Formation of Penang CM Corporation legal, says Federal Court

PUTRAJAYA: The Federal Court today ruled as constitutional the setting up of Chief Minister of Penang Corporation to, among others, hold acquired land from private owners for public purpose in the state.

A five-man bench, chaired by Chief Justice Raus Sharif, said the Incorporation (State Legislatures Competency) Act 1962 allowed the incorporation of the Office of the Chief Minister under item 8(c) of the Federal List.

“Additionally, Parliament is expressly authorised under Article 76A of the Federal Constitution to delegate its legislative powers in respect of the matter in the Federal List to the state legislatures,” he said in dismissing two declarations sought by landowner Gin Poh Holdings Sdn Bhd, from Penang.

Raus said in the present case, Parliament’s enactment of the 1962 Act authorised state legislatures to make laws to enable the incorporation of, among others, the Chief Minister of Penang Corporation.

Today’s ruling would have the effect of validating the existence of other similar entities like chief minister and menteri besar corporations in other states.

In his 48-page judgment, Raus said the bench did not find the 1962 Act and the 2009 Penang enactment to set up a corporation to be invalid on the grounds that the law related to the matter was beyond the legislative competence of Parliament and the state legislature.

The bench, however, directed the High Court in Penang to hear Gin Poh’s grievances on whether Section 68A of the Land Acquisition Act 1960 (LAA) barred it from challenging acquisition of land after it had been transferred to a third party.

A case management has been fixed for March 19.

This case took root when the Penang government re-acquired 104 acres in Pondok Upeh in Balik Pulau for public purposes.

In 1972, the state acquired 111 acres but the Privy Council in London finally held that the acquisition was bad.

However, Gin Poh sold seven acres to Mara to build a college in 1985.

In August 2009, the state reacquired the land for about RM40 million and then transferred the property to the Chief Minister of Penang Corporation.

However, following a legal challenge, the High Court in March 2011 added another RM5 million to the state’s compensation for the acquisition.

However, Gin Poh filed a court action on the grounds that the state authorities acquired the land to create a land bank, which was not allowed under the LAA.

One of the arguments raised by the state authorities was that Gin Poh had no legal standing because the property had been transferred to the corporation.

As a result, Gin Poh filed for two declarations directly to the Federal Court in 2016.

They were on whether the Penang legislative assembly had the power to approve the Chief Minister of Penang (Incorporation) Enactment 2009 and whether Parliament has the authority to legislate the 1962 Act.

The bench also consisted of Court of Appeal president Zulkefli Ahmad Makinudin, Chief Judge of Sabah and Sarawak Richard Malanjum, Federal Court judges Hasan Lah and Balia Yusof Wahi. -FMT