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Classification And Use Of Land

1. The Code use two distinct concept, i.e. “Classification” and “categories”.
a. Classification refers to the location of a particular piece of land
b. Categories refers to the nature of the use of the land as allowed under the code.
It can be categorized into 3 types, “agriculture”, “building”, and “industry”.
2. Land situated in a State is classified as:
a. land above the shore line;
b. foreshore and sea-bed.

Land above the shore line


1. Land above the shoreline include, town land, village land, and country land.
2. This type of land may be disposed by the State Authority by way of alienation or
otherwise.

Foreshore and sea-bed


1. This type of land cannot ordinarily be disposed by the SA, although proviso to S.76
provide that the foreshore and sea-bed can still be disposed of exceeding 99 years.

Implied Condition

1. When land has been categorised as either, agricultural, building or industrial land, the
Code then subjects them to certain “implied conditions” regarding its land use.
2. In case of agricultural land is provided in S.115.
a. S.115(4) provides for the circumstances where a building are permitted to be
constructed on a agricultural land.
3. Building land – S.116
a. S.116(4) provides the permitted purposes for which a building can be erected
on the land.
4. Industrial land – S.117
a. S.117 prescribes the industry shall commence its operations within three years
of the relevant date and that every building or installation erected thereon shall
be maintained in repaired.
b. No such building or installation shall be demolished, altered or extended
without prior written consent of the appropriate authority.
5. The code provides that the condition stipulated in S.115-117 are implied only in so far
as they are not inconsistent with any express conditions to which the lands are for the
time being subject. (s.115(3), 116(3) and 117(2))

*Note –The above principle refers to lands alienated by SA after the Code became law.

6. In case of lands alienated before the Code come into existence, S.53 provides that until
a category of land use is imposed under S.54 by the SA, such lands will be subjected to
an implied condition in following manner:
a. Country land, town or village land held under LOT, will be subjected to an
implied condition that it shall be used for agricultural purposes only.
b. On other hand, town land and village land held under RT, will be subjected to
the implied conditions that it shall not be used either for agricultural or industrial
purposes.
7. However, S.53(2) proviso (i) provide this will not render any land to be unlawful the
continued use of any part of the land for any agricultural or industrial purpose permitted
before the commencement of the NLC.
8. If the category of land use is provided in the express condition (which are found within
the body of grant and they clearly and expressly show that the land is to be used for the
purpose indicated) requiring them for the use for a particular purpose, then such land
shall be subjected to that express condition and not the implied condition discussed
above.
9. For land alienated before commencement of NLC, the RP may apply for imposition of
a category of land use under S.124. In absence of such application, the SA may itself
take action under S.54 to impose a category of land use on the RP land, thus rendering
such land to be subject to the implied condition provided under S.54.

Garden City Development Berhad v Collector of Land Revenue, Federal Territory (S.53(3))
Held The issue is whether or not such land held under RT can be used for the erection of
buildings after the commencement of the Code is a question of fact involving the
construction of the conditions contained in the document of title. Moreover, as pointed
out by the Lordships, the purpose of the proviso permitting the erection of buildings
after the commencement of the code is to relax to some extent stringent prohibition
against the use of land in this category for agricultural or industrial purposes.

Land held under RT is subject to the implied condition that it shall not be used either
for agricultural or industrial purposes and it is a question of fact whether or not such
land can be sued for the erection of buildings after the commencement of the NLC.

Land Executive Committee of Federal Territory v Syarikat Harper Gilfillan Bhd (s.53(2))
Facts Respondents are RP of two pieces of lands and the condition imposed on the land is to
be used for the planting of fruit trees. Later, they entered into an agreement to sell part
of the land on which is erected a block of three flats. The collector replied to R stating
they should apply for a change of category of land use pursuant to S.124 before
applying for amalgamation and subdivision under S.137 and S.148.

Held An appropriate category of land use must be imposed in respect of land held under LOT
which is subject to the implied condition “agriculture” whenever it is desired to use the
land for a purpose different from that to which it is for the time being subject.

Express Condition and Restriction in Interest

1. The discretion of SA to impose express condition and restriction in interest in respect


of alienated land is not fettered or controlled at the time of initial alienation.
2. The court had in number of occasion held that the power to impose conditions when
approving applications for conversion under S124 is limited.
Pengarah Tanah dan Galian, Wilayah Persekutuan v Sri Lempah Enterprise Sdn Bhd
Facts

Held

3. The power of Sa to impose express condition and restriction in interest is provided


under S.120.
4. These conditions and restrictions are determined by the SA at the time the land is
approved for alienation and must be endorsed on or referred to in the document of title
of the land. S.121 and S.122 provides the types of express condition that may be
imposed.
5. The term “condition” (S.5 of NLC) does not include any restriction in interest or any
express or implied condition in any agreement in which the SA is not a party.
6. Any condition imposed by the SA is in conflict with any by-laws of local authority, the
condition shall prevail and the local by-law shall cease to apply to the land.

