Bank Islam Malaysia Berhad v Quantum Majesty Sdn. Bhd. (KA-24MFC-13-04/2022)

By way of Enclosure 43, the Defendant, Quantum Majesty Sdn Bhd, applies for, inter alia, an order that the Order for Sale dated 15.08.2022 (“the Order for Sale”) made in respect of all that piece of property held under Geran 63860, Lot 1166, Bandar Alor Setar, Daerah Kota Setar, Negeri Kedah Darul Aman (“the Charged Property”) be cancelled and/or set aside. The Defendant further seeks a declaration that all consequential steps and proceedings flowing from the Order for Sale be declared null and void.

The Plaintiff, Bank Islam Malaysia Berhad, is the chargee of the Charged Property pursuant to three registered charges bearing Perserahan Nos. 3350/2016, 3351/2016 and 3352/2016. The Charged Property was charged by the Defendant as security for financing facilities granted by the Plaintiff to 5 Star Room Hotel Sdn Bhd (“the Customer”).

The relevant background is not seriously disputed. By a Letter of Offer dated 25.11.2015, the Plaintiff granted Islamic financing facilities to the Customer. The Defendant, as registered proprietor of the Charged Property, executed the relevant charges and annexures in favour of the Plaintiff to secure the Customer’s indebtedness.

The Customer defaulted in the payment of the facilities. Consequently, the Plaintiff issued a statutory notice in Form 16D dated 01.12.2021

On 15.08.2022, this Court granted the Order for Sale of the Charged Property. The Defendant and/or its solicitors were absent during the hearing on that date. It is, however, material to note that the Defendant had been served with the cause papers and had notice of the relevant hearing date.

The Defendant subsequently filed Enclosure 11, being its first application to set aside the Order for Sale. That application was dismissed by the High Court on 01.03.2023. Dissatisfied, the Defendant appealed to the Court of Appeal through Civil Appeal No. K-02(IM)-441- 03/2023. The Court of Appeal dismissed the Defendant's appeal on 18.07.2025.

Notwithstanding the dismissal of the first setting-aside application and the dismissal of the Defendant’s appeal by the Court of Appeal, the Defendant has now filed Enclosure 43, seeking once again to set aside the same Order for Sale dated 15.08.2022.

The Plaintiff resists Enclosure 43 and contends that this second application is barred by the doctrine of res judicata, issue estoppel, abuse of process and the principle of finality. The Plaintiff further contends that the Defendant is improperly attempting to relitigate issues which were either already raised, should have been raised, or could have been raised in the earlier proceedings.

The Defendant’s present application is premised broadly on seven grounds.

First and Second, the Defendant contends that the statutory notice in Form 16D is defective. The Defendant alleges that the Plaintiff is bound by a Rescheduling Agreement dated 31.01.2020 and that the Plaintiff has demanded a sum that far exceeds the true indebtedness fixed under that agreement.

Third, the Defendant contends that the Plaintiff relied on an old and inaccurate valuation report, thereby causing the Charged Property to be undervalued. The Defendant further contends that the repeated failed auctions show that the Plaintiff’s conduct is oppressive.

Fourth, the Defendant asserts that the Order for Sale was obtained in the absence of the Defendant’s solicitors, thereby amounting to a denial of natural justice.

Fifth, the Defendant argues that it has demonstrated “cause to the contrary” under section 256(3) of the NLC.

Sixth, the Defendant argues that the balance of justice favours the setting aside of the Order for Sale because the Plaintiff’s debt remains secured, whereas the Defendant would suffer irreparable loss if the Charged Property is sold below market value.

Seventh, the Defendant contends that the Order for Sale was obtained in breach of Shariah principles applicable to Islamic finance, particularly in relation to Tawarruq and ibra’. The Defendant further argues that the matter ought to have been referred to the Shariah Advisory Council of Bank Negara Malaysia (“SAC”) pursuant to the Central Bank of Malaysia Act 2009.

The Plaintiff’s primary answer is that Enclosure 43 is a second and impermissible attempt to set aside the Order for Sale. The Plaintiff points out that the Defendant’s first setting-aside application was dismissed on 01.03.2023 and the Defendant’s appeal to the Court of Appeal was dismissed on 18.07.2025. The Plaintiff, therefore, submits that the Order for Sale has attained finality.

The Plaintiff further submits that the Defendant had actual notice of the foreclosure proceedings. The Plaintiff’s chronology shows that the (earlier) Originating Summons and Affidavit in Support were filed on 01.04.2022 and personally served on the Defendant on 13.04.2022. The matter was then fixed for hearing and case management on several occasions. The Defendant’s solicitors attended before the Court on 08.06.2022, and the Defendant was later served with the Plaintiff’s Further Affidavit and informed of the hearing date on 15.08.2022.

The Plaintiff argues that the Defendant’s absence on 15.08.2022 was not caused by any procedural irregularity or failure of service. Rather, it was the Defendant’s own failure to attend despite being aware of the proceedings.

