The Second Defendant inserted an advertisement in a newspaper for the sale of her house. On seeing the advertisement the Plaintiffs became interested to buy it. After verbally agreeing with the Second Defendant to buy it for $62,000 the Plaintiffs took the Second Defendant and her husband to see Mr. Kirpal Singh Brar (to whom I shall refer as Brat), the sole proprietor of the solicitors' firm of Kirpal Singh Brar & Co. The Plaintiffs instructed Brar to draw a sale and purchase agreement. On May 25, 1976 the Plaintiffs and the Second Defendant executed the sale and purchase agreement drawn by Brat. The Plaintiffs planned to finance the purchase partly by means of a loan from their employer, Lembaga Letrik Negara, the First Defendant. A few days before the agreement was executed the Plaintiffs had sent an application to the First Defendant for a joint loan. According to the standard procedure for application for housing loan the Plaintiffs were required to appoint a solicitor for the purpose of the transfer of the house and the cheque for the payment of the loan would be issued in the name of the solicitor, and the Plaintiffs were required to submit the name of the solicitor to the First Defendant. Accordingly the First Plaintiff on his own behalf and on behalf of the Second Plaintiff wrote to the First Defendant and gave the name of Kirpal Singh Brat & Co. as the solicitor appointed.

At the time of the execution of the agreement the house had been charged to Chung Khiaw Bank Limited and the outstanding balance due at that time to the bank under the charge is stated in the agreement to be about $35,000, and it is provided in the agreement that the amount shall be paid by the Plaintiffs' solicitor direct to the Chung KhiawBank Limited within thirty days of the date of the agreement in order to obtain a discharge of the charge. On May 25, 1976 the First Defendant sent a letter to Kirpal Singh Brar & Co. as follows:— "25hb Mei, 1976.

Kirpal Singh Brar & Co.,

Bilik 504 Tkt. 5,

Bangunan Lee Yan Lian,

Jalan Tun Perak,

Kuala Lumpur.

Tuan,

Permohonan Pinjaman Perumahan

Bersama Untuk Membeli Tanah dan

Rumah Slap — Lot PT 6498

Damansara Utama, Kuala Lumpur.

Encik Kuldip Singh dan isterinya kedua-duanya pekerja Lembaga telah membuat permohonan bersama untuk pinjaman wang perumahan dari Lembaga bagi membeli harta tersebut di atas.

2. Permohonan mereka telah diproseskan dan Lembaga bersedia untuk mengeluarkan sebanyak $46,000/- kepada tuan tertakluk kepada syarat-syarat berikut:—

(a) Tuan akan mengambil tindakan untuk memindahmilik harta kepada nama Encik Kuldip Singh dan isterinya dan memajukan hakmilik ke pejabat ini selepas pemindahan milik tersebut telah didaftarkan di dalam masa 3 bulan dari tarikh tuan menerima bayaran.

(b) Hakmilik tersebut hendaklah bebas daripada sebarang bebanan.

(c) Sekiranya hakmilik ini tidak dipindahmilik dan dihantar ke pejabat ini sebagaimana yang dinyatakan di atas, tuan hendaklah membayar balik wang yang telah dibayar oleh Lembaga. 3. Sila beritahu saya samada tuan bersetuju dengan syarat-syarat tersebut di atas. Apabila diterima persetujuan dari tuan, peraturan akan dibuat untuk mengeluarkan wang ini kepada tuan.Yang benar,t.t.(Mahmud bin Hj. Zainuddin)b.b. PEGAWAI KAKITANGAN (PERKHIDMATAN),Lembaga Letrik Negara."

On May 26, 1976 Kirpal Singh Brat & Co. sent a reply as follows:— "26th May, 1976.

Pegawai Kakitangan,

(Perkhidmatan)

Lembaga Letrik Negara,

Jalan Bungsar,

KUALA LUMPUR.

Dear Sir,

We refer to your letter dated Mei 25, 1976 and have taken instructions from our clients to write to you as follows.

We accept the terms of the loan and agree to comply with them. We have been retained to carry out the terms and undertake to do so. Kindly let us have the sum so that we can take the necessary steps.Yours faithfully,t.t.

c.c. Clients."

The First Defendant approved a loan of $46,000 to the Plaintiffs, and sent a cheque of that amount to Kirpal Singh Brar & Co. together with a letter dated June