Searching Case Laws & Precedent on Legal Query..!
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Searching Case Laws & Precedent on Legal Query..!
Scanned Judgements…!
Illegality of Action Against Native Land and Auction Seekings in Sabah
Native Land and Customary Rights - Under the Sabah Land Ordinance (Cap 68), land held under native title or customary tenure cannot be sold to non-natives (PUBLIC BANK BERHAD vs RIA REALITI SDN BHD & ORS - 2021 MarsdenLR 1971, LEMBAGA PEMBANGUNAN PERUMAHAN DAN BANDAR & ANOR vs JUMARAK NIN KINJIN - 2021 MarsdenLR 2922, YUN FOOK PLANTATION SDN BHD vs JULES @ JAULIS B ROMOU & ORS - 2025 MarsdenLR 1897, YUN FOOK PLANTATION SDN BHD vs JULES @ JAULIS B ROMOU & ORS - 2025 MarsdenLR 2433). The Ordinance explicitly restricts alienation of native land, emphasizing that such land is for the benefit of the natives and cannot be transferred or sold contrary to statutory provisions.
Legal Status of Land Transactions - Actions to sell native land or seek auction of native land in breach of the Sabah Land Ordinance are illegal. For instance, a financing arrangement or sale that violates sections 17 and 64 of the Ordinance is deemed illegal and invalid (PUBLIC BANK BERHAD vs RIA REALITI SDN BHD & ORS - 2021 MarsdenLR 1971). Similarly, transfers of native land without proper compliance are null and void, especially if the transfer is to non-natives or not authorized under the Ordinance (LEE YEE WUEN vs SEEK KENG MEE & ORS - 2021 MarsdenLR 3334, LEMBAGA PEMBANGUNAN PERUMAHAN DAN BANDAR & ANOR vs JUMARAK NIN KINJIN - 2021 MarsdenLR 2922).
Authority and Jurisdiction - Native land claims and rights are under the jurisdiction of the Collector and the Director of Lands & Surveys, who have exclusive authority to decide on native customary rights and related claims (LEMBAGA PEMBANGUNAN PERUMAHAN DAN BANDAR & ANOR vs JUMARAK NIN KINJIN - 2021 MarsdenLR 2922). Court actions attempting to determine native rights or validate land transfers without following the prescribed statutory process are likely to be invalid.
Implication for Companies and Non-Natives - Companies or individuals seeking to initiate actions such as auctioning native land or seeking orders for sale with proceeds to benefit a company are likely acting illegally if they do not comply with the Sabah Land Ordinance. For example, a company claiming to hold native land or seeking to auction it without proper native consent or legal authority would be acting outside the law (PUBLIC BANK BERHAD vs RIA REALITI SDN BHD & ORS - 2021 MarsdenLR 1971, ABD HAMAN @ SAKARAN MOHD YASIN & ORS vs DATUK ZULKIFLI TUN MUSTAPHA & ORS - 2023 MarsdenLR 1567).
Summary and Conclusion - It is generally illegal for a company or any party to commence an action that seeks to auction native land in Sabah or to have the proceeds used to pay the company, unless such action strictly complies with the Sabah Land Ordinance and related statutory procedures. Actions that bypass or contravene the Ordinance, especially those involving native land, are likely to be invalid and subject to legal challenge.
References:- PUBLIC BANK BERHAD vs RIA REALITI SDN BHD & ORS - 2021 MarsdenLR 1971- PAULUS @ PAUL GAHIN & ORS vs LESTARI LTC SDN BHD & ANOR - 2024 MarsdenLR 1289- ABD HAMAN @ SAKARAN MOHD YASIN & ORS vs DATUK ZULKIFLI TUN MUSTAPHA & ORS - 2023 MarsdenLR 1567- LEE YEE WUEN vs SEEK KENG MEE & ORS - 2021 MarsdenLR 3334- LEMBAGA PEMBANGUNAN PERUMAHAN DAN BANDAR & ANOR vs JUMARAK NIN KINJIN - 2021 MarsdenLR 2922- NUR AZLIN RAZAL @ ABD RAZI vs KAMUNRI NAHO & ORS - 2021 MarsdenLR 1259- ABD HAMAN @ SAKARAN MOHD YASIN & ORS vs DATUK ZULKIFLI TUN MUSTAPHA & ORS - 2022 MarsdenLR 1829- YUN FOOK PLANTATION SDN BHD vs JULES @ JAULIS B ROMOU & ORS - 2025 MarsdenLR 2433
In the lush landscapes of Sabah, Malaysia, land disputes between companies and indigenous communities often make headlines. Imagine a company lending money to a native landowner, only to later sue for repayment by seeking to auction off native customary land (NCR land). But is this legal? The question arises: Is it Illegal for a Company to Commence an Action against a Native in Sabah and Seek for an Order that the Native Land be Auction and the Auction Proceeds with Use to Pay the Company?
