ABDUL AZIZ J:

On 6 November 1996, the third defendants, Vimtex Sdn Bhd, charged a land of theirs to the plaintiffs under s 242 of the National Land Code 1965 to secure the repayment of certain loans granted by the plaintiffs to the third defendants.

The loan agreement having been defaulted, on 6 November 1997 the plaintiffs recalled the loans.

On 19 December 1997, upon the application of the plaintiffs made in this action, receivers were appointed by the court over the business, assets and property of the third defendants.

On 6 May 1998 the plaintiffs, as chargees of the land, filed an application (S5- 24-366-98) for an order for sale of the land under s 256 of the National Land Code ('the charge action'). On 1 October 1998, the plaintiffs obtained a postponement of the charge action to enable them to seek leave to proceed with it in view of the fact that receivers had been appointed by the court over the assets of the third defendants. The present application is the leave application, filed in this action on 4 November 1998.

This application being one for leave, it must have been prompted by a belief or fear on the part of the plaintiffs' solicitors that in law leave would be necessary to proceed with the charge action in view of the fact that receivers had been appointed by the court over the assets of the third defendants. Learned counsel for the plaintiffs, however, spent some time in submitting that the authorities, particularly Zainal Abidin bin Putih v Che Wan Development Sdn Bhd [1992] 2 MLJ 241 and Tai Kwong Goldsmiths & Jewellers (under receivership) v Yap Kooi Hee & Ors [1995] 1 MLJ 1

I do not find that I need to decide the question whether leave is necessary, except to say that certain authorities cited in submission seem to afford some room for arguing that leave is necessary. I shall proceed on the assumption that leave is necessary and decide only whether leave ought to be granted.

As to whether leave ought to be granted, I am content to rely on Lane v Capsey [1891] 3 Ch 411

The only point raised by learned counsel for the third defendants in submitting against leave that I need mention is that leave ought not to be granted to cure an action that has been commenced without leave. The following statement at p 146 of Kerr on Receivers and Administrators (17th Ed) was cited: 'The court will not allow the first step to be taken by anyone in the action, whether of ejectment or otherwise, against a receiver without an application having been first made to the court for permission to take it'. In the context of this case, the more fitting venue for raising that statement is the court that is seized of the charge action, but that court has already allowed a postponement of the charge action to enable leave to be obtained. Moreover, there is a statement at p 7631 of Company Receivers and Managers by O Donovan (2nd Ed) that: 'The court may even allow an applicant to continue proceedings commenced without leave in another court'.

I think the correct position is stated in Banku Behari Dey v Harendra Nath Mukerjee (1910–11) 15 CWN 54. I quote:

The learned Vakil for the Receiver has contended upon the authority of a decision of this court in the case of Pramatha Nath Gangooly v Khetha Nath Banerjee [1904] ILR 32 Cal 270; 9 CWN 247 that the consent of the court to an action against a receiver appointed by the court, is a condition precedent to the right of the party to sue and the omission cannot be rectified by a subsequent application for leave to continue an action brought without such permission. After careful consideration of the decision on which reliance has been placed, we regret we are unable to follow it as well-founded on principle. There is no statutory provision which renders it necessary for a litigant to obtain permission of the court by which the receiver has been appointed previous to the institution of the suit against him. No doubt if such a litigant makes an attempt to disturb the possession of the receiver, he may b