On the Rescheduling Agreement, ibra’ and quantum of indebtedness, the Plaintiff submits that those issues had already been ventilated in the proceedings between the Plaintiff and the Customer. The Plaintiff obtained summary judgment against the Customer on 01.07.2020. The Court of Appeal dismissed the Customer’s appeal on 07.07.2021. The Federal Court dismissed the Customer’s appeal on 16.06.2023, and the Customer’s subsequent review application was dismissed (due to withdrawal) on 03.03.2025.

The Plaintiff therefore contends that the Defendant, as chargor securing the Customer’s indebtedness, cannot relitigate the same issues under the guise of a fresh application to set aside the Order for Sale.

In response to the Defendant’s assertion that it is merely a third-party chargor not bound by the judgments against the Customer, the Plaintiff submits that the Defendant lacks privity of contract to challenge the Rescheduling Agreement or the calculation of ibra'. The Plaintiff further submits, relying on Chan Boi Loi v Public Bank Bhd and another application [2011] 1 MLJ 478, that foreclosure proceedings are actions in rem, which are distinct and independent from the in personam civil recovery actions against the Customer. Therefore, the filing of a fresh review application by the Customer at the Federal Court on 01.01.2026 has no bearing on this Court’s jurisdiction to enforce the charge.

The Plaintiff further submits that the statutory notice in Form 16D was validly issued and complied with section 254 of the NLC. The Form 16D specified the breach, required its remedy within the prescribed period, and warned that non-compliance would result in an application for an order for sale.

As to valuation, the Plaintiff contends that valuation issues fall within the execution process and have already been dealt with in the execution proceedings. The Defendant had previously challenged the reserve price and valuation before the execution court, and that challenge was dismissed.

Finally, on the Shariah issue, the Plaintiff contends that the Defendant has merely repackaged a debt-quantum dispute as a Shariah issue. The Plaintiff argues that there is no genuine question of Islamic law requiring reference to the SAC. The issue before this Court is whether the Defendant has established a proper legal basis to set aside an order for sale which has already been affirmed on appeal.

Having considered the affidavits, submissions and authorities, the issues for determination are as follows:

whether Enclosure 43 is barred by the doctrine of res judicata, issue estoppel and/or abuse of process;

whether the Defendant was denied its right to be heard when the Order for Sale was granted on 15.08.2022;

whether the alleged defects in Form 16D, the Rescheduling Agreement, ibra’ and the alleged Shariah issues amount to “cause to the contrary” under section 256(3) of the NLC;

whether the valuation complaint justifies the setting aside of the

whether this Court should set aside the Order for Sale dated 15.08.2022. DECISION AND FINDINGS OF THE COURT

Upon considering the totality of the affidavit evidence, the procedural history of this matter, the written and oral submissions of both parties, and the relevant authorities, this Court dismisses the Defendant’s application in Enclosure 43 with costs.

In this Court’s judgment, the present application is procedurally misconceived and substantively untenable. It is, in substance, a second attempt by the Defendant to set aside the same order for sale dated 15.08.2022, after the Defendant’s first application to set aside the Order for Sale had already been dismissed by the High Court on 01.03.2023 and after the Defendant’s appeal had been dismissed by the Court of Appeal on 18.07.2025.

This Court is therefore not merely concerned with whether the Defendant has raised allegations couched in different terminology. The true question is whether the Defendant is entitled, in law, to reopen matters which were already raised, ought to have been raised, or could with reasonable diligence have been raised in the earlier proceedings. ISSUE 1: WHETHER ENCLOSURE 43 IS BARRED BY RES JUDICATA,

The first and most fundamental issue is whether the Defendant is entitled to file a second application to set aside the (same) Order for Sale.

The doctrine of res judicata is not a mere technical rule of pleading. It is a doctrine grounded upon substantial justice and public policy. In Asia Commercial Finance (M) Bhd v Kawal Teliti Sdn Bhd [1995] 3 CLJ 783, Peh Swee Chin FCJ (delivering the judgment of the Supreme Court) at p.793, stated: “What is res judicata? It simply means a matter adjudged, and its significance lies in its effect of creating an estoppel per rem judicatum. When a matter between two parties has been adjudicated by a Court of competent jurisdiction, the parties and their privies are not permitted to litigate once more the res judicata, because the judgment becomes the truth between such parties.” [Emphasis added]

The same authority further emphasised that the doctrine is founded upon the public policy that there must be finality in litigation, namely interest rei publicae ut sit finis litium, and that no person should be vexed twice for the same cause, namely nemo debet bis vexari pro eadem causa.

