Perwaja Terengganu Sdn Bhd v Asm Properties Sdn. Bhd. (WA-24FC-1151-08/2024)

Bahawa kesemua bahagian hartanah Defendan yang dipegang di bawah No. PN 20218, Lot 1752, Seksyen 46, Bandar Kuala Lumpur, Daerah Kuala Lumpur, Wilayah Persekutuan Kuala Lumpur (“Hartanah tersebut”) dicagar kepada Plaintif dibawah Perserahan No. 25415/2003 (PN 20218/M1/B2/1), 25414/2003 (PN 20218/M1/B1/2), 25416/2003 (PN 20218/M1/1/3), 25421/2003 (PN 20218/M1/2/4), 25420/2003 (PN 20218/M1/3/5), 25422/2003 (PN 20218/M1/4/6), 25427/2003 (PN 20218/M1/N4/7), 25428/2003 20218/M1/N4/8), 25433/2003 20218/M1/N4/9), 25432/2003 20218/M1/5/10), 25434/2003 20218/M1/6/11), 25372/2003 20218/M1/7/12), 25378/2003 20218/M1/8/13), 25385/2003 20218/M1/9/14), 25390/2003 20218/M1/10/15), 25400/2003 20218/M1/11/17), 25401/2003 20218/M1B/12/19), 25406/2003 (PN 20218/M1B/13/20), 25408/2003 20218/M1B/14/21), 25409/2003 (PN 20218/M1B/15/22), 25410/2003 20218/M1B/16/23), 25411/2003 (PN 20218/M1B/17/24), 25413/2003 20218/M1B/18/25), 25352/2003 (PN 20218/M1B/19/26), 25356/2003 20218/M1B/20/27), 25361/2003 (PN 20218/M1B/21/28), 25365/2003 20218/M1B/22/29), 25367/2003 (PN 20218/M1B/23/30), 25371/2003 20218/M1B/24/31), 25373/2003 (PN 20218/M1B/25/32), 25377/2003 20218/M1B/26/33), 25381/2003 (PN 20218/M1B/27/34), 25386/2003 20218/M1B/28/35), 25387/2003 (PN 20218/M1B/29/36), 25393/2003 20218/M1B/30/37), 25399/2003 (PN 20218/M1B/31/38), 25355/2003 20218/M1B/32/39) dan 25366/2003 (PN 20218/M1B/33/40) (“GadaianGadaian tersebut”) dijual secara bersama dalam Satu (1) lelongan melalui Lelongan Awam dibawah arahan-arahan Penolong Kanan Pendaftar, untuk mendapatkan kembali wang sebanyak RM251,575,382.40 (setakat 06.03.2024);

Kos dan perbelanjaan permohonan ini dan penjualan Hartanah tersebut; S/N wncsXLTDzkOq/qJLKjx1bg

Bahawa Mahkamah yang mulia ini menetapkan tarikh, masa dan tempat lelongan awam tersebut;

Bahawa Penolong Kanan Pendaftar akan menetapkan harga rizab untuk tujuan penjualan tersebut sebagai harga yang selaras dengan anggaran nilai pasaran bagi Hartanah tersebut (selepas ini disebut “Harga Rizab”);

Menetapkan bahawa mana-mana penawar tidak dibenarkan menawar sewaktu lelongan awam sedang dijalankan melainkan jika pegawai Mahkamah berpuashati bahawa penawar berkenaan memiliki jumlah wang yang bersamaan dengan sepuluh peratus (10%) dari Harga Rizab, pada waktu lelongan tersebut (selepas ini disebut “Wang Deposit”);

Menetapkan bahawa di mana keseluruhan jumlah harga belian tidak dibayar oleh penawar yang berjaya selepas tamat lelongan, Wang Deposit mesti dibayar sebagai deposit kepada pemegang gadaian dan serta merta dikreditkan ke dalam akaun penggadai sementara menunggu penyelesaian penuh baki harga belian;

