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Jual Janji
In this type of transaction, one agrees to sell the land to
another for some consideration and to buy back the land after
the settlement of the loan within an agreed period. If the
chargor fails to repay the loans, the chargee can go to the Land
Office to register the jualjanji transaction.
W.E.Maxwell (distinguished administrator & chronicler) who was the 1
writer on Jual Janji expounded its basic principles in his classic treatise,
The Law & Custom of the Malays with reference to the Tenure of Land in
(1884) 13 JMBRAS 75-200;
The Malay raises money on his holding by the transaction called J.J,
sells his proprietary right for a sum then & there advanced to him &
surrenders the land to the vendee, coupling, however, the transfer wit
the condition that if, at any time, or within a certain time, he shall
repay to the vendee the sum so advanced, he (the vendor) shall be
entitled to take back his land. This transaction differs from our
mortgage in the facts- (1) that no property in the soil passes but
merely proprietary right; (2) the possession is actually given to the
person who advances the money

David S.Y Wong in his article on jual janji,(1973) defines Jual janji as
a customary security transaction. He described Jual Janji as that :
The borrower transfers- to use the word in a loose sense- his
land to the lender who thereby takes possession of it. Whatever profits
the lender may make out of the land will be his to keep as a reward,
akin (related to) to interest, for the loan. The borrower is entitled to
resume the land upon discharging the debt except that, where a
period was fixed for the repayment of the loan, default will turn the
original arrangement in an absolute sale, Jual Putus.
The land shall remain in the hands of the borrower but the ownership
is in the possession of the lender. However, the lender would allow the
borrower to stay on the land. Only on default of payment of the debt that the
titles of the land will be transferred to the lender.
The exact definition is that jual janji is a kind of Malay customary
dealing in land in the nature of a security transfer if land and the lender, who
thereby takes possession of it, and the borrower is entitles to repurchased the
land upon the discharging the debt.
From the definition, it is similar to the equity of redemption in
mortgage, where it depends on the intent of the parties. But in jual janji
transaction, the land is transferred into the name of the lender and the
borrower is given the right to obtain a re- transfer upon repayment of the
debt within the period stipulated.
But, it is different from the concept of mortgage whereby a mortgage is
a type of security transaction where the legal title of ownership to the land is
vested / surrended to the mortgagee upon repayment of the loan.
Mohd Isa v Hj Ibrahim &Anor (1968) 1 MLJ 186.
In this case it was defined that jual janji was a conditional transfer of
land with a right to repurchase.
On default of payment of debt or loan, the borrower can be granted an
equitable relief for the purpose of extending the time period of payment.
The basic features of jual janji are the same as mortgage, but with 2
(a) On ownership
It is a Malay culture, therefore, in term of gaining a land, it is based on ihya
al-mawat, i.e one who cleared the land , he owns it. If the land is not
cultivated along certain period, the ruler can take or forfeit the land, as the
actual ownership belong to the ruler. In actual fact there is no right of
ownership on the part of the cultivator / farmer. The jual janji transaction
has its own distinctive features but not in mortgage transaction whereby the
actual equitable principle of redemption is alien to jual janji. Where no
mortgage the title is conveyed on the mortgagee.
(b) On the concept.
The concept of jual janji is based on community loan transaction, religious
adat, and gotong royong, where as this concept is nor available in mortgage.
Briggs J. in Tengku Zahara v Che Yusuf [1951] 17 MLJ 1 gave legal
recognition on J.J by describing the principal characteristics & its
(1) The seller (debtor) sells & transfers the land to the purchaser (creditor)
(2) By a collateral agreement (subordinate but from same source) the parties covenant
to resell & retransfer the land back to the seller upon payment of an identical sum
within a stipulated time
(!) The seller remains in possession of the land" paying rental in cash or in kind to the
purchaser# This consideration becomes legitimate income to the purchaser" unlike
interest" which is forbidden in $slam
(%) $f the seller shall default in paying the agreed sum to the purchaser within the
stipulated time" the transaction of &#& becomes &ual 'utus & the seller is obliged to
surrender possession of the land to the purchaser# $nvariable" however" as indicated by
(#)# *a+well" & in the true spirit of the in,unction of the -uran (.urah /l0
Ba1arah2234 $f the debtor is in the difficulty" grant him time# Till it is easy for him to
repay5)" the seller is given time by the purchaser
Effect on Transaction.
The question is whether there is any effect of the security transaction
on the contract of sale or on the customary security transaction.
In contract of sale, time is an essence but in jual janji time is not
essence, i.e the repayment can still be delayed.