This principle was also explained in Chee Pok Choy v Scotch Leasing Sdn Bhd [2001] 2 CLJ 321, where the Court of Appeal held: “Now, res judicata is not merely a technical rule of pleading. It is a doctrine of substantial justice. It is a process whereby justice is achieved procedurally by precluding a party from re-agitating in subsequent proceedings a complaint or an issue that has, or could fairly have, been disposed of in earlier proceedings between the same parties or their privies.” [Emphasis added]

Applying the above principles, this Court finds that the Defendant’s present application is barred. The Defendant had already filed Enclosure 11 to set aside the Order for Sale. That application was dismissed. The Defendant then appealed to the Court of Appeal, and the appeal was dismissed. The Defendant now seeks, through Enclosure 43, to mount another challenge against the (same) Order for Sale.

It is no answer for the Defendant to contend that the present application is founded on different legal labels such as Shariah, ibra’, the Rescheduling Agreement, defective Form 16D, valuation, or denial of natural justice. The substance of the complaint remains the same: the Defendant seeks to invalidate the Order for Sale and prevent the Plaintiff from enforcing its rights as chargee.

The Court finds further support in Ravindra A/P Karuppiah v CIMB Bank Bhd and Another Appeal [2023] 5 MLJ 106, where Ravinthran JCA (now, FCJ) (delivering the judgment of the Court of Appeal) held: “[31] Accordingly, the same matter finally decided by a court of competent jurisdiction between the same parties or their privies should not be litigated again. Otherwise, there will be no end to litigation and the binding effect of court decisions would be lost.” [Emphasis added]

In that case, the Court also rejected an attempt to distinguish a subsequent claim by merely changing the legal formulation of the complaint. The Court held that where the principal relief remained the same, namely, to nullify an order for sale and auction sale, the issues clearly belonged to the earlier litigation.

The same reasoning applies here. The principal relief sought by the Defendant in Enclosure 43 is the cancellation or setting aside of the Order for Sale dated 15.08.2022. That is the very order which the Defendant had previously sought to set aside in Enclosure 11. The fact that the present application is now dressed in additional allegations does not alter its essential character.

The Court of Appeal in Ravindra (supra) explicitly condemned the practice of challenging an order for sale on a staggered or piecemeal basis. Ravinthran JCA (now, FCJ), delivering the judgment of the Court of Appeal, held that a litigant cannot reserve or withhold a cause of action or an important issue of law to be raised in a future action, as it would defeat the policy purpose behind the doctrine of res judicata (para 34). His Lordship further observed that where a party attempts to nullify an order for sale through successive applications, it is "[37]….plain to us that the appellant is litigating by instalments. The doctrine of res judicata does not permit such an approach."

This wider principle of res judicata was firmly established by the Supreme Court in Asia Commercial Finance (supra). Peh Swee Chin FCJ held that the doctrine is not confined to issues that the Court was actually asked to decide. It extends to all issues and causes of action which could and should have been litigated or asserted in the earlier proceedings but were not, whether deliberately or due to inadvertence.

This Court finds the exact same mischief in the present application. The Defendant is plainly litigating by instalments. If the Defendant wished to raise the issues concerning the Rescheduling Agreement, the alleged defect in Form 16D, Shariah compliance, ibra’, valuation or the denial of natural justice, those matters could and should have been fully ventilated in the first setting-aside application (Enclosure 11) and in the appeal arising therefrom.

The Defendant's conduct is further aggravated by the fact that the Defendant had previously filed a separate civil suit against the Plaintiff, namely Quantum Majesty Sdn Bhd v Bank Islam Malaysia Berhad (Suit No. WA-22NCvC-263-05/2023), seeking declarations based on the same Rescheduling Agreement, which was subsequently struck out. The Defendant argued that because the suit was struck out without a full trial, the principles of res judicata and issue estoppel do not apply.

This Court finds that argument to be wholly without merit. As established by Peh Swee Chin FCJ in Asia Commercial Finance (supra), the wider doctrine of res judicata applies to prevent an abuse of process. The fact that the Defendant’s separate suit was struck out does not grant them a free pass to recycle the exact same issues regarding the Rescheduling Agreement as a collateral attack in the present foreclosure proceedings.

As established in Chee Pok Choy (supra), res judicata operates as a doctrine of substantial justice. Therefore, Enclosure 43 is not a genuine fresh application, but an impermissible attempt to reopen the (same) Order for Sale, constituting a clear abuse of the process of the Court.

The Defendant attempts to circumvent this doctrine by arguing that its first setting-aside application (Enclosure 11) was dismissed purely on procedural grounds—namely, the failure to obtain leave under Order 83 Rule 4 of the Rules of Court 2012—and that substantive issues under Section 256 of the NLC were never adjudicated. This Court finds that argument to be fundamentally flawed. The wider doctrine of constructive res judicata operates precisely to prevent a litigant from deploying such tactics. A party cannot elect to challenge an order for sale on a procedural technicality, fails at the Court of Appeal, and subsequently file a fresh application to raise substantive or Shariah issues that were available to them from the very beginning. This is the exact piecemeal litigation and abuse of process that the doctrine is designed to prohibit.

