MALAY

RESERVATION
LLB 30603 LAND LAW 11
INTRODUCTION
• Concept of reservation found in
various communities:
• US for American Indians
• Australia for Aborigines,
• New Zealand for Maori
• South Africa for Africans
• Malaysia for Malays and natives
 introduction
• The red-ink grants, as the Malay Reservation is commonly
known as, is a special category of land within the boundary of a
sale that has been declared and published in gazette as Malay
Reservation by the state authorities.
• The said land can only be owned, dealt with or transferred to
Malays being the natives of the state and to certain specified
bodies, statutorily recognised as Malays.
• This is to protect and preserve the Malay race by prohibiting all
kinds of transactions involving Malay reservation land with non-
Malays.
INTRODUCTION
• British officials claimed that the declaration of
Malay reservation land was aimed at protecting
and preserving the right to land ownership of
the Malays in Peninsular Malaysia from being
sold to immigrant communities.
• Pressed by poverty, the Malays sold or leased
their lands to Non- Malays.
• Brockman, Resident of Perak, suggested that
Malays land dealings ought to be restricted to
prevent a complete sell out of Malay land.
• Feeling dispossessed and outclassed in their own
motherland, Malays sold their land in urban
areas and moved to the villages.
• The British also noted that the Malay were in the
habit of taking up loans from chettiars and
pledging their land as security.
• They eventually lost their lands to these chettiars
upon foreclosure for failure to pay off the loans.
• Malay Reservation Enactment 1913 tended to
artificially protect Malays from economic dislocation
that resulted from influx of Chinese and Indian
immigrants to Malay Peninsular
• British colonialists introduced land reservation in
favour of Malays with objective of protecting Malay
land proprietary interests to prevent Malays from
dealing with immigrants.
• When the British brought in immigrants from China
and India to work in Malaya, vast tracks of land were
allocated to the immigrants for commercial
agriculture (eg Rubber, tea plantation) and tin
mining.
• According to Bashiran Begum Mobarak Ali ( Article: The Red
Ink Grant: Tracing Legitimacy in History), the “love‟ the British
expressed for their Malay subjects was in fact a political use to
protect their own supremacy in the Malay States.
• The British wanted the Malays to remain economically
undeveloped and in need of protection. When Chinese
immigrants began to dominate the economic sector, the
British authorities felt threatened and quickly answered by
retaining the Malays on their agricultural lands. In the mean
time the Chinese were barred from acquiring more valuable
land in the Malay States.
• In short, the Malay Reservation policy was introduced by the
British authorities to safeguard their own political and
economic interests.
Types of Reserved Lands in
Malaysia
• Malay Reserved Lands
• Malacca Customary Lands
• Native Lands in Sabah and
Sarawak
• Malay Agricultural Settlement
Kampung Bahru, Federal
Territory
Malay Reserved Law
• Laws were introduced by British during pre-
Merdeka period
• Malaysian government also introduced post
Merdeka law to safeguard Malay land ownership.
• Pre Merdeka laws : –
• 1. Federated Malay States Malay Reservations
Enactment No. 15 of 1913
• 2. Federated Malay States Malay Reservations
Enactment No. 30 of 1933 Chapter 142
• Post Merdeka Laws :-
• 1. Federated Malay States Malay Reservations
Enactment No. 30 of 1933 Chapter 142
• 2. Federal Constitution of Malaysia 1957
• Two sets of Enactment regulating Malay
Reserved land.
• Enactments aimed at specific object of
preserving and protecting Malay land proprietary
rights.
• There is one single uniform law known as the
Federated Malay States Malay Reservations
Enactment 1933 (Cap 142), which is applicable to
the States of Selangor, Perak, Negeri Sembilan,
Pahang and the Federal Territory of Kuala
Lumpur.
• former UnFederated Malay States that is the
states of Kelantan, Kedah, Johor, Terengganu and
Perlis have their respective state Enactment
• In other words, History has produced two different forms of the
Malay Reservation Enactment, namely a single uniform law known
as the Federated Malay States Malay Reservations Enactment 1933,
and the five State Enactment which are applicable to all states in
Peninsular Malaysia except for Penang and Malacca. The relevant
State Malay Reservation Enactment are:
• 1. The Federated Malay Reservation Enactment 1933 (Cap 142)
applicable to the States of Selangor, Perak, Negeri Sembilan, Pahang
and the Federal Territory of Kuala Lumpur;
• 2. The Perlis Malay Reservation Enactment 1353
• 3. The Malay Reservation Enactment of Kedah 1931
• 4. The Johor Malay Reservation Enactment 1936 (No. 1, 1936);
• 5. The Malay Reservation Enactment of Terengganu 1941(No 17,
1360);
• 6. The Kelantan Malay Reservation Enactment 1930 (No. 18, 1930)
 Malay reservation enactments

Perlis Malay Reservations Enactment came into force on 17th Zul-

1353 was modelled from 1913 Hijjah 1353/ 1935 (No.7 of
Federated Malay States Enactment 1353)
Kedah Malay Reservations Enactment of Came into force in 1931 (No.6
Kedah 1931 was modelled from 1913 of 1349)
Federated Malay States Enactment.

