The Federal Court will hear and determine the legal question of whether the Kedah Malay Reservations Enactment No 63 prohibits a Malay reservation land owned by a Malay from being charged to any party, which is not categorised as a Malay under the enactment.

This follows a decision by the Federal Court's three-man bench led by Chief Judge of Sabah and Sarawak Richard Malanjum to grant Affin Bank Bhd leave to appeal against a Court of Appeal decision.

On Sept 30, last year, the Court of Appeal in allowing the appeal brought by Jamaludin Jaafar, held that Affin Bank was a non-Malay party as its name did not appear in the Second Schedule to the Kedah Malay Reservations Enactment No 63
(the Kedah Enactment).

The Court of Appeal judge, Abdul Rahman Sebli, also held that there were currently only two banks listed in the Second Schedule, namely Bank Bumiputra Malaysia Bhd and Bank Pertanian Malaysia Bhd.

In his judgment, he said being not listed in the Second Schedule and therefore a non-Malay, Affin Bank was prohibited by Section 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 (Jamaludin).

However, Bank Bumiputra Malaysia Bhd had been merged with Commerce-Asset Holdings which is now known as CIMB Berhad while Bank Pertanian is known as Agrobank, which provides loans for agricultural activities.

Jamaludin was appealing against the Alor Setar High Court's decision in 2011 which allowed Affin Bank to obtain a judgment in default against him, whereby he was ordered to pay the bank a sum of RM998,527.86.

This arose after the bank had given a loan facility to an individual who was a businessman and for this, Jamaludin had charged his land in Kota Setar, Kedah to the bank.

Failure to pay the loan resulted in the bank filing the suit against the businessman and Jamaludin.

The Alor Setar High Court granted the bank's application for judgment in default after Jamaludin failed to enter his appearance in court after the writ of summons was served to him.

Jamaludin filed the application to set aside the default judgment and it was dismissed by the Alor Setar High Court in 2013. Dissatisfied with the decision, the appellant filed an appeal to the Court of Appeal.

At today's proceeding, the Federal Court granted leave to Affin Bank to appeal against the Court of Appeal's ruling. However, no date has been fixed to hear the appeal.

Only one question was raised, that was, "whether the Kedah Malay Reservations Enactment No 63 prohibits a Malay reservation land owned by a Malay from being charged to any party which is not categorised as a Malay under the enactment".

Earlier, the panel which included Federal Court judges Ahmad Maarop and Zainun Ali had granted the Association of Banks in Malaysia and Association of Islamic Banking Institutions Malaysia to be interveners in the appeal.

Bank Negara and the government of Kedah held a watching brief in the appeal.

Lawyer Kenny Chan represented Affin Bank while Khor Gaik Thiam and P Latsmanan acted for Jamaludin.

- Bernama