Accordingly, this Court holds that Enclosure 43 is barred by res judicata, issue estoppel and is an abuse of process. ISSUE 2: WHETHER THE DEFENDANT WAS DENIED THE RIGHT TO BE

The Defendant contends that the Order for Sale was obtained in breach of natural justice because the Defendant’s solicitor was absent during the hearing on 15.08.2022.

This Court is unable to accept that contention.

The right to be heard means a fair opportunity to be heard. It does not mean that a party may fail to attend court despite notice, fail to file the necessary affidavits, and later complain that it was denied natural justice.

The chronology shows that the (earlier) Originating Summons and Affidavit in Support were filed on 01.04.2022. They were personally served on the Defendant on 13.04.2022. The matter was subsequently fixed for hearing and case management on several occasions. The Defendant’s solicitors had attended before the Court. The Defendant was also served with the Plaintiff’s Further Affidavit and was informed of the hearing date on 15.08.2022.

Therefore, this was not a case where the Order for Sale was obtained behind the Defendant’s back. The Defendant had notice of the proceedings and had the opportunity to respond.

The principle in Ng Hee Thoong & Anor v Public Bank Bhd [1995] 1 MLJ 281 is instructive. In that case, the Court of Appeal held that where a party makes a positive assertion upon a material issue, a failure by the opposing party to contradict it on affidavit is treated as an admission of that fact. Despite the High Court's earlier directions to file affidavits in reply, the Defendant failed to file any affidavit in reply opposing the initial Originating Summons or its supporting affidavit, effectively admitting the Plaintiff's claim and the default.

Furthermore, the Defendant’s reliance on Order 83 Rule 2(4) of the Rules of Court 2012—complaining of a lack of a fresh notice of the adjourned hearing—is entirely misplaced. As clarified by Abdul Hamid Embong J (as His Lordship then was) in OCBC Bank (Malaysia) Bhd v Lean Seng Pottery Factory Sdn Bhd [1999] 5 CLJ 529, at p 533, the purpose of Order 83 Rule 2(4) is to ensure that a chargor who has not entered an appearance is served with a fresh notice of appointment. It is not designed to rescue a Defendant whose solicitors were already on record, had participated in the proceedings, were fully aware of the Court's directions, and subsequently failed to file the necessary affidavits or attend the hearing without valid justification.

In the present case, the Plaintiff has placed before the Court a detailed chronology of service, attendance, and notice. The Defendant has not provided a satisfactory answer to show that it was truly deprived of its right to be heard.

More importantly, even after the Order for Sale was granted, the Defendant already filed Enclosure 11 to set aside the Order for Sale. That application was heard and dismissed. The Defendant then appealed to the Court of Appeal, and the appeal was later dismissed. Thus, the Defendant had further opportunities to ventilate its objections.

In the circumstances, the allegation of denial of natural justice is not only belated but wholly without merit. ISSUE 3: WHETHER THE DEFENDANT HAS ESTABLISHED “CAUSE TO THE CONTRARY” UNDER SECTION 256(3) OF THE NLC

Section 256(3) of the NLC provides that on an application for an order for sale, the Court shall order the sale of the land unless it is satisfied of the existence of a cause to the contrary.

The leading authority on “cause to the contrary” is Low Lee Lian v Ban Hin Lee Bank Bhd [1997] 2 CLJ 36. The Supreme Court held that “cause to the contrary” within s. 256(3) may be established only in three categories of cases. The three categories are: first, where the chargor demonstrates that the charge is defeasible under the exceptions to indefeasibility; secondly, where the chargee has failed to meet the conditions precedent for the making of an application for an order for sale, such as a proper demand or service of Form 16D; and thirdly, where the grant of the order would be contrary to some rule of law or equity.

The Supreme Court in Low Lee Lian further cautioned against an overly liberal interpretation of “cause to the contrary”, observing that if the phrase were interpreted liberally, institutional lenders would lose confidence in their ability to realise securities, with serious consequences to commerce.

Gopal Sri Ram JCA (delivering the judgment of the Supreme Court) also stated the proper approach of a judge hearing an application under section 256 of the NLC (p 51 a-b): “A judge hearing an application under s. 256 must bear in mind that the procedure under the section is meant to be speedy and summary in nature. He is first concerned with whether the chargee has given the appropriate statutory notices as stipulated in the Code. Next, he must ensure that the procedural requirements prescribed by O. 83 of the Rules of the High Court 1980 have been complied with. Next, he is concerned with the very narrow question whether the material produced before him by the chargor constitutes cause to the contrary.” [Emphasis added]

Applying the above principles, this Court finds that the Defendant has failed to establish any recognised category of “cause to the contrary”. First, the Defendant has not demonstrated that the registered charges are defeasible under section 340 of the NLC. Second, the Plaintiff has shown compliance with the statutory requirements, including the issuance of the statutory notice in Form 16D. Third, the Defendant has failed to show that the grant or continuance of the Order for Sale would be contrary to any rule of law or equity.

