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    Krishna Kumar V United Malayan Banking Corporation BHD

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    Fatin Abd Wahab
    The applicant gave a first charge on his land to MBF. Later, three companies that the applicant was managing director of took loans from the bank but defaulted. To provide additional security, the applicant agreed to a second charge on the land subject to MBF's consent. MBF initially consented but later refused. The bank then registered a private caveat on the land. The court held that (1) the bank had a registrable interest in the land even without MBF's consent since there was an instrument of charge, and (2) the bank could extend the private caveat until the civil suit was resolved, since there was originally an intention to create a charge on the land.

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    Krishna Kumar V United Malayan Banking Corporation BHD

    Uploaded by

    Fatin Abd Wahab
    201 views4 pages
    The applicant gave a first charge on his land to MBF. Later, three companies that the applicant was managing director of took loans from the bank but defaulted. To provide additional security, the applicant agreed to a second charge on the land subject to MBF's consent. MBF initially consented but later refused. The bank then registered a private caveat on the land. The court held that (1) the bank had a registrable interest in the land even without MBF's consent since there was an instrument of charge, and (2) the bank could extend the private caveat until the civil suit was resolved, since there was originally an intention to create a charge on the land.

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    case review of Krishna's case

    Original Title

    Krishna Kumar v United Malayan Banking Corporation Bhd

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    The applicant gave a first charge on his land to MBF. Later, three companies that the applicant was managing director of took loans from the bank but defaulted. To provide additional security, the applicant agreed to a second charge on the land subject to MBF's consent. MBF initially consented but later refused. The bank then registered a private caveat on the land. The court held that (1) the bank had a registrable interest in the land even without MBF's consent since there was an instrument of charge, and (2) the bank could extend the private caveat until the civil suit was resolved, since there was originally an intention to create a charge on the land.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    201 views4 pages

    Krishna Kumar V United Malayan Banking Corporation BHD

    Uploaded by

    Fatin Abd Wahab
    The applicant gave a first charge on his land to MBF. Later, three companies that the applicant was managing director of took loans from the bank but defaulted. To provide additional security, the applicant agreed to a second charge on the land subject to MBF's consent. MBF initially consented but later refused. The bank then registered a private caveat on the land. The court held that (1) the bank had a registrable interest in the land even without MBF's consent since there was an instrument of charge, and (2) the bank could extend the private caveat until the civil suit was resolved, since there was originally an intention to create a charge on the land.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 4

    Krishna Kumar v United Malayan Banking Corporation

    Bhd.
    Fact of the case:
    The fact of this case is that the applicant gave MBF a first charge on his land.
    Later, three companies of which the applicant was the managing director had
    obtained loans from the bank. However, the companies defaulted in their
    repayments to the bank.
    Since the bank forbearing to sue them in defaulted of the repayments, the
    applicants and the three companies in consideration agreed to provide additional
    security in the nature of a second charge on the said lands conditional upon and
    subject to the consent of MBF, the first chargee.
    On 31
    st
    October 1977, MBF granted conditional consent and the relevant
    second charge documents were signed by the applicant and sent by the bank's
    solicitors to MBF for their consent on 25
    th
    October 1978. Later, MBF refused to grant
    consent for the creation of a second charge in favour of the bank for the reason, inter
    alia, that the bank had delayed in sending them the second charge instruments.
    On May 1979, the bank proceeded to register a private caveat on the said
    land and the bank sued the three companies and the applicant for the outstanding
    loans. The bank applied for and obtained an Order that the private caveat be
    extended until the final disposal. However, the applicant applied to set aside the said
    Order and for the removal of the private caveat.

    Issue:
    a) Whether the bank has registrable interest over the land within the meaning of
    the section 323 (1) (a)?
    b) Whether the application of the bank to obtain an order of private caveat to be
    extended can be granted or not.
    Held:
    a) the fact that MBF did not give the consent to the said charge did not weaken
    the fact that it was an instrument of charge in registrable form and even if the
    relevant authorities refused to accept the registrable form for registration,
    nevertheless the bank still had a registrable interest in the land within the
    meaning of the said section 323(1)(a);
    b) the bank still have a right to such registrable interest even the bank was
    considered as no registrable form because did not get the MBFs consent. It is
    because the applicant have an intention to create a charge in favour of the
    banks and in fact, he as well as his 3 companies execute the relevant charge
    form and a supplementary security agreement;
    c) therefore, the application of the applicant to set aside the order of private
    caveat to be remove should be dismissed and the caveat remain extended
    until disposal of the pending civil suit.
    Principles:
    In section 323(1)(a) of the National Land Code 1965, stated that the persons
    and bodies at whose instance a private caveat may be entered are (a) any person or
    body claiming title to, or any registrable interest in, any alienated land or any right to
    such title or interest. By refer to this section, it is agreed that the caveat should not
    be allowed to remain. It is submitted that there are three situations when a private
    caveat may be entered under the said sub-section. It is submitted that the section
    has only two limbs. The judge agreed that the bank clearly had no claim to the titles
    of the said lands. But, as regards to the question whether the bank had any
    registrable interest in the said lands, the judge agreed that an instrument of charge in
    registrable form was an example of a registrable interest within the meaning of
    section 323(1) (a) of National Land Code 1965. Although the bank has not signed
    the said agreement, it could do so at any time and therefore in this case it is not only
    an agreement but also an instrument of charge in registrable form. In this case, even
    if it was considered that the bank had no registrable interest because the relevant
    charge was not in a registrable form without MBF's consent, the bank still had a right
    to such registrable interest.
    There was at all times an intention on the part of the applicant to create a
    charge in favour of the bank and he as well as his three companies did in fact
    execute the relevant charge form as well as a supplementary security agreement..
    The learned judge held that the respondent had a caveatable interest and refused
    the application for the removal of the caveat by the appellants. The appellants
    appealed and it was dismissed by the Federal Court as it appeared that the money
    was lent by the company and that it was the intention of the parties that the loan
    should be secured by a charge, both the company and the respondent, acting as the
    managing director of the company, had a caveatable interest in the lands. What is
    important and relevant is that there was the intention of the parties in both cases to
    create a charge.

    Opinion:
    In my opinion, the bank can have registrable interest over the land even they
    failed to get the consent from the first charge was reasonable because there was an
    instrument of charge in registrable form where it could be considered as registrable
    interest within the meaning of section 323 (1) (a). Regarding the issue of whether the
    bank can extended the period of caveat was also reasonable one because it was up
    to the bank itself to remove the caveat until the loan was paid and satisfied with the
    agreement.

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