Ahmad Sharil Bin Nor Rasit v Bank Negara Malaysia (WA-25-342-04/2022)

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1 IN THE HIGH COURT IN MALAYA AT KUALA LUMPUR IN THE FEDERAL TERRITORY OF KUALA LUMPUR, MALAYSIA (SPECIAL POWERS DIVISION) APPLICATION FOR JUDICIAL REVIEW NO.: WA-25-342-04/2022

Lampiran

Lampiran A), di mana kedua-dua guaman masih berjalan di Mahkamah.”; and (c) Nowhere in the LoD to R2 and R3, and in the cause papers for the Civil Suits did the Applicants state or plead that R2 and R3 have committed an offence under the FSA and/ or IFSA. In the circumstances, there is no statutory basis for R1 to invoke its discretionary investigatory powers over what is, at its core, a private contractual dispute which was being ventilated in ongoing civil proceedings. This precise reasoning was conveyed in the 10.6.2022 Letter, which the Applicants now seek to belatedly re-characterise as a “non-decision”. 38. In addition, I also agree with R2’s and R3’s submission that the Applicants’ reliance on the following cases is flawed as they are distinguishable for the following reasons: (a) Gu Kien Lee v Ketua Polis Daerah Kota Kinabalu Polis Diraja Malaysia [2012] 7 MLJ 733 (i) the court in that case granted mandamus because the police were under a mandatory duty to investigate under the Criminal Procedure Code whereas in the instant case, s 218 of the FSA and s 229 of the IFSA confer only a discretionary power on R1 to investigate if it is satisfied that an offence may have been committed. Such discretionary powers cannot be transformed into mandatory duties; (ii) there was a complaint disclosing a possible criminal misappropriation, placing it squarely within the public duty of the police to investigate. In contrast, the present case is one where the Applicants’ own documents confirm that the dispute is purely contractual, arising from R2’s and R3’s exercise of their Terms and Conditions of Accounts, rather than from any alleged offence under the FSA or IFSA; and (iii) the court found that the police did not carry out any investigation at all and instead tried to resolve the matter amicably. In the instant case, R1 considered the Applicants’ complaint and then sought R2’s and R3’s explanation, followed by the 10.6.2022 Letter. Hence, there is no comparable failure to act. (b) Perbadanan Pengurusan Trellises & Ors v Datuk Bandar Kuala Lumpur & Ors [2021] 3 MLJ 1 (i) that case involved the grant of a conditional planning approval and a development order under the Federal Territory (Planning) Act 1982 [Act 267], which carried binding legal effect and altered rights in respect of land use and development. In contrast, there was no statutory decision in the present case as the Applicants complain is as regards R1’s alleged silence or delay in acting on their complaints, which does not create or extinguish any legal rights; (ii) the Court of Appeal intervened because the Datuk Bandar had breached specific statutory duties under the Planning Act and Rules, including duties of notification and giving reasons. The statutory scheme itself required procedural compliance, which rendered the impugned development order amenable to judicial review. However, there is no comparable statutory obligation under the FSA or IFSA to investigate every complaint lodged by bank customers, nor to notify the complainants of any supervisory steps taken; and (iii) that case was concerned with a matter immersed with public law elements; the regulation of town planning and public open space which directly affected the residents’ rights and the wider community interest. By contrast, the Applicants’ grievance in the present case was a purely private contractual dispute with R2 and R3 over duplicate credits. The mere act of routing such complaints through R1 does not transform them into a matter of public law and nor does it impose on R1 any duty to investigate or to act at the behest of private litigants. (c) Lam Eng Rubber Factory (M) Sdn. Bhd. V. Pengarah Alam Sekitar, Negeri Kedah dan Perlis & Anor [2005] 2 MLJ 493 (i) that case concerned the Director of Environment’s refusal to issue a statutory licence under the Environmental Quality Act 1974 [Act 127] despite the applicant having complied with all legal requirements and having a legitimate expectation grounded in prior approvals. The refusal carried binding legal effect, deprived the applicant of its statutory right to operate, and was ultra vires because the Director purported to exercise an appellate power that was vested in the Appeal Board; and (ii) in the present case, the Applicants were not entitled under any statute to a regulatory investigation by R1. The provisions in the FSA and IFSA do not create a statutory right for bank customers to demand investigations into contractual disputes. Unlike Lam Eng Rubber, there is no statutory duty, no ultra vires exercise of power and no deprivation of rights. 