Pemiutang boleh tuntut semula RM50 juta walau pinjaman tak sah

The Putrajaya High Court rejected a request by KBH Marine Industry Sdn Bhd to clarify a ruling that allowed a lender to seek repayment of a RM50,000 loan, despite the loan agreement being declared invalid under the Money Lenders Act. A three-judge panel, presided by Judge Abu Bakar Jais, decided unanimously that the five legal issues raised by KBH Marine did not meet the requirements for an appeal under Section 96 of the Court of Appeals Act 1964.

Judges Nazlan Ghazali and Azimah Omar agreed with the decision. The rejection means that a previous appeal decision by the Court of Appeal remains unchanged. KBH Marine, which claimed three properties in Pulau Pinang as collateral for the loan, was also ordered to pay a fee of RM50,000 to Ace Credit (M) Sdn Bhd. Issues debated included whether the lender could seek repayment of the borrowed funds under an agreement subsequently declared invalid, as well as the use of Section 66 of the Contracts Act, which seeks to return profits received under a terminated agreement.

Ace Credit transferred RM50,000 to Pioneer Conglomerate in October 2017, accompanied by three properties owned by KBH Marine in Pulau Pinang, which were allegedly used as collateral. After the borrower withdrew, disputes arose regarding the validity of the loan agreement, the security documents, and Ace Credit's right to recover the related amount.

In his latest ruling last year, the Court of Appeal held that even though the loan agreement breached mandatory provisions of the Money Lenders Act and could not be enforced, Ace Credit still had the right to recover the amount paid. Judge Lim Chong Fong, delivering the majority judgment, stated that Section 66 of the Contracts Act allows any party to seek repayment of money or benefits surrendered under a contract later found invalid.

However, the court determined that the security documents related to the loan, including attachments, deposit memoranda, and power of attorney for KBH Marine's three properties in Pulau Pinang, could not be enforced due to their reliance on the validity of the loan agreement. The Court of Appeal rejected the borrower's claim that they were entitled to retain RM50,000 due to the invalid loan agreement.

The court ruled that the repayment claim is distinct from challenging the validity of the loan agreement itself, and can be granted to prevent any party from unfairly benefiting from the other party's loss. The court referenced a previous High Court decision in Detik Ria, which acknowledged that repayment orders could be issued in cases where the underlying agreement was terminated, subject to the nature of the violation and the circumstances of the case.

The panel consisted of Daphne Choy, Tam Xin Shuin, and Amanda Lo representing KBH Marine, while Dinesh Nandrajog, Keith Loo, and Lim Chun Yen represented Ace Credit.