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©New Sunday Times (Used by permission)
by Jaspal Singh and V. Vasudevan

KUALA KANGSAR: The government is likely to amend the National Land Code to better protect the interests of real land titleholders in the country.
Minister in the Prime Minister's Department Datuk Seri Mohd Nazri Abdul Aziz said some provisions in the NLC would be strengthened following the landmark ruling delivered by the Federal Court on Thursday.

The focus of the prospective amendments would be on tightening the concept of "indefeasibility of title" belonging to real landowners.

"The recent ruling of the Federal Court is the correct interpretation intended by the legislators of the NLC.

"Therefore, I believe the government may be persuaded to amend the National Land Code in the light of the recent ruling; that is to make the provisions far more clear with respect to the rights of the original landowners," he told reporters in Padang Rengas near here yesterday.

The Federal Court's five-man bench, headed by Chief Justice Tun Zaki Azmi, ruled unanimously that where property was transferred illegally, the original owner was entitled to its return if he can prove that it was acquired through fraud or forgery.

Such property must be returned even if the second purchaser had bought it in good faith and for a valuable consideration.

The Zaki-led bench overturned the court's own decision delivered 10 years ago which ruled that any subsequent purchaser had an indefeasible title notwithstanding the forgery if the purchasing party was a bona fide purchaser.

Nazri said the previous decision, delivered on Dec 22 2000 by a three-man bench led by the then chief justice Tun Eusoff Chin, was regarded by the legal fraternity as well as the government as wrong.

He said although the NLC protected the rights of the original owner all along, the decision of the Eusoff-led bench did not reflect the intended intention of the government.

The de-facto law minister said even after the wrong decision was delivered there were "attempts by certain quarters" to amend the NLC to conform the law to the incorrect findings of the judiciary then.

"But, the government held on to its view that the decision was wrong. In fact, the government wanted to amend the NLC to rectify the provisions after the wrong decision was handed down by the Federal Court then. It was mulling over the amendments.

"Fortunately, the same court had corrected its position on the matter. Still, I think amendments are needed to clarify the intention of the legislators on the rights of landowners," he said.

Nazri said the latest decision was a great relief to everyone, adding that it would also increase the confidence of investors that fraudulent transfers were not recognised by the law and the courts.

Where does this leave the buyer caught in a fraudulent transaction?

Nazri said those buying land should be thorough in their checks to determine if the land belonged to the person they were buying from.

"The burden is on the buyer or to use the legal term caveat emptor (buyer beware). It is up to the buyer and his lawyer to make sure with the various authorities that the land really belonged to the person claiming ownership.

"If all the parties did their part, there is no danger in anyone getting cheated." Nazri said that had been the practice in the country and the question of amending the various laws like the NLC to provide protection to buyers from land purchased through fraudulent transaction does not arise.

"If anything, we should be looking at ways to strengthen the court decision to provide protection to the land owner," he said.

He said he would discuss with Natural Resources and Environment Minister Datuk Douglas Uggah Embas, who is also in charge of land matters, on the possible amendments to the NLC.

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