Ganaesh Rau A/L B.A.Ramarau v 1. ) Bhaskar A/L Nadarajan (BA-22NCvC-487-12/2021)

BHASKAR A/L NADARAJAN (No. K/P: 620819-08-5565)

PERBADANAN KEMAJUAN NEGERI SELANGOR …DEFENDAN-DEFENDAN GROUNDS OF JUDGMENT Introduction [1] The Plaintiff is the executor of the estate of one B.A. Ramarau (deceased). The genesis of this suit commenced by the Plaintiff, is an agreement entered into between the deceased and the 1st Defendant some 20 years ago. The Plaintiff now seeks to enforce the said agreement by the reliefs sought in this action. 15/10/2025 11:23:57 BA-22NCvC-487-12/2021 Kand. 207 Salient facts [2] The narration of undisputed facts, in so far as it is evident and represented by the documents in this trial, are as follows. [3] In 2003, the Selangor State Government decided to redevelop an area known as Bukit Botak. Delpuri Corporation Sdn Bhd (“Delpuri”) was the developer appointed by the State Government to undertake the development. [4] As there were squatters living in the Bukit Botak area, a resettlement scheme was embarked upon where the squatters were offered plots of land with houses. [5] The 1st Defendant (“D1”) was one of the occupants in the intended development. By a letter dated 20.11.2003 issued by the Gombak Land Office, D1 was informed that he was to be offered a plot of land measuring 2200 sq ft on which a house of either Type A or Type B was to be constructed in Taman Selayang Mutiara. D1 was also requested to pay a commitment fee of RM 1000.00. [6] On 12.2.2004, Delpuri informed the Gombak Land office that the plot identified to be offered to D1 was Lot 1513. [7] On 12.10.2004, D1 entered into a Sale and Purchase Agreement (“1st SPA”) with the deceased. The SPA was prepared by the firm of Messrs Hariharan Mohanna & Co. The Vendor was D1 and the Purchaser was the deceased. [8] The material terms of the SPA states:-

Recital A - That the Vendor is the beneficial owner of a dwelling house known as STG 987A, Kampung Lembah Mutiara 2, Selayang Baru, 68100 Batu Caves, Selangor Darul

(ii) Recital B - By a letter dated 20.11.2003 by Pentadbir Tanah Gombak, a Developer’s Lot known as Lot 1513 in Taman Selayang Mutiara was allocated to the Vendor;

(iii) Recital C - The Vendor agreed to sell and the Purchaser agreed to purchase STG 987A and Lot 1513 measuring 2200 sq ft on which a Type A house was to be built in Taman Selayang Mutiara; and

(iv) Clause 1 - The consideration sum for the said property was RM 40,000.00, of which RM 10,000.00 had been paid, leaving a balance of RM 30,000.00 which was to be paid upon the execution of the SPA. [9] Of pertinence, is that at the time of the execution of the 1st SPA, the offer in respect of Lot 1513 had not been formalized by any Sales and Purchase Agreement between D1 and Delpuri. [10] On 16.2.2010, D1 executed a Power of Attorney in favour of the deceased, granting the deceased power and authority to deal in STG 987A and Lot 1513. [11] The development of Bukit Botak was subsequently taken over by Perbadanan Kemajuan Negeri Selangor (“PKNS”), under the purview of the Selangor State Government. Lot 1513 initially identified to be allocated to D1 was substituted with Lot 1396. [12] On 4.10.2012, a formal offer was made by the Selangor State Government to D1 in furtherance of its resettlement scheme for squatters of Bukit Botak. D1 was informed that he was eligible to purchase a semi-detached single storey terrace house at a price of RM 99,000 which did not include the construction costs of RM 12,300.00. D1 accepted the offer. [13] Subsequent thereto, a Sales and Purchase Agreement was executed on 24.7.2014 between PKNS (“D2”) as the Vendor and D1 as Purchaser (“2nd SPA”). The subject matter of the 2nd SPA was property identified as HSD 76538 PT 11018 Bandar Selayang, Daerah Gombak, Negeri Selangor Darul Ehsan (“the said property”) and bearing address 23, Jalan Mutiara 6/6. The consideration sum was stated as RM 111,300.00. [14] Notwithstanding the execution of the 2nd SPA some 10 years ago, the said property has not been transferred to the Purchaser as to date the full purchase price has not been paid by D1. [15] Upon the discovery of the 2nd SPA, the deceased entered a caveat on the said property on 3.11.2014. He also instructed his solicitors Messrs. Tanes & Co to issue a Notice of Demand directing D1 to procure the registration of the said property in the name of the deceased. In the alternative, D1 was to compensate the deceased the equivalent value of the said property. [16] The deceased passed away on 12.12.2016. His son, the Plaintiff was issued a Grant of Probate on 27.6.2019. Plaintiff’s case [17] The Plaintiff’s suit against D1 is founded upon 2 causes of action, breach of contract and fraud. In relation to the contractual claim, the pleadings allege that D1 had breached its obligations under clauses 6, 10.1, 10.2 and 10.3 of the 1st SPA dated 12.10.2004. [18] As for fraud, the particulars of fraud have been enumerated in paragraph 20 of its SOC. The particulars of fraud alleged are as follows:

