The issue
in this case is whether chargee has the right to remove registrar’s caveat.
There is also issue on whether Court has power to give direction sought by
Director of Inland Revenue.
Based on
the facts of the case, the proprietors of 2 lots of land charged their lands to
the applicant to secure a loan from the applicant (MUI), made in two
transactions. The loan later on reduced to some amount. The proprietor then
secured another loan on the same land from the Public Bank offering the land as
security. This money is to be used to pay the MUI for the charge and the
balance will be returned to the proprietor. However, public bank had put a
condition that, before they pay MUI the stated amount of money, MUI is to first
discharge the land from its charges. But, since the proprietor had arreared
tax, the Director General of Inland Revenue (second respondent) had applied to
enter registrars caveat on the said land, thus freezing the land from any
transaction including any action to free the land from charge. For that, the
MUI had request for the caveat to be removed by the Registrar of Title (first
respondent). The second respondent then objected the application, saying that
should the court agreed to remove the caveat, he will apply for the land not to
be able to be charge to others until the arrears tax be paid to them.
The High
Court then held that the applicant does not have the locus standi to apply for
the cancellation of the registrars caveat as s321(3) only empowered the
registered proprietor or the registrar at his motion to do so. Even if the second respondent himself agreed
to apply for such removal under section 320(1) (ab), the section does not have
enough power to lift the caveat only to permit the registration of memorandum
of discharge and then be immediately reimposed to take priority over the charge
to the bank. The section only covers the situation where the government is to
freeze any land for tax due and payable. Therefore, the application was
dismissed with cost.
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