JUDGMENT

Low Hop Bing J:

Application

[1] This is the plaintiff's application by way of originating summons in encl. (1) pursuant to s. 256 of the National Land Code 1965 seeking an order for sale of two pieces of land held respectively under Pajakan Negeri No. 9441, Lot No. 6836; and Pajakan Negeri 9440 Lot 6837, both in the mukim of Batu Berendam, Melaka (collectively "the land").

[2] A reference hereinafter to a section is a reference to that section in the National Land Code 1965 unless otherwise stated.

Factual Background

[3] This does not appear to be disputed.

[4] Vide letter dated 12 July 1999, the plaintiff offered to the defendant banking facilities in the sum of RM1 million, of which RM350,000 was by way of term loan at the agreed interest of 2.5% p.a. above the base lending rate, with a monthly instalment of RM5,198 repayable over 84 months, the final payment being on or before 31 December 2005, and with a penalty interest of 1% p.a., while the other component of RM650,000 was by way of overdraft and letters of credit, bankers acceptance with various rates of interest stated therein (collectively "overdraft facility").

[5] The said banking facilities were accepted by the defendant and secured by way of first and second legal charges vide presentations No. 8191/99 Jilid 654, Folio 86 and No. 8192/99 Jilid 654 Folio 87 respectively.

[6] Vide another letter dated 30 December 2000, the plaintiff offered to the defendant further overdraft facility in the sum of RM1 million with the conditions stated therein and which the defendant had accepted. It was secured by way of a third legal charge vide presentation No. 2276/01 Jilid 714 Folio 86.

[7] The defendant has defaulted in the repayments and had been in breach of the terms and conditions of the above three charges.

Governing Principles

[8] The parties herein share the common ground that in the instant application, s. 256(3) applies and that the court shall order the sale of the land to which the charge relates "unless it is satisfied of the existence of cause to the contrary".

[9] Gopal Sri Ram JCA speaking for the Federal court followed Murugappa Chettiar v. Letchumanan Chettiar ; [1939] MLJ 296 HC; and Keng Soon Finance Bhd v. MK Retnam Holdings Sdn Bhd & Anor and elaborated that the burden is on the chargor to show "cause to the contrary" within s. 256(3) , which may be established only in three categories of casesviz :

(1) any of the exceptions to the indefeasibility doctrine in s. 340;

(2) the chargee had failed to meet the conditions precedent for the making of an application for an order for sale; and

(3) the grant of an order for sale would be contrary to some rule of law or equity.

[10] Defendants relied on categories (2) or (3) above, and raised several issues which I shall now consider.

Loans Not Correctly Specified

[11] Defendant's learned counsel Mr. AB Ng submitted that the plaintiff's application was misconceived as the total claim was wrong and the type of loan was not specified.

[12] Learned counsel Miss Nurul Huda contended for the plaintiff that the plaintiff's claim and type of loan has been clearly specified in accordance with the rules.

[13] My perusal of the plaintiff's originating summons reveals that the plaintiff's claim against the defendant has been clearly specified, seeking an order that the land be sold by way of private treaty and/or public auction to recover:

(1) RM244,420.18 being the term loan facility as at 15 July 2004 together with interest at 6.5% p.a. together with penalty interest of 1% p.a. on all arrears calculated from 16 July 2004 until realisation; and

(2) RM1,838,996.63 being overdraft facilities as at 15 July 2004 together with interest at 2% p.a. above the base lending rate together with penalty interest at 1% p.a. calculated from 16 July 2004 until realisation.

[14] With the utmost respect, I find that the submission presented for the defendant is devoid of any merit and cannot be sustained.

Right To Possession

[15] It was argued for the defen