Amal Dass A/L Piravalasamy v Bpv Management and Properties Sdn Bhd (JA-24NCC-34-08/2024)

On 8 September 2025, this Court heard the Defendant's application to convert the Plaintiff’s Writ of Summons to Originating Summons and proceed to hear the main suit. Parties relied on their written S/N vgajxH3IxUatqI1QwKyufw submissions filed herein and orally submitted before the Court. The decision is reserved to 3 October 2025 and this is the Court’s decision.

The Plaintiff seeks a declaration that the Moneylending Agreement (Schedule K) made pursuant to the Moneylenders Act 1951 [Act 400] (“the Agreement”) between the Plaintiff and the Defendant is null and void by reason of the Defendant’s failure to perfect the Agreement in accordance with the requirements of subsection 16(1) of Act 400. Consequent upon such declaration, the Plaintiff further prays for an order that the charge created over the Plaintiff’s property in favour of the Defendant be set aside, and that the Lien Holder’s Caveat entered by the Defendant against the said property be removed.

The parties do not dispute the fact that the Agreement dated 24 June 2022 was only stamped on 17 July 2024, whereas the Plaintiff had received the loan monies from the Defendant on 8 July 2022.

The Plaintiff submitted that Section 16(1) of Act 400 mandates that a duly stamped copy of the agreement must be delivered to the borrower before the loan is advanced. Failure to comply renders the agreement unenforceable by law. Relying on Powernet Industries Sdn Bhd v. Golden Wheel Credit Sdn Bhd [2020] MLRAU 250, the Plaintiff argued that estoppel or waiver cannot cure this statutory non-compliance, as the Act is social legislation intended to protect S/N vgajxH3IxUatqI1QwKyufw borrowers. Consequently, the Plaintiff contended the agreement is void, unenforceable, and the lien holder’s caveat registered against the property must be removed.

The Defendant, in objecting to Plaintiff’s claim, argued that the loan agreement remains valid and enforceable despite the late stamping, asserting that the essential loan transaction was completed and the Plaintiff benefited from receiving the monies. The Defendant contends that stamping is a procedural irregularity that does not invalidate the substantive agreement, and equitable principles should prevent the Plaintiff from escaping repayment obligations. The Defendant further argues that the Plaintiff, having accepted and utilised the loan sum, is estopped from denying the enforceability of the agreement. Further, the Defendant also distinguishes the Plaintiff’s reliance on Powernet Industries, suggesting that the facts and equities of the present case warrant the Court’s intervention to avoid unjust enrichment of the Plaintiff at the Defendant’s expense.

Having considered the Plaintiff and Defendant submissions, this Court determines the following issues –

whether the loan agreement dated 24 June 2022, falling under Act 400, is rendered null, void and unenforceable by reason of non-compliance with Section 16(1) Act 400, given that it was only stamped after the loan monies had already been disbursed; S/N vgajxH3IxUatqI1QwKyufw

if the agreement is unenforceable under Section 16(1) of Act 400, whether the Defendant may rely on equitable principles of estoppel or unjust enrichment, to enforce repayment of the loan against the Plaintiff; and

consequent upon the determination of the enforceability of the loan agreement, whether the lien holder’s caveat entered by the Defendant against the Plaintiff’s property can be sustained or ought to be removed.

whether the loan agreement dated 24 June 2022, falling under the Moneylenders Act 1951

The facts are not in dispute. The Agreement was signed on 24 June 2022, loan monies were advanced on 8 July 2022, and the Agreement was only stamped on 17 July 2024. No duly stamped copy was delivered to the Plaintiff before the advancement of the loan.

Subsection 16(1) Act 400 provides – “Section 16. Moneylending agreement to be given to the borrower.

No moneylending agreement shall be enforceable unless the agreement has been signed by all the parties to the agreement and a copy of the agreement duly stamped is S/N vgajxH3IxUatqI1QwKyufw delivered to the borrower by the licensee before the money is lent”.

Subsection 16(1) of Act 400 is couched in mandatory terms. Moneylending agreement is unenforceable unless –

the agreement has been duly executed by both parties; and

a duly stamped copy of the agreement has been delivered to the borrower.

The Defendant contends that the Agreement remains valid and enforceable notwithstanding the late stamping. Learned counsel argued that stamping is a matter of procedure and does not go to the root of the parties’ contractual obligations.

This Court is unable to agree with that contention. The argument conflates two distinct legal requirements –

the requirement under the Stamp Act 1949 [Act 378], including the payment of a penalty for late stamping; and

the mandatory requirement under subsection 16(1) of Act 400.

This Court views that the penalty paid for late stamping under Act 378 only cures the defect under Act 378, which renders an instrument admissible in evidence. It does not retrospectively validate or regularise an agreement which, by virtue of Act 400, is to be perfected in a prescribed manner. S/N vgajxH3IxUatqI1QwKyufw