This post delves into Sabah's unique land laws, prioritizing native rights, and examines why such actions by companies are generally unsustainable. Drawing from key legal precedents and principles, we'll uncover jurisdictional hurdles, the void nature of illegal transactions, and broader insights from auction practices. Note: This is general information, not specific legal advice. Consult a qualified lawyer for your situation.
Sabah's land regime heavily protects indigenous rights through the Sabah Land Ordinance (Cap. 68). Native customary rights (NCR) over land without formal titles are recognized and safeguarded. Land dealings involving native customary rights (NCR) are heavily regulated under Sabah law, and illegal transactions are unenforceable WONG KIEN CHING & ORS vs RIA REALITI SDN BHD & ORS - High Court Sabah & Sarawak Sandakan (2020).
Companies cannot simply treat NCR land as collateral for loans or debts. Transactions contravening sections 17 and 64 of the Sabah Land Ordinance—such as unauthorized dealings—are deemed illegal and void. Courts have ruled that ownership claims based on illegal transactions under the Sabah Land Ordinance are unenforceable WONG KIEN CHING & ORS vs RIA REALITI SDN BHD & ORS - High Court Sabah & Sarawak Sandakan (2020). This legislative intent prevents exploitation of indigenous communities.
A core barrier for companies is jurisdiction. Disputes over NCR land without clear titles fall exclusively under native courts. Disputes involving native land without titles are to be resolved within native courts, which have exclusive jurisdiction over such matters WONG KIEN CHING & ORS vs RIA REALITI SDN BHD & ORS - High Court Sabah & Sarawak Sandakan (2020).
In parallel cases from Sarawak, courts confirmed that native land disputes must go to Native Courts. Sabah precedents echo this: actions by companies lacking statutory authority are dismissed for want of standing. Companies not recognized as native entities or without approvals cannot unilaterally claim or dispute native land rights WONG KIEN CHING & ORS vs RIA REALITI SDN BHD & ORS - High Court Sabah & Sarawak Sandakan (2020).
Attempting to bypass native courts by filing in civil courts risks dismissal. Native courts are specialized, considering customary laws and community claims that general courts cannot.
Seeking a court order to auction NCR land for debt recovery typically fails. In a winding-up scenario, loans and dealings based on illegal native land transactions are invalid, and companies or individuals cannot rely on such transactions to establish ownership or rights WONG KIEN CHING & ORS vs RIA REALITI SDN BHD & ORS - High Court Sabah & Sarawak Sandakan (2020). Recognizing such claims would undermine public policy.
This principle aligns with broader auction safeguards seen in liquidation cases. For instance, illegal encroachers cannot demand sale deeds from company assets in liquidation; public auctions are mandatory under Section 457(1)(c) of India's Companies Act, 1956, to ensure fair value K.BALAKRISHNA vs Official Liquidator - 2025 Supreme(Telangana) 144. The court ruled that an illegal encroacher cannot demand a registered sale deed for property belonging to a company in liquidation, emphasizing the necessity of public auction for asset sales K.BALAKRISHNA vs Official Liquidator - 2025 Supreme(Telangana) 144.
Similarly, improper auctions—lacking publicity or fair process—are set aside. In another case, a sale was invalidated due to no proper notice or bidders, stressing that no bidder participated in the said auction and procedural compliance is mandatory Prabin Ram Phukan VS State of Assam - 2015 1 Supreme 113. These underscore that auctions, even for debts, demand strict legality, especially over protected lands like NCR.