D1 executed the SPA with the deceased to defraud the deceased of the amount of RM 40,000.00;

(ii) D1 concealed from the deceased the fact that the allocated plot had been switched from Lot 1315 to Lot 1396;

(iii) D1 failed to inform D2 the deceased’s rights and interest in the said property;

(iv) D1 acted mala fide by entering into an agreement with D2, despite knowing that he had no power/right/interest in the said property;

D1 deliberately withheld from D2 material information pertaining to the 1st SPA and the Power of Attorney executed on 16.2.2010;

(vi) D1 had deliberately concealed material information pertaining to deceased’s rights in order to unjustly enrich himself from the purchase of the property from D2; and

(vii) D1 acted fraudulently in executing the 1st SPA with the deceased as it was done without any intention to perform the terms of the agreement but to enrich himself. [19] As against D2, the Plaintiff pleads that the 2nd SPA between D1 and D2 executed on 24.7.2014, is null and void. The pleaded case states the reason as “kerana D1 tidak mempunyai sebarang hak dan/atau kepentingan untuk memasuki perjanjian tersebut dengan D2.” [20] Consequent to the wrongful conduct of D1 as stated above, the deceased’s estate had been put to loss and expense. I note that the reliefs sought are numerous and convoluted with some merely repetitive of the rest. (See: paragraph 26 of the Statement of Claim). I must add that counsels should avoid pleading reliefs in this manner. [21] I have summarized the reliefs as follows:

a declaration that the 1st SPA dated 12.10.2004 is valid and enforceable;

(ii) a declaration that the Plaintiff has rights over property identified as HSD 76538 PT 11018 Bandar Selayang, Daerah Gombak, Negeri Selangor Darul Ehsan;

(iii) an order that the Registrar of Land Titles, Gombak do give effect to the rights of the Plaintiff on the said property;

(iv) a declaration that the 2nd SPA entered between D1 and PKNS dated 24.7.2014 is null and void;

an order for specific performance against D2 wherein D2 is to both offer and sell the said property to the Plaintiff for the sum of RM 99,000.00 within 30 days from the order to be made by this court;

(vi) in the alternative, D1 is to transfer the said Land to the Plaintiff within 30 days from the order to be made by this court or to pay the Plaintiff the equivalent market value of the said Land; and

(vii) exemplary damages to be ordered against D1 and/or D2. D1’s defence [22] D1’s pleaded defence is an outright denial of the Plaintiff’s allegations. D1 denied knowing the deceased as well as attending the office of Mohanna Hariharan & Co. to execute the 1st SPA and the PA. His evidence was that he merely obtained the services of the legal firm to represent him in the resettlement scheme offer. [23] At the trial however, counsel for D1 presented a legal argument. It was contended that D1 had no title to the property mentioned the 1st SPA which comprised of STG 987A and Lot 1513, and for that reason, he lacked the capacity to enter into the 1st SPA to transfer any interest or title of the property mentioned therein to the deceased. Defence of D2 [24] The Plaintiff’s suit is opposed by D2 on 3 grounds. Firstly, it is a stranger to the 1st SPA between the deceased and D1. It had no knowledge of the 1st SPA. In any event, any issues between the Plaintiff and the deceased pertaining thereto has nothing to do with D2. [25] Secondly, the relief sought by the Plaintiff against D2 to sell the said property to the Plaintiff is against public policy as it was not the intended recipient under the resettlement scheme. [26] Thirdly, at the time of the 1st SPA, D1 was only offered an option to purchase. He had no rights in the property he sold to the deceased. This argument is consonant with the maxim nemo dat quod non habet. Witnesses [27] To establish the case for the Plaintiff, 2 witnesses were called. They were the solicitor who prepared the 1st SPA and the Plaintiff himself, as the executor of the estate for the deceased. D1 testified on his behalf as the only witness for his case. As for D2, a representative from PKNS was called to adduce evidence. Issues [28] In view of the Plaintiff’s pleaded case, the dominant issue to be decided is whether D1 is liable in fraud and breach of contract. The case against D2 is primarily for specific reliefs in the event the Plaintiff succeeds in his claim against D1. [29] The dispute between the parties therefore is to be determined by considering the following issues:

whether D1 executed the 1st SPA and the PA;

(ii) whether D1 received the RM 40,000.00 paid by the deceased in respect of the 1st SPA;

(iii) whether the maxim nemo dat quod non habet apply to the circumstances of this case;

(iv) whether there was fraud on the part of D1;

whether specific performance can be ordered against D2 or alternatively an order for D1 to transfer the said property to the

(vi) appropriate orders to be made consequent upon the findings of this court. Analysis and findings [30] I shall deal first with the breach of contract claim against D1 and the clauses in the 1st SPA said to have been breached. These clauses pertain to the event of compulsory land acquisition by the government. However, upon considering the evidence adduced by both parties, the factual matrix of this case is totally unrelated to land acquisition. The Plaintiff’s reliance on these clauses to establish a case of breach of contract is therefore wholly misconceived. Whether D1 executed the 1st SPA [31] The solicitor who prepared the 1st SPA (PW1) testified that both the deceased and D1 attended his office to execute the SPA. He stated that he explained to both of them the contents of the 1st SPA before they agreed to sign the SPA. He then attested to both their signatures. He also stated that some time later in 2010, he prepared the PA for D1’s execution. Again, D1 signed after he was explained the contents and indicated his agreement to it. [32] Having heard and observed PW1, I have no reason to disbelieve his evidence. The denial of D1 in his Statement of Defence that he did not execute the 1st SPA and PA is not only a bare denial, it is implausible. There is no credible evidence adduced to support his denial of having executed the said documents. [33] The Plaintiff first commenced the present action by filing an Originating Summons. In response to the suit, D1 affirmed an affidavit stating affirmatively that he signed the documents but was not aware of the contents. D1’s denial in his Statement of Defence that he did not execute the 1st SPA and PA is therefore inconsistent with his statement given on oath. In any event, at the trial, D1 took an about turn when he admitted in cross examination that he did sign the 1st SPA and PA. [34] In view of his admission, I find that D1 executed the 1st SPA and PA. Whether D1 received the purchase price [35] PW1 testified that on 12.12.2003, the deceased made out a bank draft for the amount of RM 30,000.00 in favour of Messrs. Hariharan Mohanna & Co. These amounts were later disbursed to D1 in four payments, over different dates in December 2003. Documentary evidence was referred to in support of his assertion. [36] PW1 added that on the day parties executed the 1st SPA, another RM 10,000.00 was paid to D1. With this final payment, the full purchase price as stated in the 1st SPA had been paid by the deceased. [37] D1’s evidence in rebuttal was a denial of receipt of the purchase price. Again, I find his denial lack credibility. His denial is controverted by the terms of the 1st SPA which he admitted executing. Clause 1 states that a deposit of RM 10,000.00 has been received by the Vendor. Clause 2 states that the balance purchase price of RM 30,000.00 is paid upon execution of the agreement. [38] Whilst the 1st SPA may suffer some lack in drafting, the terms confirm that upon the execution of the agreement, parties agree that the whole purchase price had been paid. Although the documentary evidence shows that the purchase price was paid by the deceased to the firm of PW1 even before the execution of the 1st SPA, which I find curious, this fact was not taken further by counsels. 1 therefore find that nothing turned on it. [39] On the basis of the documentary evidence, I therefore conclude that the purchase price of RM 40,000.00 was in fact paid and received by D1. Application of nemo dat quod non habet maxim [40] The application of the maxim has been explained in several cases. In Simpang Empat Plantation Sdn Bhd v Ali bin Tan Sri Abdul Kadir & Ors, [2006] 1 MLJ 193, the Court of Appeal held, That brings me to the other respondents, in particular the sixth respondent. If the receivers and managers had no right to sell, then no title could ever pass to the purchaser — nemo dat quod non habet. That has been settled by the judgment of Wan Yahya SCJ in M & J Frozen Food Sdn Bhd & Anor v Siland Sdn Bhd & Anor [1994] 1 MLJ 294 at p 309 where he said: A purchaser of land might fail to obtain a good title in two distinct ways. Firstly, if the title of the vendor is bad. Secondly, even if the vendor has a good title, there might be some invalidating defects in the