Penang British claimed that there was no Therefore, Malay reservation

customary law in existence in Island law was not introduced in
of Penang when they took over and Penang
applied English common law.
No recognition was given to law of
the natives of State, as there was
only few Malay families found when
British first occupied the state
.
Perak Federated Malay Perak was one of the
States Malay earliest States to
Reservations convert land into
Enactment 1933 Malay Reservation.

Selangor Federated Malay

States Malay
Reservations
Enactment 1933 is
applicable in Selangor.
Malacca No Malay Reservations policy in National Land Land
Malacca being a member of Straits Code(Penang and Malacca
Settlement Titles) Act 1963 governs
British has maintained and customary land in Malacca.
protected customary rights of
Malays.

Johor Adopted Federated Malay States

Malay Reservation Enactment 1933
in 1936 ( The Johor Malay
Reservation Enactment 1936)

Pahang Pahang a member of Federated

Malay States applied the uniform
law of the four States i.e.
Federated Malay States Malay
Reservations Enactment 1933.
Terengganu Terengganu followed the model of the
Federated Malay States Malay Reservations
Enactment 1933. It was the last to
implement the Malay Reservations
Enactment of Terengganu in 1941.

Kelantan Legislation modelled on the 1913 FMS Came into force on November
Enactment. 4th 1930.
Almost all lands in Kelantan are declared as
Malay reserve under Kelantan Malay
Reservation Enactment 1930.

Negeri Sembilan Federated Malay States Malay Reservations

Enactment 1933 and Customary Tenure
Enactment are applicable to Malays in that
State.
FMS MRE is applicable in districts of
Jelebu, Kuala Pilah, Rembau and Tampin.
Nature of Enactments

• Provisions in the Enactment differs and this,

to certain extent has defeated the objective
of Malay reservation institution:

• 1. ambiguity in definition of Malay

• 2. loopholes in policy of disposal or
dealing in Malay reserved land
• 3. inclusion of other races to hold Malay
reservation land, even though Federal
Constitution expressly prohibits non-
Malay from dealing with Malay
reservation land.
Who is a malay?
• Definition of Malay varies from
State to state basically depending on
the geographical location and also
interpretation accorded by Ruler in
Council or State Authority.
• definition of a Malay is determined
by state enactments.
Definition of malay
State Definition of Malay Section

PERLIS “Malay” means a person belonging to any Section 2- Perlis

Malayan race or person of Arab descent Malay
who habitually speaks the Malay Reservation
language or any Malayan language and Enactment 1353
professes the Muslim religion.
“Siamese” means a Siamese certified by
the Commissioner in writing to be a
Siamese agriculturist permanently
resident in the State of Perlis.
Perlis being situated near border of
Thailand, a Siamese has right to acquire
MRL.
person of Arab descent who habitually
speaks Malay language is considered
Malay in Perlis.
State Definition of Malay Section

KEDAH Malay” means a person professing the Muslim SECTION 2-

religion and habitually speaking the Malay Malay
language of whose parents one at least is a Reservation
person of Malayan race or Arab descent. Enactment of
Siamese is included as natives and has right to Kedah 1931
acquire Malay reserve lands.

JOHOR Malay” means a person belonging to the Malay Section 2 - Johor

or any Malaysian race who habitually speaks the Malay
Malay language and professes the Muslim Reservation
religion and such expression shall be deemed to Enactment 1936
include the authorities, boards, bodies,
societies, associations and companies described
in the Second Schedule to this Enactment:
with a preamble that reads ‘An Enactment to
prevent interests in land passing out of the
hands of the Malay race.’ Johor Malay
Reservation Enactment 1936 has employed the
word ‘Malaysian’ instead of ‘Malayan.’ in 1989, by
a PTG circular under section 22 of the Johor
MRE, an additional requirement was added: the ‘
Malay’ must have Malaysian citizenship.
 Definition of malay
State Definition of Malay

