Augustine Paul JCA:

The facts of the case, as submitted by the parties, are that pursuant to a loan agreement dated 28 May 1983 Bank Bumiputra Malaysia Berhad ("the bank") granted a RM30 million loan in US dollar equivalent to Kredin Sdn Bhd ("Kredin"). The loan was secured, inter alia, by a third party charge over a piece of land created by Kekatong Sdn Bhd ("the respondent") in favour of the bank. The charge was registered in the land office on 28 May 1983. One Raju Kerpaya Jayaraman, an advocate and solicitor of the High Court of Malaya practising under the name and style of Jayaraman, Ong & Co, is, and was at all material times, the principal shareholder and controlling director of both the respondent and Kredin. By reason of Kredin's default in settling the loan judgment was entered in favour of the bank on 1 April 1986 for the principal sum of US$17,771,319.06 together with interest thereon in Kuala Lumpur High Court Civil Suit No S23-436-86. The judgment is significant because it confirms the indebtedness of Kredin to the bank. It has not been satisfied to-date. Pursuant to cls. 2 and 15 of the charge, the respondent is deemed to have agreed to pay the bank the debt of Kredin upon demand being made. A demand was made on 24 December 1985. Hence, monies became payable by the respondent to the bank. The bank filed foreclosure proceedings in relation to the land charged by the respondent which resulted in an order for sale being granted by the High Court on 17 September 1986 against the respondent. The respondent appealed to the Court of Appeal which set aside the order for sale solely on the ground that no proper or effective service of the demand was made by the bank on the respondent prior to the commencement of the foreclosure proceedings. In consequence, the bank served a fresh notice in Form 16D of the National Land Code 1965 on the respondent on 13 October 1998 demanding payment of the sum of US$57,790,482.20 representing Kredin's debt to the bank as of 30 April 1998. On 7 May 1999 Danaharta Urus Sdn Bhd ("the appellant") acquired from the bank the loan and charge by statutory vesting pursuant to the provisions of the Pengurusan Danaharta Nasional Berhad Act 1998 ("the Act"). The vesting certificate was issued on 31 July 1999 and was lodged with the Registrar of Companies on 4 August 1999. By virtue of the Act the consequence of the issue of the vesting certificate was that the rights and remedies which originally vested in the bank under the loan agreement and the charge against the respondent now vested in the appellant with effect from 7 May 1999. Both prior to the vesting and at all material times thereafter the account had been a non-performing one, and neither the respondent nor Kredin had ever made any attempt to settle the debt to the bank or the appellant. On or about 1 April 2002 the respondent entered a private caveat against the title of the charged land. The appellant had, in a separate proceeding, applied to the High Court under s. 372 of the National Land Code 1965 for an order to remove the caveat and it is pending in the High Court.

On or about 23 January 2002 the respondent filed a civil suit against the bank and the appellant seeking various reliefs, including damages and an injunction against the appellant. The respondent sought an ex parteinterlocutory injunction pending trial to restrain the Appellant from proceeding to sell the charged land by private treaty which was granted by the High Court on 28 January 2002. The injunction expired after 21 days. On 28 March 2002 the High Court dismissed the respondent's inter partesapplication for an injunction. The respondent appealed to the Court of Appeal. On 16 April 2002 the High Court declined to grant the respondent an Erinford injunction pending its appeal. On 29 April 2002 the Court of Appeal also declined to grant such an injunction.

When the appeal came up for hearing on 9 September 2002 the Court of Appeal noted that the respondent had