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Petitioner Oktoriusman Halawa in the ruling hearing of the material review of Law No. 4 of 1996 on Mortgage over the Land and Objects Related to the Land (Mortgage Law) on Thursday (27/8) in the Courtroom of the Constitutional Court. Photo by Humas MK/Ifa.

JAKARTA, Public Relations of the Constitutional Court—The Constitutional Court (MK) rejected the material review petition of Law No. 4 of 1996 on Mortgage over the Land and Objects Related to the Land (Mortgage Law). The petition was filed by Inri Januar (Petitioner I), Oktoriusmas Halawa (Petitioner II), and Eliadi Hulu (Petitioner III).

"The [Court] adjudicated, rejects the Petitioners’ petition in its entirety," said Chief Constitutional Justice Anwar Usman along with the other constitutional justices in the pronouncement of the Decision No. 21/PUU-XVIII/2020 on Thursday afternoon, August 27, 2020 in the Plenary Courtroom.

Constitutional Justice Manahan M. P. Sitompul read out the Court’s opinion on the Petitioners\\\\' argument on the urgent condition (overmacht) that was excluded from the agreement. “An overmacht is a condition that cannot be known, cannot be predicted, will occur at the time an agreement is reached. Therefore, it is natural not to include [this clause] at the time an agreement is made, although there is a possibility that certain agreements also anticipate [this] in its clauses."

The Court believes it doesn’t infringe on debtors’ constitutional right as they can reach non-litigation agreement or legal measure, or lawsuit before the mortgage right is executed, through Article 1865 of the Civil Code, which reads, “Anyone who claims to have a right or who refers to a fact to support such a right, or who objects to another party’s right, shall prove the existence of such a right or fact.”

The Court also believes that Article 14 paragraph (3) of the Mortgage Law doesn’t violate debtors’ constitutional rights because the characteristics of mortgage right are formal and absolute. “Meanwhile, the conditional interpretation of the [phrase] ‘executorial power’ and the phrase ‘the same as a court decision that has obtained permanent legal force’ that the Petitioners intended were additional requirements within the implementation of a valid contract agreement,” Justice Manahan read out.

Constitutional Justice Suhartoyo said that a debtor’s inability to fulfill their obligation in their agreement with the creditor due to an urgent condition is not related to norm constitutionality, but to the interpretation of the agreement.

He then read out the Court’s opinion of Article 14 paragraph (3) of the Mortgage Law, which the Petitioners’ contrasted with the Constitutional Court Decision No. 18 of 2019 on the judicial review of Article 15 paragraph (2) of Law No. 42 of 1999 on Fiduciary Guarantee, which they believed was relevant in interpreting the word ‘defaults’ in the a quo petition. The Court believes that mortgage right and fiduciary guarantee are fundamentally different, leading to different interpretation of the word ‘defaults’ as well as the phrases ‘executorial power’ and ‘the same as a court decision that has obtained permanent legal force.’

Also read:

Deemed Not Providing Legal Protection, Land Mortgage Law Challenged

Petitioners of Land Mortgage Law Strengthen Argument on Constitutional Loss

In the previous hearing, the Petitioners argued that they were potentially harmed by the enactment of Article 14 paragraph (3) and Article 20 paragraph (1) of the Mortgage Law. Petitioner I is a debtor of Bank Mandiri who had put up land and buildings as collateral for six installments of loan payment when he filed the petition, which resulted in a principal agreement contained in a certificate of ownership.

The large-scale social restrictions (PSBB) potentially lead to reduction in or loss of his income, therefore unable to pay the loan installments pursuant to the agreement. Consequently, the creditor can seize his properties that are the objects of the mortgage, due to the enactment of the a quo articles.

Petitioners I and II are legal adults and therefore can give mortgage right. The enactment of the a quo articles potentially harm their constitutional rights.

The a quo articles grants creditors the right to sell the object of mortgage if the debtor defaults, as its ownership has been transferred to them. This infringes on the constitutional rights of debtors, in this case the Petitioners, which are protected by the provision of Article 28G paragraph (1) and Article 28H paragraph (4) of the 1945 Constitution.

Writer: Nano Tresna Arfana
Editor: Nur R.
PR: Raisa A.
Translator: Yuniar Widiastuti (NL)

Translation uploaded on 8/31/2020 17:13 WIB

Disclaimer: The original version of the news is in Indonesian. In case where any differences occur between the English and the Indonesian version, the Indonesian version will prevail.

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