Malay” means a person belonging to any Malayan

Section

KELANTAN Section
race who speaks any Malayan language and 3(i)
professes the Mohammedan religion, and shall
include (a) the Majlis Ugama Islam (b) the
Official Administrator when acting as
administrator or trustee of the estate of a
deceased Malay
section 9 : Prohibits the alienation of MR land to
those who are not ‘natives of Kelantan’
Thus, Malays from other states may not own MR
land in Kelantan. . Among others, who fall within any
of the following class:
1. a person in Kelantan whose mother was a Malay and
whose father was a Muslim.
2. Any person born in Kelantan whose mother was a
Malay and whose father was a Muslim.
3. Any person wherever born, both of whose parents are
Malays and who have resided for at least 15 years in
Kelantan.
4. Any person who was born in Kelantan and whose
father was also born in Kelantan.
5. Any person wherever born, whose father was a
Malay born in Kelantan.
Definition of Malay
• Terengganu- section 2
• means a person belonging to any Malayan race
who habitually speaks the Malay language or
any Malayan language and professes the
Moslem religion
• section 2 of the MRE(FMS Enactment), a Malay
means a person belonging to any Malayan race
who habitually speaks the Malay language and
profess the Muslim religion.
Definition of Malay
• Article 160 FC:
• There are four characteristics to be complied with before a
person can be declared as Malay under Article 160 of the FC;
the person must be Muslim, speaks Malay language, complies
with the Malay Custom and domiciled in Malaysia or
Singapore ( …and was before Merdeka Day born in the
Federation or in Singapore or born of Parents one of whom
was born in the federation or in Singapore, or is on that day
domiciled in the Federation or in Singapore…)
• Therefore, anyone who claims to be entitled as a Malay under
the Constitution will need to trace their birth or ancestry to
Merdeka Day. That someone is a Muslim, speaks Malay and
adopts Malay custom is not sufficient to qualify them as a
Malay under the Constitution.
Definition of Malay
• Definition of Malay in FC does not apply for MR
land - Art.89(6) FC said that : ‘Malay Reservation’
means land reserved for alienation to Malays or
to natives of the state in which it lies; and
‘Malay’ includes any person who under the law
of the state in which he is resident, is treated as
a Malay for the purposes of the reservation of
land.
• Thus, for the purpose of Malay Reservation by
virtue of A.89(6) of the FC, the definition of
Malay is left to the discretion of each state to
determine.
‘Malay’ in the respectiveMRE
• 2 categories:
• 1) Natural person
• 2) Company
• A person must come within the definition
of Malay under the MRE
• in other words, Malay may include as a
person or as a company.
• Iow: the Malay reservation enactment of each state categorised ‘
Malay’ in two terms: Malay as a person and Malay as a company.
A Malay company
• Definition of a Malay company or
requirement for a company to be
able to deal with Malay Reserved
land.
• Malay Company defined only in FMS
MRE s 2 and Terengganu MRE s 2.
• In Terengganu, a Malay Company is
addressed as Malay Holding Company.
A Malay company
• Under FMS MRE – sec 2 and Terengganu MRE,
section 2:
• Requirements:
• 1. Registered under Companies Act
• 2.All members are Malay
• 3. Restriction on transfer of shares to Malays
only in Article of Association
• 4. objective of the company is to deal with Malay
holding land.
A Malay company
• Hj Lamin bin Hj.Mohd Yunus J. in Wan
Ismail & Seng Liang Sdn. Bhd. v Musa
bin Mat Jani & Anor [1990] 2 CLJ 379
• dealing in favour of a company where,
inter alia not all members are Malay is not
a Malay company under FMS MRE s 2.
• Therefore any dealing conducted by
company is contrary to FMS MRE s 7 and
shall be declared as null and void by virtue
of FMS MRE s 19.
A Malay company
• Other States’ MRE have not included any
provisions on the requirements to
establish Malay company.
• Reason - rigid requirements to establish a
Malay company HOWEVER, Ruler-in-
Council may declare or include any person,
companies, corporations or bodies to be
treated as ‘Malay’ for purposes of MRL
(Johor MRE s 2; Kedah MRE s 19; Kelantan
MRE s 9A(1) Perlis MRE s 9(1) & 17A(i)).
• Wan Ismail & Seng Liang S/B Musa B.
Mat Jani & Anor [1990]
Held that: any dealings in favour of a
company where not all members are
Malay is contrary to section 7 of the
FMS MRE and shall be declared null
and void.
Malay Holding
• Section 2(a) FMS MRE 1993 and s.2 (d)
Terengganu MRE define a Malay holding as:
• 1. either the proprietor or co proprietor are
Malay;
• 2. alienated land;
• 3. such lands has been declared and gazatted as
MR land; and
• 4. such land has been included in the official MR
list
Malay Holding
• All requirements are mandatory to be
fulfilled before a land can be declared as
Malay holding.
• Failure to comply with any one
requirements, the alienated land cannot be
declared as Malay holding.
• If the proprietor is not Malay or none of
the co-proprietors are Malay the
registering body is not empowered to
make any memorial under the MRE or
inclusion of the said land under the Malay
reservations list. see FMS MRE s 6(vi)
• For example, if one of the proprietors is
Malay and the others are non Malays, than
the alienated Malay reservation property
can be declared as a Malay holdings.
Whereas, if all are non- Malays, than the
said property cannot be declared as Malay
holding.
• However, despite land published in
gazette as Malay reservation, State
Authority cannot proceed to endorse it as
Malay Holding if proprietor or co-
proprietor is not a Malay
• Syarikat Macey Berhad v. Nightingale
Allied Services (Sued As A Firm) & 2
Ors James Foong J. ‘since, the land has
never been registered in name of Malay
proprietor or co-proprietor, the memorial
so entered on the affected titles is
therefore erroneous.’
Jamaludin bin Jaafar v Affin Bank Bhd and
Another [2016] 12 MLJ 88
• Held that the fact that the respondent was a
non-Malay was beyond dispute as its name did
not appear in the Second Schedule to the Kedah
Enactment.
• Being not listed in the Second Schedule and
therefore a non-Malay, the respondent was
prohibited by s 6 of the Kedah Enactment from
holding any right or interest, including as
chargee, in the Malay reservation land that had
been charged to it by the appellant.
How to solve?
• According to Salleh Buang- if we wish to bring the Malay reservation
law into the 21st century, all restrictions regarding the leasing and
charging of Malay reserve land to non-Malays should be removed.
• Owners of Malay reserve land should be allowed freely to lease their
land to anyone (including a Non-Malay person or a foreign
corporation) provided it does not exceed a certain number of years,
after which there can be one further extension or renewal, but no
more.
• Owners of Malay reserve land should also be allowed to freely
charge (or create a lien as security) their land to any bank or
financial institution, thus giving the owners wider access to credit.
The old way of doing things by forcing banks to apply to state
authorities to be listed on the Second Schedule (see section 17 of
Cap 142) should be scrapped. Should the owners (borrowers) later
default and the banks decide to foreclose, only Malays are permitted
to bid for their auctioned properties. Thus, even if there is a
foreclosure action by any of these banks, these properties still
remain in Malay hands.
• However, the restrictions against alienation and transfer
of Malay reserve lands (as provided in the current law)
should remain.
• If the owners decide to develop their own lands (rather
than let others develop them under the lease
arrangements), then state authorities should work out
incentives to encourage them, such as by reducing
premiums, imposing reduced costs and charges,
expediting and simplifying procedures, offering better
densities and plot ratios, and making available affordable
development financing packages, etc.
Endorsement on IDT
• Requirement - Title must be
endorsed with words ‘Malay
RESERVATION’ – “TANAH RIZAB
MELAYU”
• Registered proprietor is required to
submit to registering authority their
IDT to be inscribed with the words
‘Malay Reservation.’ FMS MRE
section 6(iv)
Duty of registrar
• Badiaddinv First Malaysia Finance
Berhad & Anor [1988] 2 CLJ 32; [1998]
2 CLJ 75 FC. The land was gazetted as
‘Malay Reservation’ and published in
February 2nd 1917 but was only entered
and registered on the title of land on
February 18th 1984, i.e. after 67 years.
• To make matters worse the land was
already charged to a non-Malay company in
1981.
• Upon discovery of this endorsement, company
appealed to MB of Negeri Sembilan to revoke
status of Malay reserve as they are bona fide
chargee.

