On 5 May 2025, the Court of Appeal (“CA”) in Md Isa bin Bujang v PL Soon Huat Realty Sdn Bhd and others (Civil Appeal No.: K-01(NCvC)(A)-191-04/2023) in its broad oral grounds of judgment upheld the High Court’s decision¹ on the validity of the revocation of a pre-Merdeka Malay reserve land. The CA held that the Kedah Malay Reservations Enactment 1930 (“MRE”) is applicable and disagreed with the submission that the status of a pre-Merdeka Malay reserve land cannot be changed until such time as a new state enactment is passed under Article 89 of the Federal Constitution (“FC”) that facilitates a change in its status.
 
Brief Facts
 
The main appeal before the CA arose from the decision of the High Court, which held that the revocation of the Malay reservation status of a land in Langkawi (the “Land”) was properly carried out under section 4(b) MRE, and the Land was no longer a Malay reserve land (“MRL”). There were also two related appeals arising from the removal of private caveats lodged on the Land and the adjoining lands.
 
The Appellant was the previous registered proprietor of the Land, which was a declared a MRL pre-Merdeka. Sometime in 1997, he applied to revoke the MRL status of the Land under the MRE, by swapping his other land in Daerah Kubang Pasu (“Kubang Pasu Land”) to be made a MRL (“Swapping Process”). The Swapping Process took effect by way of Government Gazettes No. 124 and 127 (“Gazettes”).
 
The Land and the adjoining lands were charged by the Appellant and another individual to CIMB Bank Berhad (“CIMB”) as security for loans extended to a borrower. However, there was default in the loan payment, and CIMB commenced foreclosure proceedings. At a public auction, the Land and the adjoining lands were sold to the 1^st Respondent (PL Soon Huat Realty Sdn Bhd), which obtained financing from the 2^nd Respondent (Malayan Banking Berhad). Thereafter, a certificate of sale was issued by the 3^rd Respondent (Pentadbir Tanah Langkawi) and the Land and adjoining lands were registered in the name of the 1^st Respondent. After having bought the Land and adjoining lands, the 1^st Respondent made substantial development by erecting a hotel known as Mercure Langkawi Pantai Cenang, a shopping mall called “Cenang Mall” and another hotel called “Cenang Plaza Hotel”, which have been operating since then.
 
Some 10 years later, the Appellant (then a bankrupt) filed an action against CIMB, alleging that there was a substantial delay in the foreclosure proceedings by CIMB, which resulted in high interests being incurred on the loan. The Appellant claimed that if there had been no delay, there would be surplus sale proceeds after deducting the loan payment, and such proceeds should be paid to him. His suit was struck out by the High Court and he was unsuccessful in his appeal to the Court of Appeal, as the action was filed without the prior sanction of the Director General of Insolvency.
 
Subsequently, the Appellant filed another action at the High Court against the three Respondents and the Government of Malaysia, this time alleging that the Swapping Process was in contravention of Articles 89(3) and 89(4) of the FC. He sought an order that the Land be declared MRL and consequently for the public auction and transfer of the Land to the 1^st Respondent, as well as the land charges in favour of the 2^nd Respondent to be declared invalid and void ab initio. Central to the Appellant’s claim is whether the Land is a MRL.
 
In dismissing the Appellant’s claim, the High Court held that the Land was no longer a MRL, as the procedure to revoke the status of Malay reservation via the Gazettes was properly effected under section 4(b) of the MRE. The Court extensively analysed the applicable law for revocation and noted that the Appellant had misinterpreted Article 89(1) of the FC. The High Court clarified that Article 89(1) of the FC is intended to ensure the continuity of a MRL status declared before Merdeka Day, until otherwise provided by a state enactment. Since the Land was duly declared and gazetted under the MRE, the Court held that it would only cease to be MRL when it was duly revoked under the provisions thereof.
 
Court of Appeal
 
At the CA, the Appellant argued that MRE is not applicable for lands declared as MRL before Merdeka Day, and that Article 89(1) of the FC should have been followed. The Appellant also argued that the Swapping Process was unconstitutional and in breach of Articles 89(3) and 89(4) of the FC, as the Land and the Kubang Pasu Land are not of similar character, and the Kubang Pasu Land was owned by a non-Malay at the time of the swapping. The Appellant argued that the failure of swapping rendered the revocation of the MRL void.
 
The provisions relied upon by the Appellant, namely Articles 89(1), 89(3) and 89(4) of the FC, provide as follows:
   
The CA unanimously dismissed all three appeals and affirmed the High Court’s decision, based on the following broad grounds:
 
Firstly, the CA held that since the MRE has not been repealed, it remains valid in light of Article 162(1) of the FC, which, inter alia, provides for the continuation in force of pre-Merdeka laws unless and until repealed by the appropriate authority, and should govern MRL regardless whether the Malay reservation status was declared pre-Merdeka or post-Merdeka. The CA held that the law applicable for the revocation of MRL is section 4(i)(b) MRE and not Article 89(1) of the FC. As such, the procedure to revoke the status of MRL was properly done pursuant to section 4(i)(b) MRE.
 
Secondly, the CA clarified that the procedures and processes relating to land swap, as envisaged under Article 89(3) of the FC, are regulated by the MRE, and that matters on quality of swap are entirely a state matter. For this reason, any dispute concerning the adequacy of the swap must be resolved under the MRE and does not affect the validity of the revocation itself. That being the case, the CA was satisfied that the Swapping Process was properly done pursuant to the MRE. The CA also found that there is evidence showing that the size of the Kubang Pasu Land exceeded the size of the Land, and therefore, the Swapping Process is not in breach of Article 89(3) of the FC.
 
Thirdly, the CA found that at the time of the application for the land swap via the Gazettes, the Kubang Pasu Land was still owned by the Appellant, who is a Malay. As such, there was no contravention of Article 89(4) of the FC, which requires that any land declared as MRL must, at the time of declaration, be owned by a Malay.
 
Comments
 
Although the subject matter of this decision concerns Malay reserve land in Kedah, it has a broader impact on the validity of other existing pre-Merdeka state enactments and their compatibility with Article 89 of the FC on Malay reservation matters. This decision makes clear the applicability of existing state legislation, such as the MRE, to any lands declared as MRL before Merdeka Day, unless otherwise provided by a new or subsequent state enactment.
 
It is to be noted that the Appellant has filed a motion to appeal to the Federal Court and further updates will follow.
 
Our Ms Claudia Cheah and Ms Aufa Radzi acted as counsel for the 2^nd Respondent in this case.
 
 

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