Gunn Chit Tuan SCJ:

[1] The issues raised in these two appeals, which were heard together, involve the Court's interpretation of ss 14 and 28 of the Stamp Act 1949 (Consolidated and Revised - 1989) (hereinafter referred to as "the Act"). The principal issue in these cases was concerned with the construction of s 28 of the Act, that is, whether interest which is capitalised under a charge document still retains the character of interest so that stamp duty is chargeable on the original loan amount only under s 28(1) of the Act. The other issue is connected with the principal issue and raises the question whether such capitalised interest is interest for the purpose of s 14 of the Act so that no stamp duty is chargeable on it.

[2] The background facts of these cases are simple. Two banks, namely the United Malayan Banking Corporation Berhad (hereinafter referred to as "UMBC") and the Oversea-Chinese Banking Corporation Limited (hereinafter referred to as "OCBC") as chargees had lent RM8,000,000 and RM150,000 respectively to the abovementioned respondents, both of whom had defaulted in repayment of principal and interest after service of notices in Form 16E under s 255 of the Nat