Research on lien-holders caveat

Section 281 (2) of National Land Code

Where the holder of any lien has obtained judgment for the amount due to him thereunder, he shall
be entitled to apply to the Court for, and obtain forthwith, an order for the sale of the land or lease.

Section 330 (5) of the Code

A lien-holder's caveat shall, so long as it continues in force, have the like effect as that specified in
sub-section (2) to (5) of section 322 in relation to private caveats, but as if the references in the said
sub-section (5) to the person or body at whose instance the caveat was entered were references to the
person body for the time being entitled to the benefit of the lien; and sub-sections (6) and (7) of the
said section 322 shall also apply in relation to lien-holder's caveats as they apply in relation to private
ones.

Lekchumanan a/l Suppiah & Anor v Ravi a/l Raju [2016] MLJU 1316

[39] What was however of paramount significance in those provisions, in so far as the issues in this
instant appeal were concerned, was the statutorily stipulated requirements or processes related to
how that inchoate security could be enforced (or realised) by the lender to recover monies unpaid
under the loan. Those provisions were in mandatory terms. It was incumbent upon the lender to
firstly register a lien-holders caveat under the NLC. The lender then had to prove the debt by
obtaining a judgment (section 281(2) NLC). Only thereafter was the lender entitled to seek an
order for sale of the subject property complying with the same provisions that was applicable
as would be in the case of a registered charge under the NLC (sections 253 to 269 NLC) and
Order 42 of the Rules of Court 2012.

Perwira Affin Bank Bhd (formerly known as Perwira Habib Bank Malaysia Bhd) v Selangor
Properties Sdn Bhd & Ors [2010] 3 MLJ 43, Court of Appeal

[21] According to s 343 of the NLC, a lien can be created over an alienated land or even over a
registered lease or even in an undivided share in an alienated land. And the best remedy available
to the lien-holder would be, firstly, to obtain a judgment debt under O 42 of the Rules of the
High Court 1980 for the amount due and, secondly, to apply to the court for an order for sale
of the land or the registered lease pursuant to the provisions of ss 257259 of the NLC.