KC Vohrah J:

We allowed the appeal in this case and now elaborate on the reasons for doing so.

It is not disputed that there was a written agreement entered into between the respondent (the plaintiff) and the State Government of Perak on 4 March 1970 in respect of House No 43 Pokok Assam under the Rancangan Rumah Semua Kaum. Under the agreement it is stated that, subject to several terms and conditions, the State Government was desirous of leasing the premises to the plaintiff and the plaintiff intended to own the premises. The plaintiff agreed to buy the premises for RM3039.70 within 17 years from the date of sale and to pay monthly instalments in accordance with the amount that was to be fixed by the State Government from time to time. The plaintiff also agreed not to allow any person apart for himself and his family to occupy the premises without the permission of the State Government or to sell, transfer, charge or release the said premises.

Another term in the agreement provides that if there should be any breach of the contract by the plaintiff, the State Government was entitled to terminate the agreement after one month's notice to him.

It is to be noted that the conditions relating to the occupation, transfer, charge or release of the premises are contained in a contract and are not conditions imposed under the provisions of the National Land Code. But of course the conditions affect the plaintiff during the subsistence of the agreement and do not continue beyond the agreement to affect the land after it has been transferred to the plaintiff unless such conditions are conditions and restrictions in interest in the issue document of title affecting the land under ss 120 to 122 of the National Land Code. The point to note is that it is not the issue document of title which was relevant at the trial but the terms of the agreement which enure only during the subsistence of the agreement.

We now turn to another aspect of the case. The learned Judicial Commissioner before whom the trial was held found as a fact that the plaintiff had given a valid power of attorney to the appellant (the 1st defendant) to sell the house and that the 1st defendant, acting under the power of sale, had effected the sale of the said house to Palanisamy a/l Pampayan (the 2nd defendant) under a written agreement and that the plaintiff had failed to prove beyond reasonable doubt that the sale was fraudulent. We see no reason to disturb these findings of facts.

The learned Judicial Commissioner also held that this written agreement was void on two grounds, firstly, because the purported sale was founded on the mistaken belief that the house belonged to the plaintiff whereas the house belonged to the State Government and, secondly, because the sale was opposed to public policy.

As regards the first ground the learned Judicial Commissioner was of the view that the language of the agreement (between the plaintiff and the 2nd defendant) was clear to show that the purported sale was founded on the mistaken belief by both parties that the house belonged to the plaintiff and was therefore void under s 21 of the Contracts Act 1950. He relied on Chop Ngoh Seng v. Esmail & Ahmad Bros [1948-49] MLJ Sup p 93; Robin & Anor v. Goh Boon Chow, [1965] 2 MLJ 215 for such view. There is nothing, however, in the agreement between the State Government of Perak and the plaintiff to say that the plaintiff owned the house. It is against the weight of evidence to take the view that the plaintiff was under a mistaken belief that he owned the house. He could not have been mistaken as he was a party to that agreement. And that same agreement was handed over to the 2nd defendant as is acknowledged in the agreement between the 2nd defendant and the plaintiff. All that was sold, as will be shown later, is a right, arising under the agreement made between the plaintiff and the State Government, to purchase and own the house in the future provided certain conditions were fulfilled