39. In a nutshell, the Applicants are on an entirely wrong procedural footing. Their application was defective when filed, premature when measured against authority and was time-barred. 40. The 2nd Issue was therefore answered in the affirmative. 3rd Issue: Whether R1’s power to investigate is a discretionary power and is not amenable to judicial review 41. The Applicants took the position that R1, as a law enforcement agency or regulator, has a legal duty to enforce the law and to perform its duties reasonably, conscientiously and efficiently (see R v Police Commissioner of The Metropolis Ex parte Blackburn [1968] 1 All ER 763). Although the letter of the law granted a discretionary power to R1 to investigate, this power is not without its boundary and limit (see Pengarah Tanah Dan Galian, Wilayah Persekutuan v Sri Lempah Enterprise Sdn Bhd [1979] 1 MLJ 135). A mandamus can be granted for failure by the police to carry out their duty in commencing investigation (see Gu Kien Lee v Ketua Polis Daerah Kota Kinabalu Polis Diraja Malaysia [2012] 7 MLJ 733 and Andi Mukta Satguru Shree Muktajee Vandas Swami Suvarna Jayanti Mahotsav Smarak Trust and Others v V.R. Rudani and Others, AIR 1989 SC 1607 which was referred to in A. Pavadai Versus Revenue Divisional Officer, Revenue Divisional Office, Kallakurichi, Villupuram and Others [2014] 3 MLJ 334). 42. In a nutshell, the Applicants contended that no public authority is immune from legal oversight and its discretionary powers are subject to legal limits. Thus, although R1’s supervisory powers are regulatory, the Court retains the authority to ensure such powers are exercised lawfully and within proper limits. 43. However, I was not persuaded by the Applicants’ contentions for the following reasons: (a) In view of the case authorities of Minister of Finance, Government of Sabah v Petrojasa Sdn Bhd [2008] 4 MLJ 641, Menteri Besar Negeri Pahang Darul Makmur v. Seruan Gemilang Makmur Sdn Bhd [2010] 5 CLJ 123, Karpal Singh Ram Singh v. Ketua Hakim Negara [2011] 4 CLJ 179, Datuk Seri Salahuddin bin Ayub & Ors v Perdana Menteri, Tan Sri Dato’ Hj Mahiaddin bin Md Yasin & Anor [2021] 12 MLJ 1 and Dato' Sri Mohd Najib Tun Abd Razak v. Menteri Dalam Negeri & Ors [2025] 9 MLJ 611, where a statute imposes a duty, the performance or non-performance of which is not a matter of discretion, mandamus may be issued. Conversely, if a public officer has a power and not a duty under the law, and he does not use his powers, mandamus cannot be issued to compel him to exercise that power. In the present case, R1’s role is supervisory or regulatory in nature, and there is no legal requirement for it to investigate each complaint directed to it. The wordings in ss 218 and 219 FSA and ss 229 and 230 IFSA that R1 “may cause an investigation to be made” show that the power conferred is permissive and discretionary. The statutes do not create a mandatory obligation or duty but rather vests R1 with regulatory discretion, allowing it to act, or not act, based on its assessment of the circumstances and public interest considerations. R1 does not owe any legal duty to initiate an investigation into the Applicants’ complaints or to report the outcome to them. As regards the Applicants reliance on Sri Lempah Enterprise (supra), any discretion conferred must be exercised lawfully and for proper purposes, but a mandamus will only be granted to compel the lawful exercise of that discretion; it cannot be used to dictate the manner in which a proper discretionary decision is made. (b) R1 correctly refused to exercise its discretionary powers to investigate R2 and R3. In the Applicants’ complaints and LoD, the Applicants did not identify any specific legal or regulatory offence committed by R2 and R3 under the FSA or IFSA. Instead, their complaints are premised on R2’s and R3’s actions in enforcing their contractual rights against the Applicants by earmarking or freezing accounts to recover duplicate credits. These actions are firmly grounded in the T&C of Accounts, namely, Clause 12.1 of the Savings Account T&C, Clause 14.1 of the Current Account T&C and Clause 15.1 of the Savings-i/Current-i T&C which expressly