The proviso to section 340 (3) of the national land code 1965: A study

Noraida, Harun and Asiah, Bidin and Noor ‘Ashikin, Hamid and Kamaliah, Salleh (2018) The proviso to section 340 (3) of the national land code 1965: A study. In: INTERNATIONAL CONFERENCE ON LAW AND GLOBALISATION 2018(ICLG 2018), 22 Oct 2018, UNISZA.

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Abstract

The aims of the Torrens system are to provide for simplicity, certainty of title and registration of titles and interest. In other words, under the Torrens system, section 340 (1) of the National Land Code (NLC) only gives the indefeasibility upon the persons who deal with a person who actually registered on the register. Indefeasibility under the NLC 1965 is not absolute and there are exceptions provided in section 340(2) of NLC ie fraud, misrepresentation, forgery, insufficient or void instrument and unlawful acquisition. Under section 340(3)(a) or (b) of NLC, the person who title has been challenged, if he had created a subsequent registered transfer or interest on the land, the new owner still does not possess indefeasibility. The title or interest still defeasible. Then, if the new owner will have to prove that he had acted bona fide for valuable consideration for the title, then he will be protected by the proviso to section 340(3) of NLC. The proviso to section 340(3) applies only to the subsequent transferee and not the first transferee. The purpose of this article is to identify the criteria used by the courts in classifying that person as bona fide purchaser, the position and the remedy of the bona fide purchaser in land matters. The methodology used in this study is a library based research which includes document analysis, such as the decided cases, book and articles. This study also discusses some suggestions for improvement and outcome to ensure the interests and rights of the parties involved.

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