H

A
K

M
I
L
I
K

K
E
R
A
J
A
A
N

M
A
L
A
Y
S
I
A
CIVIL PROCEDURE BENCH BOOK
MATTER RELATING TO LAND
2009

77


ORDER FOR SALE
1. Provisions -
S. 254-265 NLC.

2. In a statutory charge under the National Land
Code (NLC), the rights and powers of the chargee
flow from the relevant provisions of the NLC, to
wit ss 254 265 of the NLC.

3. A chargee who makes an application for an order
of sale in foreclosure proceedings under s.256 of
the NLC does not commence an action. He
merely enforce his rights as a chargee by
exercising his statutory remedy against a chargor
in default. [Kandiah Peter v Public Bank
Berhad [1994] 1 MLJ 119]

4. A chargee may pursue any or all remedies to
recover monies lent by him. He may enforce his
statutory charge against the chargor by way of
proceedings in rem under s. 256 of the NLC. He
may sue the principal debtor (who may or may not
be the chargor) upon the personal covenant
contained in any loan agreement that was entered
into between the parties. He may proceed
against the surety who has guaranteed the loan.
And he may pursue all these courses
simultaneously, contemporaneously or
successively. [Low Lee Lian v Ban Hin Lee
Bank Bhd [1997] 1 MLJ 77 FC]

5. In an application for an order for sale under s. 256
of the NLC, the court must make the order for
sale unless it is satisfied of the existence of the
cause to the contrary. [United Malayan Banking
Corp Bhd v Choong Bun Sun and another
application [1994] 2 MLJ 2210]
H
A
K

M
I
L
I
K

K
E
R
A
J
A
A
N

M
A
L
A
Y
S
I
A
CIVIL PROCEDURE BENCH BOOK
MATTER RELATING TO LAND
2009

78


6. In Low Lee Lian v Ban Hin Lee Bank Bhd,
supra, it was held that cause to the contrary
within s. 256(3) of the NLC might be established
only in three categories of cases i.e.:
(a) When a chargor is able to demonstrate that
the charge is defeasible upon one or more
of the grounds specified in s. 340(2) and
(4)(b) of the NLC;
(b) When a chargor can demonstrate that the
charge has failed to meet the condition
precedent for making an application for an
order of sale. For example failure to prove
the making of a demand, or service upon
chargor of notice in Form D.
(c) When it can be demonstrated that the
grant of the order of sale would be contrary
to some rule of law or equity to which the
sale relates.

7. In the case of land held under Land Office title or
subsidiary title, the application for order for sale
has to be made to the Land Administrator in
accordance with the procedure laid down in s.
260 of the NLC. Any objection as to the validity of
the charge must be taken before the court for it is
no defence in the enquiry before the Land
Administrator. [Kimlin Housing Developmnet
Sdn Bhd v Bank Bumiputra Sdn Bhd [1997] 2
MLJ 805]

8. The Supreme Court in Kimlin case set out certain
rights of the chargor in proceedings to enforce a
statutory charge, which include:
(a) The right to be served with the notice in
Form 16D, or in a case of charges where
H
A
K

M
I
L
I
K

K
E
R
A
J
A
A
N

M
A
L
A
Y
S
I
A
CIVIL PROCEDURE BENCH BOOK
MATTER RELATING TO LAND
2009

79

the principle is payable on demand, a
notice in Form 16E.
(b) Non-compliance with the notice
requirement will render a subsequent order
for sale liable to be set aside as being void
and of no effect. [Muniandy a/l Thamba
Kaundan & Anor v Development &
Commercial Bank Bhd & Anor [1996] 1
MLJ 374]
(c) The opportunity of showing cause to the
contrary.
(d) The right to be served with a copy of the
order for sale, and for the sale to be
advertised.
(e) The right, at any time before the sale has
been concluded, to stop the sale by
tendering the total sum due under the
charge.
(f) The right to be heard where the purchaser
of a judicial sale apply for an extension of
time to pay the balance of the purchase
price. Denial of such right will render any
registration of sale procured thereby null
and void. [M & J Frozen Food Sdn Bhd v
Siland Sdn Bhd & Anor [1994] 1 MLJ
294 SC].
(g) The right to an order to setting aside a
judicial sale if he can establish that the sale
has been conducted fraudulently,
collusively or improperly to the prejudice of
the chargor. [Kuala Lumpur Finance
Berhad v Yap Poh Kian (Teo Sik & Anor,
Interveners) [1991] 1 MLJ 472]


H
A
K

M
I
L
I
K

K
E
R
A
J
A
A
N

M
A
L
A
Y
S
I
A
CIVIL PROCEDURE BENCH BOOK
MATTER RELATING TO LAND
2009

80

9. Service of notice: s. 430 433 of the NLC:
(a) In Kekatong Sdn Bhd v Bank Bumiputra
(M) Bhd [1998] 2 MLJ 440 the statutory
demand by way of Form D was not served
upon the appellant in the manner
prescribed by the NLC. It was held that
such failure vitiated the order for sale.
(b) In Oversea Union Bank (M) Bhd v L & L
Properties Sdn Bhd [1999] 2 MLJ 637, it
was held that the question as to whether
Form D has been issued prematurely must
be determined by looking at the period for
repayment stated in the notice of demand
and not in the Form 16D notice.

O 83 r 3(3) Of The RHC
10. In foreclosure proceedings of charged property,
the chargee must comply with the procedural
rules set out in O. 83 of the RHC.

11. O 83 r 3 (3) only applies to a charge action begin
by originating summons in which the plaintiff is
the chargee and claims delivery of vacant
possession or payment of money secured by the
charge or both (read with O. 83 r. 3 (6).

12. Where O 83 r 3(3) applies, the affidavit in support
must show the statement of the account between
the chargor and the chargee with particulars of
the account as set out therein. More than one
such affidavits may be filed if the matter cannot
be disposed of on the first return date. At least
one further affidavit is always required to state the
total amount due on the date of the order.
[Citibank NA v Ibrahi m b Othman [1994] 1 MLJ
608]