JUDGMENT

Peh Swee Chin J:

I have earlier dismissed the appeals of the 1st defendant, (the Company), and the 3rd defendant, (the Guarantor), respectively from a decision of the learned Registrar granting leave to enter final judgment against them in favour of the plaintiff, (the Bank), on an O. 14 application for summary judgment. I now give my reasons.

The Bank has earlier sued the Company for RM6,460,603.74 with interest and costs due on a banking account in respect of which the Bank had granted an overdraft facility. Although this action is not a foreclosure summons, it will be pertinent to point out that the money so lent and so owing was also secured by a charge over certain land of the Company, in addition to its being secured also by a letter of guarantee signed by the Guarantor in favour of the Bank and concerned herein. In this action, therefore the Bank has sued the Company on a covenant to pay money so lent and so owing, and the Guarantor on her guarantee to pay the same.

Before me on appeal, learned Counsel for the Company submitted implicitly on the basis, that the said charge executed by the Company was an English mortgage at common law or a transaction exactly like such an English mortgage. On the said basis, he submitted that the equity of redemption had been lost because of the order of sale by public auction made by the Court. He relied on the case of Khaw Joo Tok & Ors. v. Ng Boo Bee & Ors. [1920] 15 SSLR 183, as authority for the proposition that because of the loss of such equity of redemption, the Bank could not sue the Company on a covenant to pay the residue.

In the Ng Boo Bee case, certain property was mortgaged, certainly not in the form of a memorandum of charge as under our present National Land Code or its predecessor, the former Land Code of 1926 of the Federated Malay States. The mortgage took the form of and was intended to be, a mortgage as in England at common law. It was held to the effect as follows after the consideration of various English authorities on such mortgage, i.e., that if a mortgagee first proceeded in Court on the covenant to pay against the mortgagor, and obtained part but not complete payment of his debt, he could still foreclose the mortgaged property for the residue or any deficiency; but on the other hand, if the mortgagee foreclosed the property first and then found the proceeds insufficient to pay himself completely, then equity would only permit him to sue mortgagor on the covenant for the residue by requiring the mortgagee to give a right of redemption to the mortgagor but if after foreclosure decree absolute or sale and the mortgaged property had already been sold to a stranger, the mortgagee had put it out of his power to reconvey the same to the mortgagor, equity would not permit the mortgagee to sue the mortgagor on the latter's covenant to pay for the residue or deficiency.

It is necessary to set out the ratio decidendi of Ng Boo Bee case in order to understand the learned Counsel's submission.

I found the submission to have no substance at all for the following reasons.

In the first place, the premise that a charge under National Land Code is the same as an English mortgage at common law is patently erroneous. A charge is governed by detailed statutory provisions of the National Land Code while an English mortgage at common law was a horse of a different colour altogether. It is not necessary to delve into all the differences between a charge and a mortgage beyond mentioning one or two of such differences. In an English mortgage at common law, the mortgaged property was transferred to the name of the mortgagee on the creation of the mortgage with a proviso for redemption. Under the said proviso, the mortgagee agreed to re-transfer the mortgaged property by a certain date beyond which it was stated to be irredeemable. Equity stepped in and provided the equity of redemption, by which the right to redeem was extended beyond the said date and would be lost only on fo