• State Authority agreed to insert company in

FMS MRE 1933 s 17 Schedule 2, and gazetted on
March 27th 1986.

• Q – Status of charge - null and void?

• HC & FC held that irrespective of late

endorsement and that money has been released,
land is still a MRL, and it comes within ambit of
MRE, therefore, the charge is null and void.
•Reference to
Ruler in Council
WHO IS RULER IN COUNCIL
• Hanisah v Tuan Mat [1970] 1
MLJ 213 to mean ‘His Highness
acting in accordance with the
advice of the State Executive
Council’. Situations where
reference to the Ruler in Council
is necessary as provided in FMS
MRE s 20.
Can a question on MR land be
referred directly to the ruler?
• In FMS MRE s 20, it is stated that in cases
of doubt the matter shall be referred
through the Menteri Besar to the Ruler of
the State Council.
• In Johor MRE the matter is referred
through the State Secretary to His Highness
the Sultan in Council.
• Kelantan MRE, s 18 states that the matter
may be referred to His Highness the Sultan
in Council without referring to the Menteri
Besar.
• other states MRE do not contain provision
for reference to be made THROUGH the MB
or other officers.
Can the ruler in council declare
a person as a Malay
• Kedah MRE section 19 restated &
reconfirmed the right of Ruler in Council
to declare ‘any person of any race or
nationality be deemed to be recognised as
“Malay”.
• Kelantan MRE s. 9A & 13A (i)
• Included provision where Ruler-in-
Council can alienate, transfer,
transmit or charge Malay reserve
land to anyone who is not a Malay
• Kelantan Ruler not empowered to declare any
person as Malay unlike Kedah MRE which gives
a wide discretion to Ruler in Council to declare
any person of any race or nationality as Malay.
• Kelantan MRE allows the person to acquire a
right or interest over land.
• Terengganu MRE does not declare bodies as
Malays, it merely grants a right to them to hold
MRL with consent of Sultan in Council.
Foo Say Lee v Ooi Heng Wai [1969] 1 MLJ 47
 The P entered into a contract with the D for the purchase of a piece
of land in Kelantan which was held by a Malay and was situated
within a Malay reservation.
 There was an express condition in the contract that the sale was
subject to the approval of the Ruler in Council.
 The land subsequently became registered in the name of the D.
 Issue: Whether the contract was null and void under the Kelantan
Enactment.
 Held: Since the Enactment itself permits dealings in favour of a non
Malay with the approval of the Ruler in Council, any agreement for a
dealing by a method so provided for in the Enactment, as was the
contract in question, is not contrary to the provision thereof and is
therefore not null and void (section 13A(1) ).
Hanisah v Tuan Mat [1970] 1MLJ 213
Under section 13 of the Kelantan
Malay Reservation Enactment, it is up
to the His Highness the Sultan in
Council to decide whether the App is
a Malay or not and the decision shall
not be questioned or revised by any
court.
HUSSANJAN V HAJI NIK YAHYA BIN NIK DAUD & ORS
[1973] 1MLJ 9

