LAND LAW II
(JUAL JANJI)
PREPARED BY:
AZHANI BINTI ARSHAD
Definition
A sale of a promise
Conditional sale.
The
land used as security to secure the
loan which is small in size and value.
Azhani Binti Arshad (Jul-N
Origin of Jual Janji
Come into existence after the coming of
Islam to the Tanah Melayu-to avoid the
practice of usury
In the early days the concept of
transfer in jual janji is only in form of
oral understanding between the creditor
and
borrower
and
no
actual
documentation or registration of any
documents takes place.
Azhani Binti Arshad (Jul-N
Tengku Zahara v Che Yusuf
[1951] 17MLJ
Briggs J: The whole
purpose of jual janji
transaction is to
provide a procedure
for securing a loan
Without infringing the
prohibition of usury
which is binding on the
conscience of all good
Muslims.
Azhani Binti Arshad (Jul-N
W.E Maxwell (The Law and Custom
of the Malay with Reference to the
Tenure of Land)
the
jual janji (conditional
sale), the only form of
hypothecation of land known
to Malay law, is, in principal
incidents, quite unlike our
mortgage of real property.. "
Azhani Binti Arshad (Jul-N
Cont
When National Land Code 1965 was introduced
and owner must comply with the mandatory
requirement for registration of land titles, Jual Janji
transaction was also affected.
Dealings were regulated and Jual Janji has to
conform to the procedures of transfer of land.
The land will be transferred into the name of the
lender and a collateral agreement will be
executed whereby the lender is obliged to transfer
the property to the borrower upon full repayment
of the loan.
Azhani Binti Arshad (Jul-N
Modus Operandi
A contract entered between two parties (a
Borrower & Lender)
Transaction involves a transfer of land
belonging to the Borrower to the Lender for
the consideration of loan granted by Lender
With a condition or promise to retransfer to
the Borrower upon full and final settlement of
the loan within an agreed duration
Failing to do so, the transaction is declared as
an absolute sale i.e. Jual Putus.
Azhani Binti Arshad (Jul-N
Elements of Jual Janji
Lender & Borrower;
Loan;
Land as a security;
Land transferred to the Lender;
Lender takes proceeds of the land during the loan
period;
Upon full settlement of loan, Lender retransfer the
land to Borrower;
If Borrower defaulted the repayment of the loan,
land will be absolutely assigned to Lender (Jual
Putus)
Azhani Binti Arshad (Jul-N
Judicial Opinions/Views
Strict interpretation
Purely
contract of sale where time is of
essence
Purely contract of sale where time is
not of essence (exceptions)
Liberal interpretation
Equitable
principles
Azhani Binti Arshad (Jul-N
Purely Contract where time is of
essence
Leading case: Hj Abdul Rahman v
Hassan (1917) AC 209
it
was not a security transaction or
mortgage as the only form of mortgage
in Malaysia is charge or lien. Since it was
a contract, the claim was statute
barred
Azhani Binti Arshad (Jul-N
10
Cont
Cases supported Hj Abdul Rahman
A Kanapathy Pillay v Joseph Chong
(1981) 2MLJ 117 (FC)
Wong See Leng v Saraswathy
Ammal [1954] MLJ 141 CA
Ibrahim v Abdullah (1964) MLJ 139
Azhani Binti Arshad (Jul-N
11
Cont
If the Borrower failed to comply with
the terms of the contract, the court
will not assist him to invoke the
terms of the agreement i.e. to obtain
retransfer of the land
Azhani Binti Arshad (Jul-N
12
Purely Contract where time is
not of essence ( Exceptions)
Extension of time
Ismail Hj Embong v Lau Kong Han
(1970) 2MLJ 213
Abdul Hamid Bin Saad v Aliyasak
Ismail [1999] 1AMR 105
Azhani Binti Arshad (Jul-N
13
Cont
Evade of payment
Ahmad Bin Omar v Hj Salleh Bin
Shaikh Osman [1987] 1MLJ 338
Hatijah Bte Rejab v Abdullah Saad
[2004] 2 AMR 665
Azhani Binti Arshad (Jul-N
14
Equitable Principles
The collateral agreement for a
retransfer in a jual janji transaction is
in nature of an equitable security
transaction whereby the right to
redeem remains irrespective whether
the period for repayment has lapsed
Azhani Binti Arshad (Jul-N
15
Cont
Yaacob
Bin Lebai Jusoh v Hamisah
Bt Saad [1950] MLJ 255
Nawab Din v Mohamed Sharif
[1953] 19 MLJ 12
Halijah v Morad [1972] 2 MLJ 166
Azhani Binti Arshad (Jul-N
16
Recent Development in Malaysia
The Malaysian courts were reluctant to deviate
from the case of Haji Abdul Rahman.
Jual Janji can be recognised as a customary
security transaction pursuant to Sec 4(2) NLC.
In addition, section 206(3) NLC provides that
contractual operation of any transaction
relating to alienated land or interest will not be
affected.
Azhani Binti Arshad (Jul-N
17
CONCLUSION
Concept of jual janji
Position
of jual janji as security
transaction (involve giving of loan) under
the Code [section 206(3)]
General principle (time is of the essence)
Exceptions
(time is no longer the
essence)
Azhani Binti Arshad (Jul-N
18
Azhani Binti Arshad (Jul-N
19
