JUDGMENT

Gopal Sri Ram JCA:

[1] The only issue in this case is whether the respondent's application for an order for sale is barred by limitation. The facts - about which there is no dispute - are as follows.

[2] In 1984, the respondent's predecessor in title lent a sum of about RM300,000 to the appellant. The loan was secured by a charge over the appellant's land. The last repayment that the appellant made towards that loan was as long ago as 28 January 1986. By a notice dated 17 August 2000 in Form 16D of the National Land Code ("the Code"), the respondent made demand of the loan and accrued interest. Nothing was forthcoming from the appellant. So, the respondent took out an application under s. 256 of the Code seeking an order for sale of the subject land. It is the appellant's case that the foreclosure proceedings are barred by limitation since the loan had remained inactive for more than six years and the respondent had taken no proceedings to recover the same. The High Court ruled against the appellant and he appealed to this Court which dismissed the appeal.

2

The claim of the appellant in the Court below was in exercise of their statutory remedy against the respondent as chargor in default under the provisions of the National Land Code 1965 . The appellant's claim was not under a covenant but under the registered charge.

[1971] 1 MLRA 554, [1973] 1 MLJ 95 , was prayed in aid of this conclusion. In that case, Ong CJ (Malaya) said:

The chargees' claim herein was not on the covenant but in exercise of their statutory remedy against a chargor in default. Hence there could not have been any merger. In this connection I might add in parenthesis that, ordinarily, a chargee hardly ever has occasion to sue on the covenant, except where the moneys realised fall short of the amount needed to satisfy his claim for principal and interest.

Accordingly, s. 21(1) of the Limitation Act 1953 which provides that: "(1) No action shall be brought to recover any principal sum of money secured by a mortgage or other charge on land or personal property or to enforce such mortgage or charge, or to recover proceeds of the sale of land or personal property after the expiration of twelve years from the date when the right to receive the money accrued" has no application to this case. The proceeding in the Court below was not - to quote the words of the subsection - "an action ... brought to recover any principal sum of money secured by a mortgage".

(2) No foreclosure action in respect of mortgaged personal property shall be brought after the expiration of twelve years from the date on which the right to foreclose accrued:

Provided that if, after that date the mortgagee was in possession of the mortgaged property, the right to foreclose on the property which was in his possession shall not, for the purposes of this subsection, be deemed to have accrued until the date on which his possession discontinued.