Pannirselvam A/L Velu v Dana Vallen A/L Arumugam (PA-12B-40-10/2024)

equal monthly instalments of RM50,000.00 each, commencing from November 2015 until November 2016. The LOU further provided that the obligation to pay the said sum was conditional upon the financial grant provided by Malaysian Technology Development Corporation Sdn Bhd (MTDC) to Hans JDQL (M) Sdn Bhd not being recalled. [4] The Plaintiff initiated this suit against the Defendant based on the LOU, seeking to recover the outstanding balance of RM400,000.00. The Plaintiff asserts that the Defendant had undertaken and guaranteed to pay the total sum of RM500,000.00 under the LOU but defaulted after making only two instalment payments of RM50,000.00 each. In response, the Defendant filed a counterclaim seeking a refund of the RM100,000.00 paid pursuant to the LOU, contending that the payments were made under circumstances which do not justify retention by the Plaintiff. C. THE APPELLANT/DEFENDANT’S SUBMISSION [5] The learned Sessions Court Judge erred in fact and in law in failing to consider and make a finding on the issue raised by the Defendant in the preliminary objections, namely that part of the Plaintiff’s case was based on inadmissible hearsay evidence relating to a witness, Mr Haresh. [6] The Defendant submitted that the balance payment of RM400,000.00 out of the total RM500,000.00 was rightfully withheld due to the fact that the shares in Hans JDQL (M) Sdn Bhd had not been transferred to the Defendant. The Defendant relied on the express wording of the LOU, particularly the phrases “for consideration of all shares”, “to be transferred to me or my nominee”, and “upon completion of the share transfer”. Read collectively, these phrases make it clear that the obligation to pay the sum of RM500,000.00 only arises upon the completion of the share transfer from Eliamastura, Krishna Venee, and the Plaintiff to the Defendant. A company search conducted at the Companies Commission of Malaysia (SSM) as of 13 June 2022 revealed that the shares in Hans JDQL (M) Sdn Bhd remained registered under the names of Eliamastura, Krishna Venee, and the Defendant. This confirms that the shares had not been transferred to the Defendant or his nominee. Accordingly, the Defendant contended that the mechanism for monthly payments of RM50,000.00 could not have been triggered until the full and proper transfer of all shares had taken place. [7] The Defendant further asserted that the LOU was not drafted by him but was instead prepared and sent to him for execution. He contended that the LOU was signed under duress, specifically economic duress, as he was coerced by one L. Krishnan, who acted as the liaison officer for MTDC and wielded authority over the Defendant in the context of the MTDC financial grant. The Defendant claimed that he had no real choice but to comply with the instruction to sign the LOU due to the fear that failure to do so would result in the withdrawal of the MTDC grant. At the material time, the Defendant was under severe economic pressure, and the threat of losing the grant left him with no viable alternative, thereby vitiating the voluntariness of his consent to the LOU. [8] The financial grant provided to Hans JDQL (M) Sdn Bhd by the Malaysian Technology Development Corporation (MTDC) was in fact recalled by MTDC, as evidenced by a letter dated 22 May 2017. There was no documentary evidence or other admissible proof adduced by the Plaintiff to rebut this fact, save for a bare denial. Despite having had every opportunity to do so, the Plaintiff failed to call any representative from MTDC to dispute the recall of the grant. In the absence of such evidence, and in light of the express condition in the LOU that the Defendant’s payment obligation was contingent upon the grant not being recalled, the Defendant contended that there is no longer any subsisting liability on his part to make further payment to the Plaintiff. [9] In respect of the Defendant’s counterclaim, it was submitted that there was a clear and total failure of consideration on the part of the Plaintiff. The sum of RM100,000.00 paid by the Defendant was made as part of the consideration for the transfer of shares in Hans JDQL (M) Sdn Bhd. However, no shares were ever transferred to the Defendant. As such, the consideration for the said payment has wholly failed, entitling the Defendant to a refund of RM100,000.00 being monies paid for a transaction that was never completed. [10] In respect of the Defendant’s counter claim, the Defendant submitted that there is a clear total failure of consideration on the part of the