Lim Beng Choon J:

[1] The plaintiff instituted this action against Mohd Ismail bin Ali Johor (the first defendant) and two others on 13 December 1986. In the statement of claim endorsed on the writ, the plaintiff alleged that by an agreement in writing dated 21 July 1980 (the scholarship agreement) and in consideration of the plaintiff granting the first defendant a scholarship to pursue a course of study in the University of Malaya leading to the award of an Honours Degree in law, the first defendant inter alia undertook to serve the plaintiff for a period of ten years upon the completion of the said studies, failing which he would be liable to pay the plaintiff, on demand, agreed liquidated damages of RM70,000. It was also alleged that the first defendant completed his studies and commenced serving the plaintiff from 1 June 1984 but on 3 November 1984 the first defendant in breach of the said agreement, left the service of the plaintiff. It was further alleged that despite repeated demands from the plaintiff the defendant failed and/or refused to pay the plaintiff the agreed liquidated damages.

[2] The second and third defendants are being sued in their capacity as guaranto