• It is whether P was a Malay and a

native of Kelantan. The court held
that the P was not a Malay and a
native of Kelantan. This was based
primarily on her own admission.
Besides that, the P’s father was a
Pakistani Muslim and a person’s race
follows that of his father.
Decision of ruler in council
final
• Asia Commercial Finance (M) Bhd. v
Pemungut Hasil Tanah & Anor. (1983)
CLJ 86 ;
Zainal Abidin Bin Mohd. Taib v Malaysia
National Insurance Sdn.Bhd.[1994] 3
CLJ 731
observations that decision of Ruler-in-
Council shall be final and shall not be
questioned or revised by any Court.
MRE
•Land that can be declared as
Malay Reservation:
• i. State Land;
•ii. Reserved Forest Land;
•iii. Land Reserved for a public
purpose; and
•iv. Alienated Land
Power of declaration of MRE
• In the state of Perak, Selangor, Negeri Sembilan
and Pahang, where the Malay Reservation
Enactment (FMS Cap 142) are used, the power
of declaration falls under the Chief Minister of
the State with the approval from the Ruler of the
State in Council.
• In the State of Johor, the State Director of Land
and Mine with the approval from the Ruler of
the State in Council, while in other States, it is
the Ruler of the State in Council.
Purpose of declaration
• i. To declare any area of land within the State to
be a Malay Reservation Area;
• ii. To revoke any Malay Reservation Area; and
• iii. To alter the limit or boundaries of any Malay
Reservation.
• The purpose of having an area of land declared
as a Malay reservation is to ensure that certain
land in the State is alienated only to Malays and
the land thus alienated or any interest in it will
continue to remain as the hands of the Malays.
Procedures of Gazetting Malay
Reservation
• Under the Malay Reservation Enactment FMS Cap 142 (Article 89),
the procedures of gazetting Malay Reservation are as follows:
• i) Land Administrator prepares paper recommending declaration of
land by Menteri Besar (with agreement by the State Assembly
members) as Malay Reservation;
• ii) State Authority approves the declaration;
• iii) Land Administrator takes appropriate actions upon the
publication in the Gazette of the declaration as Malay reservation;
• iv) Land Administrator is to present a requisition in Form A of the
First Schedule of the Enactment containing all lands affected by the
declaration; and
• v) Registrar shall make a memorial of the inclusion in the Malay
reservation in the register and issue documents of title.
Categories of land in the Malay
reservation
1. State land, prohibition against alienation
 Sec 7 of the Enactment provides that no state land included within a
Malay reservation shall be alienated or disposed of to any person
not being a Malay, save as provided in the Enactment.
 This section restricts the powers of the SA in matters relating to the
disposal of state land.

2. Malay reservation land belonging to the Malay

 Sec 8 restricts the powers of the individuals to deal with land in
Malay reservation i.e. no land in Malay reservation areas shall be
transferred, charged, leased or otherwise disposed of to any non
Malay and no memorandum of transfer, charge or lease in
contravention of the Enactment shall be capable of registration.
 The object of the general prohibition is to prevent Malays from
losing their land to non Malays.
Categories of land in the Malay
reservation
3. Malay reservation land belonging to the non Malay
 If any land in the Malay reservation was owned by a non
Malay prior to the declaration, such land may continue
to be owned by a non Malay and he may transfer,
charge, lease or otherwise deal with the property to
another non Malay.
 In other words, there is no restriction in dealing with this
category of land for it is excluded from the Malay
reservation.
 But once the proprietorship changes from a non Malay
to a Malay, then it is subject to the Malay reservation.
• Article 89(4) FC:
• The SA cannot declare any land which
is occupied or owned by non- Malays
as Malay reservation.
• Thus, if a non- malay has any title or
interest in land, the SA is barred from
declaring the land as Malay
reservation.
Tan Hong Chit v Lim Kin Wah