The legal position for non-compliance with subsection 16(1) of Act 400 is well established by the Court of Appeal in Powernet Industries Sdn Bhd . The Court explained the following – “[84] … we are of the view that the Act is a manifestation of a social legislation and is designed to regulate the business of moneylending and to protect borrowers. As such, regardless of the circumstances which gave rise to the waiver/estoppel, a moneylender cannot rely on such waiver/estoppel to preclude the borrower from asserting his rights as provided for under the Act. Thus, in the context of a contravention of s. 16 of the Act, it is our view that the borrower is entitled to raise and rely upon the moneylender's contravention of the Act in opposing the claim for recovery of the monies that were lent”. … [87] But in the absence of a statutory saving provision like the type that was applicable in the case of Ross Cole, the court has no choice but to apply the law and hold that the agreement as unenforceable. Consequently, as there was a breach of s. 16 of the Act, and given that waiver/estoppel cannot operate against the Act, it follows that the claim against the defendant fails. … S/N vgajxH3IxUatqI1QwKyufw [89] However, non-compliance with s. 16 of the Act is a different matter altogether. It is not capable of being rectified or remedied even if a fresh suit is filed. Thus, a new suit will not overcome the breach of s. 16 of the Act as the events have already occurred, namely, the loan was disbursed to the defendant on or around 29 December 2017 and a stamped copy of the agreement was only given to the defendant on 28 June 2018. The chronology of events cannot be undone. In the circumstances, the judge was plainly wrong in granting liberty to the plaintiff to file its claim afresh against the defendant as a fresh suit is doomed to fail by reason of the contravention of s. 16 of the Act”. [Emphasis added]

In summary, section 16 of Act 400, being part of a social legislation enacted to regulate moneylending and to protect borrowers, requires strict compliance. Thus, waiver or estoppel cannot operate to relieve a moneylender of its contravention. Therefore, non-compliance with section 16 is incapable of being rectified or remedied.

In view of the mandatory wording of subsection 16(1) of Act 400 and the binding authority of Powernet Industries Sdn Bhd, this Court finds that noncompliance with subsection 16(1) of Act 400 affects the very enforceability of the agreement, and cannot be cured by the subsequent payment of a penalty for late stamping. S/N vgajxH3IxUatqI1QwKyufw

whether the Defendant may rely on equitable principles of estoppel or unjust enrichment

The Defendant sought to distinguish Powernet Industries Sdn Bhd on the basis that the equities of the present case are different. It was submitted that, unlike in Powernet Industries Sdn Bhd here, in this case, the Plaintiff had admittedly received the loan monies, benefitted from them and it would be inequitable to allow the Plaintiff to rely on a technicality to avoid repayment. In support, the Defendant relied on, among others, Ross Cole Investment Corporation Limited v New Fashions Limited [1958] NZLR 55, where the Supreme Court of Wellington, New Zealand held that statutory non-compliances could be cured where a saving provision exists and on Lian Keow Sdn Bhd & Anor v Overseas Credit Finance (M) Sdn Bhd & Ors [1982] 2 MLJ 162, which recognised that equitable relief may be available to prevent unjust enrichment even where statutory irregularities occur.

This Court, however, is not inclined to agree with these arguments. First, the authorities cited by the Defendant are distinguishable. Ross Cole concerned a situation where a statutory saving clause expressly permitted the Court to uphold the transaction notwithstanding non-compliance. No such saving provision exists under Section 16 of Act 400. Similarly, Lian Keow Sdn Bhd did not involve the specific statutory bar contained in subsection 16(1) of Act 400, which unambiguously renders an agreement unenforceable unless its requirements are met. S/N vgajxH3IxUatqI1QwKyufw

Secondly, the binding authority of Powernet Industries Sdn Bhd is squarely on point. The Court of Appeal in Powernet Industries Sdn Bhd held that contravention of subsection 16(1) of Act 400 renders a moneylending agreement unenforceable. That waiver or estoppel cannot operate to validate such an agreement.

Thirdly, it is trite that equity follows the law. While the Defendant’s concerns about unjust enrichment are understandable, they cannot override Parliament’s intention expressed in clear and mandatory language. Equitable considerations such as estoppel or unjust enrichment cannot override the statutory command in subsection 16(1) Act 400. To hold otherwise would render subsection 16(1) of Act 400 nugatory.

The Court further observed that Act 400 is social legislation designed to protect borrowers. Therefore, equitable arguments cannot circumvent its mandatory requirements. Hence, Defendant’s reliance on Ross Cole and Lian Keow Sdn Bhd does not assist his case.

Accordingly, this Court holds that equitable doctrines of estoppel and unjust enrichment cannot be invoked to validate or enforce an agreement rendered void by statute. (b whether the lien holder’s caveat entered by the Defendant against the Plaintiff’s property can be sustained or ought to be removed S/N vgajxH3IxUatqI1QwKyufw

The Defendant’s lien holder’s caveat is premised entirely on the existence of a valid and enforceable loan agreement. It follows, in view of the Court's findings that the Agreement is unenforceable, there is no legal basis for the Defendant to maintain the caveat over the Plaintiff’s property.

Consequently, the caveat registered by the Defendant must be set aside and cancelled.

For the reasons set out above, this Court finds in favour of the Plaintiff. Accordingly, this Court makes the following orders –

a declaration that the Moneylending Agreement (Schedule K) dated 24 June 2022 made pursuant to the Moneylenders Act 1951 [Act 400] between the Plaintiff and the Defendant is null, void, and unenforceable by reason of non-compliance with subsection 16(1) of Act 400;

an order that the charge created over the Plaintiff’s property in favour of the Defendant pursuant to the said Agreement is set aside;

an order that the Lien Holder’s Caveat lodged by the Defendant against the Plaintiff’s property be removed forthwith; and S/N vgajxH3IxUatqI1QwKyufw

costs of this action to the Plaintiff. Dated : 2 October 2025 Dr. Noradura Binti Hamzah Judicial Commissioner High Court Civil 2 Johor Bahru Defendant’s Solicitor : Tetuan Sheanna Velu Plaintiff’s Solicitior : Tetuan Julie Lim, Vasanthan & Co. S/N vgajxH3IxUatqI1QwKyufw