Importance/Rationale of Jual Janji Why Jual Janji?.
1 . Most of the jual janji transaction are in respect of land in the rural
areas, moderates in sizes and owned by the Malays. The amount borrowed is
usually small and is based on the potential output of the land rather than the
true market value .
2 . Based on the concept of gotong royong, the lender is supposed to help
rather than to make profit out of it .
3 . Muslims want to avoid riba which is prevalent in the practices of most
commercial bank before the introduction of interest-free bank .
Teoh and Khaw in their book, the Land Law in Malaysia Cases and
Commentary, say that :
To hold that such transaction to have effect only on the contract is to cause
the poor farmers to loose their valuable land and becomes tenant of their own
land .
S.4(2)(a) of the N.L.C provides that the customary law is not effected by the
N.L.C even though there is no provision on customary tenure, it is still a
custom having the effect in law .
S.205(1) provides that under the NLC, other than the transaction mentioned,
would not be effected that in Part 14 to Part 17 (S214 to S.219) would be
affected in respect of the alienated lands. No dealings can be effected on
agricultural land measuring less than 2/5 of a hectare. This means that
Malay peasants owning agri. Land measuring less than 2/5 of a hectare
cannot charge their land as security for a loan. Therefore they turn to J.J. to
obtain loan .
Under s.56 and s.57 of the Evidence Act, it is provided that where it
is expressly mentioned that anything which relates to customs, the court
shall take the judicial notice .
Under s.206 (3) of the NLC, it was provided that nothing will effect the
contractual transaction on alienated lands, i.e the NLC cannot intervene on
this matter. Judith Sihombing, in his book Centenary of the Torrens System
in Malaysia, mentioned that s. 206 (3) of the NLC has removed any doubt as
to whether equitable relief can be granted to transactions in alienated land
which transaction do not conform to the code .
Principle of Jual Janji
Previously, the concept of Jual Janji was on 2 things, namely :
(a) Transfer of the land for a loan;
(b) An option to re-purchase the land by the borrower at the
specific price within a stipulated period.
The land as the security, as the security usually be transferred to the lenders
name .
Different Views on Jual Janji
There are 2 views on jual janji transaction, namely whether it is an outright
sale or a security transaction .
As an Outright(direct or complete) Sale / A Contract .
Hj Abdul Rahman v Mohamed Hasan (1917) AC 209
There was a loan transaction where the land would be transferred from the
borrower to the lender. The lender had to pay back within the stipulated
period of 6 months. But after the expiry of the period, the borrower wanted to
repurchase it .
High Court & COA held : Once a mortgage, always a mortgage
Privy Council Held: As the borrower did not pay within the stipulated
period, he has no longer any right to repurchase, as it is an outright sale and
an option to repurchase. The borrower could not repurchase or transfer the
land back into his name as provided in s.4 of the Registration of Titles
Regulation 1891 .
Wong See Leng v Saraswathy Ammal (1954) MLJ 141
It was held that jual janji was a contract of sale with an option to repurchase
by the borrower. The decision followed the decision of the above case,
whereby it was said that jual janji was an outright sale with a contractual
obligation to be fulfilled .
Muray Ansley J said that The right of the respondent to repurchased the
land did not confer on the respondent any interest in the land; he only
acquired a contractual right. The respondents right is governed by the law
relating to contract, and the parties have chosen to make time of the contract
a term not prohibited by law. So, he has no right to repurchase .
Ibrahim v Abdullah (1964) MLJ 138
There were 2 agreements made between the two, namely on the sale and the
other on the right to repurchase within 3 years. After expiry of the period, the
lender applied for specific performance to register the land into his name.
The borrower refused and the question was jual janji is an outright sale .
Held: It was an outright with a contractual right .
Kanapathi Pillai v Joseph Chong (1981) 2 MLJ 117
Salleh Abas J. said that As the option to repurchase is only contractual and
as the right was not exercised at all, we are of the view that the appellant has
nothing to complain. He did not even bother to protect it by a caveat. The
caveat which she lodged was so far out of time, misconceived and no use of
all, and its has lost to protect its equitable interest, which has never
happened. So, the respondent (owner) has the right to repurchase the landl
Ismail bin Haji Embong v Lau Kong Hon (1970) 2 MLJ 213
There was a transaction of sale and an option to repurchase within 8 months
at a specific price. After the expiry, the plaintiff went to the defendant to
extend it whereby it was granted for another 5 to 6 months. Subsequently,
the defendants father transferred the land to the sons name after the expiry
of 6 months from the extension date .
