Wan Yahya SCJ(delivering the judgment of the court)

On 16 December 1991, the High Court at Kuala Lumpur allowed the application by the respondents ('the chargees') for the removal of a caveat made under s 327 of the National Land Code 1965 ('the NLC'). The appellant ('the chargor') is dissatisfied with that decision.

The events that transpired between the parties in so far as they are relevant to the present appeal are as follows: The appellant was the registered proprietor of a property held under Geran No 12088, Lot 76, Sek 89, Bandar Kuala Lumpur, Wilayah Persekutuan ('the property') which was charged to Perwira Habib Bank Bhd and Kwong Yik Bank Bhd ('the chargees'), both chargees ranking pari passu with the other.

Foreclosure proceedings were taken out by the chargees in the High Court Kuala Lumpur and an order of sale was issued on 7 February 1986. The auction sale subsequently fixed for 3 July 1987 ('the first auction sale') had to be called off because the chargor had on the same day obtained an interim injunction restraining the conduct of the sale. The injunction was later dissolved by Ajaib Singh J (as he then was) on 7 August 1987 and the auction sale was ordered by the same judge to take place on 29 October 1987 ('the second auction sale'), such sale to be so in accordance with summons for directions dated 22 January 1987 (at p 146). At the second auction sale, there was no bidder and the auction was postponed. On 13 July 1988, the plaintiff wrote to the senior assistant registrar ('SAR') asking for a new auction date and the third auction sale was fixed for 20 October 1988, copies of these letters were not extended to the chargor. According to the chargees' affidavit the third auction sale was again called off because of some differing particulars appearing in the proclamation of sale and in the court files. On 19 October 1988 (after a lapse of about one year), the SAR by letter (exh B3) appointed the same auctioneer to conduct the sale on 25 November 1988 ('the fourth auction sale').

The fourth auction was subject to conditions of sale allegedly on similar terms as the previous one prepared in the second auction sale. The relevant conditions applicable to our present case are:

(2) The chargee be and is hereby at liberty to bid at the sale and in the event of him becoming the purchaser to set off the purchase price against the amount due on the said charge on the said date of sale, plus the costs and expenses of the sale plus all costs due from the chargor by way of cost in this order of sale.

(3) No bid shall be less in advance of the previous bid than a sum to be fixed by the penolong kanan pendaftar, Mahkamah Tinggi Kuala Lumpur, at the time of sale and no bid shall be retracted.

(4) All intending bidders are required to deposit with the penolong kanan pendaftar, Mahkamah Tinggi Kuala Lumpur, 10% of the fixed reserve price for the said property by bank draft in favour of the penolong kanan pendaftar, Mahkamah Tinggi Kuala Lumpur, prior to the auction sale. (Emphasis added.)

The chargees who were the highest bidders at the sale did not pay the 10% deposit. Nevertheless, the SAR declared them to be the successful bidders, presumably on the same reason as given in the chargees' affidavit that they were entitled to set off that amount against the sum due on the charge. It was not until three days later, ie on 28 November 1988 that the chargees paid a sum of RM250,000.

The chargor, who claimed that he was not notified of the date of the auction sale and aggrieved by the breaches of its conditions, entered a private caveat which was registered on 5 June 1989.

The certificate of sale was not exhibited in any affidavit but it would appear from the letter written by the chargees' solicitor to the deputy registrar, High Court Kuala Lumpur, dated 30 May 1989 that although the certificate of sale was issued on 30 March 1989, registration of which was refused by the Pemungut Hasil Tanah, Wilayah Persekutuan on some