MALAY RESERVATION

LAND

S H A R I F AH Z U B A I D A H
L A W 3 1 1 1 - 2 019
 Coverage:

— 1) Historical Rationale
— 2) Legislating Malay Reservation Land
— 3) Definition of ‘Malay’
— 4) Revocation of MR Land
— 5) Position of Non-Malays over MR Land
— 6) Malay Company & Malay Holdings
— 7) Powers of Ruler in Council over MR Land
— 8) Prospects and Challenges
Historical Rationale
 History:

— 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 ( e.g. rubber, tea plantations) and tin
mining.
— Feeling dispossessed and outclassed in their own
motherland, Malays sold their land in urban areas
and moved to the villages.
British in Malaya
Chinese Miners and Yap Ah Loy
Indian plantation workers
 Malays taking up loans from Indian Chettiars

— The British also noted

that the Malays 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.
Legislating Malay Reservation
 Draft Malay Reservation Bill

— “the object of the draft is

to prevent the passing of
Malay landholdings into
the possession of
foreigners”
 Malay Reservation Enactment 1913

— The purpose of the Enactment was to provide for

securing the Malays their interests in land.
— Also to put the Malay temptation to sell their land
‘beyond their reach’.
— Silent feature: rubber trees not to be planted on
reservation land. – order directed to the District
Officers.
— Why? Malays wanted to plant rubber and then sell
land at higher price.
 Present Malay Reservation Enactments:

— 1) The FMS Malay Reservation Enactment 1933

(Cap. 142) for Selangor, Perak, Pahang, Negri 9
and KL.
— 2) Perlis MRE 1353H
— 3) MRE of Kedah 1931
— 4) Johor MRE 1936
— 5) MRE of Trengganu 1941
— 6) Kelantan MRE 1930
Restrictions in the MRE
 General Restriction on Dealings to non-
Malays
— See s.8 of FMS MRE:

— “No Malay holding shall be transferred, charged,

leased or otherwise disposed of to any person not
being a Malay”
 ‘Malay holding’?

— s.2:

— “any registered interest of a Malay as proprietor or

co-proprietor in any alienated land included in a
Malay Reservation.”
 Application of section 8:

— “In order for s 8 to apply, the land in the Malay

reservation must have, first of all, a Malay registered
proprietor or co-proprietors. If there has been no
such Malay registered proprietor or co-proprietors in
such a Malay reservation land before, then there
should be no prohibition in the transfer of such land
to a non-Malay.”
— James Foong, J. (HC)
— Sykt Macey Bhd. v Nightingale Allied Services
— [1995] 1 CLJ 890
 Other Restrictions (see)

— Section 8 also prohibits — under a power of

charging of any attorney if that person is
Malay holding to a non- not a Malay.
Malay. — Section 10 prohibits the
— Section 8 also prohibits creation of lien over
leasing of Malay holding a Malay holding even in
to a non-Malay. favour of a Malay.
— Section 9 prohibits the — Section 11 states that no
execution of any private caveat, trust
instrument of dealing in caveat can be registered
respect of Malay holding in a Malay holding if
by any person acting caveator not a Malay.
Definition of ‘Malay’
 Definition of ‘Malay’

— Article 160 Federal Constitution lays down 4

requirements:

Muslim

Domiciled in
Malaysia/Singapore

Speaks Bahasa
Malaysia
Complies with
Malay customs
Definition of Malay in FC does not apply for MR land

— Art. 89(6) Federal Constitution:

— ‘In this Article “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, depends on the MRE of each state to

determine.
 ‘Malay’ in the respective MREs

— 2 categories:
— 1) Natural person;
— 2) Company
— A person must come within the definition of ‘Malay’
under the MRE.
— A company may be recognised as a “Malay”
depending either by declaration, recognition or
characterisation. (See examples in FN 69 of p.441 of
your textbook)
 FMS MRE defines ‘Malay’:

— 3 characteristics:

Belong to a Malayan
Muslim race

Habitually speaks the

Malay language or
any Malayan language
 Kedah MRE defines “Malay” as:

— “whose parents, with at least one of them being a

person of Malayan race or Arab descent.”