Plaintiff. The RM100,000.00 paid to the Plaintiff was clearly in exchange for the shares of Han JDQ L (M) Sdn Bhd. However, no shares were transferred to the Defendant. Therefore, the Defendant is entitled to the refund of RM100,000,00 being monies paid for consideration of the shares. In the circumstances, the Defendant prays that the Defendant’s appeal be allowed with costs. D. THE RESPONDENT/PLAINTIFF’S SUBMISSION [11] The Plaintiff submits that the Defendant’s allegation of duress is unsubstantiated, raised belatedly, and appears to be an afterthought. The Defendant failed to produce any credible evidence to support the claim that the execution of the LOU was procured by duress. There is a conspicuous absence of any contemporaneous protest or action by the Defendant to avoid or repudiate the LOU. On the contrary, following the execution of the LOU, the Defendant proceeded to make two instalment payments of RM50,000.00 each—on 14 December 2015 and 14 March 2016—in accordance with the terms of the LOU. These payments reflect clear conduct consistent with acceptance and affirmation of the agreement. [12] With regard to the issue of the share transfer, the Defendant’s oral testimony was materially inconsistent with his own pleaded case. The Defendant had pleaded that he ceased making payments of the remaining RM400,000.00 under the LOU on the ground that the shares in Hans JDQL (M) Sdn Bhd were not transferred to him. However, during cross-examination, the Defendant admitted that his failure to make further payments was due to financial difficulties, and not because of any failure or omission to complete the share transfer. Furthermore, the Defendant conceded that Eliamastura and Krishna Venee had already executed the share transfer forms in his favour. It was also admitted that the only impediment to the completion of the share transfer was the Defendant’s own refusal to sign the relevant documents as the transferee. As such, any failure to complete the transfer of shares was entirely attributable to the Defendant himself, and not the Plaintiff. These facts significantly undermine the Defendant’s claim that the consideration under the LOU had failed or that he was not liable to make further payments. [13] Even if the transfer of shares is to be construed as a condition precedent to the Defendant’s obligation to pay the remaining RM400,000.00 under the LOU, the evidence clearly shows that such condition has been substantially fulfilled. The execution of the share transfer forms by Eliamastura and Krishna Venee in favour of the Defendant effectively vested beneficial ownership of the shares in the Defendant. Furthermore, the resignation of Eliamastura and Krishna Venee from their positions as directors of Hans JDQL (M) Sdn Bhd constitutes additional and independent consideration under the LOU. These actions collectively amount to valid and sufficient consideration in exchange for the Defendant’s undertaking to pay the agreed sum of RM500,000.00. [14] With regard to the alleged recall of the financial grant by MTDC, it is submitted that the Defendant himself admitted during cross-examination that the MTDC grant had not, in fact, been recalled. This admission directly contradicts the Defendant’s pleaded position and undermines the basis upon which he seeks to avoid his payment obligations under the LOU. E. SCJ ANALISIS AND DECISION [15] The learned SCJ makes the following analysis and decision: [31] Tuntutan Plaintif berasaskan dokumen bertarikh 30 Jun 2015 yang mengandungi “Personal Guarantee, Indemnity and Undertaking” yang jelas menunjukkan persetujuan Defendan untuk membayar jumlah RM500,000.00 kepada Plaintif. Defendan hanya membuat pembayaran RM100,000.00 dan meninggalkan baki sebanyak RM400,000.00. Kegagalan ini jelas adalah pelanggaran terhadap syarat-syarat perjanjian yang telah dipersetujui secara bersama. [32] Defendan-Defendan telah melanggari Perjanjian Penyelesaian tersebut di mana Defendan-Defendan telah gagal membuat bayaran kepada PlaintifPlaintif mengikut terma-terma ‘Personal Guarantee, indemnity and Undertaking yang terkandung di dalam dokumen bertarikh 30/6/2015 yang diberi oleh Defendan sendiri. [33] Tindakan Defendan membuat pembayaran RM100,000.00 dari jumlah hutang yang dituntut, membuktikan pengakuan Defendan terhadap hutang tersebut dan meninggalkan baki sebanyak RM400,000.00 masih tertunggak dan kena dibayar. [34] Kewujudan Syarat Perjanjian tersebut dan terma-terma yang terkandung di dalamnya adalah tidak dipertikaikan memandangkan Defendan tidak membantah kandungan Syarat perjanjian tersebut. Oleh yang demikian hutang tersebut