Eusoff Chin SCJ:

On 7 December 1982 the High Court had ordered that the land held under C.T. No. 1478, Lots 499 and 656 Mukim of Seremban which was charged to the respondent be sold by public auction under the National Land Code. Subsequent thereto, eight auctions were held on dates and at reserve prices as follows:

Dates Reserve price (in million)

4 September 1987 RM8.25

13 January 1988 RM7.4

5 April 1988 RM6.6

17 October 1988 RM6.0

4 July 1989 RM5.7

30 November 1989 RM5.3

23 November 1990 RM4.8755

12 June 1990 RM4.63

These auctions were not successful because there were no bidders.

The respondent took out a summons for direction for the Senior Assistant Registrar (SAR) to fix a new reserve price and the next date of auction sale. The respondent produced a valuation report dated 12 September 1990 prepared by a licensed land valuer which showed the estimated open market value of the land to be RM5,700,000 and the estimated forced sale value to be RM4,020,000.

On 18 January 1991 the SAR heard the application and fixed the reserve price at RM5,000,000. The appellant appealed to the Judge in chambers who on 20 March 1991 confirmed the SAR's order. The learned Judge then issued a certificate under O. 56 r. 2(2) of the Rules of the High Court that he did not wish to hear further arguments in open Court. The appellant appealed to the Supreme Court, and the respondent filed a notice of cross appeal.

Both the learned Counsels before the Supreme Court agreed that the main issue is the interpretation of s. 259(2)(c) of the National Land Code, (hereinafter referred to as the Code) namely whether the reserve price for the subsequent auction, can be fixed higher than the reserve price of the last unsuccessful auction sale which took place on 12 June 1990.

It was contended by the appellant's learned Counsel that the SAR should have fixed the reserve price at RM5.7 million because that is the estimated open market value of the land. On the other hand the learned Counsel for the respondent was of the view that since there was no bidder at the last auction sale at the reserve price of even RM4.6 million, the figure for the forced sale value of RM4,020,000 should be taken.

Section 259(1) and (2) of the Code states:

259 Procedure at Sale

(1) Every sale pursuant to an order under s. 256 shall take place under the direction of an officer of the Court, but this sub-section shall not prevent the Court from taking the assistance thereat of any licensed auctioneer.

(2) The officer under whose direction the sale takes place shall:

(a) receive the bids (including any bid by or on behalf of the chargee);

(b) settle summarily any question arising in the course of the proceedings;

(c) in the absence of any bid at or above the reserve price, withdraw the land or lease in question from the sale, direct that it be put up for auction on a subsequent date, either at the same or at a reduced reserve price, and see that the subsequent sale is publicly advertised in the like manner; and

(d) subject to para. (c), declare the sale concluded in favour of the highest bidder.

(Emphasis supplied)

We note that the order of sale of land made by the Court under s. 256 of the Code must, under s. 257(1)(d) of the Code, "require the Registrar of the Court to fix a reserve price for the purpose of the sale, being a price equal to the estimated market value of the land or lease in a question". Section 258 of the Code imposes a duty on the Registrar of the Court to see to it that everything that needs to be done before the auction sale takes place is properly done. It is argued by the learned Counsel for the appellant that at the auction sale the Registrar is not physically present, but that the sale is conducted by a Bailiff of the Court assisted by a licenced auctioneer. He is not certain whether it is the Bailiff who is "the officer under whose direction the sale takes place". Having perused the relevant provisions under the Code we are of the view that the SAR is t