— This definition does not apply to companies.

— (Sime Bank v Projek Kota Langkawi S/B [1998])
 Kelantan MRE 1930:

— Similar definition to FMS MRE but adds “Majlis

Ugama Islam and the Official Administrator” as a
Malay.
— Also wider in respect of speaking language, “who
speaks any Malayan language”.
— Section 9 of the Enactment 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.
 Ruler in Council in Kelantan has powers to
determine who is a ‘Malay’ for purposes of MR

— See s.13.
— Also power to defeat the restriction in MRE:
— under s.13A, The Ruler in Council may also approve
the alienation of any MR land, the transfer and
transmission of any MR land to any person not being
a Malay, subject to conditions and restrictions.
 Johor MRE

— 1) Belonging to a — Note:
Malay or any — In 1989, by a PTG
Malaysian race. circular under s.22 of the
— 2) Habitually speaks Johor MRE, an
the Malay language. additional requirement
— 3) Professes the was added: the ‘Malay’
Muslim religion. must have Malaysian
— ‘Malaysian race’ – race
citizenship.
that is indigenous to the
Malay Peninsular and
archipelago. (Blacker)
 Zaleha bte Sahri v Pendaftar Hakmilik Johor
[1996]

— Zaleha , owner of MR land, was a Malaysian Malay.

— Married a Singaporean Malay and became a
Singaporean citizen.
— Due to additional requirement imposed in 1989 for
Malaysian citizenship
— Zaleha applied to the High Court for a declaration to
revoke the status of her MR land in Johor so that she
could transmit the land to her husband and children.
— HC allowed the application.
— Q: Can MR status be revoked by court order?
 Common Characteristics in Definition of
‘Malay’ in all state enactments

Belong to Habitually Profession of

Malay, Malayan speaks the the Muslim
or Malaysian Malay language religion.
race. or any Malayan
language.
 Can MR land be sold to a Non-Malaysian?

— Fauziah bt Ismail v — Held:

Lazim bn Kanan — The sale was prohibited
— [2013] MLJU 359 (COA) by s. 8 of FMS MR
Enactment.
— The non-Malaysian in — The word ‘Malayan race’
this case was a Malay in s.2’s definition of
with Indonesian Malay must refer to a
citizenship. Malayan race in our
— Whether the sale of MR
country, a citizen and not
land to him was valid? a ‘non-citizen.’
Revocation of MR Land
 2 Categories of MR Land:

MR land declared before MR land declared after

Merdeka Merdeka

— Subject to stringent — Any alteration and

procedures under Art. revocation of MR land
89(1) Fed. Consti. is done by the Mentri
— Any excise, revocation, Besar with consent of
acquisition/alteration of Ruler in Council.
size of MR land requires a
new MR Enactment that — See s.4(i)(b) FMS
goes thru’ the State MRE, 1933.
Legislative assembly and
Parliament.
Mohd. Isa & Ors v Abdul Karim & Ors. [1970]

— In this case the judge (Raja Azlan Shah, J.) held that
the only way a MR land can be de-reserved is by way
of revocation by the Mentri Besar under s.4(i)(b)
MRE.
— With respect, this is incorrect as in this case the MR
land was declared in 1921, making it land subject to
the stringent procedures under art. 89(1) Fed.
Consti.
 Forfeiture of MR Land

— Under Article 89(1A) of the Fed. Consti., MR land

declared prior to Merdeka may be forfeited by the
State Authority where the owner of the MR land
ceases to qualify to own the MR land. i.e. a company,
due to changed shareholding, ceases to qualify as a
‘Malay’.
— State Authority may forfeit the MR land without
paying compensation to the land owner.
 Declaration of New MR Land

— Art. 89(2) Fed. Consti. states that any state land,

which has not been developed or cultivated, may be
declared as MR land in accordance with that law.
(law relating to MR in such state).
— Let’s look at what the FMS MRE says, (see s.5).
— Thus even alienated land may be declared as MR
land in the FMS states.
— Also in Johor and Terengganu.
— Note: Not applicable in Penang and Malacca.
 Revocation and Replacement of MR land

