Background of the Case
Orchard Circle Sdn Bhd (“OCSB”), the registered proprietor of the impugned land, applied in 1998 to surrender a portion thereof to the State Authority under the National Land Code (NLC) as a condition precedent for subdivision approval. The application, made via Form 12B under Section 200 of NLC, was approved on 4 January 1999.
Critically, however:
- No prior written consent was obtained from OCSB or its chargee, Arab Malaysian Merchant Bank (charged since 4 November 1997), contrary to Sections 196(1)(c) and 200(1)(c) of NLC;
- Form 12B was held not to constitute the requisite separate prior consent;
- The Land Administrator failed to comply with Section 201(4) of NLC, omitting to: (i) revise the rent payable; (ii) notify OCSB of the approval; and (iii) enter a memorial of surrender on the register document of title.
In November 2000, the land was compulsorily acquired for the Kajang SILK Highway pursuant to Section 3 of LAA. The Land Administrator awarded RM10.00 in compensation, deeming the land already surrendered and devoid of market value. OCSB appealed on the amount of compensation awarded as asserting invalid surrender. The High Court upheld the nominal award, finding effective surrender despite procedural lapses. The Court of Appeal reversed, declaring the surrender invalid and remitting for market value assessment before the same High Court judge. Sistem Lingkaran Lebuhraya Kajang Sdn Bhd (“SILK”) appealed, contending the challenge was barred by the proviso to Section 49(1) of LAA as it concerned quantum, not law.
Federal Court’s ruling
In a majority ruling, the Federal Court dismissed SILK’s appeal, holding that the issue of surrender did raise a valid question of law. The Court found that the surrender’s validity hinged on statutory compliance with the NLC, particularly the requirement for prior written consent and procedural endorsement, which are matters of legal interpretation, not mere factual or valuation disputes. The Federal Court held that:
- Appeals on Award of Compensation must be on Questions of Law: No appeal lies against compensation awards, but further appeal is permissible where a question of law arises as per Semenyih Jaya Sdn Bhd v. Pentadbir Tanah Daerah Hulu Langat And Another Case [2017] 4 MLRA 554 and Pentadbir Tanah Daerah Johor v. Nusantara Daya Sdn Bhd [2021] 4 MLRA 466 with emphasis on narrow interpretation to prevent disguised quantum appeals.
- Question of Law Defined: Involves statutory interpretation and application of legal principles to facts; which in the present case is the surrender’s validity under Sections 196–201 of NLC, following Amitabha Guha & Anor v. Pentadbir Tanah Daerah Hulu Langat [2021] 2 MLRA 19 guidelines and aligned with Bayangan Sepadu Sdn Bhd v. Jabatan Pengairan Dan Saliran Negeri Selangor & Ors [2022] 2 MLRA 1.
- Statutory Requirements under NLC Must Be Adhered To: The validity of surrender can be questions of law that are unbarred by the proviso due to its non-compliance with the statutory requirements as follows:-
3.1 Prior written consent from proprietor and chargee is indispensable whereas Form 12B cannot be considered as a substitute.
3.2 Section 201(4) of NLC formalities (rent revision, notification, endorsement) to be adhered to by the Land Administrator are obligatory and failure to comply renders surrender ineffective.
Key Takeaways
1. Strict Bar on Compensation Appeal: The proviso to Section 49(1) LAA bars appeals on compensation unless a genuine question of law is raised. It must not be given a liberal interpretation that negates the intent to prevent appeals on inadequacy of quantum.
2. Validity of Surrender Is a Question of Law: Non-compliance with NLC Sections 196–201 (e.g., absence of prior written consent from proprietor and chargee) involves statutory interpretation and legal application, permitting appellate review.
3. Full Procedural Compliance under NLC Is Mandatory: A Surrender is invalid without separate prior written consent and all post-approval steps (Section 201(4) of NLC: rent revision, proprietor notification, memorial on title). Though physically surrendered, partial execution is not sufficient.
4. Framing of Grounds of Appeal: Appeals in substance challenging compensation amount or relying on factual delays or administrative irregularities are barred. Only pure legal invalidity survives the proviso.
– By George Miranda, Joy Sam Jia Qian, Alisyah Maisarah –
This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please note that the law may have changed since the date of this article.
