MAGESWARAN A/L NADARAJAH 1. ) SARASVATHY A/P ANTHONY DASS 2. ) LAKSHMANAN A/L RAMAKRISHNAN

MAGESWARAN A/L NADARAJAH 1. ) SARASVATHY A/P ANTHONY DASS 2. ) LAKSHMANAN A/L RAMAKRISHNAN

Appeal allowed: OTP is a bona fide option/sale contract and its liquidated damages clause is pre-agreed compensation, not 'interest' under the Moneylenders Act 1951; Appellant's loans were interest-free personal loans and he is not an unlicensed moneylender; Session Court erred in relying on hearsay evidence of D1 and in applying presumptions under s.10A Act 400; consequentially the Session Court judgment is set aside and Appellant awarded principal amounts, contractual sums and interest at 5% p.a., with costs.

Citation
JA-12ANCvC-1-01/2025 (Mahkamah Tinggi)
Parties
Appellant (plaintiff): Mageswaran a/l Nadarajah; Respondent 1 (defendant): Sarasvathy a/p Anthony Dass; Respondent 2 (defendant): Lakshmanan a/l Ramakrishnan
Court
High Court
Jurisdiction
Malaysia
Judgment Date
5 February 2026
Case Number
JA-12ANCvC-1-01/2025 (Mahkamah Tinggi)
Procedural Posture
Civil Appeal From Sessions Court / Final Judgment on Appeal
Outcome
Appeal allowed; Session Court decision set aside; Appellant's claim allowed; Respondents' counterclaim dismissed.
Legal Topics
Option to Purchase, Liquidated Damages, Illegal Moneylending (moneylenders Act 1951), Hearsay Evidence, Estoppel, Judicial Notice, Costs, Interest
Source Language
Malay/English
Contract Evidence Civil Procedure Property Financial Services/regulatory Option to Purchase Liquidated Damages Illegal Moneylending (moneylenders Act 1951) +5 more

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Parties

Mageswaran a/l Nadarajah

Appellant (plaintiff)

Sarasvathy a/p Anthony Dass

Respondent 1 (defendant)

Lakshmanan a/l Ramakrishnan

Respondent 2 (defendant)

Procedural Posture

Civil Appeal From Sessions Court / Final Judgment on Appeal

Legal Issues

  1. 1 Whether the Option to Purchase (OTP) was a disguised loan/security or a bona fide sale contract
  2. 2 Whether liquidated damages clause in OTP constitutes 'interest' under s.2 Moneylenders Act 1951 (Act 400)
  3. 3 Whether the Appellant was an unlicensed moneylender (ceti haram) attracting illegality

Ratio Decidendi

Appeal allowed: OTP is a bona fide option/sale contract and its liquidated damages clause is pre-agreed compensation, not 'interest' under the Moneylenders Act 1951; Appellant's loans were interest-free personal loans and he is not an unlicensed moneylender; Session Court erred in relying on hearsay evidence of D1 and in applying presumptions under s.10A Act 400; consequentially the Session Court judgment is set aside and Appellant awarded principal amounts, contractual sums and interest at 5% p.a., with costs.

Court Disposition

Appeal allowed; Session Court decision set aside; Appellant's claim allowed; Respondents' counterclaim dismissed.

Orders

  • Appeal allowed
  • Decision of Sessions Court dated 24 December 2024 set aside