Held: Jual janji was a transaction but the issue was whether time was of
essence. The judge said that : From the evidence, even the time was
originally of an essence and the conduct of the parties was no longer showed,
therefore the plaintiff is entitled to repurchase the land .

Ahmad bin Omar v Haji Salleh bin Sheikh Osman (1987) 1 MLJ 338
The same decision as in the case of Ismail bin Haji Embong v Lau Kong Hon
(1970) 2 MLJ 213 was decided. The time was no longer of essence. The judge
said that : Here the borrower may recover against the registered proprietor
if she is not the actual owner. The borrower still has the right to sue if she
can prove that there is a fraud.
Mohamad Isa v Haji Ibrahim & Anor. (1968) MLJ 186
The plaintiff transferred the land to the respondent. The option was stated
to be within 6 years and further extended to another 5 years. In the
meantime, the time of the repurchase still existed, the defendant entered into
another jual janji transaction to the second defendant. The issue was whether
the plaintiff could bring up the case for the registered to declare null and
Held: The first defendant had committed fraud by selling the land to another
person, so the plaintiff could succeed.
As a security Transaction .
Jual janji is treated as security transaction (as defined by Wong). Here, the
expiration of time stipulated for the repurchased does not make it an outright
sale, which is similar to English concept.
Yaacob v Hamisah (1950)MLJ 255
The first agreement was the contract of sale and the second agreement was
the option to repurchase within 3 years.
Held: The judge said that: From the fact of the agreements, the transaction
was of the essence in mortgage of land whereby the English equity could be
applied. This is because the law has been amended from Haji Rahmans case,
and the Registration Title Regulation 1891 was repealed.
Nawab Din v Mohamad Sharif (1953) MLJ 12
There was an agreement for sale and an option to repurchase. The issue was
whether it was an outright sale or only as security transaction.
Held: It was held that it was a nature of mortgage to secure a loan and
therefore, he had the right to redeem it and the right was not affected by the
stipulation that this land could be repurchase within the stipulated period.
Note: Once a mortgage, it is always a mortgage.
Halijah v Morad & Ors (1972) 2 MLJ 166
This was an appeal against the decision of the High court on a claim by the
respondent/ plaintiffs against the appellant/ defendant for possession for
apiece of land, and damages for trespass.
Held: The appeal was dismissed because the appellant was not given
possession of the land as the purchaser but as a creditor in order to give her
security for loan and also to enable her to collect the profit fro the land. Since
her claim for transfer the land had been filed on Oct 5, 1965, the appellant
was out of time both under the Kedah Enactment No 6 (Limitation) and
under the law of Limitation Ordinance,1953.
Datuk Jagindar Singh v Tara Rajaretnam (1983) 2 MLJ 196
In this case, Lee Hun Hoe J. said that : The transaction was meant to be a
security agreement rather than an outright sale.
Mahadevan v Manilal (1984) 1 MLJ 286
The judge decided differently from the case of Kanapathi where it was an
outright sale, but the same judge said otherwise.
Salleh Abas J. said that : That having regard to the intention and conduct of
the parties at that time when the payment was made, an agreement to secure
a debt in favour of the debtors name, creates an equitable security
transaction, even though the transaction is not in compliance with the
National Land Code, relating to the situation of the security transaction,
namely charges of the security transaction.
Caveatable Interest of Borrower Protection of caveatable interest
Does a borrower in jual janji transaction have a caveatable interest in
the land?.
The right of the borrower are protected in s.4(2) of the NLC in this
type of transaction, and under s 2 of the Interpretation and General Clauses
Act 1948 that the right of the borrower to redeem would override a bona fide
Then there is a need to improvise the law on s.10 on the Malay
Customary tenure whereby the borrower should be given a notice under the
agreement of jual janji .
And the provision under s.323(1) of the NLC would have to be
amended so as to allow the borrower to enter into caveat against the title to
the land just to protect his right to be transferred.
In order for claim to be cavaetable, that claim must represent a claim
that can lead to the making of a substantive registry to the register.
Caveatable interest arises only at the time after the borrower has paid up.
Judith Sihombing, in her book, gives reasons as follows:
a) In the past, the caveat for the sale was not frequently used;
b) May be, on the attitude of the parties, whereby the borrower has
no ill- feeling towards the lender.
Registered J.J
Vendor/ Seller (Debtor) transfers land to Purchaser (Creditor).
Purchaser registered on his name (indefeasibility of title) but subject
to J.J. agreement. Purchaser has the proprietary right. The vendor
may or may not caveat his interest. But if he choose to caveat, it
would be Registrars caveat (see Mohd. Isa v Hj. Ibrahim). If the
Purchaser breach, the vendor may sue the purchaser under contract.

