This is the plaintiff's application in encl. (2) for an order for sale of three pieces of properties held under No. C.T. 8150, Lot No. 167, Seksyen 63, Bandar Kuala Lumpur, Negeri Wilayah Persekutuan; Geran No. 9978, Lot No. 147, Seksyen 63, Bandar Kuala Lumpur Negeri Wilayah Persekutuan dan C.T. 14077, Lot No. 210, Seksyen 63, Bandar Kuala Lumpur, Negeri Wilayah Persekutuan ("the properties") all of which were charged by the defendant in favour of the plaintiff by way of two memoranda of charges, videpresentation Nos. 16320/95 and 16321/95 ("the charges"), pursuant to s. 256 of the National Land Code 1965 ("NLC") and O. 83 of the Rules of the High Court 1980 ("RHC").

Facts Of The Case

By a loan agreement dated 26 July 1995 ("loan agreement"), the plaintiff granted to the defendant two loan facilities viz, a term loan of RM23.5 million ("term loan") and a bridging loan of RM36.5 million ("bridging loan").

By the charges registered on 12 November 1995, the defendant charged the properties to the plaintiff, as security for the repayment of all principal sums outstanding under or in connection with the term loan and bridging loan ("the loans") together with interest thereon.

The plaintiff disbursed RM23.5 million under the term loan and RM2.3 million under the bridging loan to the defendant on 1 August 1995.

In breach of the charges, the defendant had failed to pay interest starting from the month of August 1995, as a result of which by a letter dated 3 October 1995, the defendant had, among others, applied for a moratorium on the payment of interest for six months.

By a letter dated 9 November 1995, the plaintiff rejected the defendant's said request, but instead granted an indulgence to the defendant, in that the defendant's account was allowed to be in the state of arrears of interest for a period of not exceeding three months only.

Nothwithstanding the indulgence from the plaintiff, in breach of the charges, the defendant had failed to pay arrears of interest for a period of more than three months.

By letters dated 23 January 1996, 14 March 1996 and 22 July 1996, the plaintiff had, among others, requested the defendant to update its account or to reduce the arrears in payment of interest for a period of not exceeding three months. However, the defendant had again failed to settle the arrears of interest in its account.

By two letters dated 2 October 1997, the plaintiff's former solicitors demanded for payment of the principal, interest and all other sums payable under the loans.

By two notices in Form 16D dated 17 October 1997 ("Form 16D notices"), the plaintiff called upon the defendant to remedy its default in respect of the charges. As the defendant has failed to do so, the plaintiff filed this application.

Submission For Defendant

The defendant resisted the plaintiff's application. Encik Richard W.G. Lee, learned counsel for the defendant, submitted in great detail, that there is "cause to the contrary" under s. 256(3) NLC so that an order for sale should not be granted. The lengthy submission presented for the defendant covered such areas as procedural improprieties or nullities; illegality and breach of public policy; plaintiff's premature and flawed demands in Form 16D notices; land acquisition by the government; penalty or excessive interest; and finally wrongful and excessive variation of interest.

Under the first issue relating to procedural improprieties or nullities, it was submitted for the defendant that the plaintiff's affidavit in support was affirmed before the originating summons was filed and learned counsel said he was fortified by four decisions, viz. Arab Malaysian Finance Bhd v. Serajudin bin Mohd Ismail & Anor[1999] 6 CLJ 405; Ban Hin Lee Bank v. Pang Lai Hin[1999] 4 CLJ 385; Chin Yoon Timber Co. v. Overseas Lumber Bhd[1978] 2 MLJ 173; and Sobri bin Arshad v. Associated Tractors Sdn Bhd[1991] 1 CLJ 798; [1991] 3 CLJ (Rep) 756.

He then launched a submission on the plaintiff's alleged breach