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2021 MarsdenLR 635
HIGH COURT MALAYA MUAR
SMALL MEDIUM ENTERPRISE DEVELOPMENT BANK MALAYSIA BERHAD – Appellant
Versus
REVIDEO PRECISION ENGINEERING SDN BHD – Respondent
[Civil Suit No: JB-24MFC-36-08/2020]
A Chargor cannot use partial payments as a cause to prevent an Order for Sale under Section 256 of the National Land Code when sufficient evidence of default exists.
Headnote:(A) National Land Code – Section 256 – Application for Order of Sale – The Chargee sought an Order of Sale for property due to default on financial facilities amounting to RM3,346,709.17. The defendant failed to raise sufficient cause to prevent the sale despite some payments being made. The Court emphasized that partial payments do not constitute a cause to the contrary. Resulting in granting the Order for Sale as per statutory provisions. (Paras 1, 12, 63, 64)
(B) Cause to the Contrary – Definitions and Precedents – The court elaborated that cause to the contrary may include fraud, failure of Chargee to meet conditions precedent, or inequitable circumstances against the sale. Burden lies on Chargor. (Paras 29, 36, 63)
Facts of the case: The plaintiff charged the property as security for various financial facilities. Default was noted, leading to the application for a sale to recover the owed amount. (Paras 2-10)
Findings of Court: The defendant did not sufficiently demonstrate that an order for sale would contravene legal principles or their rights. (Paras 63-64)
Issues: Whether partial payment is enough to establish cause to the contrary or if valid cause exists preventing the order. (Paras 37-38)
Ratio Decidendi: The principles outlined in prior cases were reiterated, emphasizing the statutory nature of the order for sale under s 256 unless valid cause is shown, which was not met by the defendant. (Paras 24, 36, 63)
Result: Application granted for sale of the charged property and costs payable by the defendant. (Para 64)
JUDGMENT
Introduction
[1] This is an application vide Originating Summons for an Order of Sale of a property pursuant to s 256 National Land Code that is held under the title HS(D) 2084 PTD 4552, Kesang Sub District, in the District of Ledang, in the State of Johore ("the said property") which was charged to the plaintiff under instrument bearing Presentation Nos: 1731/2015 and 47937/2015 by the defendant.
[2] The Orders that the plaintiff is seeking are as follows:
i. An Order against the defendant that a property that is held under the title HS(D) 2084 PTD 4552, Kesang Sub District, in the District of Ledang, in the State of Johore be sold in a public auction pursuant to the National Land Code to satisfy the sum of money to the amount of RM3,346,709.17 which is owing and payable by the defendant (the Chargor) to the plaintiff as of 19 May 2020 for financing facilities known as Ba'i Bithaman Ajil (BBA), Ba'i al-Inah 1 (BIN 1), Ijarah Thumma Ba'i (ITB), Ba'i al-Inah 2 (BIN 2) and Ba'i Inah (BI).
ii. The defendant and/or its agents are required to surrender vacant possession of the building on the said property to the plaintiff.
iii. The defendant to pay the cost of this action.
iv. Other reliefs.
v. Any other reliefs that the Court deems fit and proper.
[3] The Cause Papers are as follows:
i. Originating Summons (encl 1).
ii. Affidavit-in-support by the plaintiff (encl 2).
iii. Affidavit-in-opposition by the defendant (encl 4).
iv. Affidavit-in-reply by the plaintiff (encl 5).
The Background Facts
[4] Upon the request of the defendant, the plaintiff granted these financial facilities:
i. Ba'i Bithaman Ajil amounting to RM2,230,000.00 ("BBA").
ii. Ba'i al-Inah amounting to RM480,000.00 ("BIN 1").
iii. Ba'i al-Inah amounting to RM124,000.00 ("BIN 2").
iv. Ijarah amounting to RM196,000.00 ("ITB").
[5] A Letter of Offer dated 2 April 2014 which was accepted by the defendant.
[6] The plaintiff and defendant signed the agreements as follows:
a. Letter of Offer dated 2 April 2014.
b. Letter of Offer dated 30 March 2015.
c. Facilities agreement dated 21 May 2014.
d. Facilities agreement dated 8 June 2015.
e. Buying and Selling of Assets Agreements, both of which are dated 21 May 2014 pursuant to the BBA facility.
f. Buying and Selling of Assets Agreement, both of which are dated 21 May 2014 pursuant to the BIN 1 facility.
g. Buying and Selling of Assets Agreement, both of which are dated 21 May 2014 pursuant to the BIN 2 facility.
h. Buying and Selling of Assets Agreement, both of which are dated 21 May 2014 pursuant to the ITB facility.
i. Buying and Selling of Assets Agreement, both of which are dated 27 May 2015 pursuant to the ITB facility.
j. Letter for restructuring dated 17 July 2018.
k. Additional Letter for restructuring dated 17 July 2018.
[7] As a Guarantee for payment for the facilities in respect of BBA, BIN 1, BIN 2, ITB, the defendant charged a property that is held under the Title HS(D) 2084 PTD 4552 Kesang Sub District, District of Ledang, the State of Johore and signed on 18 December 2014 and registered on 12 January 2015 ("First Charge") vide Presentation Number 1731/2015.
[8] As a Guarantee for payment for BIN facility, the same property was charged to the plaintiff dated 8 June 2015 which was registered on 21 June 2015 vide Presentation Number 47937/2015.
[9] The defendant defaulted on payments of the facilities.
[10] The plaintiff enforced para 10.1 of the First Charge and para 10.1 of the Second Charge and demanded the payment of the balance of the facilities on 3 February 2020.
[11] The plaintiff then enforced its rights pursuant to s 254 National Land Code and demanded that the defendant to make good any deficiency of the First Charge and Second Charge through Form 16D dated 16 March 2020.
[12] The Statement of Account shows the defendant was owing the plaintiff in the sum RM3,346,709.17 as of 19 May 2020.
[13] The plaintiff and defendant agreed in the following documents that a Statement of Debt (Certificate of Ind