Mohamad Isa v Haji Ibrahim (1968) MLJ 186
The lender sold the land to a third party while the agreement was still
subsisting. The due date for the repayment had not been lapsed and the
borrower had not caveat the land. Somehow or another his interest was
protected on the ground that there was a fraud on the part of the lender and
the third party purchaser. Therefore, the right of the borrower on the land
was still protected.
Note: This case was termed as an irregular jual janji. Therefore the
interest of the borrower was supposed to be protected.
Unregistered J.J.
Vendor transfers his land to Purchaser. Land will remain on vendors
name. While the Purchaser may lodge private caveat on the land. If
the vendor breach, the purchaser may sue the vendor under contract.
Development of the Law on Jual Janji Transaction
This development is based on the attitude of the court on this transaction.
Haji Abdul Rahman v Mohaned Hasan ( 1917) AC 209
A, the owner of the land, borrowed money from B and A eventually
transferred his land to B as a security. Under the written agreement, B
promised to re-transfer the land to A if a repaid all the money borrowed
within agreeable period. However, a failed to repay but in years later, A
sought to redeem the land.
The issue was that if the collateral agreement was considered a contract,
then the claim after 18 years was statute barred. However, if it was to be
considered as a mortgage or a security transaction, it is not, because the
forms of mortgage in the FMS were lien and charge.
S.4 of the Register of Title Regulations 1891 expressly mentioned that no
other type of transactions were recognized, except lien and charge.
Held: The Privy Council decided that jual janji was a customary form of
transaction but in the lower court it was not as one of the conveyance of
security that once borrower had repaid, he was entitled to retransfer. But
the PC criticized this finding as stated by Lord Dunedin that: Local judges
have been too much swayed by the doctrine of English Equity and not pay
special attention that there were here, dealing with totally different land law,
mainly a system of registration of title which had een described in s.4of the
Registration of Title Regulations 1891 of Selangor.
But, again in 1950, the courts were confused in:
Yaacob v Hamisah (1950)MLJ 255
Briggs J. said that The transaction involved was a jual janji and once it is
established, it matters not whether the agreement in the form of an
agreement of purchase and sale and auction. The case of Haji Abdul
Rahman shows that in either event, time is not an essence of the contract
since the transaction will affect redemption.
Wong See Leng v Saraswathy Ammal (1954) MLJ 141
The court strongly criticized the decision in Yaacobs case whereby Bohagiar
J. reaffirmed the principle expressed in Haji Abdul Rahmans case that the
principle of jual janji could amount to a contract that the time was an
Ibrahim v Abdullah ( 1964) MLJ 138
The court reaffirmed the judgment in Wong See Lengs case.
To avoid hardship, the courts have on several occasions, given relief to the
borrower that the transaction was an irregular jual janji.
Ismail bin Haji Embong v Lau Kong Hon (1970) 2 MLJ 213
The plaintiff needed some money and borrowed $2000 from the defendant
and it was agreed that the plaintiff to pay an interest of $40 per month to be
payable on the loan and that his land and house would be made securities.
Held : The case was concerning a jual janji transaction whereby the judge
decided in favour of the borrower and said that The agreement depends on
the intention of the parties. If the time is mentioned as not the essence of the
transaction, then the time is not an essence, delayed payment is still
So, based on the finding of the facts, the court still failed to acknowledge that
in jual janji transaction, one can delay the repayment.
Mahadevan v Manilal (1984) 1 MLJ 286
The judge, Salleh Abas CJ, decided differently from the case of Kanapathi
where where it was an outright sale, but the same judge said otherwise. He
said: It is the duty of the court to do justice between the parties and to
protect the interest of the creditor in jual janji transaction.
(1) Failure to appreciate the nature of jual janji transaction, there is a
conflicting opinion on this subject. In order to provide any relief to the
borrower, the court will declare that :.
(a) the borrower as having an equitable relief in the mode of
redemption (equivalent to the English Legal sense of law
of mortgage).
(b) The court may consider that the transaction is one of the
irregular jual janji, therefore an equitable relief cannot be
granted to the borrower, and that jual janji is purely a Malay
Customary transaction.
(2) Courts still have the authority of jual janji transaction in the light of
s.206 (3), S.4(2) (a) and s.205(1) of the NLC, hereby jual janji has the
effect/ cause of law, therefore, the court has to take judicial notice.
(3) Time is not an essence of the agreement in jual janji.