conveyance or transaction in which the purchaser attempted to obtain the title. These transactions might be void or voidable for a variety of reasons. In the case of a defect in the vendor's title, the common law rule, is that no person can give a better title than he had — nemo dat quod non habet. [41] Similarly, the Federal Court in Sia Hiong Tee & Ors v Chong Su Kong & Ors. [2015] 4 MLJ 188 held, The nemo dat rule literally means ‘no-one can transfer what he has not got’ (Bishopsgate Motor Finance Corporation Ltd v Transport Brakes Limited [1949] 1 KB 322 as per Denning LJ). This is sometimes called the ‘derivation’ principle: the transferee’s rights derived from those of the transferor. The nemo dat rule protects the true owner of the goods (right of ownership) and the innocent purchaser who purchases the goods from non-owner gets no title as the non-owner could not pass good title because he has none. [42] Both the defendants rely on this maxim to contend that when the 1st SPA was executed D1 did not have any right to the property mentioned therein. I find merit in that contention. [43] At the time of the 1st SPA, all that D1 had at most, was an offer, as evidenced by the contents of the letter from the Pejabat Daerah dan Tanah Gombak dated 20.11.2003. D1 was informed, “Sukacita dimaklumkan bahawa Pejabat Daerah dan Tanah Gombak telah mengesyorkan nama tuan/puan kepada Kerajaan Negeri Selangor untuk diluluskan satu lot tanah seluas 2,200 kaki persegi bagi didirikan ruman berkembar yang akan dipilih samada jenis A atau B atau C di Projek Taman Selayang Mutiara.” [44] I note that the letter made no mention of Lot 1513, being the specific plot allocated to D1. However, Lot 1513 was provided for in Recital B of the 1st SPA. I surmise that parties must have somehow obtained that information in order to include it in the 1st SPA. [45] The 1st SPA then states in Recital B and Recital C that D1 having been allocated Lot 1513, now agrees to sell it to the deceased. It is a material fact that at the time of the 1st SPA, the allocation had not even been formalised. It was not until some 10 years later that D1 executed the 2nd SPA with D2 to purchase the said property. Further it is undisputed that when D1 executed the 2nd SPA, the specific lot identified was Lot 1396, and not 1513. [46] In the circumstances, at the time of the 1st SPA, all D1 had was a mere offer to take up Lot 1513. He clearly had no title or legal interest in Lot 1513. He could not even be described as a beneficial owner of the said Lot as he had not yet paid any monies in respect of Lot 1513. [47] In Tan Ong Ban v Teoh Kim Heng [2016] 3 MLJ 23, the Federal Court explained the principle of beneficial ownership as follows:- [33] We will begin with an elucidation of the principle of beneficial ownership which we think is crucial to this case. This principle of beneficial ownership was alluded to by Edgar Joseph JR in Borneo Housing Mortgage Finance Bhd where he observed: … the contractual events which result in the vendor becoming a bare trustee of the land the subject matter of the agreement of sale and purchase for the purchaser, is on completion, that is to say, upon receipt by the vendor of the full purchase price, timeously paid and when the vendor has given the purchaser a duly executed, valid and registrable transfer of the land in due form, in favour of the purchaser, for it is then the vendor divest himself of his interest in the land. (Emphasis added.)” [34] According to this principle, when a purchaser of a property has performed his or her contractual obligation upon the full settlement of the purchase price besides executing all the formal documents to effect the registration of ownership, equity accords him or her with all the rights and privileges of a legal owner over the property. The purchaser thus enjoys the benefit of being the owner of the acquired property even though he or she has yet to become its registered owner. [35] This is clearly demonstrated by the case of J Raju v Kwong Yik Bank Bhd & Anor [1994] 2 MLJ 408; [1994] 2 AMR 1220, where the Supreme Court held that: … the vendor of the land is only regarded as having divested himself of the beneficial interest in his land and vested it on the purchaser at the time when the purchase money had been paid in full.” [48] To conclude, D1 clearly had no interest nor right in Lot 1513 to even pass to the deceased at the time of the 1st SPA. Whether there was fraud on the part of D1 [49] The standard of proof for fraud in a civil case has now been settled by the Federal Court in Sinnaiyah & Sons Sdn Bhd v Damai Setia Sdn Bhd [2015] 5 MLJ 1. It is on a balance of