JUDGMENT

Nik Hashim J:

Application

The plaintiff by an originating summons applied under s. 327 of the National Land Code 1965 (the Code) for the following remedies:

(a) that the private caveat lodged by the defendant against the land held under GM 4252, Lot No. 4348, Mukim of Sura, District of Dungun, Terengganu (the said land) be removed forthwith;

(b) that the defendant pay damages to the plaintiff for the losses incurred by the plaintiff as a result of the entry of the said private caveat;

(c) that the defendant do indemnify the plaintiff against any claims that the purchaser of the said land may make against the plaintiff;

(d) costs.

Background

The plaintiff by a letter dated 23 October 1983 granted a loan of RM1,780,000 to one MAE Sdn Bhd (the borrower). The loan was guaranteed by the defendant herein and another individual. The loan was secured by, inter alia, a charge dated 22 March 1984 over the said land and a charge over another property both of which under third party charges created by the defendant herein who was the registered proprietor thereof.

The borrower defaulted in repayment of its loan and the plaintiff filed a suit at the Kuala Terengganu High Court under Suit No. 23-83-86 (the suit) against the borrower and the defendant and another individual for the recovery of the same. In their defence and counterclaim, they alleged that the plaintiff had prematurely recalled and cancelled the loan and thereby had caused unneccessary loss and damages to them. They prayed the loss and damages to be set off against the plaintiff's claim.

As the defendant failed to make any payments to the plaintiff as demanded in the Form 16E, the plaintiff filed an application to the Land Office for an order for sale of the said land.

Consequently, on 19 September 2000 the said land was sold to one Ruslam bin Ali @ Mansor (the purchaser) for RM437,000 at an auction, and it was a term of the conditions of sale that the balance purchase price of RM393,300 (after deducting the 10% deposit of RM43,700) be paid within 90 days from 19 September 2000. At the time of the auction, no private caveat exists on the said land.

At the request of the purchaser, the Land Office had extended the time for the purchaser to settle the balance purchase price to 18 January 2001.

On or about 26 December 2000, the defendant lodged a private caveat on the said land. On 17 January 2001 the plaintiff was notified of the caveat by the Land Office.

On 18 January 2001 the purchaser paid the balance purchase price of RM393,300 to the Land Office.

By reason of the private caveat lodged by the defendant, the Land Office is not able to issue a certificate of sale to the purchaser and hence the plaintiff's application to remove the caveat.

After hearing the parties, I, on 5 September 2001, dismissed the preliminary objections with costs and allowed the private caveat to be removed with costs. I now give my reasons.

Preliminary Objections

At the start of the hearing, learned counsel for the defendant raised four preliminary objections to the application, namely:

(a) Originating summons is not appropriate procedure for the plaintiff's application, and therefore bad in law.

(b) The defendant contends that there is a stay order in respect of the suit, the subject matter of which is the said land. Thus, the court must stay its hand as further proceedings are illegal, and counsel cited Mulraj v. Murti Rajhunathji [1967] AIR 1386 in support.

(c) The plaintiff is not an aggrieved party as the land was successfully sold to the purchaser.

(d) The plaintiff was not capable of being a chargee under the State of Terengganu Malay Reservations Enactment 1360 on 14 March 2001 when the originating summons was filed and thus has no locus standito file the application.

With regard to the objection (a), it is to be noted that, unlike in the application, the said land is not the subject matter of the suit. Therefore, the proper procedure for removal of a private caveat is not by way of a