The Defendant’s complaints on the Rescheduling Agreement, alleged ibra’, alleged excessive amount, and Shariah compliance are, in substance, disputes on quantum and contractual effect. They do not, in the circumstances of this case, amount to “cause to the contrary” within section 256(3) of the NLC. 3A) ALLEGED DEFECT IN FORM 16D AND THE RESCHEDULING

The Defendant argues that Form 16D is defective because it demanded RM114,360,539.22, whereas the Defendant claims that the Rescheduling Agreement dated 31.01.2020 had fixed the Customer's true indebtedness at approximately RM60.63 million.

This argument fails for several reasons. First, the alleged defect in Form 16D is not a fresh matter. It was available to the Defendant from the very beginning. It ought to have been raised at the foreclosure stage or, at the latest, during the first setting-aside application. Second, the Defendant’s argument is essentially a challenge to the quantum of the amount claimed. The Defendant relies heavily on Paragraph 7.4 of the Bank Negara Malaysia Guidelines on Ibra', arguing that the failure to state the applicability of ibra' within Form 16D renders the statutory notice defective. This Court finds no merit in this technical objection. The Defendant is bound by the express terms of the “Annexure (Third Party) to the Charge” (“the Charge Annexure”), which the Defendant willingly executed. Specifically, Clause 9.2 of the Charge Annexure provides that a statement of account issued by the Plaintiff shall, in the absence of manifest error, be conclusive evidence that the amount is in fact due and payable.

The Defendant also alleges that the Form 16D failed to account for the proceeds of five properties belonging to its directors, which were purportedly assigned to the Plaintiff. However, the Defendant’s reliance on this, and on the BNM Guidelines, without providing any alternative calculations, particulars, or documentary evidence to refute the RM114,360,539.22 demanded, does not invalidate Form 16D. As held by Asmabi Mohamad JC in Bank Muamalat (M) Bhd v Hexagon Holdings Bhd [2015] 7 MLJ 134 (at para 24), a defendant cannot arbitrarily dispute the accounts of the plaintiff without showing evidence of manifest errors in its affidavit. The Defendant’s bare assertions fail to demonstrate any manifest error, and therefore do not constitute "cause to the contrary".

Even if this Court were to assume, for a moment, that the Defendant possessed the requisite locus standi to raise this issue and was not already barred by the doctrine of res judicata, the Defendant’s contention that the Form 16D is defective for purportedly failing to ascertain and crystallise the exact quantum of ibra’ (rebate) is fundamentally flawed as a matter of law. It demonstrates a profound misunderstanding of the mechanics of Islamic banking recovery and the practical application of ibra'.

Regarding the correct calculation of ibra' as required under Paragraph 7.4 of the Bank Negara Malaysia Guidelines on ibra', it is a settled practice in Islamic finance that ibra' cannot be crystallised at the time of issuing a statutory notice of demand, nor even at the time of entering judgment. As established in leading texts on the subject (see Recovery, Rescheduling and Restructuring of Islamic Banking Facilities, 2nd ed., LexisNexis, 2019), the actual recovery date of the outstanding sum is unknown at the time recovery actions are initiated. Therefore, it is strictly premature to calculate and lock in the ibra' at the pleading or demand stage (See Chapter 5, Section 5.2, pp. 131–132).

The legal literature clarifies the precise timing for the application of ibra’, noting that it should only be crystallised or locked in on the day the judgment sum is settled by the customer. Any attempt to lock in the amount prior to the actual date of settlement is premature (See

This principle has been firmly fortified by the recent High Court decision in CIMB Islamic Bank Berhad v Ahmad Asyraf bin Alias [2025] CLJU 3581. In that decision, the court categorically ruled (at para 25) that while a financial institution is under a substantive legal duty to plead an undertaking to grant ibra' to ensure Shariah compliance, the quantum of indebtedness in an Islamic financing suit is “not a static figure; it is a dynamic obligation subject to regulatory rebates." The court observed that the exact quantum cannot be locked in prematurely, and directed (at para 29) that it be expressly stated that "the actual amount of ibra' shall be determined at the time full settlement is effected before the expiry of the facility's tenure".

Therefore, the Plaintiff was entirely correct in demanding the outstanding sale price in the Form 16D. The Plaintiff’s legal and Shariah obligation is merely to calculate and grant the ibra' upon the actual settlement of the facility before its maturity, not beforehand. To require the Plaintiff to crystallise the ibra' within the Form 16D, as the Defendant suggests, would be to demand an impossibility. Consequently, the Defendant's attempt to invalidate the Form 16D on the basis of a non-crystallised ibra' is entirely devoid of merit and does not constitute "cause to the contrary" to defeat this Order for Sale.

In its Further Reply Submissions (Enclosure 56), the Defendant pivoted to Clause 13 of the Rescheduling Agreement, arguing that upon the Customer’s default, the Plaintiff is strictly bound to recover only the rescheduled sum (approximately RM60.63 million) and that the Plaintiff had breached the Rescheduling Agreement by falling back on the original Tawarruq facility sum of RM114,360,539.22.