probabilities. (See also: Letchumanan Chettiar Alagappan @ L Allagappan (as executor to SL Alameloo Achi alias Sona Lena Alamelo Acho, deceased) & Anor v Secure Plantation Sdn Bhd [2017] 4 MLJ 697). [50] The Plaintiff alleges that D1’s conduct in executing the 1st SPA with the deceased and concealing the information from D2 when he executed the 2nd SPA is tantamount to fraud, as it showed he had no intention of completing the sale to the Plaintiff as agreed. His fraudulent conduct is confirmed by the fact that he had received the full purchase price of RM 40,000.00. [51] In my view, fraud connotes dishonesty and can be inferred from actions done with a dishonest intention. I would be cautious to infer from the mere execution of an agreement to transact a piece of property which had yet to materialize, fraud on the part of D1. The 1st SPA was prepared by PW1, an advocate and solicitor. It was his testimony that the agreement was explained to both. There is nothing in the evidence to suggest that the deceased was misrepresented in any way by D1. Both parties must be taken to have understood at the time of the 1st SPA, D1’s interest, in Lot 1513 was a mere offer by the land office. [52] I therefore do not find fraud proven against D1. In view of my findings that the claim in contract also fails, the Plaintiff’s case against D1 must be dismissed. [53] As the Plaintiff failed to establish liability, the question of granting the reliefs sought do not arise. Nonetheless for the sake of completeness, I shall deal with the issue of reliefs as they raise questions of mixed law and fact. whether an order for specific performance can be ordered against D2 [54] The Plaintiff seeks an order for D2 to sell the said property to him for the amount of RM 99,000.00 within 30 days from the order to be given by this court. The purchase price was determined presumably by reference to the price offered to D1 premised on the letter by the State Government dated 4.10.2012. [55] The order sought is entirely misconceived. The Plaintiff’s principal relief is to enforce an agreement deceased entered into with D1. However, D2 was a complete stranger to the 1st SPA. [56] In Pihak Berkuasa Tatatertib Majlis Perbandaran Seberang Perai & Anor v Mohd Sobri bin Che Hassan [2020] 4 MLJ 620 the Federal Court held, [71] A decree of specific performance is akin to an injunction because it operates to compel a party to the contract to perform the action he promised to perform under the contract — provided of course that the contract is in the first place specifically enforceable. That such a decree is akin to an injunction was also impliedly recognised by Knight Bruce LJ in Johnson, at p 364. The difference between a decree of specific performance and injunctions generally is that the former is contingent upon the prior existence of a valid contract capable of enforcement. [57] The Plaintiff cannot in law, seek an order for specific performance against a non-contracting party. The issues between D1 and the Plaintiff have nothing to do with D2. [58] D2 also contends that it cannot be compelled to sell the said property to the Plaintiff as it would be contrary to the provisions of s. 24(e) of the Contracts Act 1950. The said property was allocated to D1 under the resettlement scheme, which was offered only to eligible purchasers. The resettlement scheme was a government initiative to provide housing for qualified persons. To compel D2 to enter into a contract to sell to the Plaintiff would be to circumvent the government policy underlying the sale by D2. [59] I find D2’s contention to have merit. The evidence of DW1, a representative of D2 is relevant on the criteria of eligibility of the resettlement scheme. She stated as follows, Ya, tawaran telah dibuat kepada Pembeli-Pembeli selaras dengan penawaran penempatan semula setinggan oleh Pejabat Tanah Daerah Gombak. Maka, ini bukan suatu jualan hartanah yang biasa. Jualan ini adalah kepada golongan tertentu yang telah dikenal pasti oleh Kerajaan Negeri. …. Plaintif bukan satu pihak yang diikhtiraf atau dipilih oleh Kerajaan Negeri, Melaka. Maka, jika perjanjian dibuat terus kepada Plaintif, Defendan Kedua akan memungkiri perjanjian dan/atau arahan dengan Kerajaan Negeri/Pejabat Tanah. [60] The offer to D1 was made pursuant to the State Government’s plan to resettle the squatters in order to develop Bukit Botak. DW1 had expressly stated that neither the Plaintiff nor the deceased was one of those who were eligible. [61] The policy of the resettlement scheme is also apparent from the terms in the 2nd SPA which imposes a restriction on a subsequent dealing. Clause 5 of the agreement provides,

