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6. Section 9 deals with the question of reinstatement of security, in respect of revalued debts, and will require careful consideration by each Government in the light of local circumstances and the ability of the Courts to deal with the subject in the manner proposed. The Section first establishes (Sub-section (1)) that where under the provisions of the Ordinance a secured debt is deemed either wholly or partly undischarged, the security shall be revived. The creditor can therefore (Sub-section (2)) call upon the debtor to reinstate or replace the security and in default of compliance may apply to the Courts for such order as to the Courts may seem fit. These are purely general provisions applying to all categories of secured debt. The Section, however, goes further than this in respect of debts secured by charges on land, in that the provisions of sub-section (3) and (4) are designed to secure that in all cases a mortgage or charge on land shall be available to the creditor although it has ceased to be on the register. It is appreciated that this is contrary to the usual principles of land registration law which makes the register conclusive except in cases of fraud. It is however understood that in many cases, debtors who had in the course of the occupation paid off the charge on their land, subsequently, or at the time of the discharge, disposed of the land to a third party. Since in most such cases, the land constituted the only real form of security, the revaluation of the debt itself may prove to be worthless to the creditor unless the charge is applied to the land whoever has become the owner. It is realised that the third party who acquired the land may have acquired it for value and in good faith, and it must necessarily be for local Governments to decide whether it is more equitable for the charge to be placed upon the third party, or for the creditor to be left with the revalued debt which could not be in fact enforced. Sinco it seems likely that those who acquired land during the inflationary conditions of the occupation were benefiting by those conditions the general presumption is in favour of the former course. If Section 9 is accepted, Governments may still wish to consider whether there should not be provision for the third parties to be heard under Sub-section 9 (2), and, if so, to insert an appropriate addition.
Sub-sections (3), (4) and (5) of Section 9 have been drafted to cover registration of title and registration of deeds. In all territories there is either registration of deeds or registration of titles. The amendments to Section (9) which appear necessary to take this into account in individual territories are indicated in Part II below.
PART II
Notes on the application of the draft Ordinance to individual
territories
A.
Malayan Union
(i) See notes above applying to Malayan Union. If it is desired to include the definition of "duress or coercion" presumably both should be included since the Indian Contract Act is followed in the Malay States and English Contract Law in Penang and Malacca.
(ii) As regards the definition of "occupation currency" it is not clear whether any special mention requires to be made of Siamese currency and settlement of debts in those areas of Malaya which were occupied by Siam.
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Please note that this copy is supplied subject to the National Archives' terms and conditions and that your use of it may be subject to copyright
restrictions. Further
information is given in the enclosed Terms and Conditions of supply of National Archives" leaflet.