Menetapkan bahawa baki harga belian (selepas ini disebut “Baki Harga Belian”) mesti dibayar pada suatu tarikh yang tidak lewat dari seratus dua puluh (120) hari dari tarikh jualan (selepas ini disebut “Tarikh Pembayaran Baki Harga Belian”) dan tiada lanjutan masa akan diberikan untuk tempoh yang ditetapkan itu;

Menetapkan bahawa di mana Baki Harga Belian tidak dijelaskan pada Tarikh Pembayaran Baki Harga Belian, Wang Deposit yang dibayar kepada pemegang gadaian akan dirampas dan dilupuskan mengikut cara yang ditetapkan di bawah Seksyen 267A Kanun Tanah Negara, 1965;

Bahawa Plaintif diberi kebebasan untuk memilih pelelong berlesen yang akan mengendalikan lelongan awam tersebut;

Bahawa Plaintif diberi kebebasan untuk membuat tawaran ketika lelongan awam dijalankan tanpa keperluan untuk membayar atau mendepositkan sebarang Wang Deposit dan sekiranya Plaintif berjaya membuat tawaran yang paling tinggi dan menjadi pembeli kepada Hartanah tersebut maka Plaintif seterusnya diberikan kebebasan untuk membuat tolakan dari harga pembelian terhadap jumlah yang terhutang oleh pihak Defendan di bawah Gadaian-Gadaian tersebut;

Bahawa sekiranya lelongan awam tidak dapat atau tidak boleh dijalankan atas apa-apa jua sebab sekalipun, Penolong Kanan Pendaftar mempunyai kebebasan untuk menetapkan tarikh yang baru untuk lelongan tersebut tanpa perintah selanjutnya dari Mahkamah untuk tujuan tersebut; dan S/N wncsXLTDzkOq/qJLKjx1bg