provide that R2 and R3 may combine and consolidate the Applicants’ Accounts, set-off or transfer any credit balance towards satisfaction of the Applicants’ liabilities, whether actual or contingent, primary or collateral. Pending such set-off, R2 and R3 may place an earmark or freeze the monies in the Accounts after giving seven calendar days’ prior notice. (c) The Applicants’ remedy lies in the courts which are hearing the Civil Suits. It is there that the contractual basis of the freezing or earmarking of their accounts will be scrutinised. If the courts determine that R2 and R3 acted in breach of contract and/ or tortious duties, the Applicants will obtain the appropriate reliefs. It is well established that when a complete and adequate alternative remedy exists, mandamus will not lie. This preserves the integrity of the ordinary legal process and avoids parallel proceedings that risk conflicting outcomes. Although the Applicants contended that their application concerns only R1’s regulatory functions and not the ongoing contractual dispute with R2 and R3, the very complaints lodged with R1, the relief sought by way of mandamus and the supposed “failures” by R1 are inextricably linked to the underlying contractual dispute. In other words, the earmarking and alleged freezing of the Applicants’ Accounts to recover duplicate credits form the factual and legal substratum of both the Civil Suits and the instant application. Basically, the Applicants are asking this Court to compel R1 to act against R2 and R3 on matters that are the subject of the Civil Suits. However, the Applicants cannot surgically excise the core contractual dispute and repackage it as a public law grievance. To permit this would allow private litigants to re-litigate contractual matters under the guise of public law. Judicial review against R1 cannot be used as a collateral means of pursuing private law remedies. (d) As submitted by R2 and R3, the legal framework governing the performance of public duties is set out in Chapter VIII, Part II of the Specific Relief Act 1950 [Act 137] (‘SRA 1950’). In particular, s 44 of the SRA 1950 provides as follows: “Power to order public servants and others to do certain specific acts 44. (1) A Judge make an order requiring any specific act to be done … by any person holding a public office: Provided that – (a) An application for such an order be made by some person whose property, franchise or personal right would be injured by the forbearing or doing, as the case may be, of the said specific act; (b) Such doing or forbearing is, under any law for the time being in force, clearly incumbent on the person or court in his or its public character; or on the corporation in its corporate character; (c) In the opinion of the Judge the doing or forbearing is consonant to right and justice; (d) The Applicant has no other specific and adequate legal remedy; (e) The remedy given by the order applied for will be complete.”. The prerequisites for the grant of an order of mandamus under s 44 SRA 1950 are cumulative (see Koon Hoi Chow v Pretam Singh [1972] 1 MLJ 180). In the present case, the Applicants have not established a clear and specific legal right to the reliefs sought. The Applicants were simply asserting private contractual grievances, improperly dressed up as public law complaints, and thus failed to satisfy even the most basic requirements of public law standing (see Malaysian Trade Union Congress & Ors v Menteri Tenaga, Air dan Komunikasi & Anor [2014] 3 MLJ 145 and QSR Brands Bhd v Suruhanjaya Sekuriti & Anor [2006] 3 MLJ 164 on the need for an applicant to show that he is “adversely affected” in a real and legally recognised sense). There is no legal basis for the Applicants to seek to compel R1 to investigate R2 and R3 and to provide them with the details, status and outcome of such investigations. In fact, the legal position is the direct opposite of what the Applicants asserted. R1 is expressly prohibited from disclosing any information, details or outcomes of any investigation into a financial institution or Islamic financial institution to any party, including customers. Such prohibitions are enshrined in s 86 of the CBMA 2009 which reads: “Preservation of secrecy 86. (1) Without prejudice to section 88, and except for the purpose of the performance of his duties or the carrying out of his functions or when lawfully required to do so by any court or under any law, no person who is or has been director, officer, or employee of the Bank or member of the Shariah Advisory Council or any committee appointed under this Act shall disclose to any person any information relating to the business or affairs of the Bank or of a financial institution or of a customer of the Bank or of a financial institution which he has acquired in the performance of his duties or the carrying out of his functions.”