This Court finds this argument to be wholly misconceived. A rescheduling agreement is an indulgence granted by a financial institution, strictly predicated upon the customer's strict compliance with the revised payment schedule. Once the Customer defaulted under the Rescheduling Agreement, the Plaintiff was legally and contractually entitled to revoke the indulgence and demand payment of the full outstanding indebtedness under the original “Tawarruq Facility Agreement”. Furthermore, as established earlier, the Defendant, as a third-party chargor, lacks the requisite privity to the Rescheduling Agreement and cannot weaponise its clauses to rewrite the express terms of the registered Charge and the conclusive Statement of Account.

Third, the Defendant is the chargor of the Charged Property. The Order for Sale is founded on the registered charges under the NLC. The Defendant cannot use a second setting-aside application to reopen the Customer’s indebtedness and relitigate matters already determined in earlier proceedings.

The Defendant’s reliance on Kandiah Peter v Public Bank Bhd [1994] 1 MLJ 119 does not assist it. This Court accepts that Kandiah Peter recognises that foreclosure proceedings are statutory enforcement proceedings and not ordinary actions for debt. However, that proposition does not give a chargor an unlimited licence to file repeated applications to set aside the (same) Order for Sale after the matter has already gone before the High Court and the Court of Appeal. The wider doctrine of res judicata covers causes of action or issues which, due to negligence, inadvertence, or deliberate omission, were not brought forward. Allowing the Defendant to circumvent the finality of the judgment or order under the guise of Kandiah Peter (supra) would be an abuse of the Court's process.

In the circumstances, this Court finds that the Form 16D and Rescheduling Agreement arguments do not justify the setting aside of the Order for Sale.

In respect of the Defendant’s assertion that, as a third-party chargor, it has the independent right to challenge the Rescheduling Agreement and is not bound by the civil judgments against the Customer, I agree with the Plaintiff’s submissions. The Rescheduling Agreement and the Tawarruq facilities are contractual documents entered into solely between the Plaintiff and the Customer. The Defendant lacks the requisite privity of contract to independently litigate or dispute the mechanics of those agreements or the calculation of ibra' (Glomac Alliance Sdn Bhd v Nordin Md Zain [2023] 3 MLJ 393; Bauer (Malaysia) Sdn Bhd v Hundred Vision Construction Sdn Bhd & Anor [2020] MLJU 543). As a third-party chargor, the Defendant’s liability is strictly governed by the terms of the Charge Annexure it willingly executed, and it is bound by the debt quantum as determined and affirmed by the Courts.

Furthermore, the Defendant's attempt to rely on a fresh motion to review filed by the Customer and Guarantors at the Federal Court on 01.01.2026 to argue that the debt is not final is entirely misplaced. It is trite law that foreclosure proceedings are actions in rem against the Charged Property, distinct and independent from in personam civil recovery actions against the Customer or Guarantors. As authoritatively held by Gopal Sri Ram FCJ (delivering the judgment of the Federal Court) in Chan Boi Loi (supra, at paragraph 8), the outcome of a civil recovery action in personam is irrelevant and has no effect on the Plaintiff's statutory right to enforce the registered charge. Because the Defendant is a third-party chargor whose liability is strictly limited to the security itself, it remains a stranger to the underlying financing contracts. Consequently, the existence of ongoing civil appeals or review applications by the Customer cannot operate as a backdoor stay of execution, does not constitute "cause to the contrary," and has no bearing on the Plaintiff's statutory right to an order for sale.

The Defendant further submits that the discrepancy in the amount claimed raises a Shariah issue relating to Tawarruq and ibra’. Relying on the Federal Court's decision in JRI Resources Sdn Bhd v Kuwait Finance House (Malaysia) Bhd [2019] 5 CLJ 569 (which the Defendant has cited as “TRI Resources” in their written reply), the Defendant contends that whenever a Shariah issue arises, the matter must be mandatorily referred to the SAC pursuant to sections 55 and 56 of the Central Bank of Malaysia Act 2009 ("CBMA 2009").

This Court accepts the general proposition that where a genuine and novel Shariah question arises in the recovery actions of Islamic financial business, the civil court is required to refer the question to the SAC. However, the Defendant's submission that every Shariah issue triggers an automatic and mandatory referral is a flawed reading of the law.

Mohd Zawawi Salleh FCJ, delivering the majority judgment of the Federal Court in JRI Resources (supra), in paras 85-87, clarified the limits of the SAC's role. His Lordship held that the SAC does not exercise judicial power, nor does its ruling conclude or settle the dispute between the parties. An "ascertainment" exercise which results in a "ruling" must not be confused with an act of "determination" which results in a final decision. The determination of a customer's liability under the facility is ultimately decided by the presiding judge, not the

Furthermore, Mohd Zawawi Salleh FCJ, at para 109, explicitly acknowledged the dichotomy within Section 56(1) of the CBMA 2009. The statutory provision contains two distinct limbs: the Court shall either

take into consideration any published rulings of the SAC; or (b) refer such question to the SAC for its ruling. The Federal Court held that the inclusion of the word "or" signifies that an option is provided to the Court, and the phrase "take into consideration" implies that the Court retains exclusive judicial power to decide the case by applying existing SAC rulings to the facts.