Kebebasan memohon untuk arahan-arahan lain dan/atau selanjutnya berhubung dengan penjualan tersebut sebagaimana yang difikirkan dan disifatkan patut dan wajar oleh Mahkamah ini. [2] This Court allows Enclosure 1 with costs. The reasons are as deliberated. BRIEF FACTS [3] Plaintiff is a company incorporated in Malaysia (Company No.: 198201004121 (83868-X)) with its registered office address at Lot 2.21. Lion Industrial Park, 40300 Shah Alam, Selangor. [4] Defendant is a company incorporated in Malaysia (Company No.: 199001014421 (206090-V)) with its registered office address at Level 23, Maju Tower, 1001, Jalan Sultan Ismail, 50250 Kuala Lumpur. [5] At all material times, the Defendant is the registered owner of Maju Perdana building (Charged Property). [6] Around May 1996, the Malaysian Government had intended to privatize the Plaintiff. It was agreed that Perwaja Group of Companies will be sold to Maju Holdings Sdn Bhd. For this privatization exercise, the Plaintiff will sell all ordinary shares held by the Plaintiff in 20 companies under the Perwaja Group umbrella to one Equal Concept Sdn Bhd (Company No.: 199201021727 (253231-K)). [7] On 18.11.2002, the Plaintiff and Equal Concept Sdn Bhd had executed Perwaja Group Share Sale Supplemental Agreement (PGSS S/N wncsXLTDzkOq/qJLKjx1bg Supplemental Agreement) whereby it was agreed that the Plaintiff will sell all its ordinary shares held in 18 companies (instead of 20 companies) under the Perwaja Group umbrella to Equal Concept. [8] Consequently, the Plaintiff and Maju Holdings had executed an agreement on 18.11.2002 identified as Equal Concept Share Sale Supplemental Agreement (ECSS Supplemental Agreement). It was agreed that the Plaintiff will sell to Maju Holdings 2.0 billion units of its ordinary shares in Equal Concept. In return, Maju Holdings will pay the Plaintiff the sum of RM500million. The value was revised to RM339million as per Clause 5(2)(b) of the ECSS Supplemental Agreement. [9] It was also agreed that Maju Holdings, amongst others undertook to procure the execution, registration and delivery to the Plaintiff charges of property over the Charged Property, Maju Perdana Building, comprising Tower 2 and Podium erected on PN 20218, Lot 1752, Seksyen 46, Bandar Kuala Lumpur, Daerah Kuala Lumpur, Wilayah Persekutuan as security to secure the payments. [10] In furtherance to the above agreement, the Plaintiff, Maju Holdings and the Defendant had executed an Agreement to Charge dated 18.11.2002. The Defendant had executed 38 charges under the National Land Code (NLC) in favour of the Plaintiff on the Charged Property to secure the sum of RM339million. [11] The Plaintiff then filed suit WA-22NCC-453-10/2018 (Suit 453) to recover the outstanding sum of RM197.990 million owed to the Plaintiff. Judgment was entered in Suit 453 on the said sum which judgment was S/N wncsXLTDzkOq/qJLKjx1bg also affirmed by the Court of Appeal. Due to the failure of Maju Holdings to satisfy the judgment sum, this foreclosure proceeding was filed by the Plaintiff to obtain an order for sale on all the Charged Property of the Defendant. [12] Accordingly, a demand was made against the Defendant pursuant to Clause 2.1 of the Charge Annexure vide the Plaintiff’s solicitors’ notice of demand dated 03.04.2024 for the sum of RM251,575,382.40 (as at 06.03.2024) within 30 days from 03.04.2024. The Defendant failed, refused and/or neglected to satisfy the demand. As a result of the Defendant’s breach i.e. its failure to satisfy the demand, the Plaintiff vide its solicitor’s letter dated 10.06.2024 served on the Defendant a Notice of Default with respect to a Charge in Form 16D requiring the Defendant to remedy the said breach within one (1) month from date of its service. Yet again, the Defendant failed, refused and/or neglected to satisfy the Notice of Default with respect to a Charge. [13] Subsequently, on 06.08.2024, the Plaintiff filed this OS to foreclose the Charged Property, Maju Perdana Building. Parties’ Contentions [14] It is the Plaintiff’s contention that the Defendant did not respond to the Plaintiff’s Notice of Default with respect to a Charge (Form 16D) dated 10.06.2024. Consequently, by virtue of section 256(3) of the NLC, the Plaintiff is entitled to an order for sale of the Charged Property unless the Defendant can prove that there is a cause to the contrary. S/N wncsXLTDzkOq/qJLKjx1bg [15] The Plaintiff further contended that there is no cause to the contrary in this OS. In regards to the issue of RM191.3 million set-off under the ECSS Supplemental Agreement, the agreement was between Plaintiff and Maju Holdings only and not with the Defendant. Hence, the Defendant is not privy to the contract and has no locus standi to raise the in this OS. Furthermote, this issue has been dismissed by the High Court in Suit 453 and affirmed by the Court of Appeal. [16] The Plaintiff also submitted that by the OS, the Plaintiff is seeking for an order for sale under Section 256 of the NLC. It is not a commencement of an action. The Plaintiff merely enforces its statutory rights against the chargor in default. As such, there is no cause to the contrary as alleged by Defendant. [17] On the other hand, the Defendant contended that there exists a cause to the contrary to oppose the OS on the grounds that there is no payment due and to be payable by the Defendant to the Plaintiff. In the event there is an action to be taken by the Plaintiff, it should be brought against the parties involved in the privatisation process, and not against the Defendant. [18] The Defendant also contended that there are still questions arising in regard to the funds and/or payments allegedly due to the Plaintiff, including but not limited to, regarding the deduction of RM191.3 Million that should have been furnished to Maju Holdings for the acquisition of the Plaintiff. S/N wncsXLTDzkOq/qJLKjx1bg [19] The Defendant further contended that there is a JM application by Maju Holdings in a Suit WA-28JM-18- 05/2024, hence, the OS should not be allowed as the Plaintiff had acted recklessly and cause oppression against the Defendant. ANALYSIS AND FINDINGS [20] Section 256 (3), National Land Code provides - “256 Application to Court for order for sale …