 Held: Sec 13A(2) of the Kelantan Malay Reservation

Enactment 1930 states when a piece of land in a Malay
reservation area is registered in the name of a non Malay,
who has acquired the land prior to the creation of the Malay
reservation, the non Malay owner can transfer or charge the
land to any non Malay and any subsequent transfer or charge
to another non Malay could be affected or protected without
obtaining the approval of the Ruler in Council.
 But once the non Malay owner had transferred the land to a
Malay, then the Malay owner could not transfer or charge the
land to the non Malay without the approval of the Ruler in
Council.
Ho Giok Chay v Nik Aishah
 The P who claimed to be a native of Kelantan within the meaning of
the Kelantan Malay Reservation enactment but not a Malay.
 P obtained three charges from the R who was a Malay lady in
respect of a Malay reservation land as a security for a loan granted
by him to her.
 The charge were duly registered under the state land Enactment.
 Upon default by the R, the P took out a summons against the R to
show cause why the land should not be sold in enforcement of the
charge.
 The R contended that the charge was null and void as being contrary
to section 7(1) of the Kelantan MRE.
 Sec 7(1) of the MRE said that no right or interest of any Malay in
reservation land and no right or interest in such land acquired by
virtue of sec 13A by any person not being a Malay shall be
transferred to / transmitted to / vest in any person not a Malay.
 Held: The charge in question constituted a breach of sec 7(1) of the
Kelantan MRE and was null and void.
SYARIKAT MACEY BERHAD V NIGHTINGALE ALLIED
SERVICES & 2 ORS
 Held: The term ‘Malay holding’ means that in
order for sec 8 to apply, the land in the Malay
Reservation must first of all a Malay registered
proprietor or co-proprietor.
 If there has been no such Malay registered
proprietor or co-proprietor in such Malay
Reservation land before, then there should be
no prohibition in the transfer of such land to a
non Malay.
HAJI HAMID BIN ARIFFIN V AHMAD MAHMUD
 Mahmud bin Samad, the owner of a Malay reserve land, had
sold his land to a Siamese lady and the IDT was given to her.
 Subsequently the lady sold the land to the App.
 In the meanwhile, the land remained registered in Mahmud’s
name, who had since died.
 The question arose whether the sale to the Siamese lady was
enforceable under the Kedah Malay Reservation Enactment.
 Held: The sale was not in accordance with the Kedah MRE and
therefore void ab initio by virtue of section 6(2) of he Kedah
MRE and it could not be enforced by the purchaser nor could
the purported purchaser pass a good title to another.
Restrictions & Prohibitions
on Dealing
• TRANSFER:
• Obejctive of MR: to ensure that the land
is not transferred to other races.
• FMS MRE -Section 8 – No Malay holding shall
be transferred, charged, leased or otherwise
disposed of to any person not being a Malay and
no memorandum of transfer, charge or lease in
contravention of this section shall be capable of
registration in any land office or Registry of
Titles.
TRANSFER
• Terengganu: section 9(1)
• No Malay holding could be transferred to non malays
• Section 5- Perlis
• No right or interest shall vest upon the transfer to a person
who is not a Malay or Siamese
• Kedah- section 6(i)
• No right or interest shall vest upon the transfer to a person
who is not a Malay
• Kelantan- section7(i)
• No right or interest shall vest upon the transfer to a person
who is not a Malay and native Malays of Kelantan.
• Tan Hong Chit v. Lim Kin
Wan(1964) 30 MLJ 113 - a non-
Malay who has been occupying
MRL prior to its declaration can
transfer his land to other non-
Malays without approval of Ruler
in Council as he is not bound by
MRE provisions
• Foo Say Lee v. Ooi Heng Wai,
[1969] 1 MLJ 47 FC - the purported
agreement to transfer MRL, subject
to consent of the Ruler in Council is
not contrary to Kelantan MRE.
• Reason - MRL may be transferred to
non-Malay subject to Ruler’s consent.
Charge MRL to non-Malay
• FMS MRE s 8(i) states that no MRL
can be charged to non-Malay except
to Government, Co-operative
Societies registered under Co-
operative Societies Act 1948 (FMS
MRE s 17(1)(a) & to any person
specified in Second Schedule of
FMS MRE,
CHARGE
• Charge of MLR to non-Malay not
permitted unless to a person specified in
the Second Schedule of FMS MRE.
• Any person may apply to the State
Authority to be declared as Malay for the
purposes of the MRE and to be inserted in
MRE Second Schedule.
• Therefore, a company can after
registering the charge apply to the State
Authority to be included in the Second
Schedule.
• Zainal Abidin Bin Mohd. Taib v.
Malaysia National Insurance Sdn. Bhd
[1994] 3 CLJ 731 - a charge was created
and registered on September 6th 1982 to
the Defendant, a non-Malay company.
• The defendant applied to the State
Authority to be included in the Second
Schedule as a recognised Chargor only
after registration of the charge.
• This was approved only in October 23rd
1991. Subsequently the State Authority
by its letter dated July 21st 1992, agreed
to have a retrospective approval, dating
back to January 1st 1982 of declaring the
non-Malay company as a Malay for the
purposes of the charge under section 17
and Second Schedule of FMS MRE.
• Faiza Thambi Chik J. held that the charge
is valid and the decision of the Ruler in
Council is binding.
• Badiaddin v First Malaysia Finance Berhad
Mustapha Hussain J. held that even though
the declaration of MRL was entered only
after the charge has been registered, the
charge is still void as the land is a MRL.
• This is despite the State Authority has
approved to insert the Respondent in
Schedule 2 of s 17 MRE, as a company
qualified to hold a MRL.
• Federal Court upheld the decision in 1998 and
there was no attempt to distinguish this case
with Zainal Abidin Bin Mohd. Taib v.
Malaysia National Insurance Sdn. Bhd.
• Ho Giok Chay v. Nik Aishah
(1961) 27 MLJ 49 Hepworth J.
held after analysing s 7(i) and
9A held that a charge created in
favour of a non-Malay by a Malay
on a Malay reserve land was void
ab initio.
• Whereas, in T. Bariam Singh v.
Pegawai Pentadbir Pesaka
Malaysia [1983] 1 MLJ 232,
Mohamed Zahir J. held can
create charge of MRL but in
foreclosure proceedings the
purchaser must be a Malay.
• Kelantan: sec 12(i)
• All dealings and all attempts to deal on reservation land
contrary to the provision of the Enactment is null and void.
• Kedah- Schedule A
• The holder of Permits, Banci Sewa and Surat Akuan are
allowed to charge the MR land to anyone irrespective of the
race.
• Case: Sime Bank Bhd v Projek Kota Langkawi Sdn Bhd [1998] 4
MLJ 334, held that the P, although being a company and
therefore not a Malay as defined by the Kedah Enactment, is
allowed to be a chargee in respect of a Malay reservation
land.
CHARGE
• Johor- section 9(i):
• Malay holding shall only be charged to a Malay which
includes also authorities, boards, bodies, societes,
associations and companies described in the 2nd
schedule.
• Perlis
• MR land can be charged to malays and Siamese.
• Section 5A(i): the malay vendor cannot charges his land
to the Siamese but Siamese owner may charge his MR
land to Malay or Siamese.
• Persons specified in Schedule C: MR land may be charged
to them with prior approval of Ruler in Council.
LEASE
• General prohibition in MRE s 8(i) against creation of
leases of Malay reserve land to non-Malay.
• However, Kelantan MRE s 7(iii) allows lease of Malay
reserved lands situated within town areas to non-
Malays, subject to the approval of His Highness the
Sultan.
• The said lease should not exceed 3 years and non-
renewable and any provision in the lease which allows
for renewal shall be declared as null and void.
• In Dato’ Haji Nik Mahmud bin Daud v. Bank Islam
• Malaysia Bhd,[1998] 3 MLJ 393, 400 Abdul Malek
Ahmad JCA held that the Kelantan MRE allows the
Malays to lease the Malay reserved lands to non-Malays.
• Outside boundaries of town:
• - monthly leases
• Can be terminated upon giving one month notice (
section 6 (iii)).
