Suffian LP:

On 16 August 1966 the appellant (whom I shall refer to simply as the chargor) executed a charge in favour of the respondent bank (whom I shall refer to simply as the charges) over his land to secure the repayment of an overdraft.

The relevant words of the charge read:

I (chargor) proprietor of the land described below (hereinafter called the said land): for the purpose of securing the payment to the chargee..... with interest, the sums from time to time due to the said chargee by me .... up to the limit hereinafter stipulated:

Hereby charge the said land with the payment to the chargee . . . . of the said sums and interest thereon in accordance with the provisions annexed hereto. ....

Annexure

I (chargor) DO HEREBY EXPRESSLY AGREE ...

1 On demand to pay to the chargee and do hereby confirm that the said land is charged with and shall be security for the payment on demand of all sums heretofore or hereafter to be advanced to me by the chargee.... with interest thereon at the rate hereinafter stipulated.... up to the abovementioned limit of .... $6,000 only for principal (hereinafter called the said limit) and for interest at the rate of ... 9.6% per annum with monthly rests .... such sums to be raised and paid at the times and in manner following that is to say forthwith upon demand by the chargee in manner provided.

2. Any notice or demand required or authorised by this charge or statute to be given or served may be made by a notice in writing in such form as may be prescribed by the National Land Code ...

13. It is hereby agreed that for the purpose of ascertaining whether the limit of the principal intended to be hereby secured has been exceeded or not all accumulated and capitalised interest shall be deemed to be interest and not principal sum."

On 27 March 1968 the chargee wrote the chargor a letter as follows:-

We wish to draw your attention to your excess overdrawings of $6,279.50 against an authorised limit of $6,000.

Please arrange to pay in about $350 as soon as possible."

On 11 June 1971 the chargee wrote him another letter:-

This is to inform you that you have exceeded your Current Account Overdraft limit of $6,000 by $281.03 (Dollars Two hundred eighty one and cents three only), at the close of business on 31 May 1971.

In view of our fast approaching closing, we shall be glad if you will kindly cover up the excess as soon as possible."

On 2 December 1971 the chargee wrote him yet a third letter:-

Your Overdraft Account No: 2388

We wish to draw your attention to your excess overdrawing of $465.73 as at 29 November 1971 due to accumulation of interest against an authorised limit of $6,000.

We hereby request you to settle the excess on or before 9 December 1971 failing which, we shall have no alternative but to recover the over drafting from you."

On 5 April 1972 the chargee served on him a notice of default in form 16D prescribed by the National Land Code. That notice was as follows:

NATIONAL LAND CODE

FORM 16D

(Section 254)

NOTICE OF DEFAULT WITH RESPECT TO A CHARGE

To: Jacob S/o Muthiah of 2 Jalan Cherry Park, Ipoh, chargor under the charge described in the schedule below of the land so described.

Whereas you have committed a breach of the provisions of this charge by failing to pay to the chargee the balance of the principal sum secured by the charge and amounting to $6,655.55 inclusive of interest as on 25 February 1972 payable on demand with further interest at the rate of 10 1/4% per annum from 26 February 1972 to the date of repayment.

And whereas the breach has continued for a period of at least one month prior to the date of this notice.

We as solicitors for the Oversea-Chinese Banking Corp. Ltd. the chargee by virtue of the powers conferred by s. 254 of the National Land Code hereby require you within the period of one month from the service of the notice to remedy the breach.

And Take Notice that if you fail to remedy the breach within that period the charge