Non-native companies generally lack standing in NCR disputes. Companies that are not recognized as native or have not obtained necessary permissions are barred from asserting rights over native land WONG KIEN CHING & ORS vs RIA REALITI SDN BHD & ORS - High Court Sabah & Sarawak Sandakan (2020). Courts dismiss suits where companies seek ownership via illegal dealings.
In liquidation contexts, undervalued auctions or ignored objections lead to sales being set aside. Property sold at lesser value – Company Judge failing to exercise his judicial discretion – The valuation report... ought to have been disclosed... sale liable to be set aside Tech Invest India (Pvt. ) Ltd. Thr. Major Shareholder Rajiv Gosain VS Assam Power & Electricals Ltd. - 2015 7 Supreme 229. Companies in Sabah face amplified risks, potentially incurring penalties for pursuing unenforceable claims.
E-auctions, while valid if procedurally sound, cannot cure jurisdictional defects. E-auction sale procedures followed by banks are not arbitrary or invalid... if there is no specific prohibition Tamilnadu Organic VS State Bank Of India - 2014 Supreme(Mad) 384, but Sabah's native jurisdiction overrides general auction rules.
Rare exceptions exist:- Companies recognized as native entities or with statutory permissions (e.g., under Sabah Land Ordinance) may engage lawfully WONG KIEN CHING & ORS vs RIA REALITI SDN BHD & ORS - High Court Sabah & Sarawak Sandakan (2020).- Compliant transactions avoid voidness, but require rigorous due diligence.
Illegal dealings, however, invite civil or criminal repercussions. Courts prioritize NCR, as in cases where states improperly auctioned lands without notice, leading to restoration orders Prabin Ram Phukan VS State of Assam - 2015 1 Supreme 113.
To navigate Sabah land issues:- Conduct due diligence: Verify NCR status and obtain approvals before transactions.- Respect jurisdiction: File NCR disputes in native courts.- Seek alternatives: Use mediation or compliant securities, avoiding NCR land pledges.- Legal counsel: Both parties should consult experts in Sabah land law.
Indigenous communities can assert rights early, leveraging native courts' protections.
Sabah's framework balances development with indigenous heritage. Companies eyeing land deals must prioritize compliance to avoid costly failures. For tailored advice, engage a Sabah-specialized lawyer.
References:1. WONG KIEN CHING & ORS vs RIA REALITI SDN BHD & ORS - High Court Sabah & Sarawak Sandakan (2020) – Sabah Land Ordinance cases on illegal transactions.2. WONG KIEN CHING & ORS vs RIA REALITI SDN BHD & ORS - High Court Sabah & Sarawak Sandakan (2020) – Native courts jurisdiction.3. WONG KIEN CHING & ORS vs RIA REALITI SDN BHD & ORS - High Court Sabah & Sarawak Sandakan (2020) – Company standing in NCR disputes.4. K.BALAKRISHNA vs Official Liquidator - 2025 Supreme(Telangana) 144, Tech Invest India (Pvt. ) Ltd. Thr. Major Shareholder Rajiv Gosain VS Assam Power & Electricals Ltd. - 2015 7 Supreme 229, Prabin Ram Phukan VS State of Assam - 2015 1 Supreme 113, Tamilnadu Organic VS State Bank Of India - 2014 Supreme(Mad) 384 – Auction and liquidation principles.
#SabahLandLaw, #NativeRightsMY, #LandDisputesSabah
Thus, notwithstanding the fact that the borrower is a company, the respondents would implicitly gain an undeserved windfall due to their immoral and illegal act in dealing with native land. ... [58] Therefore, it is plain that the second to fifth respondents are unjustly using their own illegal action to seek to reap a multi-million dollar windfall from a financial ins....
as the Minister may order." ... [9] On 12 July 2022, the Plaintiffs sought consent from the Collector of the Lands & Surveys Department as trustee of the Land to commence legal action against the 1st Defendant. [10] The Collector did not reply within 14 days as requested. ... Directors Of Lands & Surveys & Ors; [1992] 2 CLJ (Rep) 211, Ian Chin J held that "the Collector has been empowered to decide on claims for #HL_START....
the company Merotai Estates Sdn Bhd was void ab initio and illegal. ... It reads: "In cases where any State land planned by the Government for the natives of Sabah or a claim to customary tenure of land has been established or a claim to native customary rights has been dealt with by a grant of land and such land is to be held or is held for the common....