Syarat Khas

Pihak-pihak kepada Perjanjian ini dengan ini telah bersetuju bahawa Perjanjian ini turut tertakluk kepada syarat seperti berikut: “Hartanah yang dinyatakan di dalam perjanjian ini tidak boleh sama sekali di pindahmilik, dilupuskan atau ditukarmilik oleh Pembeli dalam masa sepuluh (10) tahun daripada tarikh perjanjian ini ditandatangani dengan cara menerima sebarang balasan samada dengan wang ringgit atau sebarang bentuk balasan lain daripada mana-mana pihak ketiga tanpa sebarang kebenaran bertulis daripada pihak Penjual.” [62] The above clause reinforces the underlying objective that the offer was only meant for those who were occupying the area of the development and who were affected as a result of the development. [63] To compel D2 to enter into a contract with the Plaintiff would clearly be contrary to the policy of the State Government, and would attract the provisions of s. 24(e) of the Contracts Act, 1950 which provide. What considerations and objects are lawful, and what not

The consideration or object of an agreement is lawful, unless-

(a)….

(b)….

(c)….

(d)….

(e)….the court regards it is immoral, or opposed to public policy. [64] Whilst our courts have not attempted a comprehensive definition of public policy, the Federal Court in Merong Mahawangsa Sdn Bhd & Anor v Dato’ Shazryl Eskay bin Abdullah [2015] 5 MLJ 639 gave a broad guideline as to what it meant in its judgment as follows, [41] In Brett AndrewMacNamara v Kam Lee Kuan [2008] 2 MLJ 450, Balia Yusof J, as he then was, referred to the following passage in Pollock and Mulla on Indian Contract and Specific Relief Act, (10th Ed), on the meaning of ‘public policy’. Public Policy — The principle of public policy is this: ex dolo molo non oritur action. Lord Brougham defines public policy as the principle which declares that no man can lawfully do that which has a tendency to be injurious to the public welfare. [42] It should also be said that public policy is not static. ‘The question of whether a particular agreement is contrary to public policy is a question of law …It has been indicated that new heads of public policy will not be invented by the courts for the following reasons … However, the application of any particular ground of public policy may vary from time to time and the courts will not shrink from properly applying the principle of an existing ground to any new case that may arise …The rule remains, but its application varies with the principles which for the time being guide public opinion’ (Halsbury’s Law of England, (5th Ed Vol 22) at para 430). [65] Upon considering the explanation of DW1, I am persuaded by D2’s contention that it would run contrary to the policy of the State Government to allow persons other than those eligible to benefit from the resettlement scheme. For this reason, I agree with D2 that it cannot be compelled to sell the said property to the Plaintiff. Whether D1 can be ordered to transfer the said property to the Plaintiff [66] In the event the order for specific performance cannot be ordered against D2, the Plaintiff seeks an alternative order against D1 to have Lot 1396 transferred to him. [67] The subject matter of the 1st SPA was a different property. It was Lot