yang berjumlah RM500,000.00 adalah tidak dipertikaikan oleh Defendan. Malahan Defendan langsung tidak menyatakan apa-apa komplen atau aduan beliau telah dipaksa atau diugut berhubung surat perjanjian yang telah ditandatangani tersebut. [35] Dakwaan Defendan adalah bertentangan dengan tingkah laku DefendanDefendan sendiri yang mana sebaik sahaja perjanjian indemnity tersebut ditandatangani, Defendan telah membuat pembayaran sebanyak RM100,000.00 kepada Plaintif bagi mematuhi syarat yang terkandung dalam surat perjanjian tersebut. [36] Definisi LOU secara jelas memberikan gambaran bahawa LOU bukan sekadar dokumen, tetapi merupakan jaminan bertulis yang melibatkan obligasi nyata daripada Defendan untuk membayar RM500,000.00 melalui ansuran bulanan. Jaminan yang diberikan oleh Defendan adalah sah daripada perspektif undang-undang, dan sebarang pembayaran yang dibuat mengukuhkan lagi kewujudan perjanjian yang mengikat. Plaintif dengan jelas menunjukkan bahawa obligasi untuk membayar adalah sebagai balasan terhadap pemindahan saham daripada Eliamastura binti Kamaruddin dan Krishnaveene d/o Baskaran kepada Defendan. Tindakan mereka meletak jawatan dan menandatangani borang pemindahan saham adalah bukti komitmen terhadap LOU tersebut. [37] Adalah tidak dipertikaikan bahawa, Defendan, melalui satu surat bertarikh 30/06/2015, telah memberi satu akujanji untuk membayar kepada Plaintif wang sejumlah RM500,000.00 secara ansuran bulanan sebanyak RM50,000.00 sebulan mulai bulan November 2015 selama 12 bulan dari bulan November 2015 sehingga ansuran terakhir pada bulan November 2016. [38] Oleh itu terdapat suatu Kontrak Jaminan (Contract of Guarantee) di antara Plaintif dan Defendan. Adalah undang-undang yang mantap bahawa Kontrak Jaminan, seperti kontrak yang lain, memerlukan elemen persetujuan (consensus ad idem) dan balasan (consideration). [39] Seksyen 79 Akta Kontrak 1950 yang memperuntukkan bahawa:- “79 "Contract of guarantee", "surety", "principal debtor", and "creditor" A "contract of guarantee " is a contract to perform the promise, or discharge the liability, of a third person in case of his default. The person who gives the guarantee is called the "surety"; the person in respect of which default the guarantee is given is called the "principal debtor", and the person to whom the guarantee is given is called the "creditor". A guarantee may be either oral or written.” [40] Seksyen 80 Akta Kontrak 1950 yang memperuntukkan bahawa: “80 Consideration for guarantee Anything done, or any promise made, for the benefit of the principal debtor may be a sufficient consideration to the surety for giving the guarantee. ” [41] Terdapat persetujuan oleh Defendan untuk menjamin bayaran Hutang tersebut oleh Defendan kepada Plaintif-Plaintif. Defendan juga melalui satu surat bertarikh 30/06/2015, "Personal Gurantee, Indemnity And Undertaking" telah memberi satu akujanji untuk membayar kepada Plaintif wang sejumlah RM500,000.00 secara ansuran bulanan sebanyak RM50,000.00 sebulan mulai bulan November 2015 selama 12 bulan dari bulan November 2015 sehingga ansuran terakhir pada bulan November

Ia adalah satu dokumen bertulis yang yang menjamin pembayaran. [42] Adalah undang-undang yang mantap bahawa kontrak jaminan, seperti kontrak yang lain, tidak memerlukan sebarang bentuk yang specific (specific form) dan boleh wujud walaupun secara lisan. Ini telah diputuskan oleh Mahkamah di dalam kes Elite Choice & Co Ltd v Cheok Kian Hing & Anor [2009] MLJU 1840 di mana fakta-fakta kes tersebut adalah hampir sama dengan kes yang dibicarakan ini. Di dalam kes tersebut, Hakim Dato Tengku Maimun (Ketua Hakim sekarang) selepas memeriksa keterangan saksi-saksi memutuskan bahawa terdapat suatu jaminan lisan (oral guarantee) yang telah diberikan oleh Defendan-Defendan untuk membayar tunggakkan yang dihutang oleh syarikat-syarikat tertentu kepada Plaintif. [43] Di dalam kes yang dibicarakan di hadapan Mahkamah ini, keteranganketerangan yang dikemukakan jelas menunjukkan bahawa terdapat kontrak jaminan oleh Defendan untuk menjamin bayaran Hutang tersebut. [44] Alasan Defendan sekiranya beliau tidak menandatangani surat tersebut, LKrishnan akan memberitahu Malaysian Technology Development Sdn Bhd ("MTDC") mengenai keadaan syarikat Hans JDQL (M) Sdn Bhd pada ketika itu yang mana boleh mengakibatkan pemberian kewangan ("financial grant") kepada Hans JDQL (M) Sdn Bhd ditarik balik ("recalled") oleh MTDC adalah satu rekaan yang sengaja diada adakan oleh Defendan. [45] Kerelaan bebas adalah persetujuan yang diberikan dengan sempurna tanpa dicemari dengan perkara-perkara yang menjejaskan