Malaysia legislation
Section 26
Section 26
(2)
Notwithstanding anything in this Act—
(a)
any moneylending agreement with or security taken by a licensee in respect of money lent by him after the commencement of this Act shall be valid in favour of any bona fide assignee or holder for value without notice of any defect due to the operation of this Act and of any person deriving title under him; and
(b)
any payment or transfer of money or property made bona fide by any person, whether acting in a fiduciary capacity or otherwise, on the faith of the validity of any such moneylending agreement or security without notice of any such defect shall, in favour of that person, be as valid as it would have been if the moneylending agreement or security had been valid:
Provided that in every such case the licensee shall be liable to indemnify the borrower or any other person who is prejudiced by virtue of this section and nothing in this subsection shall render valid a moneylending agreement or security in favour of or apply to proceedings commenced by an assignee or holder for value who is himself a licensee.
(3)
Notwithstanding anything contained in this Act, for the purpose of this section an assignee or holder for value or person
54 Laws of Malaysia ACT 400
making any such payment or transfer as aforesaid shall not be prejudicially affected by notice of any such defect as aforesaid unless—
(i)
it is within his own knowledge, or would have come to his knowledge if such inquiries and inspections had been made as ought reasonably to have been made by him; or
(ii)
in the same transaction, with respect to which a question of notice to such assignee or holder for value or person arises, it has come to the knowledge of his counsel as such or of his solicitor or other agent as such, or would have come to the knowledge of his solicitor or other agent as such if such inquiries and inspections had been made as ought reasonably to have been made by the solicitor or other agent.
(4)
Nothing in this section shall render valid for any purpose any moneylending agreement, security or other transaction which would, apart from this Act, have been void or unenforceable.