On any such application, the Court shall order the sale of the land or the lease to which the charge relates unless it is satisfied of the existence of cause to the contrary.” [21] In this regard, the Supreme Court in Low Lee Lian v. Ban Hin Lee Bank Bhd [1996] 2 MLRA 491; [1997] 2 CLJ 36; [1997] 1 MLJ 77, held that there are three (3) categories of ‘cause to the contrary’-

the charge is defeasible under Section 340(2) and 4(b) of the NLC;

the Chargee has failed to comply with the conditions precedent for the filing of a charge action; and

an order for sale of the charged land is contrary to a rule of law or equity. [22] Those are the three (3) categories pertaining to ‘cause to the contrary’. This is further deliberated in CIMB Bank Bhd v. Suppiah S Govindasamy & Ors [2025] 4 CLJ 534; [2025] 4 MLRA 138; [2025] 2 MLJ 929, where the Court of Appeal held-S/N wncsXLTDzkOq/qJLKjx1bg “[65] With respect to the learned counsel for the 4 Interveners, the court cannot dismiss a charge action under s 256(3) NLC on grounds of public policy and/ or unjust enrichment. Our reasons are as follows:

until the Federal Court's judgment in Low Lee Lian regarding the 3 Categories (Low Lee Lian) is extended by our apex court to include public policy and/or unjust enrichment as "cause(s) to the contrary" within the meaning of s 256(3) NLC, the High Court and Court of Appeal cannot rely on public policy and/or unjust enrichment to dismiss charge actions; and

an extension of the 3 Categories (Low Lee Lian) will:

undermine the principle of indefeasibility of registered charges under s 340(1) NLC; and