kerelaan. [46] Seksyen 14 Akta Kontrak menyenaraikan perkara-perkara yang menjejaskan kerelaan iaitu melakukan apa-apa perbuatan atau mengancam untuk melakukan perbuatan seperti membunuh atau mencederakan, atau menahan secara tidak sah atau mengancam untuk menahan, apa-apa harta, dengan memudaratkan sesiapa jua, dengan niat menyebabkan seseorang membuat sesuatu perjanjian. Paksaan diperuntukkan dalam seksyen 15 dan 19. [47] Paksaan ditakrifkan dalam seksyen 15 sebagai melakukan apa-apa perbuatan atau mengancam untuk melakukan apa-apa perbuatan yang dilarang oleh Kanun Keseksaan seperti membunuh atau mencederakan, atau menahan secara tidak sah atau mengancam untuk menahan, apa-apa harta, dengan memudaratkan sesiapa jua, dengan niat menyebabkan seseorang membuat sesuatu perjanjian. [48] Hujah Defendan yang menyatakan beliau telah menandatangani surat tersebut di bawah dures ("under duress") kerana telah diugut oleh LKrishnan untuk menandatangani surat tersebut adalah satu fikiran terkemudian dan tidak dapat dipertimbangkan oleh Mahkamah. Mahkamah mendapati tiada bukti kukuh yang menyokong dakwaan ini. Dalam konteks undang-undang, "duress" merujuk kepada keadaan di mana seseorang dipaksa untuk menandatangani kontrak di bawah ancaman atau tekanan yang tidak wajar. Dalam kes ini, Defendan tidak mengemukakan sebarang bantahan atau aduan mengenai paksaan tersebut pada ketika perjanjian itu ditandatangani atau selepas itu. Malahan, kelakuan Defendan yang membuat pembayaran RM100,000.00 menunjukkan pengakuan dan penerimaan beliau terhadap terma yang terkandung dalam perjanjian. [49] Kes Berjaya Times Square Sdn Bhd v. M-Concept Sdn Bhd menekankan bahawa dalam menafsirkan kontrak persendirian, Mahkamah berhak untuk melihat latar belakang dan konteks fakta yang menyokong perjanjian, bukan sekadar terikat kepada teks dokumen. Ini menekankan pentingnya memahami keseluruhan situasi yang melingkari pembuatan perjanjian. [50] Apabila sesuatu dokumen yang mengandungi terma-terma kontrak ditandatangani dan jika tiada unsur fraud atau misrepresentation di dalam menandatangani dokumen berkenaan maka pihak yang menandatangani dokumen tersebut adalah terikat dengan terma-terma kontrak berkenaan. Selain itu, adalah bukan sesuatu yang material sama ada pihak tersebut telah membaca dokumen berkenaan atau tidak atau pun sama ada pihak tersebut tidak memahami Bahasa Inggeris dan kandungannya tidak diterangkan kepada pihak tersebut. [51] Di dalam kes Ooi Yoke In & Anor v. Public Finance Berhad [1993] 2 CLJ 464 Mahkamah Tinggi memutuskan:- When a document containing contractual terms is signed, then in the absence of fraud or misrepresentation, the party signing it is bound, and it is wholly immaterial whether he has read the document or not or whether he knows no English and the contents were not explained to him". [52] Defendan-Defendan telah gagal menunjukkan bahawa Jaminan yang ditandatangani oleh mereka itu dibuat secara fraud atau misrepresentation. [53] Memandangkan Jaminan tersebut bertarikh dimasuki secara sah oleh Defendan-Defendan maka apabila berlaku keingkaran di dalam perjanjian Defendan-Defendan adalah terikat dengan syarat-syarat yang dikenak F. ANALYSIS AND FINDING [16] I am guided by the trite law that the appellate court should not interfere with factual findings of a trial judge unless it was satisfied that the decision of the trial judge was “plainly wrong” or where there was no and/or insufficient judicial appreciation of the evidence. In the case of NG HOO KUI & ANOR v. WENDY TAN LEE PENG, ADMINISTRATOR OF THE ESTATES OF TAN EWE KWANG, DECEASED & ORS [2020] 10 CLJ 1, the Federal Court held as follows: - “An appellate court should not interfere with the trial judge’s conclusions on primary facts unless satisfied that he was plainly wrong. The ‘plainly wrong’ test operates on the principle that the trial court has had the advantage of seeing and hearing the witnesses on their evidence as opposed to the appellate court that acts on the printed records. In the UK, the test adopted by the appellate courts is not whether the higher courts feels that it would have reached a different conclusion on the same fact as the trial court, but whether or not the decision by the lower court on findings of fact was reasonable. If the trial judge’s decision can be reasonably explained and justified, then the appellate courts should refrain from intervention. [17] Upon hearing the submissions of both parties, it is observed that the primary contention raised by the Defendant is that the obligations under the Letter of Undertaking (LOU) could not be fulfilled due to the Plaintiff’s