Commencement of Restrictions in Interest

1. According to S.105, every condition or restriction of interest shall commence to run


from the date of alienation of the land to which it relates, except where it is stated
otherwise provided by the Code.

Ti Teow Seow v Pendaftar Geran-Geran Tanah Negeri Selangor


Facts The first applicant land was endorsed with restriction in interest – the land could not be
transferred or leased for period of 15 years without consent of Rules in Council. The
title indicates the commencement of restriction as in 1964, but the alienation was
registered only at 1967. At 1980, the first applicant sold the land to 2nd and 3rd applicant.
Later, a memorandum of transfer was executed by the 2nd and 3rd applicant in favour of
4th applicant.

When presentation of the relevant transfer and charge documents was made to relevant
authorities, the responded rejected them for registration on ground that the restriction
was still subsisting.
Held The principle is that, the alienation of state land shall take effect upon the registration
of a register document of title by virtue of S.78(3) and notwithstanding that its
alienation has been approved by the SA, the land shall remain state land until that time.

Thus, the restriction in interest could not have commenced before the date of
registration because the land remained State land and the restriction could not have
meant to operate on the SA.
Breach of Conditions

1. Breach of conditions fall into two categories:


a. Non-payment of rent due to the State Authority in respect of the land (S.100 of
NLC)
b. Breach of implied or express conditions to which the land is subjected
2. A breach of condition requiring continuous… performance shall arise
3. S.126 – any condition consists of two or more separate obligations or liabilities, a
failure to fulfil any of those obligations or liabilities shall constitute a breach of the
condition.
4. S.94 – rent in respect of alienated land is payable as from the beginning of the calendar
year in which the land is alienated. If land is alienated after end of September in that
year, then rent is payable as from the beginning of the following calendar year.
5. S.127 – where a breach occurs in respect of any condition, express/implied, the land
shall become liable to forfeiture of the State Authority. However, after amendment in
1985, the SA now has two courses of action.
a. SA can resort to imposing a fine on the proprietor under the new procedures
provided under S.127(IA) and (IB), or;
b. SA can take temporary possession of the land with a view to remedying the
breach itself at the State’s expense under the new procedures provided under
S.129.
Rent

6. If rent payable is not paid in time, the Land Administrator will issue a notice of demand
in Form 6A requiring proprietor to pay rent within specified period, usually within
three months of the date of the service of the notice.
7. Such notice must be endorsed by or at the instance of the LA, on the register document
of title to the land to which the notice relates. (s.97)

Pow Hing & Anor v. Registrar of Titles Malacca


Held FC held that the making of such an endorsement on the register document of title is
mandatory, not just for mere formality. The rationale is to ensure that all persons
having interest in the land will know, upon examining the register, that a forfeiture
of the land is imminent if the proprietor does not take the necessary steps to comply
with the notice so endorsed.

8. If the whole sum demanded is paid to the LA within specified time, the notice shall
cease to have effect and the LA must cancel the note of service of the notice endorsed
on the register. (S.99)
9. If the whole sum demanded is not paid within time, the LA shall make an order under
S.100 declaring the land forfeit to the SA.
East Union (Malaya) Sdn Bhd v Government of the State of Johor
Held Constitutionality of S.100 was questioned. In the case, applicant sought for a
declaration that S.100 was void on the ground that it is ultra vires to Art. 76(4) of
the FC. The motion was denied by the Federal Court.
Collector of Land Revenue Johor Bahru v South Malaysia Industries Bhd
Facts The respondent land was subjected to a special condition in a lease which requires the
land, which was subject to the category ‘industry’ to be used solely for the erection of
a factory coupled with a restriction of user to light industry. However, later the
Respondent subleased the land to an urea company and uses it for a totally unconnected
purpose, that is, for storing industrial chemicals ad fertilizers.
Held The court held that it would not be a legitimate user permitted under the lease and it is
inconsistent with the express condition in the said lease, thus, it amount to a breach of
condition.

Relief Against Forfeiture

1. If proprietor is confronted with that his land would be forfeited by the SA, he must take
immediate steps to remedy his breach in manner required by the authorities.
2. If proprietor fails to do so, in which event he would have only two courses of action
open to him:
a. Firstly, he could challenge the validity of the forfeiture proceedings as was
successfully done in case of Pow Hing on ground of non-compliance by the
authorities of the mandatory procedures laid down in the Code.
b. Secondly, he could try his luck in seeking relief from the court on the grounds
of equity. This was attempted in the case of UMBC v Pemungut Hasil Tanah
Kota Tinggi.

Condition v RII
1. Condition is different from a RII.
2. Any dealings by the RP in contravention of a restriction in interest does not give rise to
cavetable interest and is incapable of registration and if registered, is void with the
result that the title or interest obtained is defeasible and may be set aside by the
appropriate party.
3. In case of breach of condition, express or implied, is rendered liable to forfeiture by the
State Authority.

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