Gopal Sri Ram JCA:

We dismissed this appeal at the conclusion of the submissions of Counsel for the appellant without calling upon Counsel for the respondent. Ordinarily we would not be minded to deliver written reasons for our decision in a case such as this. But, of late, there have been several appeals in which the issues which arose for decision were the same as those which have arisen for decision in the present case. We therefore consider it desirable to state written reasons for dismissing this appeal.

The facts relevant to the appeal are as follows.

The appellant is the registered proprietor of all that land held under HS(D) 2974 for Lot No. 11041 in the Mukim of Sungei Buloh ("the said land"). On 2 October 1985, she executed a charge over the said land in favour of the respondent to secure a loan of RM 600,000 granted by the respondent Bank to one Zinger Feedmill Sdn. Bhd. ("the borrower"). This is commonly known among the members of the legal profession as a "third party charge". It denotes a charge by a registered proprietor over his land to secure a loan made by the lender to a third party. As correctly submitted by Counsel, it is nothing more than a secured guarantee.

The loan in the present case bore interest at 3.25% above the bank's prevailing base lending rate. The rate of interest and the other obligations inter se the appellant and the bank are set out in the annexure to the instrument of charge.

The charge was duly registered in the appropriate land registry on 9 November 1985 and the loan disbursed to the borrower. The borrower having defaulted in making re-payment of the principal and interest, the respondent bank took out an application to enforce the statutory charge by way of an order for sale. The appellant resisted the bank's application on several grounds, all of which were argued before us. However, none of them found favour with the learned Judge who heard the application. He therefore made an order directing the sale of the land by public auction. It is against this order that the present appeal has been brought.

Before us the appellant argued that the learned Judge was wrong in making an order for sale of the land. Counsel submitted that the order applied for ought to have been refused for three main reasons.

First, the respondent bank had varied the rate of interest without giving any notice of the same to the appellant.

Second, the bank had, without the appellant's knowledge, permitted the borrower to breach the terms of the agreement between them. In particular, the bank had allowed the borrower to use the facilities secured by the charge for the benefit of an unrelated company. Our attention was also drawn (as was the learned Judge's) to the allegation that the bank had, without the appellant's knowledge or consent, permitted the borrower to exceed the amount of the original loan facility. It was said that the appellant had never intended the charge over the land to secure such unauthorised use of funds or the excess in question.

Third, the appellant had received neither any demand nor the statutory notice in Form 16D. We think that this ground of complaint may be dealt with shortly. There was, in our opinion, sufficient material before the learned Judge to dispel any suggestion that Form 16D had not been duly served on the appellant. In our view, there is clearly no merit in this complaint.

We now turn to the first two complaints which may be conveniently taken together. The question that arises is whether, even if the complaints made by the appellant are made out, they constitute sufficient reason for the refusal of an order for sale. This is a question of law which depends for its resolution upon the interpretation that is to be placed upon s. 256(3) of the National Land Code 1965 ("the Code")

and an appreciation of the decisions of our superior Courts on that section.

Section 256 of the Code, the marginal note to which reads " Application to Court for order for sale",