Thus, according to the petitioner, he is in possession of the land admeasuring Ac.11.48 cents in company liquidation and he is ready to pay the market value. ... He cannot also contend that he is ready to pay the market value to the Official Liquidator in respect of the land admeasuring AC.8.28 guntas and seek a direction to Official Liquidator to execute registered sale deed in his favo....
be held by a Native of Sabah of at least 30% shareholding. ... [18] The 2nd defendant further explained that the said shares were transferred to the 1st defendant who is a native to comply with the condition in the Land Title No CL085311146 owned by the Company that the Company must have a 30% shareholding held by a native. ... In short, if it is found that the transfe....
land as only the ACLR had the jurisdiction to hear any Native Customary Rights claim pursuant to the provision of the Sabah Land Ordinance. ... Original jurisdiction to grant Native Customary Rights is given to the collector and to the director under ss 9 and 14 of the Sabah Land Ordinance. ... The alienation of state land is regulated by Sab....
[63] The plaintiff contended that the 39th defendant is neither a citizen or native and pleaded that the PA is illegal under the Sabah Land Ordinance (para 3), and by virtue of s 24(2)(g) of the Contracts Act 1950 (para 4). ... [2] The land is held under Native Title 103058608. It is the subject matter of dispute in the case at hand. [3] The plaintiff's cause of action#HL_END....
In this regard, s 76 of the Land Ordinance reads: [2017] 3 MLJ 127 is instructive: "It is plain and clear that s 12 of the Sabah Land Ordinance and r. 2 of the Sabah Land Rules do not recognise mere application for land and any payment made pursuant thereto as an undertaking that, the ... in the name of the Collector as trustee for the natives concerned but without power of sale and ....
them of the use and enjoyment of the Land. ... Ordinance , which reads: "In cases where any State land planned by the Government for the natives of Sabah or a claim to customary tenure of land has been established or a claim to native customary rights has been dealt with by a grant of land and such land is to be held or is held for ... for the natives ....
deprived them of the use and enjoyment of the Land. ... Ordinance , which reads: "In cases where any State land planned by the Government for the natives of Sabah or a claim to customary tenure of land has been established or a claim to native customary rights has been dealt with by a grant of land and such land is to be held or is held for ... for the....
It is also an admitted fact that the land of the company in liquidation has been put to auction three times and at last Auction Purchaser was found who has given the reserved price for purchasing the land in question. Additionally, the offer made by the Auction Purchaser has also been accepted by the Court vide its order dated 02.12.2017. I have heard learned counsel for the parties and after the perusal of the record, am of the considered opinion that this application of ARC....
7. Rajiv Gosain, a shareholder in the appellant-company, filed an application for rejecting the auction sale and for re-auction. 1 and the Official Liquidator had appointed S. K. Ahuja & Associates who had inspected the assets of the appellant-company and valued the assets to be worth Rs. 6.25 crores.
Secondly, the appellants were not given any notice of demand for payment of Rs. 731.70 and nor any notice was served prior to sale/auction proceedings as provided in the Regulation. Thirdly, the so called auction, even if held, was no auction as contemplated in the Regulation because no publicity was given to enable any bidder to participate in the auction proceedings and in fact no bidder participated in the said auction and lastly, in such circumstances, the auction sale made in fa....
The High Court by impugned judgment dated 27th April, 2001 cancelled the auction sale and allowed the writ petition. 3. A piece of land of the Company was put to auction for recovery of dues of the Company. It was challenged by the Company by filing a writ petition.
All the three procedures, namely, e-auction, public auction and auction by way of calling for tenders have been contemplated under the relevant provisions of the Information Technology Act, 2000. As such, it is clear that an e-auction and a public auction are different concepts and therefore, an e-auction cannot be equated with a public auction.
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