Exception to Kedah…
• Section 9 – similar to Kelantan
• Provided : Not exceeding 3 years
• No consent of Sultan is required.
• If bendang land (less than 10 relongs)
• Consent of Land Office of the district in
which the land is situated is required.
ENTRY OF CAVEAT
• KEDAH
• Case: RAP Nathan v Haji Abdul Rahman Bin
Haji Yusoff & Ors, [1980] 1 MLJ 248 Syed Agil
Barakbah J held that eventhough the plaintiff is
not Malay he has a caveatable interest in the
MRL.
• Other states:
• Not allowed
• Unless: he is an agent to a Malay company, than
he is allowed to enter the caveat on behalf of his
Malay principal
• Usually refer to the schedule of the respective
Enactments ( Federated Malay States Malay
Reservation Enactment Schedule)
LIEN
• In FMS MRE s 10, it is stated that no lien
can be created on Malay holding. The
provision is:
• “No lien by deposit of issue document of
title for any Malay holding as security for
a debt shall be capable of being created in
favour of any person, and no caveat in
support of any such lien by deposit shall
be capable of registration in any land
Office or Registry of Title.”
Exceptions:
• However, the FMS MRE provides an
exception to the general rule by allowing
the title of Malay holding land to be
deposited to:
• (i) in favour of Menteri Besar;
• (ii) any such co-operative society
registered under the Co-operative
Societies Act 1948;
• (iii) any such person specified in the
Second Schedule.
RESTRICTION AS TO
CREATION OF TRUSTS
• Generally, no trusts could be created
or enforced by Non-Malay on Malay
holding or MRL. By applying the
literal interpretation, one can safely
assume that the provision does not
mention either expressly of impliedly
any prohibitions against the
appointment of non-Malay trustee.
GRANTING OF POWER OF
ATTORNEY
• There is clear prohibition in FMS
MRE s 9 on the creation of power of
attorney in favour of a Non-Malay to
act on behalf of a Malay proprietor
to transfer, charge or lease of a
MRL or Malay holding.
• Such memorandum shall be declared
as void and shall not be capable of
registration.
RESTRICTIONS AS TO
DEALINGS BY ATTORNEY
Idris v Ngah Siew
 The registered proprietor of certain land in a Malay
Reservation, charged his land to a non Malay for security of a
loan.
 Subsequently, the Malay owner executed a Power of Attorney
on the land in favour of the non Malay.
 The Malay owner subsequently revoked the power of
Attorney before the full payment was made.
 The chargee brought an action in court claiming that the
agreement and the Power of Attorney was valid.
 Held: Dealings in MR land by way of a Power of Attorney
executed in favour of a non Malay is prohibited and is not
binding.
Sakinah v Kua Teong How
Held: The Power of Attorney executed
by the chargor in favour of the non
Malay chargee was null and void and
the D in entering into possession of
the charged land was a trespasser.
REVOCATION AND REPLACEMENT OF MRL
OF MRL
• Art 89(3) FC: if MRL is revoked, then the SA
has to replace it with any other state land.
• 3 conditions:
• i. it is similar in character
• Ii. Area not exceeding the area revoked
• Should be done immediately
‘similar in character’
• Not defined. Guidelines:
• 1. same economic value relating to type of cultivation.
• 2. Location similar. Eg access to road.
• 3. Potential for development similar
• 4. same category of land use.
• ‘Immediately’-
• V Sp Suppiah Chettiar v KS navaradnam [1972], the HC
held that ‘immediately’ means ‘”allowing a reasonable
time for doing it”
Problems and challenges in regard to Malay
reservation land
• Ignorance of the purpose of MR lands.
• Complacency by owners of MR lands.
• Remoteness and low fertility of MR lands.
• Unfavourable location of MR lands.
• The effectiveness of restrictions on MR
lands
• The SA’s powers of disposal.
1. Ignorance of the purpose of
MR lands
• The problem is how to fully utilise the protection and to
ensure that the Malays can benefit from it.
• This is the responsibility of the owners and administrators
together with the policy makers.
• In the preface to the Malay Reservation enactment 1913, it is
stated that the purpose of the reservation is to provide for
securing the Malays their interests in land.
• Thus, it is not only to protect the ownership of the land but
also to ensure that the interest in the land shall remain to the
benefit of the Malays. Therefore, any law and policy which is
introduced must ensure that the interests remain with the
Malays.
CHALLENGES
• Unfortunately, Malay Reserve issues have no serious
champion and disputes left unresolved. Article 89 of
the Federal Constitution specifically mention that
Malay Reserve land to be cancelled or transferred
must be replaced with land of similar character and
size.
The problem with Malay Reserve Land is basically
land acquired were not replaced and in place, the
compensation has been insufficient. Construction of
infrastructure, especially highways and property
development continued despite unsettled resolution
to disputes and court judgment ignored.
2. Complacency by owners of
MR lands
• It has been argued that the Malay Rulers persuaded the British to
implement the laws in question.
• The Malays soon developed a complacent attitude toward the
reservation laws and thus failed to make any effort to change or
improve the law.
• This complacency has to a certain extent become a hindrance for
the development of these pieces of land because a portion of the
Malay owners have failed to initiate any efforts to the further
enhancement of their land and increase its value.
• Similarly, the restrictions on dealings have hindered the Malays from
competing in the open market which resulted in a value reduction of
their properties.
• As such, it is commonly perceived that the reservation has
contributed to the slow development of the Malay reservation land
in Malaysia.
3. Remoteness and low fertility
of MR lands.
• Under the British regency, fertile land was preferably given to fellow
British citizens.
• Most of the land that had been declared as Malay reservation by the
British was considered third and fourth class land. Moreover, these
lands were located in rural areas and covered by jungle vegetation.
• Developing these types of land is expensive and considered
uneconomic, a reason for these lands being abandoned by its
owners and neglected by the government.
• Although much of the Malay reservation land is situated in rural
areas, the Malay owners need to invest in the development of their
land.
• Proper policies could ensure that Malay land ceases from being
treated as second class land to obtain loans from financial
institutions.
4. The factor of location
• Most of the Malay reservation land is situated in remote
areas with limited accessibility and low infrastructure.
• Most of the land declared by the British was village land
or wasteland where the value of the land was low.
• How this state of affairs can be improved?
• With sufficient political will and resolution
• It is not enough to furnish the Malays with subsidies and
special quota, but the area need developing and proper
infrastructures.
5.The effectiveness of
restrictions on MR lands
• All Malay reservation Enactments provide for restriction in dealing
with non Malays.
• The restriction includes the disposal of Malay reservation land to
any non Malay.
• Similarly, in the case of alienated land (except for Kelantan), no
Malay reservation land can be sold, charged or leased to a non
Malay, irrespective of the time period.
• Furthermore, some state has a list of companies which are listed as
Malay Companies with whom Malay owners may deal.
• Despite many restrictions provided in the Enactment, a lot of Malay
reservation land has lost title and privileges, mostly caused by the
irresponsibility of decision makers who either openly or secretly sell,
charge or even lease the land to non Malays.
• People who are entrusted to deal with the red ink grant fail to
understand the need to preserve and protect the reserved land and
decide to revoke the land and do not care to replace it.
6. The SA’s powers of disposal.

