A verbal agreement that lacks necessary governmental approval is void and unenforceable.

(Datuk Mohd. Saari Bin Yusoff H)

This proceeding is against the first defendant only. In statement of claim the plaintiff prays inter alia for the refund of RM 30,000/- with interest. In counter-claim, the defendant prays for damages in lieu of specific performance.

Plaintiff's case

2. The plaintiff's case is reflected in plaintiff solicitor's letter dated 25 April 1986 (P. 7 of Ex. B1) addressed to the defendant, which is reproduced below:

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KANDIAH CHELLAH & PARTNERS

ADVOCATES & SOLICITORS

PEGUAMBELA & PEGUAMCARA

NO. 61. 3rdFLOOR, LEBOH AMPANG,

KUALA LUMPUR. TEL: 03-2301800/03-2304505

Date: 25th April, 1986

Your Ref:

Our Ref: KC/Misc/86

KANDIAH CHELLIAH - Barrister-at-Law (Lincoln's Inn)

N.R. Kothandabani a/l Ramasamy

A.R. REGISTERED

(I/C No. 3842640),

No. 3. Jalan Limau Purut,

Bangsar Baru, Bangsar,

59000 Kuala Lumpur.

Dear Sir,

re: Sale Purchase Of Property:

No. Lot 80, Taman Dato Hormat,

Sungei Way. Selangor

We act for Mdm. Thanaletchumy a/p Veloo of No. 624C, Jalan Besar, Sungei Way, Selangor.

Our client states that sometime in May 1984. or thereabouts she had verbally agreed to purchase the abovesaid property for the total sum of $70.000.00 and had paid to you the following sums on the dates indicated herein and wherein receipts had been duly issued.

(1) 16.5.1984 - $2,000.00 cash to M/s Vadiveloo & Co(Advocates & Solicitors).

(2) 5.6.1984 - $9,500.00 Bank Draft in your favour

(3) 5 .6. 1984 - $8.500.00 Bank Draft in your favour

(4) 12.11.1984 - $10,000.00 Bank Draft in your favour

Further, our client was not informed or provided with any of the particulars relevant to this sale purchase transaction such as copies of title document, the presence of encumbrances, presence of restrictions and conditions, etc. And to date, she notifies us that no Sale Purchase Agreement or other agreements/documents were ever drawn up and executed although she and her husband discussed the matter and had engaged M/s Vadiveloo & Co. Advocates & Solicitors, and had paid a total sum of $30,000.00.

Now, our client understands that that the Issue Document of Title contains a restriction stating that the property cannot be transferred, sold, charged, etc., express consent of the State Authority, etc., and that the property is presently charged to HBSB.

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hereby do, that unless the sum of $28,000.00 received by you is returned to her or to us as her solicitors, within (10) days from date hereof, our client shall issue such proceedings at the High Court, Kuala Lumpur, to recover the said sum, with interest and costs and also take such relevant procedures to protect her lien on the said property. (underline added)

Sgd.

... ... ... ... ... ... ... ... ... ... ... ...

Solicitors for the client

abovenamed

c.c. 1. M/s Vadiveloo & Co

Advocates & Solicitors

2. ord. post

3. client.

3. It is not in dispute that the defendant had received RM 30,000.00 from the plaintiff as part of the purchase price.

4. It is significant to note that as reflected in document of title (P6) the said property is subject to restriction in interest as follows:

"Tanah yang diberimilik ini tidak boleh dijual, dipajak, digadaikan atau dipindahmilik dengan apa cara sekalipun melainkan dengan kebenaran Pihak Berkuasa Negeri"

5. Issue for determination is whether the verbal agreement entered into between the plaintiff and the defendant in May 1984 is null and void.

6. On question of illegality as contemplated under section 24 Contract Act 1950, it is pertinent to refer to the case of Foo Say Lee v. Ooi Eng Wai . In that case, on August 19, 1958 the plaintiff entered into an agreement with the