— Art. 89(3) FC: If MR land is revoked, then the State

Authority has to replace it with any other state land.
— 3 conditions:
— i. It is similar in character.
— ii. Area not exceeding the area revoked.
— iii. Should be done immediately.
 ‘Similar in character’

— Not defined. Guidelines:

— 1) Same economic value relating to type of
cultivation.
— 2) Location similar. E.g. access to road.
— 3) Potential for development similar.
— 4) Same type of soil.
— 5) Same category of land use.
 ‘Immediately’

— In V SP Suppiah Chettiar v KS Navaradnam [1972],

the High Court held that ‘immediately’ means
“allowing a reasonable time for doing it.”
Nor Azahar bin Zainol v PT Langkawi & Ors.
[2017] 10 MLJ 53

— April 2006 - Pf entered

into SPA with 4th Df to
sell his land located in
Kuah town for RM 1.1
mil. Purchase price paid
in full.
— Pf sought declaration
that the SPA was void ab
initio because the land
was MR land and the 4th
Df was not a Malay.
 Cont.:

— Land was previously held — Df contended that the

by a 3rd party who had land was no longer MR
failed to pay annual rent. land due to redrawing of
— Land had been forfeited the boundaries of Kuah
by the State Authority town.
and re-alienated to the
Pf. — Issue: Whether the
— No endorsement of MR land was MR
land on new title but land?
land was MR land under
old title.
 HELD: (HC Alor Star)

— The status of the land

remains as MR land until
revoked by the Ruler in
Council.
— SPA was invalid as it
contravened s. 8 of the
Kedah MRE.
The Position of Non-Malays
over MR Land
 No declaration of MR Land
for Land of Non-Malays

— Article 89(4) FC:

— The State Authority 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 State Authority is barred from declaring the land
as Malay reservation.
— This is to protect the legitimate interests of non-
Malays under Art. 8 and 153(7) of the Fed. Consti.
 FMS MRE 1933

— Prohibits a non-Malay from occupying MR land.

— A non-Malay may however get an interest in MR
land if he applies through a company specified in the
3rd Schedule.
— The Ruler in Council has wide powers in declaring a
company as a Malay company, irrespective of its
members. (see s.7 & 20).
 Johor MRE

— Where a non-Malay has — Similarly, in Kedah and

been occupying the land Perlis MRE.
before its declaration as — It is only where the MR
MR land, such non- land comes into the
Malay may continue to hands of a Malay owner
occupy and own such that the restrictions on
land and can enter into transfers and dealings
dealings with other non- will apply.
Malays on such land.
 Tan Hong Chit v Lim Kin Wan (1964)

— Federal Court held that — 1) Approval of Ruler in

there are 2 ways where Council.
non-Malays can acquire — 2) Where such non-
MR land: Malay has occupied
the land before its
declaration as MR
land.
 Non-Malays Who Own MR land

Through approval of Ruler Occupied land b4

in Council declaration as MR land.

— Subsequent dealings — Subsequent dealings with

with non-Malays will non-Malays do not
require approval of require approval of Ruler
in Council.
Ruler in Council.
— Provisions of MR land not
applicable to such
proprietor.
— (Sykt Macey Bhd. V
Nightingale Allied
Services [1995])
‘Malay Company’ and ‘Malay
Holdings’
 ‘Malay’ Company

— Under FMS MRE and Trengganu MRE.