. Sub-s 143(7) of the FSA and sub-s 155(7) of the IFSA also provide that: “Submission of document or information to Bank 143. … (7) Subject to section 145, where a document or information obtained by the Bank under subsection (1) relates to the account or affairs of any customer of any person referred to in subsection (1), that document or information shall be secret as between the Bank and such person submitting the document or information.” “Submission of document or information to Bank 155. … (7) Subject to section 157, where a document or information obtained by the Bank under subsection (1) relates to the account or affairs of any customer of any person referred to in subsection (1), that document or information shall be secret as between the Bank and such person submitting the document or information. …”. Any order forcing R1 to comply with the Applicants’ demands would contravene these statutory confidentiality obligations and risk exposing the internal practices, processes and procedures of R2 and R3 that led to the duplicate credits, which are highly confidential and commercially sensitive (see Empire Holdings Ltd v Securities Commission Malaysia & Ors [2024] 9 MLJ 123 on the importance of preserving the confidentiality of regulatory investigations). A compelled disclosure would also pose grave risks of misuse, evasion, circumvention and manipulation. It would undermine the integrity of the regulatory framework, compromise financial confidentiality protections and jeopardise public confidence in the financial system as a whole. 44. The 3rd Issue was therefore answered in the affirmative. 4th Issue: Whether R1 owes the statutory duties as alleged by the Applicants 45. R1’s statutory and regulatory functions are as stipulated in s 5 of the CBMA 2009 and s 6 and sub-s 7(1) of the FSA and IFSA. 46. The Applicants submitted that R1 owes the statutory duty to – (a) promote, regulate and supervise financial institutions in Malaysia in accordance with laws, rules and regulations enforced by the Respondents pursuant to s 5 of the CBMA 2009; (b) ensure and safeguard the interest of the public, especially the interest of financial consumers utilising the services of financial services providers in Malaysia who may be aggrieved; (c) meet the public’s legitimate expectation that it will act in a fair manner and not act unfairly by omitting or refusing to deal with the Applicants’ complaints; (d) be transparent with any enforcement action in line with its Enforcement and Penalty Framework; (e) investigate the Applicants’ complaints as they concern financial services providers under its purview; (f) respond to the Applicants’ complaints and carry out investigation in a timeous, courteous and efficient manner; and (g) inform the Applicants of any reasons for delays to the commencement of investigation. 47. In support of their position, the Applicants relied on the following: (a) ss 5, 45 and 77 of the CBMA 2009; (b) ss 218 and 219 of the FSA; (c) ss 229 and 230 of the IFSA; (d) Sections 11, 12 and 15 and Appendix 5 of the Bank Negara Malaysia Fair Treatment of Financial Consumers Policy Document; (e) Section 12 of the Bank Negara Malaysia Guidelines on Governance and Operational Requirements on Conduct of Money Services Businesses; and (f) Sections 8 - 13 of the Bank Negara Malaysia Risk Management in Technology (RMit) Policy Document. 48. Upon scrutiny of the submissions of the parties, I find that the Applicants’ reliance on the policy documents as mentioned in subparagraphs 47(d) to (f) above are misplaced because they do not confer justiciable rights upon individual consumers like the Applicants. These documents are prudential and supervisory instruments designed to regulate the conduct of licensed financial institutions and are enforceable solely as between R1 and financial institutions. These policies do not create any private law cause of action and nor do they impose a correlative duty on R1 to investigate or provide redress at the instance of an individual complainant. 