alleged failure to comply with a key condition of the LOU. Specifically, the Defendant contends that the Plaintiff failed to effect the transfer of shares in Hans JDQL (M) Sdn Bhd, held by Eliamastura and Krishna Venee, to the Defendant or his nominee. The Defendant argues that this transfer was a fundamental term of the LOU, forming the basis of the consideration for the agreed sum of RM500,000.00 to be paid by him. Additionally, the Defendant relies on the clause in the LOU which stipulates that the said payment is conditional upon the financial grant from the Malaysian Technology Development Corporation (MTDC) not being recalled. [18] The learned SCJ did not err in his finding that the resignation of Eliamastura and Krishna Venee as directors, coupled with their execution of the share transfer forms, constituted valid consideration for the Defendant’s undertaking to pay the sum of RM500,000.00 under the Letter of Undertaking (LOU). These actions clearly demonstrate their commitment to perform their part of the agreement. It is evident that, but for the LOU and the Defendant’s express undertaking to pay the said sum, Eliamastura and Krishna Venee would not have taken steps detrimental to their own interests—namely, resigning from their directorships and agreeing to transfer their shares in Hans JDQL (M) Sdn Bhd. Moreover, the Defendant’s payment of RM100,000.00 in two instalments pursuant to the LOU further affirms his acknowledgment that the Plaintiff had fulfilled his obligations under the agreement. Now that the share transfer forms have been signed by the transferors, the only remaining step is for the Defendant himself to execute the form as transferee, after which the forms can be lodged with SSM. Accordingly, it is without basis for the Defendant to contend that the Plaintiff has failed to discharge his obligations under the LOU. The non-completion of the transfer lies solely with the Defendant’s inaction, not any breach or failure on the part of the Plaintiff. In other word, legal title was not transferred solely due to the Defendant’s own failure to complete the formalities as transferee. [19] With regard to the alleged recall of the MTDC grant, the Defendant failed to produce any documentary evidence to substantiate his claim that the grant had been recalled. In fact, during cross-examination, the Defendant himself conceded that the MTDC grant was not recalled. In the absence of any credible documentary proof to support the Defendant’s contention, there are no valid grounds warranting appellate intervention in the findings of the learned SCJ on this issue. [20] The learned SCJ also rightly rejected the Defendant’s allegation of duress, as it was unsupported by any credible or corroborative evidence and appeared to be a mere afterthought. The evidence clearly revealed that the Defendant executed the LOU voluntarily and without any immediate protest or attempt to repudiate the agreement. The Defendant’s subsequent conduct—particularly the payment of RM100,000.00 in accordance with the LOU—further affirms that the execution was done willingly and in full recognition of the obligations contained therein. Thus, given the Defendant’s conduct post-execution, including the absence of any legal challenge or complaint at the material time, it is evident that the LOU was entered into voluntarily. Accordingly, I consider the transaction as concluded and had no reason to believe that the Defendant intended to repudiate the LOU. The Defendant’s continued refusal to pay the balance sum of RM400,000.00 is unjustified and in breach of the LOU. [21] Having perused the grounds of judgment delivered by the learned SCJ, I am of the view that the evidence on record was sufficient to support the SCJ’s findings without the need to expressly address the preliminary objection raised by the Defendant. In light of this, the failure to call certain witnesses—specifically, a representative from MTDC— does not, in the circumstances, warrant any adverse inference against the Plaintiff. The Plaintiff’s case rested on documentary and direct evidence which the learned SCJ was entitled to rely upon, and the omission to call additional witnesses does not diminish the strength or sufficiency of the Plaintiff’s case. [22] Based on the above reasons, I dismissed the Defendant’s appeal with cost RM5,000.00 to be paid by the Defendant to the Plaintiff. SGD (ROZANA BINTI ALI YUSOFF) Hakim Mahkamah Tinggi Pulau Pinang Dated on 20th June 2025 Counsel Simrenjeet Singh and Nicholas (Messrs Simrenjeet Tay & Co.) for the Appellant. Tinoshiny (Messrs Athimulan & Co.) for the Respondent.