— Requirements:
— 1) Registered u-Companies Act.
— 2) All members are Malay.
— 3) Restriction on transfer of shares to Malays only
in Articles of Association.
— 4) One of the objects of the company is to deal with
Malay holding land.
Wan Ismail & Seng Liang S/B v Musa b. Mat
Jani & Anor. [1990]

— Pf and Df entered into an — exercising the rights

agreement allowing the given to Pf under the
Pf to mine for tin on the agmt.
Df’s land wch ws MR — Held:
land in Pahang. — Any dealings in favour of
— Pf also given an option to a company where not all
hold a sub-lease over the members are Malay is
land. contrary to s.7 of the
— Df terminated the agmt. FMS MRE and shall be
— Pf sued for an injunction declared null and void.
to stop Df from
 Musim Yakin v Koperasi Pekebun
KecilWilayah Johor Selatan Bhd [2018] 7
MLJ 37

— An agreement permitting the plaintiff ( a non-Malay

company) to cultivate the Df’s land which was MR
land amounted to giving the plaintiff an interest in
MR land and was prohibited by the Johor MR
Enactment.
— The contract was a void contract under ss 24 and 25
of the Contracts Act 1950.
 Malay Holding

— S.2(a) FMS MRE 1933 and s.2(d) Trengganu MRE

define a Malay holding as:

— 1) Either the proprietor or co-proprietor are Malay;

— 2) Alienated land;
— 3) Such land has been declared and gazetted as MR
land; and
— 4) Such land has been included in the official MR
list.
Powers of Ruler in Council over
MR Lands
 Reference to Ruler in Council

— Where in doubt as to the — Doubts may arise as

MR law in the state, regards:
reference should be — -who is a “Malay’ in such
made to the Ruler in state.
Council. (see s.20 FMS — - The mode of operation
MRE) of the MRE.
— - Interpretation and
enforcement of the MRE.
 Who is the ‘Ruler in Council’?

— Hanisah v Tuan Mat [1970]:

— “Ruler in Council means His Highness acting in

accordance with the advise of the State Executive
Council.”
 Can a question on MR land be referred
DIRECTLY to the Ruler?
— FMS MRE: — Other states MRE do not
— Must refer the matter contain provision for
THROUGH the Mentri reference to be made
Besar. (s. 20) THROUGH the MB or
— Johor MRE – must refer
other officers.
the matter THROUGH
the State Secretary.
(s. 22)
Can the Ruler in Council declare a person as
a ‘Malay’?
— Only under Kedah MRE — See also s. 13 of Kelantan
(see s. 19) MRE.
 Foo Say Lee v Ooi Heng Wai [1969]

— Fed. Ct. held:

— The purported agreement to transfer the MR land to
a non-Malay, was subject to the consent of the Ruler
in Council, and was therefore not contrary to the
Kelantan MRE.
 Decision of Ruler in Council final

— Asia Commercial — Zainal Abidin bn Mohd.

Finance (M) Bhd v PHT Taib v Malaysia
& Anor. [1983] CLJ 86 National Insurance
Sdn.Bhd. [1994] 3 CLJ
731
Challenges & Prospects for MR
Lands
 Some Problems Identified:

— 1. Ignorance of the purpose of MR lands.

— 2. Complacency by owners of MR lands.
— 3. Remoteness and low fertility of MR lands.
— 4. Unfavourable location of MR lands.
— 5. The effectiveness of restrictions on MR lands.
— 6. the State Authority’s powers of disposal
MR land typically in areas difficult to develop

— From the statistics of MR land in Peninsular

Malaysia (see p.446 of textbook), it can be seen that
MR land has mostly been declared in remote areas
and not in states with town centres like KL, Penang,
Malacca etc.
— Thus, no infrastructure and limited accessability and
difficult to develop.
— British prohibited mining lands from being declared
MR land and rubber trees not to be planted in MR
land.
— Thus, decline in value of MR land.
 Further Reading on MR Land:

— Bashiran Begum Mobarak Ali, Nor Asiah Mohamad;

“The Red-Ink Grants”: The Malays and the Land
(2007) 15 IIUM Law Journal 273.
— Bashiran Begum Mobarak Ali, “The Federal
Constitution – A Shield for the Protection of Malay
Reservation Policy” (2008) The Law Review p.53.
— Bashiran Begum, Ainul Jaria Maidin, “Who is a
Malay: Defining ‘Malayness’ from the Legislative
Perspective” [2008] 5 CLJ i.