This was the original lot offered to D1. However, the said property that the Plaintiff how seeks to be transferred to him is the subject matter of the 2nd SPA, which is Lot 1396. [68] PW2’s own evidence states as follows, Tanah Lot 1513 tersebut kemudiannya telah digantikan dengan Lot 1396 oleh pihak Pejabat Tanah yang mana penggantian Lot 1513 tersebut tidak dimaklumkan oleh D1 kepada simati. [69] The substitution of the lots took place after the 1st SPA. Whilst the Plaintiff seeks a declaration that the 1st SPA in respect of Lot 1513 is valid and enforceable, he wants Lot 1396 which was eventually sold to D1 by the 2nd SPA. Needless to say, there is no legal basis for this court to do that. Appropriate orders to be made [70] Arising from the aforementioned findings, the conclusion this court must arrive at is that the obligations under 1st SPA cannot be performed. Apart from the fact that the nemo dat quod non habet principle applies, Lot 1513 which was the subject matter of the 1st SPA was not the eventual lot allocated to D1. To my mind, the 1st SPA can be said to be a contract which has become void. In addition, the agreement is void as against public policy as only persons eligible under the resettlement scheme can be offered housing by D2. [71] However, it is also my finding that D1 received the RM 40,000.00 purchase price stated in the 1st SPA. The question that arises is whether D1 can be ordered to repay the said sum. [72] The Federal Court in Tan Chee Hoe & Sdn Bhd v Code Focus Sdn Bhd. [2014] 3 MLJ 301 had the occasion to deal with this issue and it held, [37] The effect of a void contract or agreement is provided for under s 66 of the Contracts Act 1950, which reads: 66 When an agreement is discovered to be void, or when a contract becomes void, any person who has received any advantage under the agreement or contract is bound to restore it, or to make compensation for it, to the person from whom he received it. [38] The facts of the present case do fit the meaning of the words ‘discovered to be void’ or ‘becomes void’ as found in section 66 above. The Privy Council in Harnath Kaur v Inder Singh [1922] LR 50, 1 A 69 in considering a claim based on s 65 of the Indian Contracts Act 1872 (which was identical to our s 66 of the Contracts Act 1950) ruled: an agreement, therefore, discovered to be void is one discovered to be not enforceable by law, and on the language of the section, would include an agreement that was void in that sense from its inception as distinct from a contract that becomes void. The above principle was followed by Wan Suleiman J in Ahmad bin Udoh & Anor v Ng Aik Chong [1969] 2 MLJ 116. [39] A right to restitution may arise out of a failure of a contract though the right itself be not a matter of contractual obligation. It appears to be based on the principle exemplified in the Roman Law condictio causa data causa non secuta (contract becoming impossible to perform owing to the outbreak of war [2014] 3 MLJ 301 at 318in 1914). The Privy Council in Menaka v Lum Kum Chum [1977] 1 MLJ 91, in dealing with s 65 of the Indian Contracts Act 1872 (which is identical to our s 66 of the Contracts Act 1950) ruled: In that way effect will be given to section 65 under which each party is bound to restore any advantage which he has received to the person from whom he received it — see Govindram Seksaria v Radbone where Lord Morton of Henry ton said: The result of section 65 of the Indian Contract Act was that, as from (the date on which the contract became void) each of the parties became bound to restore to the other any advantage which the restoring party had received under the contract of sale. (See also: Paragon Union Bhd v Prestamewah Development Sdn Bhd & Anor and another appeal [2018] 4 MLJ 307) [73] Having received the purchase monies, D1 must return the benefit received for an unenforceable contract. It would be unconscionable to allow D1 to retain the purchase price paid by the deceased. I am therefore inclined to make an order that D1 return the purchase price he received. Conclusion [74] Premised on the foregoing reasons, the Plaintiff’s claim against both the Defendants is dismissed. [75] I order for the sum of RM 40,000.00 to be paid to the Plaintiff as the executor of the deceased estate together with interest at the rate of 5% from the date of payment being the date of the 1st SPA i.e 12.10.2004 until realization. [76] In respect of costs, both the Plaintiff and the 1st Defendant are to bear their own costs. However, I would order the Plaintiff to pay RM10,000.00 costs to the 2nd Defendant. Dated: 15th of October 2025 -sgd-Alice Loke Yee Ching Judge High Court Shah Alam Counsel for Plaintiff: Dato’ Gobinath Mohanna (Mr P. Taneswaran with him) The Law Office of Mohanna & Co. Counsel for 1st Defendant: Mr Lingaswaran Singh Tetuan R. S Seelan, Parames & Co. Counsel for 2nd Defendant: Mr Karamjit Singh a/l Harbhajan Singh