render nugatory the security interest of chargees (in the form of charges) when the chargees grant loans and banking facilities. This will have adverse repercussions for banks and development finance institutions in this country which lend money and extend banking facilities based on the security of charges registered under the NLC. We rely on the following judgment of the Federal Court in Low Lee Lian, at pp 498- 499: "As earlier observed, unless a chargor can bring himself within one of the three categories of cases set out earlier in this judgment, no cause to the contrary would be shown and the court will be obliged to make an order for sale. It would not be sufficient, as was done in the instant case, to allege mere breaches by the chargee of the loan agreement between the chargee and the borrower or even of the terms of the annexure to the charge in order to resist an application under s 256(3) [NLC]. An allegation that the chargee acted in breach of contract, while it may give rise to an independent action in personam, is insufficient per se to defeat the ad rem rights of a chargee under his registered charge to an order for sale. We are conscious that the approach we have adopted results in a very narrow and restrictive interpretation of s 256(3) [NLC]. But there are good reasons of policy for such an interpretation. It must not be forgotten that in the ordinary way, banks and other financial institutions loan moneys deposited with them by their customers to a borrower on the faith of the security of a charge created over the landed property of the borrower, or as here, of a third party. In the event of a default by the borrower, the lending institution normally looks to early recovery of all or a substantial part of the money due to them from a sale of the security. If the courts of this country interpret the phrase 'cause to the contrary' appearing in s 256(3) [NLC] liberally, then, S/N wncsXLTDzkOq/qJLKjx1bg institutional lenders would lose confidence in their right to realize their security through an order for sale. Financial institutions would then become reluctant to lend money to bona fide entrepreneurs. Commerce would come to a standstill and the development of land and industries in this country which are largely dependent upon loans from banks would cease. No judgment of this court will be designed to produce such a consequence." [Emphasis Added] Premised on the above reasons, the learned High Court Judge fell into error in deciding that the Third Party Charge was contrary to public policy (High Court's 5th Legal Error).”. [23] It is therefore, on the part of the Defendant to raise ‘cause to the contrary’ to prevent the order for sale. [24] The Defendant generally had raised two (2) issues; namely that Maju Holdings is entitled to a set-off the sum of RM191.3 million and that the Plaintiff has decided to release Maju Holdings from its liability and it is unreasonable for the Plaintiff to foreclose the property. In this regard, this Court is inclined with the submissions of the Plaintiff that the Defendant as the chargor, does not have the locus to question this OS on that basis (see Suwiri Sdn Bhd v. Government of the State of Sabah [2007] 2 MLRA 667; [2008] 1 CLJ 123; [2008] 1 AMR 1; [2008] 1 MLJ 743). [25] Furthermore, the issue raised pertaining to Suit 453 was already decided by the High Court and affirmed by the Court of Appeal (see Maju Holdings Sdn Bhd v. Perwaja Terengganu Sdn Bhd [2022] 1 LNS 2977; [2023] 2 MLRA 259; [2023] 1 MLJ 420 (CA) and Perwaja Terengganu Sdn Bhd v. Maju Holdings Sdn Bhd [2019] 1 LNS 1061; [2019] MLRHU 756; [2019] MLJU 728 (HC)). Also, the Plaintiff contended S/N wncsXLTDzkOq/qJLKjx1bg that it has never released Maju Holdings from its liability under the Judgment dated 25.07.2019. [26] Accordingly, a person who makes an application for an order for sale in a foreclosure proceeding does not commence an action or suit, but merely enforces his rights by exercising a statutory remedy against the chargor in default. In Kandiah Peter v. Public Bank Bhd [1993] 4 CLJ 332; [1993] 1 MLRA 505; [1994] 1 MLJ 119, the Supreme Court held- “[7] The principles governing the matter are well settled by authority and are not open to question. A chargee who makes an application for an order for sale in foreclosure proceedings under s 256 of the Code does not commence an action. He merely enforces his rights as a chargee by exercising his statutory remedy against the chargor in default. The chargee, therefore, does not sue for a debt. It is also clear that his claim for an order for sale is not based upon a convenant but under the registered charge. The order for sale when made under s 256 of the Code is not a judgment or a decree. The Court hearing the application for foreclosure does not make, and in any event ought not to make, any adjudication upon any substantive issue. These principles are culled from several decisions of our Courts which have correctly stated the law upon the subject…” [27] Obviously, this is not a suit for recovery of a debt but statutory in rem action on a registered charge. The issues raised of the debt are not causes to the contrary, but issues that may be pursued in a separate suit (See Siong Holdings Sdn Bhd v. Development & Commercial Bank Berhad [1997] 1 MLJ 340; [1997] 1 CLJ 590; [1997] 1 MLJ 340). [28] Therefore, this Court is of the considered view that none of the issues raised by the Defendant is ‘cause to the contrary’ that could dismiss this OS. S/N wncsXLTDzkOq/qJLKjx1bg CONCLUSION [29] Hence, Enclosure 1 is allowed with costs. The outstanding sum is RM257,542,200.00 as at 20.06.2025 as shown in the Affidavit affirmed by Shahlan bin Md Shukor @ Kadari on 16.06.2025 in Enclosure 22. Dated: 3 SEPTEMBER 2025 -SGD- (SUZANA BINTI MUHAMAD SAID) Judicial Commissioner of the High Court NCvC 1 Kuala Lumpur COUNSELS For the Plaintiff : Mohd Zein b. Md. Tajuddin dan Asha Anandan : Tetuan Md. Tajuddin & Co. For the Defendant : Nur Hikmah Mohamad dan Noor Syakirah Khalil Tetuan Jasbeer, Nur & Lee S/N wncsXLTDzkOq/qJLKjx1bg