As queried by this Court to the Defendantduring the oral submission session, this position of the majority court in JRI Resources (supra) was also supported by the subsequent decision in Pan Northern Air Services Sdn Bhd v Maybank Islamic Bhd & Another Appeal [2021] 3 CLJ 34. In that case, Lee Swee Seng JCA (now, FCJ), delivering the judgment of the Court of Appeal, affirmed that Section 56 clearly envisages two options. At Paragraph 93 of the judgment, His Lordship laid down a clear four-step approach for civil court judges when confronted with a request to refer an issue to the SAC:

The Court must first determine if the issue raised is ostensibly a Shariah issue or a pure contractual issue bereft of any Shariah element;

(ii) If it is a Shariah issue, the Court must ascertain if there is already an existing guideline, ruling, or resolution of BNM or the SAC;

(iii) If there are existing guidelines or rulings, the Court proceeds to decide which is applicable considering the factual matrix; and

(iv) Only if the matter is novel, in that existing rulings do not deal with the issue at hand, would there arise a need to refer the matter to the SAC.

Applying these principles, the present dispute is fundamentally a contractual dispute over the amount demanded, the effect of the Rescheduling Agreement, and the validity of Form 16D. It is well established in settled legal commentary that the mere existence of Islamic financing documents does not automatically transform every contractual dispute into a matter requiring the halting of proceedings for SAC intervention (see “Islamic Banking in Malaysia: Cases and Commentaries”, LexisNexis, 2018; and “Recovery, Rescheduling and Restructuring of Islamic Banking Facilities”, 2nd ed., LexisNexis, 2019).

Furthermore, the Defendant’s assertion is fatally defective as it failed to provide any precise details or evidence as to what the alleged Shariah issues regarding the Tawarruq or Ibra' actually are. The Defendant’s contention amounts to nothing more than a bare denial of its indebtedness, conveniently repackaged in religious and statutory terminology. As held by Lau Bee Lan J (as Her Ladyship then was) in TMF Trustees Malaysia Berhad v Maxlin Garments Sdn Bhd [2015] 1 LNS 1162, a bare denial lacking in precision or inconsistent with undisputed contemporary documents does not constitute a valid defence and cannot give rise to triable issues.

Applying the wider principle of res judicata as enunciated by Peh Swee Chin FCJ in Asia Commercial Finance (supra) and Ravinthran JCA in Ravindra (supra), this Court finds that the Defendant cannot escape the boundaries of issue estoppel merely by reframing their challenge via a request for reference under Section 56 of the CBMA 2009. A litigant cannot reserve or withhold an important issue of law—including alleged non-compliance with Shariah principles—to be conveniently raised in a future, staggered application.

This strict prohibition against piecemeal challenges was eloquently expressed by Azimah Omar J (Now, FCJ) in the High Court case of Radiant Splendour Sdn Bhd & Ors v Dato’ Seri Mohd Najib bin Tun Abdul Razak & Ors [2020] MLJU 961, where Her Ladyship aptly held: "[58] … Litigants cannot be allowed to reveal their causes of action on a staggered basis, intending to inundate the court and the opposing party in an unending saga of litigation. There must be finality in litigation, and to decide against such finality would only open the courts to a chasm of unending litigations." [Emphasis added]

Applying these binding appellate authorities and Her Ladyship's sound rationale, the Defendant’s invocation of Tawarruq, ibra’, and the SAC is plainly an attempt to relitigate matters that either were or ought to have been raised in the first setting-aside application. It does not alter the substance of this application. In Enclosure 43, the Defendant is still challenging the same indebtedness and the same Order for Sale. Therefore, there is no genuine or novel Shariah issue requiring reference to the SAC for the disposal of Enclosure 43. ISSUE 4: WHETHER THE VALUATION COMPLAINT JUSTIFIES SETTING

The Defendant also contends that the Plaintiff relied on an outdated and inaccurate valuation report and that the Charged Property is being sold below market value.

This argument is misplaced in the context of the present application.

The issue of valuation concerns the execution stage, particularly the fixing of the reserve price and the conduct of the auction. It is not a proper basis for setting aside the Order for Sale through a second application.

The Defendant had already raised valuation-related objections in the execution proceedings. Those objections were dismissed. The Defendant cannot now use Enclosure 43 to collaterally attack a matter already dealt with by the execution court.

Moreover, three prior auctions had failed to attract bidders. The reserve price was reduced in accordance with the statutory auction process. A bare assertion that the Charged Property is worth more does not invalidate the Order for Sale.

