IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR
(COMMERCIAL DIVISION) SUIT NO. D-22-648-2009
MALAYAN BANKING BERHAD
1. AMITBAL’S SDN BHD
2. BRIJMOHAN A/L MANOHAR LAL CHHABRA
3. KRISHNAN KUMAR A/L MANOHAR LAL
4. BALRAM A/L MANOHAR LAL CHHABRA
5. ASHWANI KUMAR CHHABRA
6. MANOHAR LAL CHHABRA A/L K. CHAND CHHABRA
GROUNDS OF DECISION
1. The plaintiff has made an application in (encl. 10) for an order that summary judgment be entered against the 1st defendant as the Borrower and the 2nd to 5th defendants as Guarantors. The 6th defendant is unrepresented.
Facts of the case
2. Upon a Banking Facilities (Facility) dated 14.3.2006, the plaintiff agreed to grant the 1st defendant a loan of RM550,000.00 comprising of an overdraft facility of RM250,000.00 and a Trust Receipt of RM300,000.00 (The Term Loan). The 2nd to 6th defendants executed guarantee in favour of the plaintiff to secure repayment of the facilities.
3. The 1st defendant defaulted in making the repayment due under the facility and the plaintiff issued the relevant demand letters.
4. The plaintiff contended that there is no issue that needs to be tried nor is there a need for any witnesses to forward any testimony at the trial of
the action and accordingly seek an order that judgment as prayed for be entered against the defendants.
5. The defendants submitted that the court should dismiss the plaintiff’s application as there are triable issues.
6. The defendant substantively raised the following issues :
(i) the total amount claimed by the plaintiff is uncertain because there were disputes as to the actual amount owing under each facility agreement before it was converted into Term Loan of RM500,000.00.
(ii) the Certificate of Indebtedness issued by the plaintiff does not contain the account number under which the amount is outstanding.
7. The plaintiff counsel argued that the issue raised concerning the details of the outstanding sum prior to the restructuring of the Facility are
not tenable as they amount to more than bare allegations. As the 1
defendant was unable to repay the entire facility, it was duly restructured to a Term Loan, the outstanding sum owing under the Term Loan would obviously include any outstanding sum prior to the restructuring. He further argued that the terms of the Facility are clear in respect of the interest rates applicable on the Facility prior and post-restructuring.
8. The Court found that as the 1st defendant was unable to repay the facility granted the plaintiff duly restructed it to a Term Loan.
9. The Letter of Offer dated 14.03.2006 converted the overdraft and trade facilities into a Term Loan of RM550,000.00. Notwithstanding there being no fresh facility agreement, the Letter of Offer was duly executed by the Borrower without any dispute at the material time. Clause 1 of the Letter of Offer dated 14.03.2006 (at the acknowledgment part) provides inter alia, ‘Subject to the terms and conditions of the legal documentation to be executed, I/we further that this letter embodies in writing all and the entire terms of our agreement…”
10. Thus it is clear that even though no subsequent legal documentation was executed, the said letter of offer remains binding and enforceable on the parties as duly agreed upon. The parties had already made a contract and the written agreement was a mere formality. There was an offer by the plaintiff and it had been accepted by the 1st defendant. There was consideration. There was certainty of parties, certainty of the amount. Cipta Cermat Sdn Bhd v Perbandaran Kemajuan Negeri Kedah  2 MLJ 746.
11. The 1st defendant was aware at all material times that the conversion of the overdraft and trade facilities to Term Loan would be for the sum of RM550,000.00 as expressly stated in the Letter of Offer.
12. The sum of RM690,502.50 demanded by the plaintiff in the letter of demand dated 27.11.2008 includes the interests levied upon the principal sum granted under the Term Loan and in accordance with the terms of the loan dated 14.3.2006.
13. The Court also found that the Certificate of Indebtedness issued was in accordance with the provisions of the Letter of Offer dated 14.3.2006.
Notwithstanding that it does not state the account number of the 1 defendant’s account, there is no confusion as it referred to the sum owing by the defendants in respect of the Term Loan granted to the 1st defendant and no other. In this respect the defendants’ counsel admitted that there is only one loan facility with the plaintiff.
14. The statement signed by the deponent on the plaintiff’s behalf constitutes final and conclusive evidence of the defendant’s indebtedness under the facility and as expressly agreed between the parties. The sums stipulated in the certificate shall be deemed as accurate and are binding on the defendants in the absence of any manifest error. There was nothing to indicate or suggest any manifest error on the face of the certificate issued by the plaintiff. Cempaka Finance Bhd v Ho Lai Ying (Trading as KH Trading) & Anor  2 MLJ 685.
15. The 2nd to 5th defendant as Guarantors failed to make any payments and they remain jointly and severally liable under the guarantee.
16. On the facts and circumstances of this case, I am of the opinion that there is no defence to the plaintiff’s claim and the defendants have failed to
raise any triable issue. National Company For Foreign Trade v Kayu Raya Sdn Bhd  2 MLJ 300, Bank Negara Malaysia v Mohd Ismail  1 MLJ 400, HSBC Bank Malaysia Bhd v LH Timber Products Sdn Bhd & Ors  6 MLJ 625.
17. In the circumstances and given the authorities cited the plaintiff’s application in enclosure (10) is allowed.
Dated : 17.5.2010
(DATUK HANIPAH BINTI FARIKULLAH)
JUDICIAL COMMISSIONER HIGH COURT KUALA LUMPUR (COMMERCIAL DIVISION)
Word : 978