TIMUR RAYA RESOURCES SDN BHD v 1. ) AHMAD KAMEL BIN HJ MAT 2. ) MAZLAN BIN HJ YUSOFF 3. ) ROSLI BIN SALLEH 4. ) MASJID AR-RAHMAH MUKIM CHEMPAKA DAERAH PANJI JAJAHAN KOTA BHARU KELANTAN

Case Significance

Illustrates the assessment of wrongful termination and quantum in a publicly funded mosque-construction project, including a religious institution's capacity to contract and be sued.

This High Court decision at Kota Bharu, delivered by Datuk Mohamad Abazafree bin Mohd Abbas J, concerns a construction dispute over the building of a new mosque, Masjid Ar-Rahmah in Kampung Chempaka, Kelantan, to replace the old building. The plaintiff, a construction company, was appointed main contractor under a letter of offer signed on 16 November 2018 at a lump-sum contract price of RM3,825,000, based on drawings prepared by the architect engaged for the project, and was given 36 months to complete the works. The plaintiff claimed it had carried out the works to 79.65% completion and had progressively claimed some RM3,046,612.50, of which RM2,200,000 had been paid without dispute, leaving a balance of RM694,281.88 that the defendants failed to pay before appointing a new contractor. The individual defendants and the mosque were sued; the defendants counterclaimed, alleging that it was the plaintiff who had breached the contract.

The issues the catchwords foreground were whether the mosque institution is a badan berkeperibadian undang-undang (a body possessing legal personality), whether the termination of the contract by the defendants was valid, and whether the plaintiff was entitled to be compensated. On the question of juristic personality the Court drew on comparative authority, including the Indian Supreme Court decision in Shriomani Gurudwara Prabandhak Committee, Amritsar v Shri Som Nath Dass, alongside the Contracts Act 1950 and the Kelantan enactment governing the religious council.

The Court found for the plaintiff. It declared that the purported termination of the contractor's engagement by the letter dated 13 March 2021 was null and void, that the rejection of the plaintiff's Bill of Quantities was invalid, and that the BQ price of RM3,825,000 was valid, and it ordered the defendants to pay the plaintiff the outstanding balance of RM694,281.88 claimed under progress claim No. 9. Because the case involved public funds for the construction of a mosque, the Court made no order as to costs, and — with the plaintiff's consent — imposed no interest on the sum payable. The judgment is a useful illustration of how the courts assess wrongful termination and quantum in a public-interest construction project, and of the treatment of a religious institution's capacity to contract and be sued.