49. In so far as the Applicants’ reliance on the specific provisions of the CBMA 2009, FSA and IFSA as mentioned earlier, these do not impose any statutory duties on the R1 in the manner as contended by the Applicant. In particular, these provisions do not create a legally enforceable obligation on the Bank to – (a) investigate complaints lodged by members of the public within a prescribed timeframe; (b) conduct such investigations in a courteous or efficient manner; (c) provide periodic updates or reasons for any perceived delay; and/ or (d) disclose details of enforcement action. 50. On the contrary, the CBMA 2009, FSA and IFSA confer upon R1 broad supervisory and regulatory functions, and the necessary discretionary powers to determine how to exercise such powers, for example, sub-s 5(3) of the CBMA 2009 provides that “The Bank shall have all the powers necessary, incidental or ancillary to give effect to its objects and carry out its functions.” and sub-s 7(1) of the FSA and IFSA stipulate that “The Bank shall exercise the powers and perform the functions under this Act in a way which it considers most appropriate for the purpose of meeting the regulatory objectives of this Act and the Governor shall exercise such powers and perform such functions of the Bank on its behalf.”. 51. In my considered view, the answer to the 4th Issue is in the negative. 5th Issue: Whether the Omissions/ Refusals are tainted with procedural impropriety, irrationality and unreasonableness 52. The Applicants fervently argued that R1’s Omissions/ Refusals were tainted with procedural impropriety, irrationality and unreasonableness because, in spite of the duty owed by R1 to the Applicants and the public at large, R1 remained silent for almost three months since receipt of the LoD and almost four months since having knowledge of the Applicants’ complaints, without any reasons whatsoever. Even though R1 finally responded vide the 10.6.2022 Letter, all that R1 said was that it is in no position to comment on such cases which are currently under the consideration of the court when in fact – (a) R1 had knowledge of the Applicants’ complaints as early as 14.2.2022, before legal proceedings were filed against R2 and R3; (b) in the 10.6.2022 Letter, R1 did not deny any lack of jurisdiction or power for it to investigate on the complaints; and (c) R1 has knowledge that R2’s and R3’s processing errors had affected thousands of account holders since early 2021 and R1 had released statements to the press on R2’s and R3’s actions of freezing or earmarking accounts of account holders. 53. As a result, the Applicants have been greatly prejudiced and continue to be prejudiced as they – (a) are prevented from using or accessing their accounts to carry out transactions and using the monies rightfully belonging to them; (b) experienced shortage of funds during the Hari Raya season; (c) continuously suffer from mental and emotional distress by having to find other alternative medium to sustain their livelihood; and (d) remain clueless on any investigation process and are left without redress from R1 which is supposedly a competent authority to supervise and enforce laws, rules and guidelines on financial services offered by financial institutions such as R2 and R3. 54. As regards the general legal principles, the Applicant drew support from the judgment of – (a) the Federal Court in Malaysia Airline System Bhd v Wan Sa’adi @ Syed Sa’adi bin Wan Mustafa [2015] 1 MLJ 757 at p 768 as follows: “[24] Now, procedural impropriety is said to have occurred when a decision maker (including an administrative tribunal or an arbiter) empowered by public law in the form of legislation or common law (that is, prerogative power), in coming to a decision (including his refusal to make a decision) with consequences affecting ‘some person or (body of persons)’, fails: (a) to observe the ‘basic rules of natural justice’; (b) ‘to act with procedural fairness towards the person who will be affected by the decision’; or (c) ‘to observe procedural rules that are expressly laid down in the Legislative instrument by which its jurisdiction is conferred, even where such failure does not involve any denial of natural justice’ (see Council of Civil Service Unions v Minister for the Civil Service [1985] AC 374).”; and (b) the Court of Appeal in Lam Eng Rubber Factory (supra, at p 500) where the legitimate expectation which members of the public have for the government department was explained as follows: “[11] In my judgment, each and every member of the public has a legitimate expectation to have his or her written communication to a government department looked into and dealt with in a timeous, courteous and efficient manner. It may be an application for a licence. It may be a letter of query. Or it may be a letter of complaint. Whatever the nature of the communication, there must be a response within a reasonable time. Otherwise, it will be a case of poor administration. And the law does not sanction poor administration. Indeed, in Padfield v Minister of Agriculture, Fisheries and Food [1968] AC 997, the House of Lords approved Lord Denning’s dissent in the Court of Appeal in that case where he said: Good administration requires that complaints should be investigated and that grievances should be remedied.”