JUDGMENT

Abdul Hamid Bin Hj. Omar LP:

In June 1983, the first respondent, Mae Perkayuan Sdn. Bhd. had desired to develop certain lands comprised in Lots 3243 to 3248, Mukim of Dungun, Trengganu, into a housing estate ("the Dungun Project"). It had also desired to purchase 6 Lots of agricultural land in Tampin, Mukim of Alor Gajah, Melaka, in total area 29.1 acres for the purpose of development into a housing estate ("the Alor Gajah Project"). To this end, the first respondent approached the appellant, Bank Bumiputra Malaysia Bhd., Kuala Trengganu ("the Bank"), for a bridging loan for the Dungun Project, and for money to purchase the land for the Alor Gajah Project.

On 25 June 1983, the Bank having studied details of the proposals of the first respondent, had agreed in writing to grant what it called 'overdraft facilities' to the first respondent, in the sum of RM4,500,000 (See the facility letter Exh. P2). Among the terms and conditions contained in Exh. P2 were these:

Facility: secured overdraft for RM4,500,000.

Purpose: (1) As building finance for proposed development of 6 Lots of land in Dungun ... RM2.4 million. (2) To purchase 29.1 acres of agricultural land in Alor Gajah .