Eusoffe Abdoolcader FJ:

These two consolidated appeals, by the Government of the State of Negeri Sembilan and the Commissioner of Lands and Mines, Negeri Sembilan (whose correct designation however should be the Director of Lands and Mines by virtue of the amendment effected by PU (B) 324 of 1970) in Civil Appeal No. 86 of 1984, and Lesco Development Corporation Sdn. Bhd. (`Lesco') in Civil Appeal No. 101 of 1984, relate basically to the claim of the respondents to an equitable right to remain on their respective lots on the land in Ulu Temiang in the Mukim of Seremban on which they have been resettled. The respondents originally had also sued the Collector of Land Revenue, Seremban (`the Collector') and the Registrar of Titles, Negeri Sembilan but at the inception of the hearing in the High Court withdrew the claim against them.

It will be necessary to briefly set out the factual background of this matter, without however requiring any extensive introgression into details as in our view the issues that arise for determination are primarily matters of law. The respondents who were living in houses built by them on some land in Rahang Kecil in the Township of Seremban and paying ground rent to Seremban Enterprise Ltd., the registered proprietor thereof, were informed in April 1972 that a portion of this land had been acquired by the State Government for a road widening project. The respondents then appealed to the Collector for time to vacate and either for low cost houses or State land, and in due course they were asked to attend an inquiry before him which they did with regard to compensation as a result of the acquisition. They were offered and agreed to accept varying amounts by way of compensation and were also allotted lots of land in Ulu Temiang for resettlement. They also appeared before the State Land Committee and it would appear, as the State Legal Adviser conceded in the course of the trial, that the respondents did submit applications for State land in that area. The lots allotted to the respondents were demarcated by wooden pegs and they were permitted by the Collector to build houses on their respective lots and were able to obtain water supply on his recommendation. So much is agreed between the parties but the area of serious dispute between them is whether the respondents were only permitted to stay at Ulu Temiang pro tempore as alleged by the appellants or whether, as the respondents contend, they were allowed to reside there permanently with a promise of a State lease for a term of ninety nine years in respect of the lots allocated to them.

In the event not only were the respondents given no title but the land in question occupied by them was alienated to Lesco in May 1981 for a term of ninety nine years. Lesco was to develop the land in question into a housing estate to be known as Taman Muhibbah and accordingly called on the respondents and the other families settled there to quit and deliver up vacant possession of the parts occupied by them and demolish and remove the buildings erected thereon and coupled this with an offer to each of them of compensation and an option to purchase a low cost house in the proposed housing estate at a reduced price and temporary accommodation in the meanwhile. Several other families resettled on the land in question accepted the offer but the respondents adamantly refused and instituted the present proceedings to advance claims against the appellants which raise two main issues for determination, namely, (1) whether the respondents have acquired an equitable right or interest to remain on the respective lots allocated to them, and (2) whether the alienation of the land in question to Lesco is bad in law and therefore void.

This action was heard by Peh Swee Chin J who in a reserved judgment delivered on 25 February 1984 held on the first issue that the Collector did intimate to the respondents that they would be allowed to remain on the land on a permanent basis a