• Land is a state matter. The 1933 Malay Reservation Enactment

states that no Malay reservation land shall be sold, leased or
disposed of to non- Malays.
• However, in 1962, government in order to allow companies
and corporations to deal with Malay reservation land
amended this provision.
• The provision states that Ruler in Council or the YDPA in the
case of the Federal Territory is given discretion to alienate
state land within a Malay reservation to any person, body,
corporation as Malay which is specified in the Third schedule,
and to declare any company or corporation as Malay.
• This decision is final and cannot be questioned by the Court.
• It has also the discretion to add, delete or amend the list
in the Third Schedule.
• Any item on the list becomes official once it has been
published in the gazette.
• The objectives of the above amendment was to permit
development and to raise the economic status of the
MRL owners.
• In relation to that, many companies and corporations
which were not 100% Malay have been declared Malay
for the purpose of section 7 of the FMS MRE.
• The Kedah MRE has given a wide discretion to
the Ruler in Council to declare any person of any
race or nationality as Malay who becomes able
to hold any Malay reservation land.
• In the case of Johor, by virtue of section 8, the
SA, nevertheless has no right to dispose by way
of alienation to any person not being Malay. The
Johor state Authority can dispose Malay
reservation land to non Malays through TOL,
licence, lease or tenancy.
THE FUTURE OF THE MALAY
RESERVATION LAND
• The development of Malay reservation land is slowed down
due to the financial weakness of the Malay owners.
• It is suggested that a Malay company shall be considered as
individual under the Enactment.
• Such a company may be categorised as a Malay Holding,
provided there is a better mechanism to monitor the
management of the company. With this formation, Malay
companies can develop Malay reservation land. The state
government should give priority to develop Malay reservation
land and to give priority to the owners of Malay reservation
land to develop their land with the support from the state
government.
• - The state has to ensure that any piece of Malay
reservation land, which has been revoked for
whatever purposes, is properly replaced because
this is in line with the requirement Art 89(3) of
the FC.
• - confusion about the definition of the term
Malay. It would be beneficial if the legislator
could formulate a uniform and precise definition
of the term ‘ Malay’ to avoid further confusion in
handling the Malay privileges which meant to be
reserved for the benefit of the Malays.
CONCLUSION
• The future of the Malay reservation land lies in the hand
of the Malays.
• The enactments contain many restrictions but do not
provide a sufficient protection against abuse and
misappropriation.
• The trust to protect the land lies in the hands of many
different party, such as SA and the Ruler in Council.
• Land administrators and politicians also have an
important role to play in determining the future of the
Malay reservation land.