ALASAN PENGHAKIMAN

These two suits were consolidated vide court order dated 13 January 1995. The background leading to the dispute is as follows:-

(1) By a memorandum of deposit dated 29 June 1967 (exhibit D.8), Dato Abdullah Ahmad who is the 1st plaintiff in the 1st suit and the 5th defendant in the 2nd suit, in consideration of Bank Bumiputra Malaysia Berhad ('BBMB'), which is the 1st defendant in the 1st suit and which has now ceased to be a party, granting him an overdraft facility ('the said facility'), deposited 5,000 shares of a company called Central Sugars Ltd which value then was RM7,200/-. The memorandum of deposit also provides for 'further shares/stock to be deposited from time to time'. From time to time, Dato Abdullah Ahmad deposited other stocks and shares as security for the said facility which later included 2,383,815 shares ('the said shares') of a company called Syarikat Permodalan Kebangsaan Berhad ('SPK') which is the 2nd defendant in the 1st suit and the 1st defendant in the 2nd suit. The said shares is the subject-matter of these suits. The registered owners of the said shares are Dato Abdullah Ahmad and three other persons who are the plaintiffs in the 1st suit and defendants in the 2nd suit (hereinafter referred to as 'the Abdullah group').

(2) Dato Abdullah Ahmad agreed and declared in the said memorandum of deposit, inter alia , that it shall be lawful for BBMB at any time or times thereafter during the continuance of the said facility 'without any notice to or any further consent or concurrence' from him 'to sell the mortgaged securities or any of them in such manner and upon such terms and conditions generally as they shall think fit and to apply the net proceeds of any such sale in or towards the discharge of the moneys hereby secured'.

(3) By letter dated 12 November 1981 BBMB increased the limit granted under the said facility to RM6 million and the security was stated therein as 'against the deposit of public-quoted shares approved by the Bank together with duly signed blank transfer forms'. Dato Abdullah Ahmad agreed to all the terms contained in that letter. The limit granted under the said facility was later increased to RM10 million vide letter dated 10 March 1982.

(4) In 1986 Dato Abdullah Ahmad defaulted. Several proposals to settle were made by Dato Abdullah Ahmad but nothing materialised. Subsequently by letter dated 24 March 1989 (exhibit P.11), the manager of the Kuala Lumpur branch of BBMB informed Dato Abdullah Ahmad that his outstanding balance in his overdraft account is currently RM18,388,509.13. After making reference to their recent discussion relating to the outstanding balance, the said manager informed him that with effect from the date of that letter, the bank is authorised to dispose off the public quoted shares as per list attached to that letter at the best prevailing rate and that the proceeds will be deposited into his account to reduce the outstanding balance. The said list did not include the said shares. The manager also informed Dato Abdullah Ahmad that a property agent will be appointed to dispose of the landed property charged to the bank. The said letter (exhibit P.11) read:-

'Re: Overdraft Account No. 001-0100963

Outstanding Balance As at to date:- $18,388,509-13(dr)

With reference to our recent discussion on the settlement of your outstanding balance with us I am pleased to advise that after taking into consideration your proposals, the Bank has decided on the following:-

1. That with effect, from today the Bank is authorised to dispose off your public quoted shares as per list attached at the best prevailing rate.

The proceeds of the disposal of the shares are to be deposited into your account to reduce the outstanding balance.

2. That a property agent be appointed to dispose off the landed property charged to the Bank.

This exercise is to be given six months to be finalised. Any proceeds from the sale of this property is to be applied towards the reduction of the overd