100%(1)1 out of 1 people found this document helpful
This preview shows page 11 - 12 out of 18 pages.
The contention of the appellants is that the agreement was an outright sale of the property with the option forTara to repurchase within a year from the date of the execution of the agreement, that is, March 30, 1974.On the other hand, the respondent contended that the agreement was a security agreement whereby the1983 2 MLJ 196 at204property would be transferred to Suppiah on payment of the two sums mentioned earlier subject to the twoundertakings given by Suppiah in the form of a manuscript. The two undertakings were (i) that Suppiahwould not sell the property to anyone for one year without the consent of Tara; and (ii) that he would transferthe property back to Tara on her repaying the $220,000.00 within one year. It is the submission of therespondent that the one year period is to be calculated from the time Suppiah paid the two sums andbecame the registered proprietor and not as contended by the appellants from March 30, 1974.Several factors favour the contention of the respondent. The insertion of the manuscript was a clearindication that it was meant to be a security agreement rather than an outright sale. It is not unlike the Malaycustomary transaction known asjual janji.In such a transaction the borrower transfers his land to the lenderon payment who takes possession of the land and may make any profit out of the land as a sort of interestpayment. The borrower is entitled to have the land transferred back to him on paying the debt. However,when a period for repayment of the loan is fixed then the default to pay will convert the original arrangementinto an absolute sale,jual putus.The learned Judge had no doubt at all that the appellants knew that Taraand Devan intended the agreement to be a security agreement by reason of the manuscript. He also pointedout that Tara had an earlier experience of such transfer and re-transfer of the property. Devan transferred theproperty to one H.L. Tan for $10,200.00. Later, H.L. Tan transferred it back to Tara for $10,700.00. The extrawas meant to be for interest. Tara was therefore familiar with such type of transaction. Also, nowhere in theagreement was any mention made of selling and purchasing. Neither was purchaser or vendor used tosuggest an outright sale. Further, if it was meant to be an outright sale the usual practice of payment within areasonable time, say within a week, must be followed. Suppiah conceded as much when cross-examinedthat such was the practice in an outright sale. Further, the correspondence referred to earlier betweenSuppiah & Singh and the CKB do not seem to support an outright sale. In P.33 (Volume 8 page 179)