The Court also notes the principle stated in Mustapha Bin Mohamed v Ji Seng Hong Plastic Manufacturing Sdn Bhd [2014] 11 MLJ 793, where the Court held that a party disputing a valuation report must discharge its burden by producing proper countervailing valuation evidence. Mere dissatisfaction with the valuation is insufficient.

The valuation complaint therefore affords no basis to set aside the Order for Sale.

Having addressed the Defendant’s principal grounds, this Court finds no basis to set aside the Order for Sale. The Defendant’s application suffers from three fundamental defects. First, it is procedurally abusive. It is a second setting-aside application after the Defendant’s first application (and its appeal) had failed. Second, it is barred by finality. The Order for Sale has already been challenged and affirmed. The Defendant cannot endlessly reopen the same order merely by changing the formulation of its grounds. Third, it is substantively unmeritorious. The Defendant has not established any defect in the charge, any fatal defect in Form 16D, any breach of natural justice, any genuine Shariah issue requiring reference to the SAC, or any valuation irregularity capable of nullifying the Order for Sale.

This Court is mindful that the Charged Property is the Defendant’s land, and that enforcement of a charge is a serious matter. However, the Defendant voluntarily charged the Charged Property to secure the Customer’s financing facilities. The Plaintiff, as registered chargee, is entitled to enforce its statutory rights under the NLC upon default, provided that the statutory requirements have been complied with.

The Court cannot permit the foreclosure process to be indefinitely stalled by repetitive applications. To do so would undermine the integrity of registered securities, the finality of court orders and the orderly administration of justice.

For the reasons stated above, this Court makes the following orders:

Enclosure 43 is dismissed;

the Order for Sale dated 15.08.2022 remains valid and enforceable;

all consequential execution steps taken pursuant to the Order for Sale are not invalidated by Enclosure 43; and

the costs of RM10,000.00 are awarded to the Plaintiff, subject to allocatur. Dated: 31st May, 2026 _____________________________________________ DR. HJ JOHN LEE KIEN HOW @ MOHD JOHAN LEE JUDGE HIGH COURT OF MALAYA ALOR SETAR Solicitor For the Plaintiff : Nur Aini Binti Yaakob & Farah Sakinah Binti Paridul Adras Sidek Teoh Wong & Dennis Solicitor For the Defendant : Ahmad Farid, Kamal Hisham & Hj Ghazali Chia Ahmad Farid & Associates Authorities Cases Asia Commercial Finance (M) Bhd v Kawal Teliti Sdn Bhd [1995] 3 CLJ 783 Bank Muamalat (M) Bhd v Hexagon Holdings Bhd [2015] 7 MLJ 134 Bauer (Malaysia) Sdn Bhd v Hundred Vision Construction Sdn Bhd & Anor [2020] MLJU 543 Chan Boi Loi v Public Bank Bhd and another application [2011] 1 MLJ 478 Chee Pok Choy v Scotch Leasing Sdn Bhd [2001] 2 CLJ 321 CIMB Islamic Bank Berhad v Ahmad Asyraf bin Alias [2025] CLJU 3581 David Cheah Seng Chye v So Miau Song & Ors [2023] 5 CLJ 20 Glomac Alliance Sdn Bhd v Nordin Md Zain [2023] 3 MLJ 393 JRI Resources Sdn Bhd v Kuwait Finance House (Malaysia) Bhd [2019] 5 CLJ 569 Kandiah Peter v Public Bank Bhd [1994] 1 MLJ 119 Low Lee Lian v Ban Hin Lee Bank Bhd [1997] 2 CLJ 36 Mustapha Bin Mohamed v Ji Seng Hong Plastic Manufacturing Sdn Bhd [2014] 11 MLJ 793 Ng Hee Thoong & Anor v Public Bank Bhd [1995] 1 MLJ 281 OCBC Bank (Malaysia) Bhd v Lean Seng Pottery Factory Sdn Bhd [1999] 5 CLJ 529 Pan Northern Air Services Sdn Bhd v Maybank Islamic Bhd & Another Appeal [2021] 3 CLJ 34 Radiant Splendour Sdn Bhd & Ors v Dato’ Seri Mohd Najib bin Tun Abdul Razak & Ors [2020] MLJU 961 Ravindra A/P Karuppiah v CIMB Bank Bhd and Another Appeal [2023] 5 MLJ 106 TMF Trustees Malaysia Berhad v Maxlin Garments Sdn Bhd [2015] 1 LNS 1162 Statutes Central Bank of Malaysia Act 2009 National Land Code 1965 Rules of Court 2012 Secondary Authorities Mohd Johan Lee, “Islamic Banking in Malaysia: Cases and Commentaries” (LexisNexis 2018) Mohd Johan Lee, “Recovery, Rescheduling and Restructuring of Islamic Banking Facilities” (2nd ed., LexisNexis 2019)