. 55. After having carefully considered the submissions by all the parties, I find that there was no illegality in R1’s actions as R1 were not under any legal obligation to act in the manner as suggested by the Applicants i.e. to conduct a “full investigation” or to take appropriate steps or actions that the Applicants deem sufficient. R1 took appropriate and necessary steps within the scope of its regulatory functions in response to the Incident by seeking an explanation from R2 and R3. Upon being made aware that the Incident was a contractual matter between R2 and R3 and their customers, including the Applicants, under the T&C of Accounts, and of the Civil Suits, R1 took the position that, given the pending Civil Suits to be determined by the courts, it would not comment on the matter. This was communicated to the Applicants’ solicitors in the 10.6.2022 Letter. 56. Similarly, I find that R1 cannot be said to have failed to act or to have acted irrationally simply because it chose, in the exercise of its discretion, to take a position not to comment on a matter which was pending before the courts. Moreover, there is no statutory duty on R1 to report or disclose to the Applicants the details of any regulatory action taken in response to their complaints. Moreover, regulatory and supervisory processes are, by their nature, confidential. Disclosure of any regulatory correspondence, assessments or potential enforcement considerations could compromise the integrity of R1’s supervisory regime and prejudice ongoing or future regulatory engagement with financial institutions. 57. It is well-established that the court will not interfere with or substitute its own judgment for that of a regulator acting within the scope of its lawful discretion (see The Ordinary Co Sdn Bhd v Lembaga Rayuan Negeri Selangor & Anor [2013] 1 LNS 1544). In substance, the Applicants’ challenge amounts to an attempt to compel R1 to exercise its regulatory powers in a manner of their choosing, which is impermissible. As at 29.4.2022, R1 did not omit or refuse to investigate the Applicants’ complaints or respond to the LoD and there was no inordinate delay in responding to the Applicants vide the 10.6.2022 Letter. There was no statutory duty imposing a legal obligation on R1 to deal with the Applicants’ complaints in a timeous, courteous and efficient manner as contended. At its highest, the principle in Lam Eng Rubber reflects a public law aspiration of good administration, but it does not impose a justiciable duty to act in the manner as contended by the Applicants. 58. The Applicants’ unilateral imposition of a 14-day deadline was irrelevant as R1 is under no statutory obligation to respond within such a timeframe, and the Applicants cannot by their own act create a duty where none exists. In any event, R1 lawfully exercised its discretion in declining to comment further on the Applicants’ complaints once it became clear that the issues raised were already the subject of pending court proceedings. That decision was a proper exercise of discretion in the circumstances. 59. Accordingly, no breach of procedural fairness arises and the Applicants have failed to demonstrate any basis for judicial intervention. The 5th Issue was emphatically answered in the negative. Conclusion 60. Premised on all the aforesaid considerations, the Applicants’ application for judicial review was dismissed with costs of RM15,000.00 to be paid by the Applicants to R1 and RM20,000.00 in total to both R2 and R3, subject to allocatur. DATED: 29.12.2025 (ALIZA SULAIMAN) JUDGE HIGH COURT IN MALAYA KUALA LUMPUR (BKK1) Solicitors for the Applicants: Azrul Haziq Khirullah Messrs. Nazmi Zaini Chambers Solicitors for the 1st Respondent: Janice Anne Leo (Adrienne Sena with her) Messrs. Steven Thiru & Sudhar Partnership Solicitors for the 2nd and 3rd Respondent: Mohammed Daud Sulaiman (Rabindra S. Nathan and Sathya Kumardas and with him) Messrs. Shearn Delamore & Co