Professional Documents
Culture Documents
Mardhiyyah Sahri
CHRONOLOGY OF CASES
2
1994
1996
2006
2007
2008
2009
2010
FACTS:
Two sets of appeal went to Court Of Appeal It was decided that BBA contact was valid and enforceable. The cases were sent back to High Court to decide on the quantum of claim and amount due. BIMB was unsatisfied with the decision and now appealed to Court of Appeal.
ISSUE:
Whether there is an obligation for the defendant to pay full sale price stated in the Property Sale Agreement irrespective of a premature termination?
PRINCIPLES:
BBA
are sale contracts and the court must give full effect to the same Ibra is applicable in early settlement cases and not in default cases The bank is allowed to claim balance sale price Court should not interfere with the contract if there is no vitiating factors to do so
DECISION:
Claim
FACTS:
Appeal
judgment for 12 cases concerning islamic financing. Whereby the learned judge declared that the BBA contract was contrary to the religion of Islam Questioned the validity and enforceability of the BBA contract
ISSUES:
Whether
BBA contract was more onerous/burden than the conventional loan agreement with riba. Whether BBA contract was prohibited in Islam
PRINCIPLES:
Comparison
between conventional & Islamic (BBA) contract was not appropiate. Judge should not decide on their own. They should consult to qualified jurists. Intepretation of Islamic Banking Business under section 2 of the Islamic Banking Act 1983 does not mean banking business whose aims and operations are approved by all the four mazhabs.
DECISION
Court
FACTS
The respective defendants had already purchased the property from third party and had paid part of the price. Approaching the plaintiff banks for facilities to complete the purchase , the defendants were required to sell the property they had bought to the respective bank for the balance stipulated in the banks PPA. The bank then sold the property to the defendants via the banks PSA. The defendants defaulted in the payment of the bank selling price and the bank applied for an order for the sale of property. The defendants argued that the transaction herein comprising the letter of offer , the PPA, the PSA and the charge or assignment became transparently financing in nature.
ISSUE
Whether involved element not approved in Islam. Whether riba a prohibition element in Islamic financing
PRINCIPLES
The functions of civil court. Pertaining to the section 66 of the Contract Act; the price of the property must close to the market price and cannot be more than that. Section 256 of the National Land Code read with the Order 83 Rule 3. The element must be recognised by the four mazhabs as it to be approved by the religion of Islam. Interpretation of the BBA Contract. Interpretation of other elements which not approved in the religion of Islam; riba and usury.
DECISION
Court
ordered sale by public auction of the charged properties with costs to be taxed.
FACTS
Plaintiff
had granted the defendants financing amount RM 80, 094 under BBA . Defendants defaulted after paying the sum of RM 16, 947.62 Plaintiff sought an order for sale under section 148 (2)(c) of the Sarawak Land Code to recover the sum of RM 167, 797.10
ISSUES
Whether
the court should allow the order for sale for the repayment of the sum in the original form or restrict the order for sale.
PRINCIPLE:
Based
on just and equity. Islamic contract must be decided based on Quranic injuctions.
DECISION:
Bank
to resubmit amount with proposed rebate. If the court is satisfied that the proposed rebate is just and equitable, it shall make an order for sale Otherwise the court may make some other order as the justice of the case requires
12
FACTS
The
defendant bought a double storey link house Secured the loan under the Shariah principle of BBA from the plaintiff, who was his employer at that time, for the sum of RM 346,000. Then, the defendant resigned from the plaintiff bank and at his request, the loan facility was restructured whereby under the revised facility The bank selling price of the house was RM992,363.40 payable over a period of 25 years
13
ISSUES
What
is the amount that a customer has to pay the provider of BBA facility in the event of default Whether provider of an BBA facility can, in the event of a default before the end of tenure, claim as part of the sale price or bank selling price the profit margin for the unexpired tenure of the facility When tenure shortened, whether profit margin could be recalculated with equal certainty
14
PRINCIPLES
Principle of applicability of civil law as found in the Court of Appeals decision in Bank Kerjasama Rakyat Malaysia Bhd v. Emcee Corporation Sdn Bhd. Under a conventional loan, the amount due by a borrower over and above the loan amount (i.e. interest and late payment interest), is limited to the period from release of the loan until the loan amount is fully settled, and not for the full original tenure of the loan where no interest is applied on the unexpired tenure. However, in this case, the bank is seeking to claim the profit on the unexpired tenure of 25 years. The bank's selling price in BBA financing, is not a sale price paid in a single payment, but is a series of equal monthly installments. The profit margin is calculated with the profit rate applied to the full tenure.
15
PRINCIPLES
If the customer is not given the full tenure to pay the selling price, then the bank is not entitled to claim for the bank's profit margin for the full tenure, as to allow the bank to do so would mean that the bank is able to a earn a profit twice upon the same sum at the same time. The profit margin charged on the unexpired part of the tenure is unearned profit and not actual profit, and therefore cannot be claimed under BBA.
DECISION
Granting the order for sale and reducing the amount of repayment
FACTS:
The
plaintiff with attorney had entered into a PSA and PPA with the defendant in respect of 25 lots of land in BBA concept. The defendant purchased the properties and resold back to the plaintiff with additional prices and charges. The plaintiff applied for an order that the charges be declared null and void. He also applied for the return the titles of the properties, free of all encumbrances.
ISSUES:
Whether
sale of land in accordance with IB Concept of BBA contravened the Malay Reservations Enactment 1930 of Kelantan. Whether purchase and resale of land for profit by bank contravened the Malay Reservations Enactment 1930 of Kelantan
PRINCIPLES:
Section 7(i) of the Enactment prohibits any transfer or transmission or vesting of any right or interest of a Malay. However, when the property purchase agreement was signed, the right that could be acquired by the defendant under the agreement at that point of time, the agreement being still executor, was only a right to a registrable interest which right was yet to crystallized into a registrable interest. The contemporaneous execution of the property purchase agreement and the property purchase agreement and the property sale agreement constituted part of the process required by the Islamic banking procedure before the plaintiff could avail himself of the financial facilities provided by the defendant under the BBA concept. Indefeasibility could only be successfully attacked by evidence which manifested that registration was obtained by means of insufficient or void instrument. This meant that the plaintiff could only successfully seek the aid of section 340(2)(b) of the NLC if it could be shown that there existed a defect or illegality in the execution of the charge documents Dismissing the appeal with costs.
DECISION:
FACTS:
The
defendant sold to the plaintiff a piece of land for $265,000. On the same date, the plaintiff resold the same piece of land to the defendant for $583,000 which amount was to be paid by the defendant in 180 monthly instalments and the land was charged to the plaintiff by the defendant as security for the debt of $583,000. In case of default in payment by the defendant, the plaintiff entitled to sell the charged land as agreed in the BBA contract.
ISSUES
Whether
they have a full knowledge when sign the contract. Whether they have the same understanding of the term of the agreement. Whether the civil court will hear matter of Islamic finance.
PRINCIPLES
Shariah
courts have jurisdiction only over persons processing the religion of Islam. Bank Islam is a body corporate entity will not be subject to the jurisdiction of the shariah courts. Shariah court has no jurisdiction on debt When they have been an agreement between the parties, the contract cannot be disputes because the agreement show they have a full of knowledge
DECISION
Failure
to pay the installment is a breach of the agreement and the plaintiff has the right to terminate the facilities and demand for the immediate full repayment of the load. Order of sale granted.
23
END