approval").

[5] The actual status of the construction and development on Parent Lot 1304, ie whether the construction development thereon has been in accordance with Subdivision Approval, the approved plans, terms and conditions there from is not clear based on affidavit evidence.

[6] However, it is indisputable that the separate individual documents of title in respect of the proposed subdivided lots in Subdivision Approval have still yet to be issued by the relevant authority under s 244 of the Land Code (Cap 81).

[7] It is not disputed that the Borrower had entered into various sale and purchase agreements whereby the Borrower agreed to sell various proposed subdivided lots in Subdivision Approval to various purchasers.

[8] These purchasers had also procured loan facilities from their respective bankers concerned for payment of the purchase price of proposed subdivided lots concerned in Subdivision Approval and for which the Plaintiff disclaimed and agreed to discharge these proposed subdivided lots concerned from the charge under the said Memorandum of Charge.

See: Exhibits TMH-3 and TMH-4 of Encl 2.

[9] It is a fact that the Borrower was ordered to be wound-up by the Court on 19 January 2022. It is indisputable that the Borrower has defaulted in the repayment of the banking facilities granted by the Plaintiff.

[10] The Plaintiff through its solicitor issued statutory notices all dated 8 June 2022 (Exhibit TMH-9 of encl 2) to the Defendants which demanded payment by the Defendants as chargors under the said Memorandum of Charge, of the sum of RM17,945,162.63 due and owed by the Borrower as at 31 May 2022, failing which the Plaintiff will apply to the Court for all legal remedies available to the Plaintiff under s 148(2) of the Land Code (Cap 81) (hereinafter referred to as "the s